Coffee Wars in India Essay Example

The coffee market in India has perceived a notable demographic and economic shift. Initially, this nation was famous for its customary traditional tea consumption, but it is evident that the number of coffee chains outweighs the tea shops in the Indian market today, and consumers in large numbers now prefer coffee to tea. Consumption of the coffee beverage has been a spectacle, particularly in Southern India. Currently, the coffee plantation is in large scale in Karnataka, Nadu, and Tamil, and is being consumed all over India. Due to this unique process, significant firms have come up like the Cafe Coffee Day (CCD), that initiated the idea of coffee in 1996 in India (Yoffie and Bijlani 2). CCD is the leading specialist coffee chain in the country, having over 60% of the market share (Yoffie and Bijlani1). Irrespective of this, the CCD encounters strong competitions from Starbucks in India's coffee business. The goal and challenge are currently for the Cafe Coffee Day management to analyze and evaluate the status quo and then figure a way of beating Starbucks and maintain its top position in the growing economy. This essay attempts to discuss the coffee war in India's competitive market between its local leading company Cafe Coffee Day and the global coffee brand, Starbucks.

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The coffee market in India is rapidly rising than the tea market, but when compared to America's market, it still has much to be accomplished, meaning it is still maturing. Global brands encounter the dilemma of either venturing alone in the market or link with a local partner. India's TATA Beverages partners with Starbucks to exhibit a focus on leveraging several advantages. TATA is one of the nation's morally-driven brands; a perception passed on concerning Starbucks India as well (Yoffie and Bijlani11). It offers scope for regressive connections, and its Indian partner generates the coffee beans in Karnataka. Since India produces coffee beans in a few regions, the alternative source was importing the seeds although this could significantly hike the cost of input. TATA's coffee plant in Karnataka also supplies the coffee beans to Starbucks' internationally, generating mutual collaborations.

By the end of 2013, the CCD organization had a significantcollapse of being uncompetitive to withstand its rank as the leading coffee brand in India. The CCD external surrounding has been evolving significantly due to the sudden upsurge in the expectation levels from the middle class and the antagonistic entry of the global dominant coffee brands such as Starbucks (Yoffie and Bijlani5). For the Cafe Coffee, there is a clear line between focusing the youth and the affluent group. The CCD competitive change in planning from the differential leadership approach to the cost leadership tactic has managed to provide it with an exceptional gain over cost. By generating a premium brand for the wealthy group separate from other brands, the firm will tap into striking sectors without losing their high spot in the youth groups. This independent brand will permit all efforts motivated toward branding to focus successfully on competing with their opponents without fading out their image in the curious minds of the youth. The decision based on the slight alteration of the development is anonymous since it is quite conservative in the firm's competitiveness. The stated perspective does not in any way target the prosperous group of the economy, and this offers Starbucks with an invitation to gain high profits from this group, hence, putting extra pressure on the Cafe Coffee Day. The other option of correcting the course is also rejected since it will affect the youth's development. The decision makes the position of the firm to fit in between the youth group as well as the effluents, and this will have the effect of giving additional inconsistent and conflicting messages to the clients, thus creating a confusion concerning the brand. The option of customer and staff satisfaction and the budget have a lower significance while assessing the choices. These decisions meet the criteria and are hence appropriate for making the firm very competitive.

Even though the company encounters stiff rivalry from the global powerhouse in the coffee industry such as Starbucks, several options can be implemented to aid in sustaining the company's growth. The preferred choices will significantly enable the company to adopt a strategy for both the advancement of the affluent and youth groups. The new set of the premium brand will permit the company to compete with the global brands. The growth's momentum in the young ones will keep rolling through the firm's brand. Cafe Coffee day also needs to generate a unique marketing proposition that is, making services and products that offers something that cannot be provided by any other firm. This proposal is exclusive in its plan, and they attract a particular market sector that they would approach them for their exceptional service. If all the preferred options are considered, the company will experience a favorable competing environment. Nevertheless, CCD seems to be on the right path with its more than 1000 outlets whose majority of the customers are the youth; it has excellent brand visibility and brand name, it also has excellent service and ambiance (Yoffie and Bijlani3).

Starbucks has articulated aggressive extension strategy in India by aiming the demographic factors in its marketing plan. It observes good citizenship and valuable practices to motivate its stakeholders. The firm is focused on helping in the creation of a better future for the farmers, the Indian community, and coffee. Generally, Starbucks has turned out to be a very efficient management firm (Yoffie and Bijlani9). They are useful in communicating with their stakeholders. Their success can be attributed to their view of the external environment. The organization is also good at strategizing their moves.

Additionally, they also value the feedback, comments, and suggestions from its consumers, and this eventually raises the value of the management process, since it provides opportunities for stakeholders to participate and make improved programs and strategies. Even with its entry, good management, and good relations in the Indian market, Starbucks might not have a smooth ride there like in China. Therefore, it has to tread well for it to be successful in the Indian market.

Conclusion

In conclusion, Cafe Coffee Day, the most affordable and recognizable coffee chain in India, in its attempt to be competitive would aim at providing a particular setting which would be different from all the other competitors in the Indian coffee market. The firm was active until the aggressive Starbucks entry into the Indian economy. Starbucks works jointly with TATA which is a local coffee company in India to enhance its growth in the nation's economy. The CDC management ought to evaluate the level and degree of rivalry from Starbucks. While Cafe Coffee Day is the leading performer in India, Starbucks is a dominant and giant player globally. Defeating Starbucks in India's coffee market is CCD's primary challenge. The management has to assess and evaluate how to best deal with Starbucks entrance into the market.

Works Cited

Yoffie, David B., and Tanya Bijlani. "Coffee Wars in India: Cafe Coffee Day Takes on the Global Brands." (2013).