With reference to the case study “Coffee Parlours in India-Hotting Up”, you will take on the “Barista Coffee” featured. You have to do an evaluation of how well they think their company (compared to the other two companies) is equipped to resist the increased competition that will occur when Starbucks enter the market. You should consider both marketing and operations issues in their analysis of the three companies.
Just because Qwiky’s and to a lesser extent Café Coffee Day have been opened for some time and Starbucks will be opening shortly it does not mean that Barista Coffees has to close and that everybody has to lose their job or even start to panic. There is a huge market of potential coffee drinkers in India and plenty of scope for expansion. Such numbers of potential customers gives the companies the alternatives of going for lower priced and lower quality to attract the customers with little amounts of money to spend or to concentrate on higher priced yet higher quality coffees for consumers with greater disposable income. To make this statement more than just lame fighting talk will involve developing strategies to overcome the perceived as well as the actual advantages that Starbucks and Qwiky’s hold over Barista Coffee. To be continually successful Barista Coffee needs to concentrate on what it does best rather than worry about Starbucks, Qwiky and Cafe Coffee Day do. In other words Barista Coffee should stick to the image it was always trying to bring to the affluent young Indians that were the company’s most loyal customers. Barista Coffee should not attempt to be like any American coffee shop that you could find in New York or Los Angeles or any of their franchises across the globe. That is because it could not hope to compete with Starbucks on that score. Instead it should make young Indians feel that they in Italy rather India, in Milan rather than Bombay. It showed an emphasis that nobody else outside of Italy does Mochas and Lattes so well.
Barista Coffee was originally based on creating an atmosphere conducive for its customers to enjoy a great variety of coffees and pay a little extra for the privilege of doing so. Getting the atmosphere right allowed for fairly quick expansion across India, backed up strongly with well-trained and motivated staff. Barista Coffee also liked to pride itself on its well-organised supplies; good promotions and staff are wasted if there is no coffee to drink. Part of the secret of Barista Coffee’s original success had been in persuading Indians to switch from been tea drinkers into becoming regular drinkers at its coffee bars. India itself had been a net exporter of coffee for decades and had a history of coffee production stretching back centuries. Barista Coffee had not started the trend towards coffee drinking at coffee shops and coffee bars but it was set up to make profits out of the great potential offered by the Indian market. Barista Coffee offered high quality Indian and foreign coffee beans with newly developed different varieties to give their customers the finest tasting Italian inspired blends. Barista Coffee aimed towards giving its customers a colourful yet relaxed ambience. Barista Coffee bars were a place to relax and unwind with the finest ordinary and exotic coffees being the central experience offered by the company. Sound marketing strategy was combined by equally business deals, sticking to such strong points could hold the key to surviving if not overcoming the threat posed by its rivals in the coffee bar business area. Barista Coffee tried to ensure its success by good business deals such as making its main supplier Tata Coffee yet also by such promotions such as Coffee of the Month that was successful in raising sales of the new or more exotic blends. Opening smaller coffee bars and kiosks gives more people the chance to sample Barista Coffee and allows the brand to be known and enjoyed across India. It makes sound marketing and business sense to expand the number of Barista Coffee bars prior to the arrival of Starbucks in an effort to expand the number of loyal Barista Coffee customers before there are more rivals to take away their custom. Barista Coffee intended to expand rather than contract to counter Starbucks move into India and to take a leaf out of Starbucks by opening branches globally. On the other hand it makes less sense to open Barista Coffee bars and shops after Starbucks have opened new bars in the same area as potential customers may have already been lost to Starbucks. Café Coffee Day had lost ground to Barista Coffee and Qwiky because it failed to take full advantage of starting the coffee bar trend in India. Barista Coffee and Qwiky were tempted to start their coffee bar businesses in India with different target groups as part of their marketing and business strategies. Starbucks can learn from Barista Coffee and Qwiky experience in India whilst having its much greater resources available to make sure it is a success. Starbucks also has more capacity to invest in the operation systems and the marketing campaigns to ensure success. Barista Coffee does have the advantage of local knowledge and committed local staff with incentives to work hard and ensure that the company is successful. The opening of smaller bars and kiosks allows the expansion of sales without the same level of expenditure on furnishings and fittings used in the larger flagship stores. Without such expenditure it means that a smaller range of high quality coffees can be sold to workers at a lower price than the customers of the main bars can afford. Drinks vending machines are an alternative source of increasing sales and market share without the expense of opening new coffee bars and saving the cost of hiring, training and paying extra staff. Vending machines can give people the taste for the coffee and maybe tempt them into buying coffee from the coffee bars and sampling the relaxed atmosphere that attracts the more affluent customers to be regular customers. Barista Coffee can adapt to meet the competition from Starbucks whilst having to lower its prices in some of its smaller coffee bars. Qwiky would also probably be able to survive the challenge from Starbucks whilst Café Coffee Day would probably find it hardest to survive. All three companies responded to Starbucks move to India by expanding their number of branches and expecting that arrival would increase the coffee sales for all four countries.