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Colombian Coffeehouse Chain
Market Entry Analysis
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Coffee is one of the most popular beverage globally
Well-known for its taste and aroma, Colombia
Arabic coffee is a prefer coffee in ItalyWith over 200,000 caf and at $1.8B Italy coffee
market is both highly competitive yet profitable
Presentation will cover Colombia and Italy coffee
industry, SWOT analysis, Porter Five Forces Modeland Recommendations.
Introduction
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Colombia Arabic coffee is traditionally grown in a very
unique environmental conditions which allows it toproduce a very distinctive aroma and taste.
Colombian coffee exports are value at 2.8 billion dollars,approximately 0.8% of Colombia gross domestic product(GDP)
Colombian coffee industry is monitored and regulated by
Colombia Coffee Growers Federation (FNC)Juan Valdez Caf, a FNCs house brand, dominating
domestic market and expanding in both US and EUmarket.
Colombia
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Italy is one of the largest coffee importer in the EU
Italy hot drinks market generated $2.7B
68% of income came from coffee, value at $1.8B
Italy coffee market is highly saturated andcompetitive, with over 200,000 caf nationwide,roughly 70% of the market are dominate by 3 large
companiesWhile coffeehouses are popular, 70% of coffee
consumed are at home.
Italy
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SWOT Analysis
Strengths Colombia coffee quality is
well known and prefer in
Italy market Recent studies showed that
regularly drinking coffee gainhealth benefits such asprotections against diabetes,dementias, heart problems,cancers and strokes
Large consumers based due to66% of Italy age demographicare 15-65, top destinations totravels also increaseconsumers based
Weaknesses Highly saturated and
competitive market with over
200,000 caf 70% of the market are
dominate by 3 large company 70% of coffee consumed were
at home Juan Valdez is the only
authorized coffeehousecompany to sell ColombiaCoffee in the EU
Possibility of trademark andlicensing infringements
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SWOT Analysis
Opportunities Italy coffee consumption
is stable and expect toincrease despite recession
Specialty and gourmetcoffee are relatively newand have less competition
International Coffee
Organization coffeepromotion campaignincreased consumerawareness, thus lowercost to advertise
Threats Coffee is a commodity
that highly affected byweather, thus coffeeprices is very unstable
Italian consumers aretrendy, thus tastes andpreferences may change
Readily availablesubstitutes and newhealthy products posed asa threat to coffeeconsumptions.
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Competitors With large number of vendors as well as
the domination of a few large company, the threats ofcompetition in Italy coffee market must be taken intoaccount
Potential of new entry Starbucks and Juan Valdez arestrong possible competitors that have large availablecapitals, experiences, and presence in the global coffeeindustry
Substitute Traditional style coffee still play adominance role in the industry. Healthier substitute suchas fruit blended drinks or frozen yogurts are also affectconsumer tastes and preferences
Porter Five Forces
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Suppliers Colombia Arabic-coffee is highlydemand globally. Prices and availability can affect
business operation, thus needed to self-supply orcarefully monitored.
Consumers Italian consumers are trendy, andmajor specialty and gourmet coffee consumers are
younger generation, this group of consumers arelikely to have tastes and preferences change rapidly.
Porter Five Forces
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Study and understand business practices andcustomer relation managements in Italy culture
Research and differentiate product to better fitconsumer taste and preferences
Analyse competitive ability, financial commitment,considering cooperate or join venture with
established businesses to increase competitiveadvantage as well as minimize financial risks.
Recommendations
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Cooperate with farmers or develop self-producecoffee production to minimize cost while controlling
supply availability.Considering join venture with domestic company
such as Juan Valdez to effectively penetrate foreignmarket.
Recommendations
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http://ico.heritage4.com/heritage/heridata/ico_pdf_docs/cy2010-11/documents/icc-106-11e-outlook-2010-
2019.pdf
http://www.federaciondecafeteros.org/particulares/en/nuestro_cafe/el_cafe_de_colombia/
http://colombiareports.com/colombia-news/economy/20733-colombias-coffee-exports-valued-at-28m.html
http://www.federaciondecafeteros.org/particulares/en/nuestro_cafe/cafe_juan_valdez/
http://ico.heritage4.com/heritage/heridata/ico_pdf_docs/cy2010-11/documents/icc-106-11e outlook-2010-2019.pdf
http://360.datamonitor.com.ezproxy.lib.usf.edu/Product?pid=3698EBC6-DDC8-4F1D-9A3E-15A2DD4C7B89
http://www.webmd.com/food-recipes/features/coffee-new-health-food
https://www.cia.gov/library/publications/the-world-factbook/geos/it.html
https://gain.fas.usda.gov/Recent GAIN Publications/The Italian Coffee Market 2010_Rome_Italy_12-3-2010.pdf
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