A review of industry literature and analyses of other retail coffee strategies will be conducted. Some of the best general advice and recommendations made by economic experts will be applied to the coffee business in…
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"What adjustments to prices could Moscows Kofe Haus (Кофе Хауз) restaurant formulate in order to draw more customers during the recession"
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Many assumptions will have to be made due to a lack of good market data, typical of the non-transparent Russian business operating environment.
An anecdotal SWOT analysis and literature review was conducted to find solutions to the difficult economic conditions confronting COFFEE HOUSE in the global recession. Marketing strategies and business models from North America were examined. Local competition was surveyed and the target market consumer was profiled. Although the North American market leaders have a dominant world position, they have also suffered during the recession. Not all the strategies and tactics are applicable in the Russian market; but some techniques were adapted with some reservation.
COFFEE HOUSEs strength lies in its long history adapting to local market conditions, close contact and development of loyal customers. An evolving strategy must respond to deteriorating purchasing power of consumers and possible loss of market share to new competitors. A shift away from food-based price discounts towards value-based espresso drinks is recommended.
The retail hospitality industry is generally vulnerable to downward swings in the economy. Coffee retailers in specific exist in an extremely competive environment and need a strong strategy to survive. The retail coffee market is generally susceptible to fickle consumer tastes and highly price sensitive.
Russian coffee and tea franchises are relatively young and it is assumed that much can be learned from experiences in the international arena where a longer track record is evident. Additionally, the hotter competitive scene in mature markets may provide excellent examples for where the Russian market can expect to evolve. Coffee establishments in North America, Europe and Australia have already weathered economic downturns and have applied creative tactics to maintain profitability. These examples, if carefully selected fit unique Russian consumer demands, may provide a attractive pathways
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The rapid increase in production costs due to higher costs of doing business resulted in inflation; thereby reducing consumer purchasing power and real incomes. For instance, the consumers sharply cut down their spending amid low real incomes, which led to negative GDP growth, aggregate consumption, production and saving (BBC Article, 2008).
The year 2008 witnessed the greatest depression since the great depression of the 1930s. This was because of the irrational exuberance in the housing market that led many people to buy houses that they could not afford. These investors were speculative that the future prices of houses would only rise.
The current economic crisis, considered as one of the most severe downturn after Great Depression, has tested the capabilities of all global leaders, both in the arena of political or corporate world, while all business firms have faced various challenges and uncertainties.
Cost centres in companies come under immediate scrutiny, and foremost among these cost centres is the human resources development programmes. Seen as not directly income generating, training and skills development programmes
It offers value for your money with the selection of its menu and considering its price with the location, ambiance and quality of food, it is considered as making the most of your money no wonder it became World Famous.
Normally, restaurants will price their food at a
simple terms, recession is when businesses can no longer grow or expand, the GDP diminishes for two swapping quarters and the rate of unemployment rises as the prices of housing come down.
There are many factors which can contribute to the falling of economy into a recession,
The surprising thing is that today tables have turned there are more whites employees than Latinos (Leonhardt, 2009).
According to LEONHARDT (2009), 2008 recession is worse than the one witnessed in the 1990s and 1930s. It began from the Dakotas and it moving down to
Negative economic growth can act as an indicator for a recession within a period of two or more consecutive quarters. The U.S experienced a recession during the 2008-09 global economic crises that occurred as a result of risky investment strategies. The U.S suffered a major setback and had to develop numerous economic policies.
Most declines have been trivial in the regional and national levels, with the exception of a few serious cases like the East Asian crisis of 1997 (Radelet and Sachs, 1998). It triggered short and long standing effects in nations,
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