Illy Study Case

1.India: Due to its nature of growing but low saturated market, it is highly important to Illy to enter as earlier as possible to get a high percentage market share and gain advantage over its competitors. Since India is 6th producer of coffee in the world, the Company could gain access to coffee suppliers and reduce costs of shipping and risks linked to the long-distance shipping (risks of mould, condensation and unwanted odors).Due to low percentage of urbanization (30%), the Company should target big metropolis with high percentage of young people, exposed to international trends and who might well accept Illy’s unique approach to coffee, aesthetics and Italian-style focus. Furthermore, Illy could compete in this market with its core product, Espresso, which fits with local tastes. Franchising sector in India is young and encumbered by indian banking system and bureaucracy. Illy’s competitor Lavazza has expanded in India through acquisitions, and establishing a wholly owned subsidiary might be the right choice for Illy. It could provide better transfer of Espressamente’s core competencies such as Italian-style, focus on design and aesthetics, high quality, espresso culture. 2A. United Kingdom: Coffee market in United Kingdom is expected to grow by 16% in 2011-2015, and branded coffee shops are popular (great opportunity for Illy’s high quality coffee). Coffee is popular among all social classes and all ages, therefore Illy could target several segments. Coffee sales per capita ($15.07 million) are similar to sales in Italy ($16.91 million), but income per capita ($102,275) which is higher by 20,000 than in Italy, shows that there is still space for coffee sales, and consumption, to grow. Illy could compete well with its main competitor in the UK, Costa Coffee, since roasting heritage and quality obsession are Illy’s core competencies as well. The UK is characterized by small both geographical and cultural distance to Italy. Illy would operate in a market quite...