OPERATIONS MANAGEMENT

ASSIGNMENT - I

Submitted to:-

Prof. Rajeev A

Group number- D8
Yash Mahajan P42224
Shrey Agrawal P42217
Dhrumil Rajendra Shah P42182
Vikas Kalki P42227
Gokul Krishna KG P42184

INSTITUTE OF RURAL MANAGEMENT ANAND

20th February 2022
INTRODUCTION

Café Coffee Day is an Indian multinational chain of coffeehouses headquartered in Bengaluru,

Karnataka. Cafe Coffee Day is more than just another coffee shop for the people of India. It's more
of a deliberately cultivated societal trend. Because of its tranquil ambience and ample amenities, it is
one of the most popular hangout areas for young people. The first Cafe Coffee Day branch debuted
on July 11, 1996, in Bangalore, Karnataka, with the tagline "A lot can happen over a cup of
coffee." It quickly grew across India, with new locations opening in a variety of places, and by 2016,
there were over 2000 cafes operational across the country.

HISTORY

V. G. Siddhartha started the café chain in 1996 when he incorporated Coffee Day Global, which is
the parent of the Coffee Day chain. The first CCD outlet was set up on July 11, 1996, at Brigade
Road, Bangalore, Karnataka. It rapidly expanded to other cities in India, with more than 1,000 cafés
open across the nation by 2011.
In 2010, it was announced that a consortium led by Kohlberg Kravis Roberts would invest ₹1,000
crore in Coffee Day Resorts, owned by the company. The same year, the logo was changed to the
current logo, which the company stated was to showcase the chain as a place to talk. This was done
with major changes in the layout of the stores, including the addition of lounges and a total revamp
of the interiors.
The company is vertically integrated as per the strategy to cut costs: from owning the plantations to
growing the coffee, making the coffee machines and making the furniture for the outlets.

MISSION

Café Coffee Day mission statement is “To be the best Cafe chain by offering a world class coffee
experience at affordable prices.”

VISION

Cafe Coffee Day's vision is to become an 'experience beyond a cup of coffee'.

INNOVATION AND EXPANSION

CCD was made feasible by the vast array of food and beverages available. Moreover, CCD's bold
movements and rapid expansion into India's level 2 cities and other remote locations were among
the winning strategies that helped CCD stay ahead of competitors such as Starbucks and Barista.

Coffee Day Fresh 'n' Ground, Coffee Day Square, Coffee Day Resorts, Coffee Day Beverages, and
other subsidiaries have enabled the company to meet client needs while also staying ahead of the
competition.
CCD's regular participation on Twitter, Facebook, and Instagram also helped to engage its
customers. Cafe Coffee Day had also brought in the character, Beano, to connect with the purchasers
in 2016.

KEY STRATEGIES

Affordability: Cafe Coffee Day is all about supplying fine in pleasant meals & beverage choices at a
low-price without compromising on quality. They agree with offering lower priced luxurious
choices at a terrific value.
The same affordability strategy is today getting adopted by the teahouses like Chai Sutta Bar and
MBA Chaiwala and is gaining massive success through the same. However, Cafe Coffee Day was
the first among the coffeehouses in India to adopt this strategy and paved the way for future
businesses to gain success through its adoption.

Accessibility: Cafe Coffee Day believes that there is a want among the youth to find a cool spot
where they can easily hang out with their friends. Also this want is spread across cities and for the
same reason. Cafe Coffee Day enjoys widespread penetration in near around 200 cities of India.
They are aware of the fact that even the best products and services fail when their accessibility levels
for the general public are low and hence much emphasis is placed on the strategy of Accessibility.

Amazing Value: The Company affords early life an assembly area the place they can unwind,
loosen up and rejuvenate with first-rate meals and beverage offerings.
Thus CCD has consistently focussed in providing an amazing value proposition to its customers by
not only offering the best quality products and services but also keeping the affordability levels of
its customers in mind.

Details of different processes, activities and tasks that help firms to achieve the proposed
strategy

Functional Level Strategies:-

Figure 1
The company has the highest number of outlets among all the coffee houses in India. Having close to
1100 stores in 2018, although the number of outlets declined rapidly after the death of its owner, the
company is still leading the charts with nearly 550 stores in 2021. It also has one of the highest
brand equity among the youth. The prices of the products and services are nominal and within
the affordability range of quite a large segment of coffee lovers. The company is also focussing
on the strategy of Vertical Integration where instead of relying on external contractors or suppliers,
the company is taking direct responsibility of various phases of the manufacturing process. The
strategy of Vertical Integration is also helping the company to achieve cost cutting operations
thereby contributing to its Focussed Cost Leadership strategy.

Figure 2

Business Level Strategy:-

The company is currently following the Focussed cost leadership strategy where it is targeting to
provide low priced products to a certain group of customers. Because price was one of the factors
that served as a hindrance not only for the students but even for working professionals. So for
targeting the segment with income on the lower side, CCD adopted focussed cost leadership
strategy. By this way they were able to penetrate into the smaller cities and town than sticking to the
niche markets.
 Figure 3

The company has also adopted Localization strategy where it is altering the design of its coffee
stores as per the coffee culture of the local culture prevailing there. The localization strategy also
allows the company to provide the suitable ambience to the local customers as per their preferences
that leads to customer satisfaction leading to customer attraction and retention in the long run.
Understanding more of the local culture and the preferences of the people of that locality helped
them get an idea of the tastes and preference of the region. Thereby suitable ambience and
customized themes are setup into the CCD stores specifically to each region.

Figure 4
Marketing Strategy:-

Coffee Day segments its choices throughout one of a kind conceptual retailers based totally on
demographic elements and psychographics elements due to the reality that demographically the
wants & wishes to exchange to which on hand sources additionally performs a most important role.
It is targeting middle aged youth and the higher income segment of students and working
professionals.
CCD has also located itself primarily based on an aggregate of positioning techniques i.e. product
attribute & high-quality /value basis.

Figure 5

Cafe coffee day's marketing mix consists of four components:-

1. Price

If a cafe understands that its consumers are between the ages of 15 and 24, it will try to keep the
prices of its beverages as low as possible.
Café coffee day's pricing strategy aims to meet the needs of its clients. It ranges from 45 to 80 cents
for a coffee cup.
CCD's pricing policy has seen minimal alterations since the day it debuted its Bangalore shop.
Taxes imposed by the Indian government have influenced pricing policies more than anything else.
2. Place

There is no doubt that place is one of the driving factors in the success achieved by the Indian coffee
retail businesses. Cafe Coffee Day has tried to open outlets in almost all the places where it finds
some business opportunities. As of 2021, the company has close to 550 outlets in nearly 200 cities.

The majority of the outlets are located in places like law colleges, petrol pumps, Entertainment
centres, and High Streets. The north Indian population can easily relate to the fact that it is a very
ordinary thing to find multiple Cafe Coffee Day outlets on the same metro station in Delhi.

3. Promotion

Friends’ characters were frequently seen visiting the coffee shop as part of a promotional drive for a
famous Zee TV show called Friends. It also worked on a show called Get Gorgeous with Channel
V. Other next-generation brands, such as Scooty, Levis, and Airtel, collaborated with Cafe Coffee
Day (friends).
Café Coffee Day employs a special 'Café Citizen Card' to reward its clients.
It's a loyalty programme designed to attract new clients and keep existing ones.

4. Product

Café Coffee Day's product mix includes a diverse selection of items aimed mostly at Indian coffee
and snack enthusiasts. Food and coffee, for example, have a distinct Indian flavour.

Most foods, such as samosas, biryani, masala sandwiches, and tikka sandwiches, have been adapted
to appeal to Indian palates. As a result, they've been attempting to combine traditional coffee with
Indian flavour. In the summer, frappe, which combines coffee and ice cream, is the most popular
item. It is popular among the youth. It’s a cappuccino in the winter.

T-shirts, hats, and other wacky items are part of their merchandising.

Process in the Marketing mix of Cafe coffee day:-

Previously, CCD's ordering and delivery process was self-service. But now in most of its coffee
shops the waiter comes and takes away the order and delivers the order on the table

Physical evidence in Cafe coffee day's marketing mix:-

A) Logo, image, and brand: Café Coffee Day's logo features vivid red and green colors.
Leadership, vitality, and a taste for coffee are all represented by the color red. The GREEN stroke
harkens back to their coffee farms. Café is prominently included in the design to indicate that Café
Coffee Day was the first to introduce the café concept to India in 1996. The letters appear to have
congealed out of a liquid in the font.
B) Architecture and Decor: Interiors are predominantly made of wood and granite, with vibrant
colours such as lime green, yellow, orange, and purple dominating.

C) Literature: Café Coffee Day's literature reflects the company's youthful image.
Themes, posters, and pamphlets are all made to appeal to the young and the young at heart.

People in the Cafe Coffee Day Marketing Mix:-

"People are hired for what they know, but fired for how they behave", Café Coffee Day
employees believe. The importance of motivation and personal ability is emphasized.
Their personnel treat customers like friends, but they are also aware of worldwide standards of
sanitation, cleanliness, and personal grooming.

Distribution strategy:-

Figure 6

Café Coffee grew into India’s largest coffee chain and operated more 1,752 outlets across some 243
cities in the country during 2018/19.Cafe Coffee Day has also expanded outside India with its
outlets in Austria (Vienna), Czech Republic, Dubai, Malaysia & Cairo, Egypt. However,
underlining how the coffee chain has been diminished, CDEL revealed its store footprint had
shrunk 67% to 572 stores across 165 cities.
They have a growth target of 60% in Tier I cities, 30% in Tier II cities and 10% in Tier III
cities. Decentralized distribution strategy is opted in cafe coffee day so that they can expand
quickly. Started off as a centralized unit with single unit at chikamngalur has a capacity of 70000
tonnes per annum. Regional wise distribution is mainly implemented through two ways, in smaller
towns they are more targeting on expansion, whereas in metros and bigger cities new cafe formats
like lounge and square are introduced as a distribution strategy. Cafe coffee day stores are for
majority of the segments where they can enjoy coffee, food and spend time with friends and
family. Whereas lounges are for niche segments. These are premium outlets aimed at the coffee
enthusiasts who love to pay premium for a great cup of coffee. Square outlets sell variety of single
origin coffee from various countries which produce them. Its menu is also wider and contains a
variety of cuisines.

ACTIVITY MAP

STRATEGY MAP CAFÉ COFFEE DAY

The strategy map is a representation of an organization's objectives and the relationship among
them. There are 18 strategic objectives for Café Coffee Day, which are organized into four
perspectives.

1. Finance
The two levers for the financial strategy are revenue growth and productivity. Focused cost-
leadership strategies help companies grow their revenue by offering low prices to certain groups of
customers and by increasing accessibility will help to expand the sales.
To achieve operational excellence, productivity strategies strive to reduce direct and indirect costs by
standardizing products and improving margins.
2. Customer
CCD customer value proposition is driven by three differentiators: operational excellence, cost
leadership, and accessibility. CCD ensure a quality relationship with its customers by offering a low
priced product along with excellent service and comprehensive solutions.
Accessibility will provide large customer base and targeted customers will be easily identified.
Currently, there are 1450 cafes in 200 cities. And providing home delivery services is next step to
further diversify the customer at any corner of the city.
Across different geographic regions, productivity strategies focus on standardized features,
functionality, and similar tastes for targeted customer base.

3. Internal Business Process

Once an organization has a clear picture of its customer and financial perspectives, it can then
determine how best it can differentiate its value proposition for customers and improve productivity
to achieve its financial objectives.
A strong supply chain and vertical integration, along with clear segmentation, lead to revenue
growth for the company. CCD stores & kiosks, lounges, and CCD squares are some of the strategies
to improve accessibility.
To maximize operational efficiency, the use of common sets of processes and mechanization,
combined with specialized training sessions for employees, across different regions is important.

4. Organizational Capacity
Organizational Capacity is at the heart of any strategy map, because they define the core
competencies and skills, technologies, and corporate culture required to support an organization's
goals.