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Group 4
International Companys India Operations
The Usual Suspects:
31 Hardik aik3! "alpesh a#lakha33 Gaura# ayak34 $isha ikam3% Shrikrishna &alekar3' &rasad &alle(ad3) Saura*h &andey3+ ,anish &a(ar3- Shreya &oo.ary
4/ Sneha &or(al
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History o0 Costa Co00ee
Bruno and Sergio Costa set up their coffee roastery inLambeth, London in 1971, supplying local caterers andcoffee shops with their slow-roasted blend mocha talia
Costa branched out to retailing coffee in 197!, whentheir first store opened in "au#hall Bridge $oad,London, %ngland
n 199&, the business was ac'uired by (hitbread and isnow a subsidiary of (hitbread Company
n )**9 Costa celebrated the opening of their 1***th
store in Cardiff, and is conse'uently the largest coffeechain in the +
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O00erin2 the 0inest co00ee Costa has a (ide ran2e o0alternati#es includin2 hot chocolate teas and in0usionsiced co00ees 0rescato
Costa has its o(n roastery and employs the only threeItalian ,aster 5oasters in the U"6 The *lend ser#ed inretail stores is kno(n as 7,ocha Italia7 and contains si8parts ara*ica *eans and one part ro*usta *eans
Costa Co00ee employs Gennaro &elliccia as the o00icialco00ee taster (ho had his ton2ue insured 0or 91/m (ith
loyd;s o0 ondon in !//-
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Its Signature Coffees Contents
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Costa Co00ee International Story
Operates in !% di00erent countries throu2hout the (orld
Currently has around 11)% stores in the U6" and another 44/ in
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Competition in U6" B Costa Co00ees home market
Source: 5oden*er2 and Tillman =ssociates U6"
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?as a(arded as the *est co00ee shop a(ard in U6" andIreland *y the
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?hy IndiaF
Or2anied retail co00ee market is (orth morethan 5s6 1/// cr6
Ay ne8t three years it (ill *e dou*led6
Co00ee chain sectors 2ro(in2 at !%@3/ on a
yoy *asis
Source:
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Gro(th in terms o0 num*ers
Increase in the no6 o0ca0es :
!//%: 33/
!//': %!/
!//): )//
!//+: -%/
!//-: 1!//
0
200
400
600
800
1000
1200
2005 2006 2007 2008 2009
NO. of Cafes
Source:
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Gro(th in terms o0 Sales
Increase in Sales: DinUS millionE
!//%: 3/
!//': 4%
!//): +/
!//+: 1!/
!//-: 1%/0
20
40
60
80
100
120
140
160
2005 2006 2007 2008 2009
Sales(in US$illion!
Source:
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Costas Competitors
Ca0 Co00ee day B -)/J ca0es 1/ re#enue 0rommerchandise sales
Aarista a#aa B !!/ outlets
Gloria Keans D=ustralian ChainE B 1! outlets in ,um*aiAan2alore and $elhi % re#enue 0rom merchandisesales
=tleast 3 international *rands alon2 (ith Star*ucks :Co00ee 5epu*licDU6"E Co00ee Clu*D=ustraliaE and Ca0Ku*ilee D,altaE lookin2 to set up outlets in India
Source: >inancial Chronicle Kan !/11
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"araeter In#ia U.$
&rice Sensiti#ity Lery Hi2h ,oderate
Occasion oods and other *e#era2es ,oderate Lery Hi2h
= Comparison *et(een the U6" and India Co00ee Tastes
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Insi2ht
Moun2 a00luent middle class like to drink co00ee
ike to di00erentiate themsel#es 0rom older
2eneration
inancial Times B Nuoted *y ,$
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Strate2ies Implemented
Took ease 5entals at Hi2h &rice6 Had to shut 1/@1!shops
&lan : >ocus only on ,etro cities a#oidin2 Tier 1 !
since Costa is an ur*an 0ormat location plays a crucialrole
e( strate2y in#ol#ed:
@ Chan2in2 the look 0eel o0 outlets @ Customisin2 menus to *etter suit Indian palate
@ Se2mentin2 strate2y 0or di00erent locations
Source B uoted *y Santhosh Unni B C
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5estructurin2
Identi0ied 4 "ey =reas:
@ =irports ,alls IT parks Hi2h streets
?ant to penetrate South India hu2e co00ee drinkin2
population : 3 ,a.or metro cities B Aan2alore ChennaiHydera*ad
Indian tastes catered :
@ &aneer tikka Chicken tikka sand(iches o00ered alon2(ithslo(@roasted Italian co00ee
@ ,o2iano B com*o o0 ,u2hlai Italian
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e( strate2y attempts to *alance @
Traditional international co00ee li2ht snack o00erin2s (itha more ro*ust 0ood menu alon2 (ith (ine *eer 0or the
0irst time
aunched ne(@a#atar 0la2ship store in e( $elhi
Introduced o00@premise *usinesses : @ settin2 up o0 kiosks at (eddin2s seminar meetin2s
5estructurin2 strate2y B a success
@ re2istered !4 2ro(th in last Nuarter o0 !//-
Source B >inancial Chronicle B Kan 1/!/1/ uoted *y Santhosh Unni B C
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Se2mentation
$emo2raphic :
Students and Moun2sters
&ro0essionals
>amilies
Income: Hi2h
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Tar2et and &ositionin2
Mouth
Students
&ro0essionals >amilies
&ositionin2: >inest Co00ee deser#es the>inest >ood
,o#in2 0rom u8ury to Con#enience
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4&s
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"er%e&tion 'a&
(ange
"ri%e
Hi2h
o(
Hi2h o(
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"orter)s *i+e *or%e
'o#el
o(
,-reat of
sustitutes
,-reat of ne/
entrants
0argaining
&o/er of
u1ers
0argaining
&o/er of
su&&liers
,edium
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India can a*sor* upto %4// ca0es accordin2 to HarishAi.oor
Costa Co00ee can e8pect intense competition as ma.or
co00ee players like Star*ucks plan to enter the market
&lans to open !%/@3// outlets *y !/14
=ims to 2ro( *y 1%@1) in the ne8t 0e( years to co#er losses(hich (ill take place (hile openin2 ne( outlets
Source B >inancial Chronicle B Kan 1/!/1/ uoted *y Santhosh Unni B Cuture 0or Costa Co00ee
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Thank Mou