MKT 415 Extra Credit
1) To what extent do you think a global strategy in coffee is well founded? For example, is the espresso market global or multidomestic?
a. The global strategy for Illycaffe is to globalize their brand identity that is associated with quality. For example, when it comes to coffee, they would want to associate with a more premium product. Their strategies are more regional but they are looking to move forward to the US, Europe as well as Asia.
2) How would you define Illycaffe’s FSAs? CSAs? Can they be transferred abroad?
a. Illycaffe’s firm specific advantages include their knowledge-based technique. They believe and act in priority-expertise experience within their own industry. Illycaffe works towards quality. They are resource based where they relate to the raw material sources. They use 100% Arabica beans in their production. They are also marketing-based where they market differently in each country. The link the country to the brand for brand loyalty. A few of the country specific advantages include their “made-in” strategy and their own brands. Espresso is a symbol of the Italian because thanks to the made-in label. In Italy, Illycaffe is famous for their espresso quality. Illycaffe’s firm specific advantages with quality and resources can be transferred abroad but their marketing based advantage cannot. As for the country specific advantages, they cannot be transferred because the consumer’s perception.
3) What were the difficulties Illyacaffe faced when expanding abroad? How did these impact its choice of entry mode?
a. When Illycaffe entered into the US in 1981, the company faced many challenges that affected Illycaffe. They had a hard time adapting to the US lifestyle and the difference of tastes of espresso. They also struggled with teaching the barmen how to handle the machine and serve espresso to their standards. Americans were unresponsive to the brand all together. This reaction impacted Illyacaffe by