Start a Coffee Shop case
1. What is the competitive strategy of Vincent’s business – cost leadership, differentiation, or focus?
Focus and differentiation strategy (offering a right product at a right place=serving coffee fast near the industrial area)
Price would not be a big deal as long as competitors launch the shops in the same area and sell coffee for a cheaper price.
2. What are the critical success factors of The Cappuccino Express? Which of these are controllable by Vincent?
Location – Locating near firms and offices makes customers buy coffee easy.
No competition – Vincent’s idea was very innovative when he launched the shop, so his business did successful. However, since entry barrier into this market is low, so he has to think about alternative ways to be competitive against future competitors.
Product focused strategy – Serving only two types coffees makes service quick and does not require company to spend money for employee training and other coffee makers for different coffees
Location, price (not stated in the case), employee’s salary are controllable by Vincent. Cost of coffee beans are not controllable
3. What major tasks does Vincent have to undertake in managing The Cappuccino Express?
His business has performed well so far due to low competition, but he needs to prepare well and do researches on industry trend, potential competitors, and suppliers which can reduce production costs. Finding a supplier to reduce production cost and serve good quality coffee is the key to sustain business because the company would need to compete with existing huge coffee businesses in the future.
He also needs to learn how to manage people as the business grows. It is necessary to develop an employee training plan and a management tool to provide same quality of service at every store. Vincent also needs to find ways to differentiate his business from others in order to gain competitive advantages.
4. What are the costs of operating The Cappuccino
Focus and differentiation strategy (offering a right product at a right place=serving coffee fast near the industrial area)
Price would not be a big deal as long as competitors launch the shops in the same area and sell coffee for a cheaper price.
2. What are the critical success factors of The Cappuccino Express? Which of these are controllable by Vincent?
Location – Locating near firms and offices makes customers buy coffee easy.
No competition – Vincent’s idea was very innovative when he launched the shop, so his business did successful. However, since entry barrier into this market is low, so he has to think about alternative ways to be competitive against future competitors.
Product focused strategy – Serving only two types coffees makes service quick and does not require company to spend money for employee training and other coffee makers for different coffees
Location, price (not stated in the case), employee’s salary are controllable by Vincent. Cost of coffee beans are not controllable
3. What major tasks does Vincent have to undertake in managing The Cappuccino Express?
His business has performed well so far due to low competition, but he needs to prepare well and do researches on industry trend, potential competitors, and suppliers which can reduce production costs. Finding a supplier to reduce production cost and serve good quality coffee is the key to sustain business because the company would need to compete with existing huge coffee businesses in the future.
He also needs to learn how to manage people as the business grows. It is necessary to develop an employee training plan and a management tool to provide same quality of service at every store. Vincent also needs to find ways to differentiate his business from others in order to gain competitive advantages.
4. What are the costs of operating The Cappuccino