Colombian Coffeehouse Chain Market Entry Analysis
Introduction
Coffee is one of the most popular beverage globally Well-known for its taste and aroma, Colombia Arabic coffee is a prefer coffee in Italy With over 200,000 caf and at $1.8B Italy coffee market is both highly competitive yet profitable Presentation will cover Colombia and Italy coffee industry, SWOT analysis, Porter Five Forces Model and Recommendations.
Colombia
Colombia Arabic coffee is traditionally grown in a very unique environmental conditions which allows it to produce a very distinctive aroma and taste. Colombian coffee exports are value at 2.8 billion dollars, approximately 0.8% of Colombia gross domestic product (GDP) Colombian coffee industry is monitored and regulated by Colombia Coffee Growers Federation (FNC) Juan Valdez Caf, a FNCs house brand, dominating domestic market and expanding in both US and EU market.
Italy
Italy is one of the largest coffee importer in the EU Italy hot drinks market generated $2.7B 68% of income came from coffee, value at $1.8B Italy coffee market is highly saturated and competitive, with over 200,000 caf nationwide, roughly 70% of the market are dominate by 3 large companies While coffeehouses are popular, 70% of coffee consumed are at home.
Strengths
SWOT Analysis
Colombia coffee quality is well known and prefer in Italy market Recent studies showed that regularly drinking coffee gain health benefits such as protections against diabetes, dementias, heart problems, cancers and strokes Large consumers based due to 66% of Italy age demographic are 15-65, top destinations to travels also increase consumers based
Weaknesses Highly saturated and competitive market with over 200,000 caf 70% of the market are dominate by 3 large company 70% of coffee consumed were at home Juan Valdez is the only authorized coffeehouse company to sell Colombia Coffee in the EU Possibility of trademark and licensing infringements
Opportunities Italy coffee consumption is stable and expect to increase despite recession Specialty and gourmet coffee are relatively new and have less competition International Coffee Organization coffee promotion campaign increased consumer awareness, thus lower cost to advertise
SWOT Analysis
Threats Coffee is a commodity that highly affected by weather, thus coffee prices is very unstable Italian consumers are trendy, thus tastes and preferences may change Readily available substitutes and new healthy products posed as a threat to coffee consumptions.
Porter Five Forces
Competitors With large number of vendors as well as the domination of a few large company, the threats of competition in Italy coffee market must be taken into account Potential of new entry Starbucks and Juan Valdez are strong possible competitors that have large available capitals, experiences, and presence in the global coffee industry Substitute Traditional style coffee still play a dominance role in the industry. Healthier substitute such as fruit blended drinks or frozen yogurts are also affect consumer tastes and preferences
Porter Five Forces
Suppliers Colombia Arabic-coffee is highly demand globally. Prices and availability can affect business operation, thus needed to self-supply or carefully monitored. Consumers Italian consumers are trendy, and major specialty and gourmet coffee consumers are younger generation, this group of consumers are likely to have tastes and preferences change rapidly.
Recommendations
Study and understand business practices and customer relation managements in Italy culture Research and differentiate product to better fit consumer taste and preferences Analyse competitive ability, financial commitment, considering cooperate or join venture with established businesses to increase competitive advantage as well as minimize financial risks.
Recommendations
Cooperate with farmers or develop self-produce coffee production to minimize cost while controlling supply availability. Considering join venture with domestic company such as Juan Valdez to effectively penetrate foreign market.
References
http://ico.heritage4.com/heritage/heridata/ico_pdf_docs/cy2010-11/documents/icc-106-11e-outlook-20102019.pdf http://www.federaciondecafeteros.org/particulares/en/nuestro_cafe/el_cafe_de_colombia/ http://colombiareports.com/colombia-news/economy/20733-colombias-coffee-exports-valued-at-28m.html http://www.federaciondecafeteros.org/particulares/en/nuestro_cafe/cafe_juan_valdez/ http://ico.heritage4.com/heritage/heridata/ico_pdf_docs/cy2010-11/documents/icc-106-11e outlook-20102019.pdf http://360.datamonitor.com.ezproxy.lib.usf.edu/Product?pid=3698EBC6-DDC8-4F1D-9A3E-15A2DD4C7B89 http://www.webmd.com/food-recipes/features/coffee-new-health-food https://www.cia.gov/library/publications/the-world-factbook/geos/it.html https://gain.fas.usda.gov/Recent GAIN Publications/The Italian Coffee Market 2010_Rome_Italy_12-3-2010.pdf
