Black Canyon Coffee (BCC)
Black Canyon Coffee (BCC), founded in 1993 in Thailand, is a privately held, largest chain of coffee shop in Thailand serving western style coffee together with Asian style popular Thai food to consumers, with a strong incentive of sustainable international expansion. Key external forces dominating the company's performance and the internal competencies and weaknesses affecting the key results are identified in below summary table. Strength
Unique menu offering mix-matching coffee with savory Thai food (differentiated customer experience) Wide-spread presence of chains throughout the country against international brand's targets in uptown locations only Strong local community knowledge and relationship with local customers as compared to international brands Reasonable & affordable pricing
Ownership of unique coffee processing design (supported by local university) Corporate office functional supports in key process areas of procurement, logistic, restaurant design and support, employee development Weaknesses
Limited internal financial capital to fund international expansion Weak international investor relation limiting access to external capital fundamental for growth Scarce multi-linguistic Human capital deterring international expansion Inefficiency in handling complex supply chain problem associated with international operation (stale inventory or stock shortages)
Ever increasing coffee demand globally
Consumer's changing coffee habit pattern to more upscale coffee types than traditional types Government support in local coffee industry which BCC can leverage for sustainable supply chain stability Potential "exit strategy" of competitor in Thailand thus potential opening of market segment
Increasing strong head-to-head competition in the industry (increasing presence of international brands such as Starbucks as well as local chains such as Coffee World) Strong potential threat of local conglomerate (PTT)'s interest for economies of scope diversification in kiosk & mini-restaurant segment (could lead to red ocean competition) Global coffee chains under a threat of industry consolidation
Setting aside existing competitions from international as well as local brands, the biggest potential threat of PTT's interest in kiosk and mini-restaurant market segment pushed BCC to think twice on its future strategies. What should BCC management do to increase domestic market share? What strategies should BCC management implement to achieve sizeable and sustainable expansions in international market?
Alternative Actions and Evaluation of Alternatives
Differentiated Strategy by offering varieties of international cuisine (current strategy) *ability to serve different segments of customers through different types of restaurants & different types of menu *continuous, innovative offering of widespread menu to increase customer retention *increased raw material input cost to offer non-standardized food & drink menu *increased requirement of food experts for continuous innovation of food & drink menu Focused differentiation strategy by offering only Thai cuisine & Thai roasted gourmet coffee *targeted Thai food lovers are served through non-fine dining atmosphere *narrower and focused relationship with customers based on "the love of Thai food" *competitors difficult to imitate BCC's innovative Thai coffee bean processing technology & roasting equipment *challenge in availability of Thai ingredients supplier in the targeted country *availability/retention of food expert associated with "Thai food" Focused low-cost strategy by offering standardized one-dish Thai menu and Thai-roasted gourmet coffee *Achieve economies of scale to better serve focused customer groups at affordable prices *Customers can expect exactly what they will get through standardized F&B menu *Relatively easier...
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