Internal And External Factors Of Costa Coffee †Free Samples

Question: Discuss about the Internal And External Factors Of Costa Coffee. Answer: Introduction Contemporary business organizations are operating in more intensely competitive market scenario along with facing added challenges in terms of external and internal environment. Moreover, the present business scenario demands innovative business policies of the business organizations in order to gain the competitive advantages in the market (Urbancova 2013). Thus, effective determination of the external and internal business environment is important for the contemporary business organizations in order identify the major trends and implanting strategies accordingly. One of the major profitable and competitive business sectors is the FMCG sector. This is due to the reason that, FMCG goods are in daily use for the consumers and are consumed in huge quantity worldwide (Stjames.gg 2018). Coffee is one of the prominent FMCG products being sold around the world due to being treated as one of the most effective refreshment mediums. However, coffee sector is also highly competitive with the presence of various global brands in the market. Costa coffee is one of the leading chains of coffee shops. They are having their stores in more than 30 countries with having their base in the United Kingdom (Costa.co.uk 2018). Currently, they are competing mainly with Starbucks in the global market. This report will determine the internal and external business environment of Costa coffee. Moreover, the segment and target market of them will also be identified. In accordance to the identified factors, SMART objectives will be discussed and effective 7ps will be proposed. Recommendations will also be provided in terms of measurement and control. Analysis of the internal environment Strengths Wider market reach helps them to cater to more market segments. Having positive brand value in the market with being the second largest coffee chain in the world (Iglesias, Ind and Alfaro 2013). Unique and distinctive taste of Costa coffee compared to their competitors. Weaknesses They are still very much trailing behind Starbucks. Lessmarketing inclination compared to their competitors. Premium pricing is restricting their customer bases. Opportunities Huge opportunities are waiting for Costa coffee in entering in more countries. Strategic relationships with different coffee brands will help them to grow more rapidly. Diversification will help them to offer different products to the customers. Threats Threats of new entrants in the market with having various smaller competitors in different countries. Increase in the demand for tea. Trailing behind Starbucks for more period of time. Analysis of the external environment Political The increase in the value added tax by the government of the United Kingdom is increasing the cost for Costa coffee. Creation of barriers in the recent time causing negative implications on sourcing the coffee beans from the producing countries (Lester and Barbee 2013). Entering in foreign countries also facing the unstable political scenario in different countries. These factors are reducing the competitiveness of Costa coffee. Economical The global economy is increasing and thus the spending power is also enhancing. However, increase in the competition is reducing the profitability. Emergence of global economical crisis is having negative implication on the global business operation (Singer 2013). Thus, Costa coffee will face more competition and uncertainly in their future course of business. Social Trend of accepting coffee shops is increasing more countries. Coffee increasingly accepted as major refreshment drinks in some major tea drinking countries. Coffee shops are complimented with corporate and white collar jobs. The market acceptance for coffee is increasing in the global scenario. Thus, it will be an opportunity for Costa coffee. Technological Coffee vending machines are rapidly becoming popular in the market. Self service is also gaining popularity in the recent times. Major players are initiating smart coffee shops by providing facilities such as free Wi-Fi. It is important for Cost coffee to invest more in initiating latest technologies in order to compete in the market. Legal Stringent laws in relations to employee health and safety are introducing. Costa coffee has to adhere with different safety norms in having their stores in different countries. Also important to adhere with food safety laws and legislations. Overlooking any of these will cause negative word of mouth for them in the market. Environmental Costa coffee sources their coffee beans from the coffee plantation in selected countries. Environmental degradation and climate control is having negative implications on them (Eisenack et al. 2014). They should also look after the negative impact of the coffee plantation. There are laws in relation to the environmental impact of the business. Costa coffee should initiate sustainable strategy in sourcing their raw materials. Customer classification of Costa coffee Segmentation, targeting and positioning model (STP) will be used in order to determine the customer segment of Cost coffee along with their targeting and positioning strategies. Segmentation strategy Costa coffee mainly involves two types of segmentation strategy, geographic and demographic. In terms of the demographic segmentation, Costa coffee segments their customers in terms of age groups, occupation and income level. They target both the teenage and adults customers due to the fact that, coffee is targeted to all customers across every age group. In terms of occupation, mainly the professionals are selected due to the fact that, they are in the need of frequent coffee breaks and sorts of meetings are being done in the coffee shops itself. In terms of income level, customers from the top of the pyramid are targeted due to the reason that, they will pay extra for variants of coffee (Babin and Zikmund 2015). In terms of geographic segmentation they classify the customers based on their locations. Targeting strategy Costs coffee involved selective targeting strategy in order to offer products according to the taste and preference pattern of the customers. Thus, the product strategy of Costa will be different in country A and country B. selective targeting strategy also helps them to offer different products according to the trend of the particular age groups (Horvat, Antic and Jeremic 2015). High quality is being maintained in order to justify the premium pricing for the higher end customers. Positioning strategy The above positioning map shows that, the positioning of Costa coffee is distinctive from their competitors. While Starbucks, the key competitor of them concentrates more on user experience, Costa is more products oriented in the premium market offerings. SMART objectives Recommendations 1. Training program 2. Storing facility 3. Quality control Specific Training should be given in accordance to latest business requirement. Effective storage facility will help in effective inventory management. Initiation of stringent quality control process in ensuring the quality. Measurable Can be measured by meeting the diverse customer requirement. Storing the materials for long time period with same quality content. Non-emergence of any health issues. Achievable Effective fulfillment of customer requirement will attract more customers and revenue. Costa is already having expertise in storing of coffee beans Qualified human resources are required for quality control. Realistic Trained and equipped employees will lead to introduce newer variants. Will not face the issue of shortage in case of any mishaps. Enhancement of customer satisfaction by providing quality products. Time 1 year is enough for implementation. 1 year will be enough given the expertise of Costa. 2 years will be required in setting up the infrastructure for quality control. Proposed marketing mix Product Products should be made healthier in order to create distinctive image among the consumers. More fusion products should be introduced in order to create product differentiation (Kjellberg, Azimont and Reid 2015). Price Flexible pricing should be initiated in order to cater to the middle of pyramid and to increase the customer bases. Customer footfalls will get increased by this. Place Stores should be in elite areas in order to enhance the brand value. Moreover, size of the stores will vary in accordance to the size of the market (Hollensen 2015). Promotion Social media marketingshould be initiated in order to determine the customer trend and preferences along with identifying the customer feedback of their existing products (Menon et al. 2015). Physical evidence Packaging will be made more attractive with the use of bright colors to attract customers. Recycled and food grade materials will be used. Positioning Products will be positioned as more affordable in order to gain more customer and market share (Gummesson 2014). People Initiation of the employee training will help to provide more effective customer services. Measurement and control Key performance indicators will be used in order to determine the effectiveness of the marketing plan. Few indicators will be rate of customer acquisitions, customer attrition and average time for delivery (Mladenovic et al. 2013). Operations will be gauged in terms of these performance indicators. Moreover, employee feedback mechanism will be initiated in order to gain the operational insights from the point of the employees. Customer relationship management should also be initiated in order to identify the customer feedback regarding the service. Conclusion Thus, from the above discussion, it can be concluded that, effective implementation of the suggested steps in this report will help Costa Coffee to enhance their organizational effectiveness in the global market. Various threats and opportunities are being identified in this report, which should be effectively mitigated by them in order to have more future certainty in their business operation. The current segmentation, targeting and positioning strategies are also being discussed in this report, which helped to identify the current marketing strategies being practiced by them. References Babin, B.J. and Zikmund, W.G., 2015.Exploring marketing research. Cengage Learning. Costa.co.uk. 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Available at: https://www.stjames.gg/stjames_cafe.php [Accessed on 14th February 2018] Urbancova, H., 2013. Competitive advantage achievement through innovation and knowledge. Journal of Competitiveness, 5(1).