02-02-2013, 09:38 AM
Costa Coffee
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EXECUTIVE SUMMARY
This report strives to outline the strategic and marketing approach to be undertaken for the current year of 2012 by the “Costa Coffee” a chain- part of a UK- based Multinational conglomerate Family white bread.
Whitbread PLC is The UK’s leading Hospitality Company with franchises all over the world. Their business encompasses Hotels, Restaurants [Household names like TGI Friday], Health and Fitness plus Other Businesses.
The contents of this report include Background of the company, Mission Vision and objective of the company, SWOT Analysis, TOWS Matrix, PESTLE Analysis, Porter’s 5 Force Analysis, Strategy they used are also included.
COMPANY BACKGROUND
Costa Coffee is a British multinational coffeehouse company headquartered in Dunstable, United Kingdom and a wholly owned subsidiary of Whitbread. It is the second-largest coffeehouse chain in the world (behind Starbucks) and the largest in the United Kingdom. Costa Coffee was founded in London in 1971 by the Italian brothers Sergio and Bruno Costa, as a wholesale operation supplying roasted coffee to caterers and specialist Italian coffee shops. It was acquired by Whitbread in 1995, since when it has grown to over 1,700 stores across 28 countries. The business has 1,375 UK shops, 920 Costa Express vending machines and a further 800 shops overseas.
Bruno and Sergio Costa founded a coffee roaster in Lambeth, London in 1971, supplying local caterers and coffee shops with their slow-roasted blend mocha Italia.[4] Costa branched out to retailing coffee in 1978, when their first store opened in Vauxhall Bridge Road, London. In 1995, the business was acquired by Whitbread, becoming a wholly owned subsidiary. In 2009 Costa celebrated the opening of their 1,000th store - in Cardiff. In December 2009, Costa Coffee agreed to acquire Coffee Heaven for £36 million, adding 79 stores in central and Eastern Europe. By the end of 2010 the company had overtaken Starbucks in the UK, reaching a 37.6% market share measured by revenues.
PESTL
Political:
Coffee beans are grown in developing countries. Discussions about work conditions, child labor. Also political influence by tariffs and taxes. The United Kingdom has experienced electoral and political transitions and crises in the last 12 months. There have been at least four political trends that have emanated from these political events. These are:
(a) The cry for democracy and reforms;
(b) Increased popular and local-level assertiveness;
© Greater public accountability;
(d) Re-definition of the concepts of power and politics. Also, the forms of political economies have slowly shifted from a bipolar (big government-big business) to a tri-polar structure (authorities - private sector – civil society).
Economic
The key business challenges for the industry as a whole firmly relate to the economic recession from 2008, as consumers become much more cautious with their discretionary spend due to the high Unemployment and personal debt. Despite the adverse economic trends in the first half of the year, the United Kingdom as a whole experienced relatively robust economic growth. It is estimated that the United Kingdom, taken together, posted a better-than-expected GDP growth of 4.5% last year, slightly higher than the 4.1% growth that they achieved in 2002.
Social/cultural
People spent more and more money on coffee (UK: Tea: £623m, Coffee: £738m)
5. Customers do not Only go to coffee shops to drink a coffee but also to sit down, and relax. With the rise in the middle to upper-middle class households in certain provinces within the United Kingdom, there exists a strategy mismatch for not considering the potential for consumer market in the country.
There have also been social and cultural trends that have been evident over the last 12 months. These include: (a) the irreversible rise of civil society among English provinces; (b) the rise of civil society blends perfectly with a tri-polar structure of political economy; © the increase in the roles of intellectuals; and (d) the beginning of a period of introspection.
CONCLUSION
Costa Coffee has been able to remain one of UK's leading coffee brewing companies for more than a century now primarily because of the execution of the company’s branding and positioning strategies to perfection. Add to the mix the company’s dedication to high quality of service and the formula for success is at hand. Moreover, the utilization of the appropriate knowledge management tools is necessary for their products to reach out to people even in different cultures.
However, certain points have to be taken into consideration by Costa Coffee regarding knowledge management tools. Since their income is relatively higher than most coffee brewing companies, the time for implementation of their chosen knowledge management tools would take longer than usual, aside from being expensive. But since the goal of Costa Coffee is towards a long-term dominance and stability in the brewing industry, then the pursuit of these promotional campaigns will be beneficial for the company in the long run.