Costa Coffee - Essay Example

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This report covers the mature premium coffee market and includes an analysis of the present external environment, generic business strategies currently pursued by major players, various tools used for analysis in formulation of the right business strategy to pursue, a review of…
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Costa Coffee
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Download file to see previous pages This is to ensure it will acquire brand recognition as a true global brand like giant Starbucks but at the same time maintain its brand essence in a highly-competitive premium coffee market that no longer relies on price or differentiation as key success factors. Key industry drivers like the 4 Ms are briefly mentioned in relation to the coffee industry. Management theories and models like the Boston Consulting Group’s market matrix, Gap-needs Analysis and Ansoff’s product-market model are utilized to illustrate some of the key concepts in strategy analysis and formulation. Based on the last model by Ansoff, market development, product development and increased market penetration were thought to be viable alternatives. However, a closer analysis would reveal a branding strategy is the most suitable for a brand like Costa Coffee that is situated in a mature market dominated by only a few big players. This is because a brand is not only a functional concept but also an emotional one with regards to coffee drinkers, who not just drink it but to experience the ambiance as a symbol of affluence, social identity and new lifestyle patterns (Elliott & Percy, 2007:25).
There are three coffee house chains competing for preeminence in London and all over the United Kingdom and these are Starbucks, Caffé Nero and Costa Coffee. There is a smaller Coffee Republic and there are other coffee houses which are not part of a franchise (Edward, Cortinovis, Eggleton, Lee & Hermitage, 2007:110). After several years of very fast growth, the so-called premium coffee market is now in its mature stages. This means new sources of revenue growth has to be found before market share stagnates. A company has to be proactive rather than reactive and there are three possible sources of growth assuming it is alert enough: new opportunities presented by the changing external environment, develop a new strategy by monitoring emerging trends and how ...Download file to see next pagesRead More
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