TATA Starbucks Coffee Kiosk

Harshita Shah D 52 Batch 2013-15

Coffee Kiosk Market

Estimated size of organised coffee retail market in India 200mn and expanding annually at the rate of 14 to 20 % Estimated number of stores by 2015 is 5000 Coffee chains are eyeing newer territories, like highways, and busy premises such as hospitals and college campuses; experimenting with scalable new formats including kiosks and coffee carts; firming up on supply chains; refining and expanding menus, and also elevating the overall experience quotient via exclusive coffee blends and menu, unique crockery, digital interactivity experience, and contemporary store designs. Coffee Kiosk Market in India : CCD has 900 kiosks in 170 cities and towns (which is 75 per cent of the total number of stores in India's branded coffee retailing market) Branded players in the Coffee kiosk market: Caf Nescafe, Costa Coffee, Gloria Jeans , Barista Lavazza Huge market share belongs to unorganized sector International Players: 2 Starbucks Coffee Kiosk, Seattles Best coffee kiosk, Costa Coffee, Gloria Jeans etc.

Porters Five Analysis

Industry Rivalry
(High)

Specialty Coffee Retailers Coffee Day Xpress, Nescafe Kiosks, Costa Coffee, Barista Lavazza Food chains offering coffee Mconalds, Burger King Unorganized Retail

Threat of Substitutes (High) Buyer Power

(High)

Tea, cola, juices, energy drinks Low disposable income of the target group ( students and young professionals) Availability of substitutes and abundance of offers Minimal Government restrictions Cost of setting up kiosks is less TATA Starbucks has coffee sourcing and roasting agreement with Tata Coffee to provide coffee beans to its outlets in India

Barriers to entry
(High)

Supplier Power
(Low)

Target Market segmentation

Geographic: Demographics: Economy class: Psychographic: Behavioral: Institutions, Malls, Parks, Supermarkets, Airport, Railway station Youth, Students and Professionals Middle, Upper middle class and Upper class People looking for quick service time, high hygiene standards, freshness and quality of delivery Commuters - people travelling for work or leisure, shoppers Captive Consumers - people who are searching for coffee refreshments in office parks, manufacturing facilities, colleges, city centres Competitors

Foreign brands: National Chains:

Local Outlets:
4

Costa Coffee, Gloria Jeans Coffee Day Xpress, Caf coffee day, Coffee Bean & Tea Leaf, The Chocolate Room, and Caf Nescafe
Coffee hut, Perks and Brews, Coffee Stop

SWOT ANALYSIS
Strengths Strong brand awareness Low cost High brand visibility in Kiosks High food Quality Quick service Opportunities Huge market size ( Pune Educational and Corporate hub) Growing middle class and income of population Caf and Coffee sales to increase by 25% in the next five years Threats Coffee is the secondary beverage in India Established competition (unorganized sector, Snacks and juice counters Obesity and obesity related problems in India Low per capita Income

Weakness Lack of presence in Pune Expensive Pricing Limited food variety in kiosk Absence of seating facilities (in the planned kiosk)

Business Overview
TATA Starbucks kiosks are introduced in Pune with concept of fast, hygienic, and convenient-to-eat food to consumers on the go at affordable prices. Workplace environments, universities and hospitals can provide quality coffee whilst generating significant revenue from underutilised areas in reception areas, libraries, waiting rooms and retail shops. Proposed Location Hinjewadi IT park, Senapati Bapat Road , Hadapsar , Pheonix Market city, Symbiosis Lavale Campus Rs 500, 000 for setting up kiosk and additional training cost 75 to 150 square feet 250- 300 consumers To open 5 kiosks at strategic locations in Pune having high traffic and high visibility providing fast service to consumers on the go at affordable prices.

Proposed Cost Proposed area per Kiosk Expected average footfall per day Strategy

Bibliography
http://businesstoday.intoday.in/story/competition-

in-coffee-retailing-grows/1/17520.html http://articles.economictimes.indiatimes.com/2012 -10-25/news/34729911_1_starbucks-howardschultz-tatas/3 http://research-methodology.net/starbucksporters-five-forces-analysis/ http://www.franchiseindia.com/articles/tag/Coffeekiosk-franchise