BY ROBIN GHOSH
ECONOMIST AND BUSINESS MENTOR.
KOLKATA, 8 FEBRUARY 2024:
Cafe business is growing. According to Crisil, the local cafe market in India is growing at the rate between 19 to 21 percent per year. And it is expected to clock a revenue of Rs. 7000 to Rs. 8000 crores in a year or two.
The expanding cafe market has created an optimistic environment for cafe business.
Tata Starbucks has plans to setup one store every three days and around 1000 by 2028.
Apart from Tata Starbucks, a number of international cafe chains are waiting in the wings – like Tim Horton and Pret A Manger. Some domestic cafe chains like Third Wave Coffee and Blue Tokai Coffee are also expanding their storefronts.
While the Indian Cafe market is likely to grow – to create a sustainable success story – will be a daunting task. A real entrepreneurial challenge.
Laxman Narisimhan, who masterminds Starbucks in a recent interview has mimeographed a strategy outline.
Laxman’s interview indicates following things:
1. Elevate the brand and partner’s experience to exceed customer’s expectations.
2. Continuously upgrade the company’s  digital capability.
3. Continuously produce innovations.
4. Design your store as a multi-sensory, intimate cafe experience.
5. Creating moments of human connections.
6. Position your cafe as the third place between your home and office.
The development strategy architecture of Starbucks is a great lesson for those who are in cafe business.
The Starbucks growth model is multidimensional and multi-disciplinary in content and form and holistic in nature.
If you distill the policy document and uncover dominant themes – you will have an experience of a master class on how to create and develop a classic development strategy for cafe business.
Briefly, the learning nodes are:
1. The cafe business is deeply connected to ” experience “, and
” human connection”
2. Ensure significant value to partners, customers and shareholders.
3. To upscale the value, you will have to elevate the brand. Scale up digital capability and try to build a national and global brand.
4. To elevate the brand, clearly define the purpose of the cafe you want to promote and what differentiated ” experience” you promise to offer to your customers.
5 Ensure continuous product innovation by way of menu customization and personalized marketing.
6. Strengthen your digital capabilities to connect customers with membership, rewards programmes, using state of the art technology like Generative AI.
7. Do research to turn your brand into a national and international brand .
8. Design efficiency programme to deliver returns to shareholders through progressive margin expansion and earnings growth.
9. Remember your partners are your superpower. It is to create a differentiated experience for your customers.
10. Create opportunities for partners to grow, listen to their needs and support their team with best of your ability and resources.
What we have described is a kind of roadmap – action plan to move forward. It is a deeper and imaginative venture requiring advice from experienced Consultants and Business Mentors.
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