PORTER’S FIVE FORCES MODEL

THREAT OF NEW
ENTRANTS

New entrants are less likely to enter

the Indian Café Market, as the
following entry barriers are placed in
the market.

• Economies of Scale
• Capital Requirement
• Switching Cost
• Access to distribution Channels
• Regulatory Restrictions
THREAT OF SUBSTITUTES

A Substitute is defined as performing the same

or similar function as a company’s product by
different means. In the case of Café Coffee Day,
the threat of substitute is considered as High
based on the following:

• Switching Cost

• Substitute performance
BARGAINING POWER OF CUSTOMERS

• Swapping Cost

• There are very low chances that

buyer will integrate backward
and threaten Café Coffee Day
because the product do not have
significant important in the
consumer’s daily living.

• It is a daily basis consumable

products and take insignificant
share of buyer’s income.
BARGAINING POWER OF The Bargaining Power of Supplier, in the
SUPPLIERS case of Café Coffee Day, is Low, based on
the following justifications:

• Backward integration is very high in the

case of Café Coffee Day.
• There is vast availability of substitutes of
raw materials and products are
undifferentiated.
• Regulatory bodies have enforced several
regulations on the prices of raw materials
such as milk.
COMPETITIVE RIVALRY

• The competitive rivalry for the Company

depends on mainly the number of competitors
available in the market at the moment,
product and brand differentiation and the
switching cost of the customers.
• switching costs can be considered close to
zero.
• Product Differentiation.
• Price Differences.
• Number of Competitors.