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AMITY LONDON BUSINESS SCHOOL
UK RESEARCH REPORT
ONSTARBUCKS IN UK
AND
CAF COFFEE DAY INDIA
BY-
ANKIT MEHRA
MBA 3C
A1808711002
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Table of Content
Sl.no Content Page no.
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5.1
5.2
5.3
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6.1 6.2
6.3
6.4
6.5
6.6
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910 .
Literature review
Objective and Research Methodology
Introduction
Cultural Context and issues India and UK
Detailed Analysis Caf Coffee Day INDIASTP
SWOT Analysis
Porters five forces
5Ps
PESTEL Analysis
Market share and competitor analysis
Detailed analysis Starbucks UK
STPSWOT Analysis
Porters five forces
5Ps
PESTEL Analysis
Market share and competitor analysis
Comparison and Contrast INDIA VS UK
Recommendations for INDIA
Recommendations for UKBibliography
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LITERATURE REVIEW
Starbucks is a high-margin brand that serves about 4 million customers per
week (Forbes). Furthermore, the company also currently owns Seattles Best
Coffee and Torrefazione Italia coffee brands. The company is ranking in at
#338 in FORTUNE 500, and its on 240 in FT Global 500.
One of the reasons that Starbucks employees are often so pleasant and
helpful is that Starbucks is a great company to work for, says Starbucks
partner Joy Wilson in The Starbucks Experience. It takes care of employees
with respect. This mind-set trickles down from the executives to the
thousands of baristas worldwide.
The Starbucks name is synonymous with coffee. Each week around forty
million customers visits Starbucks and 18 times per month is the rate ofmost loyal customers who visits their Starbucks. If we talk about employee
turnover rate, its 250 percent lower than the industry level, which is not an
accident.
Caf coffee day.Cafe coffee day is the first caf who pioneered the caf
culture in India by opening its first caf at Brigade road, Bangalore
A smart, simple space that they could call their own for a while. Over cups ofcoffee people can discuss, hold short meetings listen to conversations, or
even have a lot of good fun .It is still the largest organized retail caf chain
in India with cafs across the country. Coffee Day today is totally in tune
with its target audience with the rapport thats very strong just as the deep
red coffee day color.
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Today Caf Coffee Day is at the forefront of the Coffee revolution co-riding
with coffee growers, corporations, suppliers, and planters.
OBJECTIVES AND RESEARCHMETHODOLOGY
Objectives
Products and segmentation of both the markets.. Marketing strategies of both the companies. Detailed analysis of Starbucks in UK and Caf Coffee Day in India.
Methodology
Here project analysis will be made by collecting secondary data fromdifferent websites, journals, etc.
Secondary datas- published and research datas collected fromdifferent websites, journals, newspapers, company research papers.
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Introduction
Starbucks Coffee UK
Starbucks is not just related to a great cup of fresh coffee, but also a betterquality product with excellent customer service and better understanding ofcoffee culture. It has achieved unpredictable achievements in coffee chainindustry.
In United Kingdom Starbucks have around 793 stores.
For making excellent coffee it purchases and roasts the high quality coffeeand sell them with fresh, rich-brewed espresso beverages, different varietiesof coffee related accessories and equipments.
More than quality coffee, Starbucks features a variety of hand-craftedbeverages, a selection of salads and sandwiches.Starbucks merchandise includes exclusive coffee brewers, espressomachines and other items related to coffee and tea.
The total numbers of Starbucks stores are 15,011. Starbucks have theirstores in 44 countries outside of the United States and 1,049 stores are
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company owned operated in Australia, China, Canada, Singapore Germany,U.K. and Thailand
Caf Coffee Day
It is a division of, Amalgamated Bean Coffee Trading Company Ltd. ABCTCLwhich is largest coffee conglomerate in India. Coffee In its own estates of10,000 acres ABCTCL grows coffee. US$250300 million is the land value ofthe plantations. It is the largest producer of Arabica beans in Asia.ABCTCL is one of Indias leading coffee exporters with its clients across USA,Europe, USA and Japan.
First caf of Caf Coffee Day was opened at Brigade Road, and its still one ofthe most happening places in Bangalore.
The First Caf Coffee Day logo was of a bright red cube with a green strokeabove e in Caf Coffee Day.The word Caf was made to focus Caf Coffee Days introduction of Caf
culture in India.SLURRY was the font used for Caf the font looks as though the lettershave congealed or coagulated out of liquid.The currently used logo includes a dialogue box which highlights theconnection between 'conversations' and coffee. "A lot can happen overcoffee is the tagline.
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The business of Caf Coffee Day has grown spectacularly 1,408 storesacross the country, it is the largest chain of coffee stores.They clearly had the most recognizable of all coffee brands and youngpeople People who comes under the bracket of Middle income Group regularly visited their stores.
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Cultural context and Issues India and UK
Caf Coffee day in India is more focused at Value for Money which catersits target market.The low per capita consumption and increasing income levels are the factorsfor the growth of coffee Industry in India.
In UK, people have high standard of living and to maintain that they cannotafford to compromise on anything, whether its quality of Coffee, ambience ofthe place or leisure.
Starbucks is mainly adult-focused. Urban areas are its target market, wherepeople are willing to go the extra mile to purchase costly gourmet coffee.
Unlike in Indias Caf Coffee Day, Starbucks have a strategy of opening anew store in a area where a store already exists, it applies this strategy toavoid long line ups and crowdie atmosphere.
In India people like spicy and tangy food (snacks) so the cafs (caf coffeeday) offers people samosas, tangy wraps and rolls.Here in UK people usually do not prefer spicy and tangy food so to cater theneed of the people in UK, cafes here (starbucks) offers non spicy Perfect
Porridge, Pastrami & Emmental Sandwich and other sandwiches includingham tuna etc. ,croissants and much more.
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Detailed Analysis
CAF COFFEE DAY
STP
Segment Nice place for coffee and
snacksA good hangout place
Target Group Youth in the lower and middleclass people
Positioning Youths favorite coffee shop
SWOT Analysis
Strengths Excellent brand visibility and brand name
Large number of young crowd as target group
Good service
Around 1000 outlets across India and 300,000 visitors per day
Its the producer of its own coffee thus reducing the cost.
Weakness
High competition in this sector
Opportunity
Introduction of cheaper versions of coffee
Tapping the smaller towns/cities
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Merchandising
They can tie up with other companies for promotion
Threats
Entry of foreign players in the Indian market
Dependent on Government commodity rates
Large unorganized market.
Porter's Five Forces Analysis
Threat of new entrants Costa Coffee
Barista
Bargaining power of customers: Comparison in price with competitors
Variety of products offered Service provided
Bargaining power of Suppliers: local suppliers are contact for supply of food items
Believes in backward integration
Its own coffee plantation base in Bangalore
Threat of substitutes:- Costa coffees ice tea.
Coffee offered by its competitors.
Cold drinks served in stadium.
Competition within industry :- Barista who targets same youth
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Coke and Pepsi
5 Ps of Caf Coffee Day
Price: Caf Coffee Day segments lower and middle class people so the price
for a cup of coffee ranges from Rs.17 to Rs.99.
Product:
Let it be food or coffee, products here are according to Indian taste.
Most of the eatables are made according to Indian taste buds like
samosa, masala sandwich, tikka sandwich etc.
The best selling item in summer is frappe, which is coffee with a blend
of coffee.
In winter it is cappuccino.
Coffees and teas Refreshing alternatives Eatables
Coffee Granitas Melting moments
Espresso
Espresso AmericanoMacchiato
Cappuccino
Caf Latte
ChococinnoCaf Mocha
Irish Coffee
Blood Orange
Cool BluePineapple Crush
Emerald Ice
Ruby Surprise
Banana n Walnut Cake
Banana Chocolate MousseBanana Caramel pie
Chocolate Doughnut
Cookies
Marble CakePineapple Getaux
Chocolate Cake
International coffees Smoothies Ice creams
Colombian Juan ValdezEthiopian Qahwah
Kenyan Safari
Mango ColadaStrawberry Colada
VanillaChocolate
Seasons Best
Cold Coffee Quick Bites
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Sweet Mint
Cold SparkleBrandied Banana
Tropical Iceberg
Iced Eskimo
Samosa
PuffPizza
Croissant
French Fries
Kathi RollWraps
Masala Sandwich
Promotion:CCD is involved in -
Television: CCD held a contest around a very popular programme on Zee
English called Friends.
Get Gorgeous contest which comes on Channel [V] advertises caf coffeeday.
Movies Assosiation: CCD can be seen in movies like Khakhee and Mai Hoon
Na
Sales Promotion: CCD uses special Cafe Citizen Card for rewarding Cafe
Coffee Days customers. By this program new customers are gained and
existing ones are retained.
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Based out of South India where there is high political stability andgreater respect for the customer
Less of red tapism Easy sourcing of coffee beans Rules and regulations according to Indian market
Economic
Heavy coffee drinkers in South India Cheaper sourcing maintain Quality
Social
Since it targets the middle class and is affordable so it acts as a goodmeeting place.
Technological
They provide entertainment over Bluetooth and marketing strategyalso based around technology.
Associations with different e-comers portals
Environmental
Effective water conservation. Limited production Use biodegradable plastics
Legal
Since its ethical and based on customer delight so there are fairly lessnumber of consumer complaints and quick customer service.
Caf Coffee Day
Human Resource Management;
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With the boost in the number of their retail outlets, C.C.D concentratesmainly on the quality and quantity of their human resource so as tomeet up with the set standards.
They have a clear intension of keeping well trained employees who canprovide constant service at every store.
People are hired for what they know but fired for how they behave.People of CCD believes this.
. More emphasis is given on personal skills and motivation
Caf coffee Day
COMPETITIVE ANALYSISIn India, caf coffee day suffers a lot of competition; it results in carryingout new marketing strategies and different ways to fight competition. Thefollowing are the current figures showing the market share of companies inIndia.
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30%Caf Coffee Day26%Barist23%Costa coffee12% Mocha
9%Others
EXPENSIVE
COSTA COFFEE
MOCHA BARISTA
LOW HIGH
QUALITY QUALITY
CAF COFFEE DAY
OTHERES
INEXPENSIVE
Detailed analysis
Starbucks Coffee UK
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STPS
Segment People can sit back and relaxA great cup of coffee withgood atmosphere andfacilities.
Target Group Middle and Higher incomegroup
Positioning A highly reputed brandName says it all
SWOT Analysis
Strength:
Strong brand name and image associated with high quality. Healthy financial performance People admire the atmosphere of Starbucks High-skilled management team High technology High quality products with new innovations.
Weakness: Products with high price Clusters of stores with aggressive expansion
Opportunities: Large consumer group Launching new products extension Lifestyle Selling more whole coffee beans and equipments
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Threats:
Competitors Lack of ownership of coffee farms Global crisis Intellectual-property violation
Porter's Five Forces Analysis
The threat of entry:
Nothing can make much of a problem for Starbucks as they have avery large share of the London market that will be relatively immuneto the threat of new entrants.
It would not be easier for the new entrants to offer great quality ofcoffee at a competitive price
The power of buyers:
Starbucks has low switching costs between the suppliers. Starbucks is associated with a great quality of coffee for elite and loyal
customers.
The power of suppliers:
Starbucks being the most famous specialty coffee shop chain in UKand still expanding need for Suppliers increases.
It would not be unwise to say that Suppliers need Starbucks.
The threat of substitutes: Just as a bald head reduces the need for hair gel. Starbucks example would be, if an alternative to coffee is offered to a
customer, he would rather switch from coffee to tea. This is the powerof Brand
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Competitive rivalry: Starbucks is free from any competitive rivals that are of similar size to
them as a result there are no rivals in the market that would beconsidered in balance with them.
5PS
Price:
Starbucks prices matches with its competitors but, it assures quality.
Starbucks is an attractive combination of features, high quality,excellent service and other attractive attributes.
Product:
Starbucks is known for care in selection of high quality coffee beansand expertise in roast.
It takes care of strict economical, environmental, and qualitystandards of its coffee beans.
Starbucks differentiates its coffee and related products dependingupon its innovation and competence.
Coffees and teas ReferishingAlternatives
Eatables
Coffee Cool lime with real lime Muffins and donutsVanilla spice Latte Berry Hibiscus Skinny ginger muffinCafe Americano Chocolate Beverages All butter croissant
Flat white Classic Hot chocolate Cinnamon swirlCaf Latte Vanilla spice hotchocolate
Skinny blueberry muffin
Caf Mocha Starbucks signature hotchocolate
Triple Belgian Muffin
Cappuccino SandwichesCaramel Macchiato Gluten free tuna Nicoise
roll
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Espresso Free York egg mayoEspresso con panna Roasted chicken egg
mayoIced Caf Americano Bistro boxesFlavoured Latte chicken with red pesto
pastaIced Caramel Macchiato Tune with mint peaSkinny Flavoured LattePlace:
Starbucks site its stores at that place where the access of itssegmented customers are more.eg Oxford Street, Chelsea.
In order to relieve long customer lines and improve service, Starbucksgenerally opens a new store near the existing one.
The Starbucks strategy for expansion is by entering new marketswhere the opportunity exists, in UK itself there are more than 750
stores.
Sale promotion
Starbucks loyalty scheme is simple Pre-paid the card with 5and for free shots syrups and whipped cream.If you then buy enough coffee you will earn 15 stars, which will helpyou get a voucher for a free coffee home delivery.
People: It provides dental, vision and medical coverage to all employees, even
including part-timers. . The purpose is to instill in its partners a sense of purpose, loyalty,
enthusiasm and commitment.
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Physical Evidence:
Logo, Colors, Images: In a lot of ways, shes a muse always inspiring and pursuing us
ahead.
She is a storyteller who is carrying Starbucks, and remembering thepast.
Any other people who look at her, it means something different toeveryone.
PESTEL Analysis
Political
Rules and regulations according to the UK industry. The level of Political stability within UK. Greater public accountability
Economic
Customers buying power Local currency exchange rates Economic environment of the locations where Starbucks operates Level of taxation
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Social Consumer spend more and more money on Coffee Customers also visit to sit down and relax
Technological
Coffee machines are also available for home usage which are betterand cheap
Environmental
Rules and regulations for the Local Environmental countries producing coffee beans faces problems in the country
(natural disaster)
Environmental issues in a global level and Global warming
Legal
policies and regulations about caffeine production and consumption byhealth authorities
Trade regulations and introduction of tougher customs Industries licensing regulations
The Value System
Human Resource Management;
All employees are equal for Starbucks. Bonuses like health care coverage, free coffees are given to its
employes. Employees of Starbucks undergoes a 24 hour training period before
dealing with customers.
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Competitor Analysis of Starbucks
The following are the share of companies in the coffee industry in UK.35% Starbucks
20% Local Coffee Outlets14% Internet Cyber Cafes13% Caffe Nero10% Costa Coffee8% Coffee Republic.
EXPENSIVE
STARBUCKS
COSTA COFFEELOW HIGH QUALITY
QUALITYCAF NERO
COFFEE REPUBLIC
INDEPENDENT COFFEE SHOPS
INEXPENSIVE
Comparison and Contrast INDIA VS UK
1. Brand Image
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Caf coffee Day in India has a good brand image in its target market, who ismiddle class and strong youth orientation. The mentality of this targetmarket is value for money and thus there is a good brand Image in theireyes, unlike the upper middle class and the elite who does not have apositive brand image about the company. Caf coffee days brand loyalty is
weak and not up to the mark. The brand doesnt project a clear image tocustomers about what Caf Coffee Day is all about
Starbucks UK has a very good brand image in the market as it caters to thepublic who can sit with a great cup of coffee with great ambience withleisure.
2.Value for money Proposition
Caf coffee day leads the table in this proposition as there prices starts from
RS 17 which is not even a pound (0.20 pence).The mentality of large part ofIndia is getting the value for the money .Starbucks do not compromise on the quality of coffee in relation to its priceand this is the reason for Starbucks success.
3. Ambience and Dcor
In Starbucks, this is what the customers likes the most. They just sit with acup of great quality coffee with leisure with a soothing environment and justrelax.
Caf Coffee Days outlets are very loud and youth oriented with the use ofbright shades of Red and yellow.
4. Highly rated taste and Quality of product.
Starbucks has the highly rated taste and quality of product and the best partis that it has same prices with its competitors such as Caf Nero CostaCoffee etc. Thus it comparatively represents a combination of features, high
quality and excellent service
Caf Coffee Day has an average rating for the quality but as far as taste isconcerned it is that they have not performed up to the expectations ofgeneral public.
5. Inefficient human resources:
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Caf Coffee Days staff has only an average rating for their behavior andservice. Motivation and personal skills are laid emphases upon. Althoughthey are high on Corporate Social Responsibility by employing handicappedpeople
Starbucks manages its staff very well and thats the reason that theemployment turnover is very less in the company. It provides Medical,dental, and vision coverage to its employees even part timers to bring in thecommitment, enthusiasm and loyalty, what it benefits out of this is reducedrecruiting and training costs.
6. Advertisements
The things which we can see in the CCD stores are lots of advertisements
and promotions all over just seems like it has been hijacked by just theadvertising, just the opposite of Starbucks UK.
Starbucks do not advertise, infect it only picks one or two charity or events
that reaches the community it serves.
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Recommendations for India
The Coffee Coffee Day made extremely well for the moment to projectitself like accessible youth directed brand. But there are alwayscertain areas where the brand must be much stronger.
My strong recommendation for the Caf Coffee Day is that, they mustrehabilitate the decoration, where that uselesspublicity/advertisements occurs.
Caf Coffee Day would do better if it uses clever collaborations, andnot just printed posters and advertisements all around.
Recommendations for Starbucks for UK
Starbucks in UK is at such a position that it can sustain the downfall oftaking the risk. While the customers are waiting for the order, aninteresting non elevator type of music can be played, to give a moresoothing effect.
Between the order taking counter and the delivery desk or somewherean LED television can be put up to advertise products with lessdemand.
Exclusively new range of products can be offered in the market, t hecompany must not stop innovating and taking risks. Starbucks shouldinnovate such items that can be had with any drink, any time in a daythat will not only make current customers happy but draw in newmore customers as well.
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BIBLIOGRAPHY
http://starbucks.co.uk/
http://www.studymode.com/subjects/starbucks-4-p's-of-marketing-page1.html
http://www.managementparadise.com/forums/principles-management-p-o-m/208074-swot-analysis-starbucks-corporation.html
Book Setting up and managing your own coffee bar by JohnRichardson
http://www.marketing91.com/swot-cafe-coffee-day/
http://www.marketing91.com/marketing-mix-cafe-coffee-day/
http://www.cafecoffeeday.com
Weekly Magzine The World February 14 2013