Introduction:
In this blog, we discuss a business case study of Cafe Coffee Day. In India nowadays many coffee chain businesses are open Like Starbucks, Dunkin‘, and Tim Hortons.
But you know about a story of CCD. What does a ccd do to create the biggest coffee chain business? How to become the biggest café franchise in India. Which mistake does V. G. Siddhartha make that’s why CCD has just become a name nowadays.
Intro of V.G. Siddhartha
V.G. Siddhartha basically came from a political and business family. His father-in-law is a former CM of Karnataka. Nandan nilekani and Radhakrishna Damani is a friend of him.
If we discuss his education then he received a master’s degree in economics from St. Aloysius College and Mangalore University, Karnataka. He is interested in an Indian army but for some reason, he can’t join it and go to Mumbai to learn share-market knowledge in JK MARKETING.
In 1986 he started a company named “Shivan Security” in this company he provides a share market investment and consultancy services. After then in 1999, this company was renamed “WAY2WEALTH”.
Starting of Cafe Coffee Day:
In 1996, he started a coffee business for the first time in history. At the start of business, he just sold unroasted coffee only. But sometimes later he irritated with the daily price up-down of coffee and small profit so he wants to start a new business, but he has a 3 choice
- Open a café.
- Sell coffee powder.
- Sell coffee vending machines.
He discussed this topic with his friend. Now he decided to start selling a coffee powder packet. Now here starts a story of “café coffee day”. In starting he named their company “coffee day: fresh and Ground”. He sold a packet of coffee in grocery stores. During this time, he wants to go on a business tour of Singapore. On this tour, he saw all educated people are attracted to cafes and future of these cafés is bright.
On July 11, 1996, V.G. Siddhartha opened their first café name with “Café Coffee Day” In between 4 years he started 22 new outlets in southern areas. And in 2004 he opened 200+ outlets in India. In 2014 he owned a total no. of 1488 outlets all over the world.
This is a rising story of CCD now we discuss another business of V.G. Siddhartha.
Other Business of V.G. Siddhartha:
In other businesses we can see V.G. Siddhartha, is an investor, a real estate business, a resort business, and a share market.
In 2000 he started a share market advisory company “WAY2WEAILTH” In this company they provide an advisory of the market and many other services.
In 2006 he made a tech park. This park is named after “GLOBAL VILLAGE TECH PARK”. In this park, he invites many big companies to open their offices. This business park is made on 120 acres of land.
He also owns a resort named “SARAI”. He was starting 4 new resorts in: 3 in Karnataka and 1 in Andaman Nicobar.
In 2009 inspired by their 15,000-acre farm he started a furniture business. In this “black forest furniture”. In this business made furniture for their office and cafes also he exported their product for it.
During this time, he invests in INFOSYS and takes a 6x profit from it. He was an investor in “MINDTREE”. In this golden time, V.G. Siddhartha made a net worth of Rs. 6000 cr.
If he managed the café business well, he owned other businesses and many investments then which mistake would have been made by V.G. Siddhartha that’s why he lost everything. And now days ccd has lost its position in the cake business. Let’s start with a lesson that we learned from it and which mistake V.G. Siddhartha in his life.
Downfall Reason for Cafe Coffee Day:
1. Open new business without experience is harmful:
If you do some business in the Pacific sector then you need to expand your business in this sector you aren’t interested in this sector, then you go to your interested and experienced sector to easily grow. If you don’t know about the business sector and you enter then definitely your loss in it. If you have no experience, then you take some advice from an expert in this sector and if you need guidance on it then you partner with them in your business also. If you like to grow your business, you make a good research team that supports you to grow your business. In many businesses you can’t give full attendance to all businesses so if you have a team then it will take care of all businesses and try to solve a problem and if needed help and inform you. So, you are always updated with all businesses, and easy to grow a business.
2. You need to be calm and always take advice from all:
If you have a good and profitable business and grow your business day by day. But when someone who is smaller or older can give advice to you then you can’t ignore it. If you make this mistake then you can’t take the right way to grow. Sometimes many people know what is a problem and how to solve it. So always you listen to other advice. If in your business office, one small employee can find something in your business model and give a solution to it that time you give a bad response and say that is not your business then you can’t find a way to grow. It is your decision whether can you implement it in your business or not. So be calm and be humble to grow.
The definition of business also calls this, “IF YOU ARE CALM AND HUMBLE THEN IT IS EASY TO GROW A BUSINESS AND RELATION WITH CUSTOMER.”
3. Take many low-business loans and investments:
If you have capital and need to expand your business, then you have to spend the highest your money if you take the high loan for it then you will be in trouble after some years. When V.G. Siddhartha starts a new business, he always takes big amounts of loans that’s why when your business can’t make a profit then you spend your savings to pay a loan and sometimes later you need to sell your company. For that, in investment, if you take an investment from an investor then they are pressuring you to make a profit and do what they say that’s why you can’t make any decision in your business. So that’s why you take small loans and investments and if you don’t need to money then you don’t go from loan and investment.
In 2009 to 2015, in only 2 years v.g. Siddhartha can do a profit and it is only 37 cr. For another 4 years, he made a loss of 167 cr. The reason for this loss is the loan.
In 2015, the net worth of v.g. Siddhartha was Rs 6000 cr. At this time he has a Rs 4500 cr. Loan. So you understand which mistake is the reason for the downfall.
During this critical condition, he was suicide on 29 July 2022. So this is a story of v.g. Siddhartha. Nowadays CCD is managed by their wife and she is given many loans and runs CCD well.
Conclusion:
In conclusion, if you have a business like this and make a business like v.g. Siddhartha then it is a good story learning. Which mistake destroys your business and which mistake you don’t make in your business is important. All these businesses are models for us to learn business strategies and mistakes. This is for only knowledge don’t take it for any other reason.
Cafe Coffee Day, commonly known as CCD, was founded in 1996 by V.G. Siddhartha in Bangalore, India. It quickly became the largest coffee retail chain in India and gained international recognition for its unique concept of providing a relaxed and vibrant environment for coffee enthusiasts.
V.G. Siddhartha was inspired by the coffee culture he observed during his travels abroad. He envisioned creating a space where people could enjoy high-quality coffee in a comfortable setting. This idea led to the establishment of the first Cafe Coffee Day outlet in Bangalore.
CCD is known for its warm and inviting ambiance, coupled with a diverse menu that goes beyond coffee to include snacks, desserts, and more. The chain emphasizes a “third place” concept, positioning itself as a comfortable space between home and work where customers can unwind.
CCD’s expansion was rapid, and it became a household name in India. The company adopted a franchise model, allowing it to reach various cities and towns. By the early 2000s, CCD had a significant presence across India and even expanded internationally.
In recent years, CCD faced financial challenges and controversies, including the tragic death of its founder, V.G. Siddhartha, in 2019. These events raised questions about the company’s financial health and corporate governance.