Chapter I

Introduction to Entrepreneur

1.1 What is an entrepreneur.

Entrepreneur , is a loanword from French. It is defined as an individual who

organizes or operates a business or businesses. Credit for coining the term

entrepreneur generally goes to the French economist Jean-Baptiste Say, but in fact the

Irish-French economist Richard Cantillon defined it first in his Essai sur la Nature du

Commerce en Général, or Essay on the Nature of Trade in General, a book William

Stanley Jevons considered the "cradle of political economy" Cantillon used the term

differently. Biographer Anthony Breer noted that Cantillon saw the entrepreneur as a

risk-taker while Say considered the entrepreneur a "planner".

1.2 Definition

Cantillon defined the term as a person who pays a certain price for a product

and resells it at an uncertain price: "making decisions about obtaining and using the

resources while consequently admitting the risk of enterprise." The word first

appeared in the French dictionary entitled "Dictionnaire Universel de Commerce"

compiled by Jacques des Bruslons and published in 1723.

Successful entrepreneurs have the ability to lead a business in a positive

direction by proper planning, to adapt to changing environments and understand their

own strengths and weakness.

1.3 Objectives

Understand the role of entrepreneurs in the economy.

Identify the traits of successful entrepreneurs.

Think about whether they might want to be an entrepreneur.

Learn the ways entrepreneurs fund their businesses.

Evaluate the trade-off between risk and reward for entrepreneurs.

1.4 Qualities

See Opportunities.

Risk Taker

Accepts Responsibilities

Make Money

Independent

Own Boss

Must be a good learner

1.5 Characteristic

Creativity

Leadership

Goal orientation

Innovation

Team Building

Risk Taker

Dynamism

Problem Solver

Commitment

Chapter II

Review Literature

A.H Cole, Stated that Entrepreneurship is the purposeful activity of an

individual or group of associated individuals, undertaken to initiate, maintain

or aggrandize profit by production or distribution of economic goods or

services.

Benjamin Higgins has highlighted entrepreneurship as “ Entrepreneurship

means the function of foreseeing investment and production opportunity,

organizing and enterprise to undertake a new selecting top managers for the

day to day of an operation of an enterprise.”

B. C. Tandon , has described Entrepreneurship as the function of creating

something new, organizing and co-ordination and undertaking risk and

handling economic uncertainty

Chapter III

A Growth of a V.G. Siddhartha(CCF).

3.1 Introduction:

We all know the famous coffee shop in India, “Café Coffee Day”. Popularly

known as Coffee Day. With Asia's second-largest network of coffee estates (10,500

acres) and 11,000 small growers, Coffee Day has a rich and abundant source of

coffee. This coffee goes all over the world to clients across the USA, Europe and

Japan, making us one of the top coffee exporters in the country. A division of India's

largest coffee conglomerate, the Amalgamated Bean Coffee Trading Company

Limited (ABCTCL).

Personal life:

Siddhartha (now known V. G. Siddhartha) obtained a Masters degree in

economics from Mangalore University, Karnataka. He married the daughter of S. M.

Krishna, the former Chief Minister of Karnataka, Indian Minister for External Affairs

and Governor of Maharashtra.

3.2 Background:

After doing his Masters he joined J M Financial Services (now J M Morgan

Stanley) in Mumbai as a management trainee/intern in trading on the Indian Stock

Market under Mr. Mahendra Kampani. After two years with J M Financial Services,

when Siddhartha returned to Bangalore, his father gave him money to start a business

of his choice. Siddhartha bought a stock market card for Rs 30,000, along with a

company called Sivan Securities, which was renamed in 2000 as Way2wealth

Securities Ltd with vision to set "new standards in the retail financial services in

India". Its venture capital division came to be known as Global Technology Ventures

(GTV) as well as a site in the city in 1984 and turned it into a highly successful

investment banking and stock broking company.

3.3 Growth

Almost 15 years later, Siddhartha established a successful coffee business in

Karnataka. He grows coffee in Chikmagalur and exports about 28,000 tonnes of

coffee annually and sells another 2,000 tonnes locally for about Rs 350 million each

year. His coffee growing and trading company, Amalgamated Bean Company (ABC),

has an annual turnover of Rs 25 billion. Siddhartha now has 200 exclusive retail

outlets selling his brand of Coffee Day powder all over South India. ABC is India's

largest exporter of green coffee.He owns 12,000 acres (4047 ha) of coffee plantations.

He started his coffee trading company ABC in 1993, with a Rs 60 million turnover.

His company grew gradually. He bought an ailing coffee curing unit in Hassan for Rs 40

million and turned it around. Now, his company has a curing capacity of 75,000 tonnes,

which is the largest in the country.

He was the first entrepreneur in Karnataka to set up a cyber café in 1996 (Café Coffee

Day, a chain of youth hangout coffee parlors). Now, he has 1,407 Coffee Day Cafes in India.

Siddhartha also hopes to win the contract to take his chain to all the airports of Karnataka and

then to the rest of the country. His cyber cafes attract at least 40,000 to 50,000 visitors a

week.

Siddhartha was awarded the Entrepreneur of the year title in 2003 by The Economic

Times for "crafting a successful pan Indian brand for a commodity business and giving

Indian consumers a new lifestyle experience that is within reach of the common man".

Amalgamated Bean Coffee Trading Company Ltd. today is the largest exporter of

green coffee from India and perhaps one of the two fully integrated coffee companies of Asia,

involved in all sectors of coffee from plantations to retailing to exports. Coffee Day Group

today is the only fully integrated and the largest coffee conglomerate in India and is credited

with creating the "coffee revolution" in India - acknowledged by the Coffee Board of India

Amalgamated Bean Coffee Trading Company Ltd.. From a handful of cafés in six cites in the

first five years, Café Coffee Day has become India's largest and premier retail chain of cafes

with 1,438 cafes in 135 cities.

Other businesses:

Siddhartha also founded Global Technology Ventures Ltd. in 2000, a company

that identifies, invests and mentors Indian companies engaged in cutting edge

technologies. Currently,[when?] he also holds board seats in GTV, Mindtree, Liqwid

Krystal, Way2Wealth and Ittiam. GTV has now set up a global technology village on a

59-acre (240,000 m2)technology incubator park in Bangalore, which will provide office

space, communication links, recreational facilities and even a commercial centre. GTV

was valued by BankAm at $100 million last year,[when?] and is expected to have

doubled its valuation this year.[when?] It is poised to grow on the lines of Softbank of

Japan.

Banana exports:

He has planted banana trees on 3,000 acres (1,214 ha) and plans to export bananas.[5]

Daffco Furniture:

He owns a furniture company called The Dark Forest Furniture Company, named

after Kathale Kaad Estate (Black Forrest), his estate in Chickamagalur, which is venturing

into furniture by building a 600,000 square feet (56,000 m2) factory in Chikmagalur,

Karnataka, which will use timber from his coffee plantations in India and a rainforest in

Guyana.It initially plans to supply furniture to Cafe Coffee Day outlets. However, the

construction of the facility is yet to begin.

Logistics:

A majority stake in SICAL Logistics was purchased by him. It has acquired coal

mines in New Jersey. SICAL will become one of the multibagger in coming days as per

his view.

3.4 Awards:

The Economic Times – Brand Equity survey 2008

India’s most trusted brands – ranked No. 2 in the ‘Food Services‘+ segment

CCD ranked as No. 31 in the top 50 service brands

"Best Coffee Bar" award from Times Food Guide 2007 – New Delhi

"Best Coffee Shop" award Times Food Guide 2007 – Mumbai

Awaaz Consumer Awards 2006 – Best Coffee Shop Brand

V G Siddhartha was voted as the "Entrepreneur of the Year" by Economic Times in

2003 – for crafting a successful pan Indian brand from a commodity business and

giving Indian consumers a new life style experience that is within the reach of the

common man.

3.5 About the Company:

A.) History:

Amalgamated bean coffee trading company (ABCTC) is a

Chikmagalur based company which grows coffee in its own estates of 12,000 acres (4249

hectares).It is the largest producer of arabica beans in Asia exporting to various countries

including USA, Europe and Japan.

Café Coffee Day was started as a retail restaurant arm of ABCTC in 1996. The first CCD

outlet was set up on July 11, 1996, at Brigade Road, Bangalore, Karnataka. It rapidly

expanded across various cities in India adding more stores with more than 1000 cafés open

across the nation by 2011.

In 2010, it was announced that a consortium led by Kohlberg Kravis Roberts would invest

INR 1,000 crore (USD 200 million) 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.

B.) Outlets:

As of December 2013, there are 1534 outlets across 28 states of India.[9] Cafe Coffee

Day has also recently expanded outside India with its outlets in Karachi, Vienna, Dubai and

Prague.

C.) Subsidiaries:

In June 2010, CCD acquired Café Emporio, a café chain from the Czech

Republic. Cafe Emporio has 11 cafés in Czech Republic. While 7 of them are in

Prague, 1 is in Brno and Olomouc and 2 are at Freeport-Hate.

Cafe Coffee Day's divisions include:

Coffee Day Fresh 'n' Ground, which owns 450 coffee bean and powder retail

outlets

Coffee Day Square, a high level coffee bar in Bangalore

Coffee Day Xpress, which runs 900 plus Coffee Day kiosks

Coffee Day Beverages, which runs over 14,000 vending machines

Coffee Day Exports, its exporting wing

Coffee Day Perfect, its fast-moving consumer goods packaged coffee division

Coffee Day B2C Plant, Coffee vending machine manufacturing division

D.) Awards:

Cafe Coffee day was named "most popular hangout joint amongst youth" at

the 3rd Global Youth Marketing Forum in 2011. The Indian Hospitality Excellence

Awards also named it "India's most popular coffee joint" in 2011.

E.) Basic Fact:

Café cofee day poineered the café concept in india in 1996.

It is a rupees 750 crore iso certified company.

It is india’s one of the leading cofee exporters with the clients across usa

europe and japan

F.) Factors determining demand for CCD:

Afforbable price as compared to competitors.

Strong youth orientation.

Social place to relax.

Customer orientation.

High rated tastes.

Value for money

Variety and wide choice

Bandwagon effect AND Demonstration effect

good hospitality

Strong brand image

Coffee drinking fashion

Wide network of branches, stratergic positioning

Status factor for middle class youth

Quality products

Friendly and Stylish social hub

Increase in disposable income

Consistent service at all outlets

G.) THREAT FROM COMPETITORS:

Competitive coffee outletes like mochas, barista, all have the same target audience

The branches of all competitors are located close to each other , thus eating into

each other’s market

Low degree of product differentiation

Substitute effect

Chapter IV

Case Study

Cafe Coffee Day – Brand Strategy in India

This case study covers the following issues:

Examine and analyze Cafe Coffee Day’s brand strategy in India, its success and future

challenges

4.1 Introduction

“CCD today has become the largest youth aggregator, and from a marketing

stand point, the success has come by focusing on the 3As: Accessibility, Affordability

and Acceptability.”- Bidisha Nagaraj, the Marketing president of Cafe Coffee Day

“Although demographically, a typical consumer would be male or female

between 15-29 years of age, belonging to middle or upper middle class, we call our

consumers young or young at heart. We are about juke boxes, good and affordable

coffee and food. The brand fit is with youth or the young at heart. So we often look

out for brands that are aspirational in nature.” – Sudipta Sen Gupta, Marketing head,

Café Coffee Day.

CCD – an established brand image in India:

Cafe Coffee Day (CCD) has an established brand image in India and ranks No 2 in the

Brand Equity’s Most Trusted Brands 2008 survey – in the food services category. Rival

Barista is at No 5. CCD has been able to make a connection with the Indian consumers,

predominantly among the youth. CCD is the market leader in India and was awarded the

‘Exclusive Brand Retailer of the Year’ by ICICI Bank in its Retail Excellence Awards 2005

for the organized retail sector.

CCD’s wide network – the anytime, anywhere café:

CCD has been able to make its brand presence felt through the sheer number of stores.

CCD has 620 cafes at present and it has ambitious plans to launch more than 900 cafes by the

end of the current financial year. This means launching one store every other day which is not

surprising from a company which launched a cafe (in 2005) in Vienna, the coffee capital of

the world. CCD also has three cafes in Vienna, and two in Karachi, Pakistan. Lagging behind

CCD in the Indian market, Barista has about 200 cafés, Java Green (around 75 cafés) and

Mocha (around 25 cafés). The Indian organized sector has potential for around 5,000 cafés

but fewer than 1,000 cafés exist currently.

Exhibit 1: Total number of stores/cafes of Café Coffee Day and its competitors

Case Study Keywords:

Cafe Coffee Day, CCD, Amalgamated Bean Coffee Trading Company Ltd., ABCTCL, V G

Siddhartha, Café Beat, Brand Equity’s Most Trusted Brands 2008 survey, Bidisha Nagaraj –

Marketing president, brand image, brand management, Exclusive Brand Retailer of the Year,

Barista, Java Green, Mocha, company owned stores, national brand, south Indian retail chain,

Chikmagalur, Co-branding, international brand consultant Landor, Silent brew masters –

special employee program, a feeling of togetherness, Coffee Day Exports, Coffee Day

Xpress, Coffee Day Take Away (coffee vending machines), Coffee Day Fresh ‘n Ground

(ground coffee retail outlets), Coffee Day FMCG (packaged filter coffee powder)

CCD’s vision:

To be the only office for dialogue over a cup of coffee

CCD’s Expansion Strategy:

Cafe Coffee Day has around 821 outlets in 115 cities in India. CCD plans to take the

total number of cafes to 1,000 by March 2010 and double it to 2,000 by 2014. (Update: By

Jan 2012, CCD had approx 1,200 cafes and 900 Express outlets) In October 2009, CCD

announced that it will increase its international presence from the current six outlets in

Vienna and Pakistan to a total of 50 stores across Europe and Middle East in two years time.

International coffee chains in India – Recent entrants in the Indian market include Gloria

Jeans, Coffee Bean & Tea Leaf and Illy Café.

Operating Formats :

Café Coffee Day operates in both regular (Coffee Day Square) and premium formats

(Lounge).

Highway Cafes:

In 2004, CCD began cafes on highways. By 2009, the total number of Café Coffee

Day highway cafes rose to 30 owing to the overwhelming response it received from

travellers.

CCD’s new brand identity:

In October 2009, CCD unveiled a new brand logo, a Dialogue Box, to weave the

concept of ‘Power of Dialogue’. In accordance with this new brand identity, CCD planned to

give all its existing outlets a new look by the end of 2009. Cafés would be redesigned to suit

different environments such as book, music garden and cyber cafes suitable for corporate

offices, university campus or neighborhood. The change plan included new smart menu,

furniture design, among others.

Coffee consumption in India is growing at 6% per annum compared to the global 2% plus. In

India, the per capita consumption of coffee is around 85 grams while it is six kgs in the US.

Per Capita Coffee Consumption in kgs across the World

Milk production in India – India is the largest producer and consumer of milk in the world

with 98% of milk being produced in rural India.

Coffee production in India – India ranks sixth as a producer of coffee in the world accounting

for 4.5% of the global coffee production. India has about 170,000 coffee farms cultivating

around 900,000 acres of coffee trees.

CCD’s International Expansion Strategy:

In June, 2010 Cafe Coffee Day chain acquired Emporio for Rs 15 crore. Emporio is a

Czech Republic-based café chain present at 11 locations. CCD plans to co-brand the chain as

Café Coffee Day Emporio and later transition it to Café Coffee Day. CCD is also present in

Vienna. The company wants to expand in the East European region, West Asia and the Asia-

Pacific region.

Cafe Market in India

Coffee retailers cover only 170 cities out of 3,000 in India (early 2011 reports). In

2008, according to Technopak Advisors, the Indian food servcies market – cafes, full-service

restaurants, fast-food outlets/quick-service restaurants was estimated to be $6 billion (Rs

26,000 crore) with organized players taking 13% of the market. (By 2014 this number is

expected to increase up to 27%.). According to Technopak Advisors, the café market in India

is estimated at $150 million (Rs 678 crore) and growing at 40 per cent over the last five

years.

New Entrants in Indian Coffee Cafe market: In early 2011, Hindustan Unilever, the FMCG

giant planned to open a cafe outlet in Mumbai named ‘Bru World Café‘ to popularize its in-

house coffee brand Bru (HUL’s only coffee brand sold only in India).

CCD to double its human resources count: CCD has 6,500 employees (as per Feb 2011

figures) with each cafe requiring about 6 employees. CCD plans to double its employee count

by 2013.

CoffeeDay Wakecup:

In January 2012, CCD launched its own brand of coffee maker called CoffeeDay

Wakecup targeting all coffee lovers. The product will be marketed at its 1125 cafes and 900

Express outlets. Competitor Lavazza had launched its own portable coffee machines

(Lavazza Blue 850) already but targeted the premium segment with the price being higher

than CCD’s machines.

In February 2012, Café Coffee Day announced plans to install interactive touch

screen tablets in 500 cafes across the country.

Conclusion:

CCD is at the heart of the cafe culture wave that has swept across metropolitan cities

It has tremendous demand and following but it still needs to work on creating a strong

brand image and customer loyalty, also there is a constant need to move and evolve

for there is cut throat competition in this sector …

It has great potential to be one of the leading coffee shop brands in India and a brand

to reckon ……..

RECOMMENDATIONS:

Better décor, less congested, more spacious.

Better advertising and promotional campaigning.

Focus on other age groups apart from youth.

Better Discounts and offers.

Build customer loyalty

How can Café Coffee Day meet the Starbucks challenge?

November 28, 2013:

Today, the coffee chain market is more than Rs. 1,000 crore and is growing at almost

30 per cent each year. The market is dominated by a few brands with CCD the largest in

terms of turnover and the number of outlets in India, followed by Barista – a distant second.

Other players are Costa Coffee, Mocha, Coffee Bean & Tea Leaf and Gloria Jean’s.

Currently, India has about 1,800 coffee outlets, or cafes, and business sources claim India can

accommodate another 2,700 cafes. This seems plausible given that, against global per capita

coffee consumption of 4 kg a year, India stands at 0.82 kg.

THE CCD JOURNEY

The Amalgamated Bean is among India’s top two coffee producers and exporters,

with 10,500 acres of coffee plantations in Chikmagalur. It produces 7,000 tonnes of coffee

every year and sources another 35,000 tonnes from other plantations. About 25,000 tonnes

are exported and 3,000 tonnes used in CCD cafés.

The company started with its first store in Bangalore in 1996. It took six years to reach 35

outlets across the country by 2002.

However, by 2008 CCD had opened 595 outlets. And in 2012, the count stood at 1,400. In the

same period it went from zero to a Rs. 800-crore turnover.

Currently the company has three formats: CCD, CCD Lounge (Premium Format), and CCD

Square (single-origin coffee, from one estate, not blended).

In addition to this, the company has 900 CCD Express (kiosks for take-away) and 16,000

vending machines in offices.

CCD had a clear vision that the outlets would not be coffee-drinking places. They would be

the perfect hangouts for young people and a place for occasional casual meetings for

corporates.

Therefore, the business model was built towards enabling CCD to be a good hangout place,

both in terms of its ambience and the pricing.

The philosophy of the brand is well captured in the tag line ‘A lot can happen over coffee’.

While all was going well for CCDs, Starbucks with its 50:50 joint venture with Tata Global

Beverages, entered the Indian market in its second attempt.

THE GLOBAL PLAYER

Starbucks started in 1971 with one outlet but today, with more than 15,000 stores in 50

countries, Starbucks is the premier roaster and retailer of speciality coffee in the world. The

company in India, called Tata Starbucks Ltd., launched its first outlet in Mumbai in October

2012.

Starbucks expanded its presence to Delhi in January 2013 by opening two outlets at Terminal

III of the Indira Gandhi International Airport and later one in Connaught Place. Initially,

Starbucks opened a combination of standalone outlets located at malls, airports, metro

stations, and commercial complexes. The company plans to expand its retail footprint in India

by opening outlets in hospitals, near gyms or health stores, educational institutions and

corporate campuses.

The decision to open outlets inside Tata-owned retail stores and properties would depend on

the brand’s premium positioning. As of June 2013, Starbucks operates 15 outlets in two cities.

The company plans to have 50 outlets in India by the end of 2013.

THE PROBLEM

The business head at CCD has various questions on his mind.

Should CCD even recognize the entry of Starbucks as the latter is in a far more

premium segment than CCD?

Would the brand image of Starbucks just be of one-time novelty value or will it be

able to shift consumers to a more premium concept in the long term? Therefore,

should CCD react? And, if yes, how ?

You are the head of Marketing at CCD and you have been asked to recommend

insightful marketing inputs in this scenario with a special focus on the strategic

direction for the brand. As both the companies in question are live companies, you can

gather additional information on their current strategies from secondary research.

(The writer, an alumnus of IIM Ahmedabad, runs Brand Vectors, a marketing

consultancy. This case has been written purely for student analysis and does not claim

factual accuracy. The figures, drawn from secondary research sources, are used only as

inputs for the respondents to devise strategy. The writer does not claim to have any first-

hand information from the companies mentioned here.)

Bibliography

Books:

Article:

http://www.thehindubusinessline.com/on-campus/case-studies/how-can-caf- coffee-day-meet-the-starbucks-challenge/article5397467.ece this article was published on November 28, 2013.

Webliography

(This article was published on November 28, 2013)