Coffee Wars In India Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Coffee Wars In India Case Study Help

Rivalry Competition

The threat of competition is high, which could impose a high challenging situation for CCD with the entry of Starbucks - a largest coffee seller worldwide.The two coffee brands, Bru and Nescafe have already captured the Indian coffee market by a wide margin. Along with this, the Indian coffee market has a number of coffee chains across the country, which includes Dunkin Donuts, Costa Coffee, Lavazza, Gloria Jeans and approximately 2,300 more coffee shops.

Threat of Substitute Product

The threat of substitute product is high because historically India’s economy is filled by the tea lovers. In India, tea could be purchasedeasily from everywhere by spending just few rupeesA research conducted in 2011 represented that the Indian people consume tea more than 10 times as compared to coffee.

Threat of New Entrants

The threat of new entrantsis high because it could be seen that the fresh coffee sales volume in India hasgrown by approximately 40% from 2005 to 2011. The new entrants in the Indiancoffee market includes:Dunkin Donuts Costa Coffee, Lavazza, Gloria Jeans and an approximate of 2,300 coffee shops engaged inproviding fresh coffee across the country, in 2011.

Alternative Solutions

After analyzing the external and internal prevailing environment of the company, following strategic alternative solutions have been proposedfor the company to cope up with the potential challenges. (See appendix 4)

Alternative Solution: 1- Expand Customer Base, Cost leadership

The first alternative solution suggests that CCD should adopt an aggressive strategy to target new customers. It should expand its customer base by targeting smaller cities or rural areas. In addition to this, India is a developing country and has number of villages and small areas. Thus, targeting these locations with the help of its cost leadership would prove to be a better option in order to maximize its revenues. Furthermore, it would be difficult for Starbucks to approach this target market.

Alternative Solution: 2- Expand Customer Base, Elite Class

The second alternative solution suggests that CCD should adopt an aggressive strategy to target new customers. It should expand its customer base by targeting elite class customers.This would be considered as the best option, because it would enable CCD to capture high market share in those markets, where Starbucksis expected toapproach.

Alternative Solution: 3- Advance training process

CCD’s biggest weak point was its low-quality services by its employees. Thus, it would be a better option to provide advance high service training to the employees. Employees training sessions should be conducted on weekly basis. It would not onlyhelp the company to develop strong long-term relationship with customers by providing them high quality services and product, butwould also enable it to develop healthy relationship with its employees.

Recommendations

It is recommended that the company should provide high quality training to its employees because it would not require massive investment and efforts. CCD’s biggest weak point is its low-quality services by its employees. Thus, it would be a better option to provide an advance high service training to the employees. It would not only help the company to develop strong long-term relationship with customers by providing them high quality services and product, but so would enable the company to develop a healthy relationship with its employees.

Conclusion

It is concluded that CCD became India’s leading coffee brand along by acquiring 60% of market share in 2013. The company was profitable and had earned a revenue of $200 million in March, 2013. On the other hand, Starbucks, a leading coffee brand worldwide, entered in India by making a joint venture with Tata Group. Siddhartha has to consider the possible strategic proactive approach, which could minimize the risk of losing market share because of Starbucks’ entry in the Indian market. It is recommended that the company should provide high quality training to its employees, because it would not require massive investment and efforts.............................

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