Cafe Coffee Day (CCD) successfully created a coffee revolution through changing India’s ten times more tea drinkers to young coffeeloving social outlets. V.G. Siddhartha, the chairman and CEO focused on targeting India’s youth, becoming a market leader, building operational efficiency, and segmenting the market. His success was compromised with the entrance of Starbucks to the Indian coffee market. Starbucks offered customer service that CCD struggled with and offered a new and exciting brand to younger customers. However, the 50% higher prices at Starbucks was a turnoff to younger customers who were very loyal the the CCD brand. The strategic issue of this case is how Cafe Coffee Day should manage its business strategy in order to compete with Starbucks entering the Indian coffee market. II.
Porter’s five forces of industry competition serve as an excellent tool for examining the industrylevel competitive environment for CCD. Threat of new entrants is relatively high as they have been faced by Starbucks, Costa, Lavazza, and more. They are however the market leaders in India and one of the largest exporters of coffee in the country.