MINI-CASE ON COFFEE CABANA

Rohit, on his way back to his main office,

do next.
He had a
long drive home and
was
pondering on the past and wondering what to
tohis initial
a lot to think about. His mind kept wandering
years and how he had back
struggled
wandering mind was his running into his old get where he
to was today. The reason tor his
invest in his new
business. venture-capitalist friend who had ottered to

Background
In 2004, Rohit chose
tion was also
high-visibility location for his first coffee shop. Luckily.
a
this lx-
synergistically complemented by being situated next to a
Chandigarh. In the initial years of his
business, Rohit's father helped out with the investment
shopping hud n

as a venture capitalist and had become a silent partner. With

his first entrepreneurial venture Coffee
to name help of his father. Rohit derided
Cabana.
Because of the location, the customer
the middle and
profile that Rohit was able to target consisted d
upper-middle class from the Tri-city area. These were mostly people wbo
were visiting the
shopping hub and wanted to take a "load off their feet". The high visibhay
of the shop ensured
good footfall for Coffee Cabana. These customers not only consstad
of people who were regulars and
employees
of the
shopping area or
nearby ottices. but the
shop also had a good percentage of walk-in customers.
Though only an arts graduale, Rohit had worked with the masters in the cottee indus
to gain knowledge of coffee beans and blends, and the processes related to prepanng them
He invested ycars and valuable resources in gaining this knowledge. lt was berause ot tnis
knowledge that he was able to offer his customers customized coffee blends like ns xht
shop in the region. His little spot became famous for offering cotiee-lovers an opprzi
o choose theircoffee and grind them before handing them in for a fresh and unique i
 shop's *"wall of fame" and his Web site
His HAPTER 4° THE INTERN
CIS. 'This also prompled nim to delve into were full of
praises from
only cotlee. selling unique coffee blends rather than
ony tred concentrated blends like elaichi
liohtly mixed alcohol-based coffees. coffee, cinnamon
coffee, spice coffee, and
t o order customized blends to take dack home International customers often into his
siness was a good revenue-earner, Rohit neverand requested refills online.came
tamized coffee blends. He was able to ofter this fully explored the potentialThough
of
the

hin ith his suppliers, who offered him the bestsupcrior service only because of hisselling
rela-
ies His relationship with the supplierS ensured quality coffee and beans at competitive
superior service.
relationship with them that he has never ever felt the need to He had such
strong a

also concentrated on other elements of his enter into formal

contract. He a
service, which was good, courteous employces.
Even though he suffered a high attrition rate in service
ensured that employees were motivated and knew that the personnel, good work environment a

customer be valued. His

customization strategy could not work without
good customer-contact
was to

vears,Rohit has been able to

develop some employees. Over the
which have increased the
unique and
patented blends of coffee and tea,
popularity of his shop. In
Chandigarh, the outlet, in its third year
of operation, has become very
popular with university and college students. and is a hangout
spot, especially on weekends. On weekdays, it is a meeting
place for the office crowd. The
diversity of the customer base has ensured a steady stream of demand
Rohit was able to break even in first three throughout the week.
years of his operations, and in 2010, bought out
his partner and converted the business to a sole
proprietorship.
Motivated by his success, Rohit has opened outlets in Amritsar, Ludhiana, and Jalandhar.
Rohit has ensured that the blueprint of the outlets in these three towns is same as that of the
one in Chandi garh so that customers associate with the brand. This has given his brand
Coffee Cabana, a regional recognition. On the demand of his customers, he has converted a
pure coffee shop into a snack-and-coffee outlet, where he offers a bare basic assortment of
coffee compliments. This has changed the concept of his coffee shop, and led to him com-
peting with not only other big coffee shops like Barista and Café Coffee Day (CCD), but
also with other restaurants. In comparison to big these outlets, his product. though custom-
1Zed, were considered expensive and, as a result, he was alienating the younger college and
customers considered his shop only
for special occasions rather
university students. Such
in the case of the Coffee Cabana outlet in Chandigarh. His
nan as a hangout place, as
coffee chains.
restaurants or
Cconomies of scale were no match for these big
Rohit has taken every decision himself. He
Since the inception of the business in 2004,
his father taught him, that is, *if you want
nas been a true entrepreneur and believed in what
But the increased Scale
or buSiness taught him that he
Something done right do it yourself." hired MBA graduates to take c a r e of the
therefore, reluctantly,
could not be everywhere and, the functions of the
w a s still facing
problems in integrating
three outlets. However, he
Otner
four outlets. aware or tnem even when his operations
and was
challenges
Rohit understood these of the business.
He considered
these to be part andneparcel
Were limited only to Chandigarh. theretore, he thougnt
lnat need not worry. But
and,
is business is still making profits
his business. His old
had ininany Tinanced
now he wanted more. who
venture capitalist Rohit had never thouoh t of
He had run into the business international.
Rohit take his on his way back to Chandioarh
partner had offered to help tenmpting and,
was certainly
but the offer
expanding further.
what to do.
he w a s contemplating

not