Search This Blog

Thursday, 27 June 2013


Costa coffee is an international coffee chain based in the UK. Apart from coffee it offers snacks and other soft drinks. Costa coffee is among the leading players in the coffee industry with its headquarters in the UK. Its main rivalry is the McDonalds, cafĂ© coffee Day, Starbuck and subway. The company is known for its quality and flavored coffee it also has a well structured organization which explains to its success in the industry. Its vision is to become the most successfully business in the world. For it to achieve its vision there was need to conduct an environmental audit which is divided into two internal audit and external audit. 

Internal audit focuses on the resources, capabilities, strength and weakness of the organization and how a combination of the same can inform corporate and operational strategies. Resources are assets owned by the company or factors of production that the company has an influence on them. Among the characteristics of a good resource include valuable, rare, and inimitable. A resource becomes valuable when its benefits surpass its cost and it is rare when it’s not readily available. Inimitable means that it is difficult for a competitor to come up with a resource offering similar benefits. Costa coffee has a tasting machine that of high quality and makes its coffee to be of a greater value this gives it a competitive advantage over the rest.

This is done in two level the industry and macro environmental analysis. Industry level we look at the forces that influence the operation of the company. The porter’s five forces frame worker is useful in this analysis with the main factors being considered including bargaining power of customers, bargaining power of suppliers, threat of new entrants, threat of substitute of products, competitive rivalry within an industry. Market rivalry is high in this industry because of the numerous competitors both local and global though there is an easy on the global market due to the changing lifestyles in markets of China and other parts of Asia where coffee is being embraced.

Buyer power is where by a consumer has the ability to impose on the pricing of commodity. In this case of Coffee Costa the consumer may lack the ability to organize its self in groups and impose on the pricing but they have substitute products therefore raising their buyer power. Supplier power the inability to switch from one supplier to the other in this case the supplier power is weak since there numerous suppliers. The threat of entry is very minimal since entering this market is difficulty. Though we have tea in the market the threat of substitute is very minimal since coffee is unique.

According to the pestel model it includes analysis of political, economic, social, environmental, technological and legal factors. Political factors include the system and structure of the ruling class, for a business to thrive in this environment its needs the assurance of a free market. Political stability allows business to grow faster. Economic factors include the rate of the economic growth per capita income, cost of living and others. These factors determine the buying power of consumers with Costa coffee all these factors are positive hence high opportunity. Social cultural factors, the culture of taking coffee is seen to be growing especially in Asian markets therefore Costa coffee has a potential market and locally it has established itself to an extended that no substitute can beat them. Technology has made Costa coffee to be a head of other industry players. Environmental factors entail the protection of the environment whereby there is no wastes. Legal factors include all the laws set in order to start and run a business.

Swot analysis stand for strength, weakness, opportunity and threat in this analysis Costa coffee strength include; high tasting abilities, motivated and highly skilled workforce, innovation abilities and good branding. It has a small distribution net work therefore this makes it its weakness. Opportunities include growing market in Asia, economic growth and good political will towards private enterprise in the likes of china.
Costa coffee has a great opportunity for its business to expand since it has a well planned strategy in place, with proper execution as it does then the company is way forward its competitors.

For more on management theory and case studies 

For custom made research papers,

1 comment:

  1. You marketing plan should illustrate that you have carefully considered how to produce a product or provide a service that is innovative, unique and marketable. Some marketing plan templates may vary but a good marketing plan captures basically the same information.