Caffébene was founded in 2008 by Sun Kwon Kim in South Korea and achieved remarkable success in the highly competitive coffee market dominated by international brands like Starbucks. Through innovative strategies like differentiating its menu, store layout, and customer experience, Caffébene was able to overtake Starbucks as the top coffee brand in South Korea. However, Kim now faces a difficult decision of whether to abandon Caffébene's new flagship store in New York City's Times Square after facing initial struggles expanding internationally into the US market. The case examines Caffébene's strategies for growth and differentiation, and how Kim's entrepreneurial perspective and flexible decision-making have contributed to the company's success so far.

1. Report on
Caffebene: Master Brewer of Growth and Global Ambition
Submitted by:
Karan pratap-1226114116
Naseer khan-1226114117
Lalit Akhil pillala-1226114119
Sai surya raghava-1226114120
Malavika issar-1226114121

2. Summary:-
The case presents a wide range of topics relevant to entrepreneurship and franchising, such as
the development of a new concept store, create and maintain a competitive advantage,
managing rapid growth, new market entry strategies, including other. The case portrays Sun
Kwon Kim, the founder of Caffébene as an entrepreneur, who had already achieved success
in various business sectors like home electronics distributorship for Samsung, franchising of
video arcade shop, and food service franchising before entering into coffee market. Caffébene
was founded by Kim in 2008. It was to achieve remarkable success in a highly competitive
South Korean coffee industry dominated by U.S. and conglomerate-founded brands like
Starbucks, Angel-in-us, Twosome Palace etc. The case depicts the strategies employed by
Caffébene to differentiate itself and achieve an extraordinary rate of growth. When Caffébene
overtook Starbucks in South Korea, Kim decided to go head to head with Starbucks in the
U.S. in Times Square. However, Kim was faced with a difficult decision making situation,
whether to abandon flagship store in USA or not. The case is particularly interesting because
(1) has an unusual history of a service concept of Asian business trying to expand
internationally and enter the United States (most cases of this type are going on business the
opposite) direction, (2) describes the process of development and refinement of a new store
concept in a highly competitive market, (3) explains the strategies to stimulate and manage
the significant growth in short period of time, and (4) exposes students to Caffebene
unorthodox thought processes of management development strategy of international business.
In examining the options Caffebene process, students are introduced to several useful
frameworks for international marketing and entrepreneurship.
Objectives:-
(1) Examine the development of a focused, differentiation strategy in a highly competitive
industry - coffee retail stores.
(2) identify the sources of competitive advantage (of Caffébene) and assess to what extent
they are transferable to another country, i.e., the U.S. or China.
(3) Understand how an entrepreneurial perspective affects decision making and can
contribute to the success (and missteps) of a company.
(4) Appreciate the entrepreneurial perspective needed to pursue an entrepreneurial career.

3. Case analysis:-
Caffébene founder Sun Kwon Kim has demonstrated the remarkable success in the coffee
business which seemed as a saturated market where the top class American founded brands
had already dominated the Korean market.
Personality of the entrepreneur:-
Like Kim can play a bigger role in terms of entrepreneurial creativity. It was his determined
entrepreneurial alignment and opportunities he saw in the market that made his outlandish
decisions a phenomenal success in coffee business. An ambitious growth plan in the mind
along with the intention of addressing the fast changing needs of the customer can act a good
foundation to start any business.
Kim possessed an ability to see the prospects from diverse angles. Through this capability, he
was able to develop a new retail concept in a highly competitive market and created a
competitive edge which largely contributed for rapid expansion of business within a short
span. Kim’s extraordinary
Capacity of envisioning big, blended with the ability to articulate the vision within his work
team paved the way for the success of his business. He was never disappointed with his
failure. Instead he learnt from failures and speedily corrected them in the best possible
manner as demonstrated in the early opening phase of Caffébene when the business was not
doing well as expected. Kim always was out of conventional thinking and never gave himself
up to pessimistic thinking and fear of failure. Many business are hesitant being the first
mover as they fear of unexpected disappointment and loss of money.
However, Kim’s leadership was not on the verge of submission to that sort of
Conventional thinking. Caffébene became a first coffeehouse to advertise on TV with
celebrity endorsement and gained vast popularity in the Korean market. Had it been the trend
follower, it never would stand out in the competitive market. As a result, Caffébene is known
as a trendsetter in world coffee industry. We are exposed to numerous examples in the real
world of trendsetting company failing during expansion phase due to their inability .
Manage growth and product quality:-
When they are inside the tornado of explosive growth. Caffébene, however, well-managed
its growth and product quality during this phase. Kim established Berne Cup Coffee College,
which provided a barista training program, coffeehouse start-up education program, and
coffee-making classes for both employees and hobbyists. Employee benefits program was
introduced along with the provision for vacation bonus to ensure employee feel satisfied and

4. respected. Moreover, for establishing good customer and franchisee relations, open
communication with customers and franchises was conducted. Mystery shopping program
was employed to ensure the service quality. Additionally, the discussion of executives
presented in the case demonstrates the Orientation of the company towards the longer term
success. Hence, we can see that Kim used effectual thinking.
Starting a New Venture
Issues andchallenges ofnew business startup
How Kim started video game business but duet financial crisis had to close the business.
Despite realizing how Starbucks and other companies were not catering to the needs of the
Korean market, despite realizing how Korean tastes were fast changing, despite providing the
more wholesome menu that would go well with the coffee and despite designing the café to
be more socializing-
Friendly, there weren’t significant repeat
Customers as they did not see anything special about Caffébene.
Generating new ideas:-
Kim saw how the coffee industry in Korea was very homogenous and decided to provide new
offerings like a menu (healthy drinks) that went well with coffee, designing of the café to be
more socializing-friendly, providing books and tabs to be used in the café, giving that 30
wish list gifts (Mystery Shopping Program Hearing aid), Not following the status quo (TV
advertising in times of recession when others like Starbucks Weren’t), employee benefit
Programs. Making drinking coffee an experience and not just a transaction
Sources of Innovation:-
Demographics (Starbucks was providing standardized service while not considering the
preference of the Korean Market) and Changes in Perception (Something about changes in
tastes)
Stakeholder Analysis:-
Kim played a big hand in giving franchises as he did not give companies who were only
willing to use big money to get the franchise as that could mean those companies.

5. Competitive Analysis:-
Kim always went about making Caffébene operate in a way that was unique to other
coffeehouses. In fact, the operations were so unique that other companies started to follow
Caffébene’s strategies. Seeing this, Kim wanted to go international and had the ability to do
so too with their main targets being China and the US. In the end, Kim never really followed
the market leaders (like Starbucks) but always did this differently from the start. Kim also
focused on the process aspect to be more competitive by purchasing the big coffee machine
which made the cost of producing coffee much cheaper. This meant that Caffébene were
providing high quality coffee at more affordable prices.
Competitor Analysis:-
Despite being a global brand, Starbucks made their service standardized which made Kim
see an opportunity to exploit as the service given by the competitors was not matching the
services that the customers wanted/were looking for.
Socio-demographic Analysis:-
Kim managed to identify the dynamics of the coffee consumers were changing, at least in
Korea. While others, only saw their café as a place to consume coffee, Kim saw that the
customers wanted more than that, they wanted an experience. So, Kim designed the café’s
layout in such a way that the customers were left in an environment were they could sit Back
and converse more privately in public. Also, Kim saw how the Korean market wanted more
than only coffee for which he provided a well-researched healthy menu and also added items
that went well with coffee like ice-creams for the female-customers.
Problems:-
The core issues of this case are as follows:
1. What accounts for Caffébene's remarkable success?
2. Is Caffébene really No. 1 brand in Korea?
3. To what extend did personal qualities of the founder contribute to Caffébene's success?
4. To what extend does Kim display "effectual reasoning"? How has his reasoning helped so
far and how will it help Caffébene's success going forward?
5. What did Caffébene do to manage and control product and service quality during a period
of such remarkable growth?
6. What is the financial significance of the NYC store decision?

6. 7. Is Kim's global ambition realistic given his company's financial position?
8. What should Kim do now with the lease/permit situation in NYC?
9. Should Kim try to get out of the lease, find a new location and perhaps abandon the US
entry altogether?
Conclusion:-
Failure is always the learning point in any business. Instead of dwelling over the
disappointment of failure, an entrepreneur should quickly move towards better strategy
learning from it at the cost of not repeating it. A high degree passion, patience, sense of
value, integrity, proposes and flexibleness are some of the major traits to be a successful
entrepreneur. Further, one should bearing mind that risk is an inherent business characteristic
in any profitable venture. Thus, well-informed decisions should be made by analyzing every
possible sort of pros and cons. Expansion is also a one of the most critical stage in business
where tendency of compromising on quality and mismanagement are higher. In this stage,
cautious handling of customers and related stakeholders is very critical in order to sustain and
remain competitive in the market for the longer-term. Also Entrepreneurs need to cautiously
concerned for the continuous growth and longer-term success of their business ventures.