Cafe Coffee Day: Evaluating International Market Entry Strategies

This project provides a comprehensive analysis of Cafe Coffee Day's (CCD) international market entry strategies, covering key aspects like SWOT and DESTEP analyses for Brazil, Ireland, China, Australia, and Bangladesh. It delves into Porter's Five Forces model, Ansoff Matrix, and Porter's Diamond to evaluate market attractiveness and competitive dynamics. The project explores entry modes, including franchising and joint ventures, alongside relevant costing strategies such as penetration and competitive pricing. It also outlines customer attraction strategies and utilizes the McKinsey 7S framework and Four Link Analysis to assess competitive strategies. The recommendations section offers insights for CCD's global expansion plans, emphasizing the importance of thorough market research and strategic planning. The assignment is designed to help students understand and apply business development concepts in a real-world context.

Cafe Coffee Day

Table of Content
• Introduction
• Selected destinations
• SWOT Analysis
• DESTEP Analysis
• Ansoff Matrix
• Porter's Five Forces Model
• Mode of entry and Plan B
• Porter's Diamond
• Relevant costing
• Strategies of attracting new customers
• Mc Kinsey framework
• Four link analysis
• Recommendations
• Conclusion
• References

Introduction
Cafe Coffee Day is a business that is based in Chikmagaluru which is among
the largest producer of Arabica beans in Asia and also exports the same to
various countries like US, Japan and Europe (Jana, Das and Mishra, 2015).
The company's primary objective is to provide the best possible experience to
its customers. Founded in the year 1993 and popularly referred to as CCD,
cafe coffee day continues to be a hangout spot for the youth. It has got a
presence worldwide including locations like Austria, Malaysia etc.

Selected destinations
Brazil
Ireland
China
Australia
Bangladesh

SWOT Analysis
Strengths Weaknesses Opportunities Threats
Products offered by
CCD are extremely
good in quality and
are priced at
affordable rates.
The brand does not
invest much in
promotions and as a
result, is losing its
popularity. Also,
many outlets incur
loss due to selection
of a wrong site
(Rahul and Keerthi,
2018).
The company
should introduce
new and innovative
items on its menu
and should also
market itself as a
point of informal
gatherings.
CCD faces direct
and indirect
competition from
brands like
Starbucks, Costa
Coffee etc.

DESTEP Analysis
• Brazil
Demographics CCD should have a complete understanding of the size of
population that it will serve.
Economic These factors include information about finances, characteristics as
well as trends of the market etc.
Social These factors include emerging new trends in the culture of the
country.
Technological The country has is technologically advanced and people prefer
using smart phones.
Ecological Proper locations to store all the raw material as well as the role of
the Brazilian government should be determined.
Politics The company will be involved in a lot of paperwork since Brazil is
a highly bureaucratic country.

Cont.…
• Ireland
Demographics CCD should conduct analysis of demographics of Ireland in order to
understand the factor in a better way.
Economic The country has low tax rates and a highly skilled workforce which
will be beneficial for CCD.
Social The social condition is not very good as there is a large segment of
customers that falls under poverty.
Technological The country is not as much technologically advanced as other
countries and fails to connect to a large proportion of households.
Ecological The country is ecological and if an outlet is set up here, it will attract
a lot of tourists.
Politics Ireland is a politically stable country.

Cont.…
• China
Demographics The country has a cheap labour, enhanced infrastructure ans is
politically stable.
Economic Economic challenges include fast urbanisation, high rates of
inequality as well as damages to the environment.
Social The Chinese market is huge with great opportunities for customer
products.
Technological Technology is highly advanced as a large percentage of the
population uses online services.
Ecological Fast ecological development has impacted the natural climate of the
country drastically.
Politics China is among the most powerful countries in the world.

Cont.…
• Australia
Demographics Over 78% of population consumes coffee per day, which opens a
huge market for CCD.
Economic Australia is a developed economy with GDP of A$1.89 trillion as of
2019. Its economic growth is good. People there can afford the prices
of CCD.
Social The crazy of coffee is into the people is at peak. They are enjoying
the new experiments, innovation or creativity done with coffee.
Technological With respect to technology, the county is well advance. Any advance
technology with respect to coffee industry can be available there.
Ecological People now a days has become more concern about environment.
They more prefer sustainable goods and products.
Politics The political situation in the country is very stable making the
investors feel confident in their purchase.

Cont.…
• Bangladesh
Demographics The growth for coffee in country is assumed above 7% over a pop. of
163 million people, which can set quite a strong base for CCD.
Economic The country is a developing nation and its GDP runs at an average
rate. Also the % of corruption and criminality is quite high. Therefore
the company can invest but only after secure research.
Social People there are becoming more trending with the taste of coffee and
enjoying the upcoming innovations and experiments with it.
Technological As the country is a developing nation, the technological
advancements could be very basic or limited.
Ecological There people are becoming more aware towards the environment and
prefers the sustainable goods and products.
Politics Government party is quite stable there but the transparency of
bureaucracy is limited, also the laws form are weak along with
corruption and criminality.

Ansoff Matrix
Market Penetration Product Development
The company should decrease the prices of
existing products in order to attract customers.
CCD should invest more in its research and
development in order to fulfil the needs of
existing customers significantly.
Market Development Diversification
It can start operations in an untapped market to
serve a new segment of customers.
The company can also diversify its business by
getting involved in a new business like selling
coffee equipment that is in sync with the latest
trends of the market.

Porter's Five Forces Model
• Brazil
Threat of New Entrants The country is located such that the threat of new businesses
entering the country is high.
Bargaining Power of
Suppliers
Due to presence of a large number of suppliers, the
bargaining power of individual suppliers is less.
Bargaining Power of
Buyers
People in Brazil have a high power of bargaining as there
are less number of people who consume coffee
Threat of Substitutes CCD starting is business in Brazil will be new to the
country, thus this force is high.
Competitive Rivalry There are only few such business in the country which
makes this force low.