THE ESPRESSO

LANE TO GLOBAL
MARKETS
Group 10
15P16
8

Sankalp Madaan

15P14
1

Harsh Pathak

15P15
7

Prateek Chauhan

ILLY
Founded in Trieste, Italy
Inventor of the precursor to the espresso machine
Well known for producing the worlds finest tasting coffee
Company based on quality and espresso culture
Focused on premium travel, business-to-business operations, fashion and
culture
Quality obsessed and knack for innovative design
Zero defects approach in selecting coffee beans.
Built its brand upon its decadent coffee but expanded its product lines over
time to include espresso machines, cups and mugs

 Illys own franchised coffee bar with 200 locations in over 30 countries
Served transit retail markets and began to expand to premium retail
markets
Meaning clearly or expressly in Italian, was meant to purvey the
original Italian cult of espresso
Goal To be recognized as the only authentic Italian bar chain
delivering superior customer satisfaction to premium transit coffee
lovers; to be profitable; and to become a strong stand-alone brand
First focused on premium transit, retail and service partners instead of
private dealers
Also added luxury retail stores

The Global Coffee Industry

Second most heavily traded commodity in the world
Growing Demand
Predicated growth potential
Correlation between consumption and disposable income
Developed Nations Highly saturated and aggressive competition
Many of the larger retail chains looked into international expansion
High levels of competition in premium coffee shops Starbucks,
McDonalds McCafe, Costa Coffee, Lavazza, Tchibo, Segafredo and the
Coffee Bean and the Tea Leaf
Continuous innovation and adapting their product offering to compete
in concentrated and saturated markets
Sustainable Coffee Production and human rights issue Affecting the
supply side
Characterized by a Coffee Paradox

Brasilia, 9054 kms away from Rome; 12 hrs flight time

Beijing, 8147 kms away from Rome; 11 hrs flight time

Relaxed FDI rules twoplus-one requirement

Preferred lattes,
cappuccinos and mochas to
espressos which they
consider bitter

Declined per
capita
consumption of
coffee
Unfashionable
and unhealthy
reputation

Berlin, 736 kms away from Rome; 2 hrs flight time

New Delhi, 5929 kms away from Rome; 8 hrs flight time

Tokyo, 6138 kms away from Rome; 13 hrs flight time

London, 893 kms away from Rome; 2 hrs flight

time

Washington DC, 4497 kms away from Rome; 9 hrs flight time

Criteria for best market selection

Coffee Consumption
Coffee shop concentration
Income per capita of the top 10% of the population
Urbanization rate
GDP per capita
Ease of doing business rank
Most attractive segments
Coffee Sales

GE McKinsey Matrix

Brazil

Japan

India

China

Germany
UK and
USA

BCG Matrix

China

US
UK
German
y
Japan

India
Brazil

Variables considered for

selecting the Market
1. Income per capita of 10% of the population
2. Projected %age of market growth of coffee sales
3. Illy coffee sales in each country

Order of entering the countries

Brazil

Second largest
consumer of
coffee in the

world
growing
franchise sector
not have much
competition
has a strong
business
strength
high market

attraction
high market

growth
and high
market share

India

Espresso
matches with
Indian tastes
threat is the
countrys
banking system
and
bureaucracy

has the
potential to

hinder
businesses
medium market
attractiveness,
strong business

strength
high market
growth

Japan
a weak

franchising
sector
it is sometimes
difficult to find
the correct

business
partner
high market

attraction
medium

business
strength
low market
share
low market
growth

German
y
High

competition and
concentration
weak market
attraction

medium
business

strength
low market
growth,
low market
share

China
a saturated
coffee market
high
competition
Strong business
strength
low market
attraction
low market
share
high market
growth.

UK

USA

Entry Modes

THANK YOU