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Cafe Coffee Day Essay

741 words - 3 pages

To brace itself for the potential impact that the entrance of Starbucks will bring, CCD should have a series of responsive measure to tackle the challenges that the entrance of Starbucks will bring. We have proposed two different categories of measures that CCD should implement: corrective measures which are to deal with the immediate threats that Starbucks will bring and preventive measures which are to address the future threats of Starbucks.

We will first look at the corrective measures which CCD should implement to deal with the immediate threat that Starbucks is bringing. As mentioned previously, Starbucks which offers premium coffee to a group of price insensitive customers, is ...view middle of the document...

The second corrective measure would be to leverage on vertical differentiation which refers to differentiation based on higher and lower quality, to raise its perceived benefits and reduce cost. To increase its perceived benefits to the consumers so that CCD's products would be seen to have a higher quality, CCD could perhaps employ professional cuppers and barista who have the expertise to introduce new coffee drinks by constantly experimenting with the coffee beans and roasting temperatures. This would help to fill the product gap in CCD current product offerings and with more flavours available, customers would be able to find a coffee drink that would best suit their preferences. For the cost, CCD could perhaps raise its productivity so that more higher coffee beans can be produced with the same amount of resources and in the same amount of time. This will move CCD one step closer towards having a sustainable dual advantage over Starbucks in the premium coffee landscape.

Now we will look at the preventive measures that CCD should have to deal with the future threats that Starbucks will bring. Given that CCD pioneered the growing cafe culture in India, it has an early mover advantage which gives it an over 60% share of the...

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