Expresso Espresso Case Study
Introduction/Key Issues
After dabbling in various professions, Todd came to realize that his greatest satisfaction comes from interacting and developing relationships with people. By utilizing his strong entrepreneurial background, he hoped to operate a business that would provide a welcoming atmosphere for customers, where his family could grow and learn business management skills and life lessons. For that reason, he has opened the coffee shop Expresso Espresso, right across the street from the University of South Alabama in Mobile, Alabama. Though Expresso Espresso has only been open for a mere twelve weeks, Todd is optimistic about his company’s potential and is already hoping to expand by opening up a second coffee shop in a midtown location. That said, he is faced with some major obstacles. Several new coffee shops are in the process of entering the Mobile Bay area and pose a threat to Expresso. Todd is concerned about the strategic position of his shop after expanding so soon. And most importantly, Todd needs sales to drastically improve to get Todd and his family out of financial hardship. Todd takes great pride in the company he has created, but in order for him to see Expresso Espresso thrive, he must carefully evaluate the following: 1) the positioning of his company in the local specialty coffee industry; 2) how high sales must rise in order to start becoming profitable; and 3) what is needed overall to become successful.
Recommendations
1. The decision to open a new store location is premature; Todd should hold off on this plan until his current store begins to thrive and generate profit.
2. Expresso Espresso’s product line should be diversified by integrating more food items, as well as drip coffee, into the menu.
3. Todd should reposition the company in the specialty coffee industry by increasing prices on all menu items. Additionally, all tips should go toward supplementing employee wages in order to reduce payroll
After dabbling in various professions, Todd came to realize that his greatest satisfaction comes from interacting and developing relationships with people. By utilizing his strong entrepreneurial background, he hoped to operate a business that would provide a welcoming atmosphere for customers, where his family could grow and learn business management skills and life lessons. For that reason, he has opened the coffee shop Expresso Espresso, right across the street from the University of South Alabama in Mobile, Alabama. Though Expresso Espresso has only been open for a mere twelve weeks, Todd is optimistic about his company’s potential and is already hoping to expand by opening up a second coffee shop in a midtown location. That said, he is faced with some major obstacles. Several new coffee shops are in the process of entering the Mobile Bay area and pose a threat to Expresso. Todd is concerned about the strategic position of his shop after expanding so soon. And most importantly, Todd needs sales to drastically improve to get Todd and his family out of financial hardship. Todd takes great pride in the company he has created, but in order for him to see Expresso Espresso thrive, he must carefully evaluate the following: 1) the positioning of his company in the local specialty coffee industry; 2) how high sales must rise in order to start becoming profitable; and 3) what is needed overall to become successful.
Recommendations
1. The decision to open a new store location is premature; Todd should hold off on this plan until his current store begins to thrive and generate profit.
2. Expresso Espresso’s product line should be diversified by integrating more food items, as well as drip coffee, into the menu.
3. Todd should reposition the company in the specialty coffee industry by increasing prices on all menu items. Additionally, all tips should go toward supplementing employee wages in order to reduce payroll