Caf Coffee Day Conglomeration: ABCTCL Tag line: "A lot can happen over coffee.

" Vertical integration with 1000 acres of coffee estate and making coffee and making furniture for their outlets. Division:

Coffee Day Fresh 'n' Ground, which owns 450 coffee bean and powder retail outlets. Coffee Day Square, a high level coffee bar in Bangalore. Coffee Day Xpress, which runs 900 plus Coffee Day kiosks. Coffee Day Beverages, which runs over 14,000 vending machines. Coffee Day Exports, its exporting wing. Coffee Day Perfect, its (FMCG Packaged Coffee) division. coffee Day B2C Plant ( Coffee vending machine manufacturing in India )

STP: Segmentation: People looking to hangout and coffee lovers Target: Youth of the age 15-29 years and the middle income group Positioning: Indias favorite coffee shop for young To be a meeting place for conference To satisfy coffee lovers as CCD is known for its taste The initial logo where caf was predominantly shown to bring in the caf culture

The present logo goes with its tag line. Conversation and coffee.

SWOT: Strength: Brand name Young lovers and loyal to the brand 1000 outlets Vertical intergration thus reducing cost Ambience is a plus All produces and byproducts from the estate is fully used All divisions make a group a coffee gaint Weakness: High competition Target as youngster who always change and like to try new things, thus hard to retain the target customer Less TVC and awareness Opportunity: Introduction of cheaper coffee and new variation to keep the young attracted Open outlets in smaller town Tie up with hostel to have cafe inside Tie ups with hotels and tea shops to deliver coffee powder Preferred location for informal meeting Threat: Entry of international players like star bucks.

Hukka parlour Government commodity rate Poters Five Force: Bargain power of suppliers (low) Their suppliers for coffee is from the base Bangalore Other raw material from local market may be a problem as it differs in different locations Backward integration Bargain of buyers (high) Price comparatively lower Good ambiance and service provided Variety in menu to choose from Threat of New entries (high) Starbucks with TATA are entering into India Barista and caf mocha are improving its outlet chain Threat of substitutes (High) Coffee substitute from barista, Coffee costa, etc or even local coffee shops Tea is a substitute as India is major tea drinking country (variants in tea like ice tea, masala tea etc) Cold and hot beverages Industry rivals (High) There are competitors like Barista, Mochas, Costa Coffee There is international new entry like Star Bucks Beverage companies like (pepsi, coke will be a competition for cold coffee) 7Ps

Product: They sell coffee at the outlets There is a online shopping site for t-shirts and coffee mugs etc Coffee powder are sold in separate outlets Caf Lounge is recently introduced Price: CCD is known for its affordable prices The price starts from Rs.50 onwards From their inception there was no much of a price variation Place: Their outlets are generally located in High Street/ Family Entertainment Centers, gas stations, near Colleges etc They come up with outlets where they can find some business Outlets are franchised CCD has international presence in Karachi, Vienna and Prague. Process: Self Service However now a days waiter serves a little Flexible delivery process Online shopping includes home delivery Physical Evidence: The logo uses bright green and red color to attract the young crowd and a representation of the coffee plantation The outlet architecture is uniform with granite interiors and red cushions.

The pamphlets and posters also have vivid colors to attract the target group People: Employee trained on international levels of hygiene and cleanliness Waiters behave like friends Motivation and personal growth is emphasized Promotion: CCD is more to the consumer passion than mass media advertising CCD ties-up with companies to sponsor in competitions like Levis Liril HDFC Scooty Airtel friends Tie-up with television like The famous serial of friends shows the character hangs out in the coffee shop [V] Channel get gorgeous contest [H] History channel Associated with lots of movies like Fashion, Bas Yun Hi, Khakee, Main Hoon Na, Kyun Ho Gaya Na, Mujhse Shaadi Karoge, Lucky, Socha Na Tha, Telegu & Tamil movies Ticket sales for events like Enrique, WWE, Elton John, and Bryan Adams shows CCD commercial http://www.youtube.com/watch?v=Q-FaBUkD70k Sales promotions like Gifts Coupons

Caf Citizen card (to maintain the existing customer and attract new customers) Sugar free campaign (for the calorie conscious target group, a separate menu) Discounts

Industry Analysis: Economic Factor: Coffee outlets use the coffee from the estate itself. There are enough hot and old beverages as substitute for the coffee Their expected profit margin in 1billion in 2015 Supply and Demand: Coffee as a raw material is scares and the need for coffee is high. CCD is safe with in backward integration There is quite good competition with companies like Star Bucks, Barista, Mochas, Costa Coffee thus both price and quality are to be kept in mind. Competition: Star Bucks (world leader, brand name) Barista ( know for ambience, service) Mochas Costa Coffee

Competitors Analysis
Gloria Jenas 9% Barista 35%

CCD 52% Minerva Coffee shop 4%

Future Conditions: Planning to go international Furniture manufacturing can be branded Coffee machines is half the export cost and also the maintains cost is less thus they can diversify into this field

Risk Matrix MARKET RISK Credit Risk Frequency Impact Cost of mitigating risk Low Strategy to mitigate risk Credit risk will include Employee Supplier Customer Employee training cost is bearded and this risk Benefit of mitigating risk This will improve the good will of the company and customers will have good service from the

Low

Low

Interest Rate Risk

Medium

Moderate High

is very negligible Supplier Here its backward integration as they supply for their outlets there wont be much of a problem and the risk is very low. Customer are the young crowd who wants to hangout, also the informal meetings can be an occasion, however this TG are people who like change and new experience so either CCD keeps changing to be in trend or loose customers The amount of loan for the year 20010-11 is 1102.24 Crores

company employees will give customer delight.

Currency Risk

Medium

Extreme

High

Equity Risk

Low

Moderate Low

They can be make more profit than paying interest regularly CCD has international This will make presence in Karachi, more profit. It Vienna and Prague.Caf can be used Coffee day, in June advantages too 2010, acquired Caf like if raw Emporio, a caf chain material and from the Czech transportation Republic. cost is less in one country then they can be transported to the other country. Also setting up supply chain to reduce exchange rates will prove costlier than the import/export duities A share capital of 15.43 If this risk is

crores

Commodity Risk

Low

Low

Low

As the major ingredient is coffee there wont be much of a fluctuation in the price. The only risk in commodity may be the land, chocolate price for the outlets

Refinancing Risk

Low

Moderate Low

Liquidity Risk

Low

Low

Low

As they have competition their growth may be slower than the earlier trend. There is a risk of the interest rates being increased. However they can repay their debts and loans On liquidity their biggest assets land can be sold with profit and also the coffee is a needed plantation, so there are less chances for liquidation.

mitigated then there will be a static market for the company and thus more share holders and more money to invest. There wont be much of a price fluctuation in the prices to the customer thus the price sensitive customer will remain loyal Better financial status

Thus the liabilities can be paid and a handsome profit also can be made on liquidity

Legal Risk Political Risk Reputation Risk Volatility Risk Settlement Risk Profit Risk Systemic

Risk Operational Risk

Frequency: Low 1% (1% to 33%) Medium 50% (33% to 66%) High 99% (66% to 99%) Impact: All impacts are financial risks Low Negligible Medium Moderate High Extreme