A Case Overview of Café Nero is an Italian Coffee Shop

Caffe Nero
Question 1- Case Overview
Introduction
London, England-based Caffè Nero is an Italian-
inspired coffeehouse chain with locations across
the globe. Gerry Ford started the business in
1997, and it now has over 1,000 coffee shops in
eleven countries, including the United Kingdom,
Ireland, Sweden, Poland, Cyprus, Croatia,
Turkey, the United Arab Emirates, Oman, and
the United States. Caffè Nero purchased and
established its very own coffee business in
Battersea, south London, in 2009, which also
provides coffee to most of its coffee shops
globally. Nero Group Holdings Ltd (UK) and
Rome Intermediate Holdings Sarl (Luxembourg)
are held by Gerry Ford, who is the largest shareholder of Caffè Nero Ltd.
After a corporate takeover effort even during the COVID-19 epidemic, the corporation won.
Caffe Nero's sales were up by even more than about over the six months from May to
November of 2021, only when the COVID epidemic had a significant impact on the company's
sales. It provides various types of coffee such as cappuccino, coffee as the main product. Italian wraps
are also included in their range of products.
Current status of Caffe Nero
After Starbucks Coffee Company and Costa Coffee, Caffè Nero Group PLC is one of the three
main espresso cafe franchises in the United Kingdom. Caffè Nero has approximately 150 sites in
the UK, ranging from Brighton, England to Glasgow, Scotland. Although the firm works to give
the chain a cohesive, branded personality, it also strives to adapt each store to the specifics of
each location. Caffè Nero intends to rapidly increase its store count by opening stores in both
major cities and rural places around the world. Furthermore, the company plans to expand into
France. Coffe Nero Company operates 263 coffee shop in more than 50 cities in the UK. It is
classified as a large-scale enterprise and employs more than 1960 people.

Question 2-Analysis of the business
SWOT Analysis Caffe Nero
SWOT analysis is a tool used to assess
a company's position in the market by
identifying its assets, liabilities,
strengths, weaknesses, opportunities,
and threats. The SWOT analysis is a
useful tool for companies in
understanding all of the facets
involved in making a business
decision. In the 1960s, Albert
Humphrey of the Stanford Research
Institute developed this method to
investigate the reasons why business
planning was unsuccessful. When it
comes to establishing and expanding
their businesses, one of the most
helpful tools for company owners is
the SWOT analysis.
Source: Internet
Strengths
Pricing is less expensive than that of competitors (Costa Coffee, Starbucks). Starbucks charges
$2 for a small coffee, Costa Coffee $1.79 for a small cappuccino, and Caffè Nero $1.55 for a
small cappuccino. According to the official website, food sales make up approximately a third of
the company's total sales. The company's strategy is based on its ability to establish a strong
brand as a European-style coffee shop chain in the local market. Intensive and aggressive
marketing techniques (e.g. loyalty cards for customers). One of Caffè Nero's main selling points
is its Continental-style menu, which contrasts with the American selections offered by Starbucks
and Costa Coffee. Caffè Nero can save money by renting instead of purchasing the space it
needs.

Weaknesses
The placement of Caffè Nero's units - a scarcity of sites in Central London and a prevalence of
locations in the British provinces as a result of the saturation of cafes and bars on UK High
Streets.
Caffè Nero has no past international expertise; as a result, entering new markets in other
nations may prove difficult for the company.
Opportunities
Expanding Opportunity across the Subcontinent, Commencing with West Europe As a
consequence of working closely with the Royal Bank of Scotland, we were able to get a credit
line of four million pounds, which will be used to fund new ventures and business growth.
Threats
The United Kingdom, which is the country's principal
market, is susceptible to a high danger of being struck
by terrorist strikes. There was a reduction in the
overall number of visitors that came to the UK as a
direct result of the terrorist attacks that took place in
July of 2005. (the domestic market). Because it is not
difficult for new companies to create an identical
image, the level of competition that already exists in
the market is likely to increase as a direct consequence
of this fact.
As a result of the continued growth in the cost of renting a property, which has been larger
than 30 percent over the preceding year, there is a likelihood that rental rates could go up in
the future. This rise in rental costs will likely have an effect.
While there are many positive aspects of Caffè Nero Group's current situation that are reflected
in the SWOT analysis, the company's high potential for international expansion into Europe is
evident in the company's cost-cutting strategies, strong brand positioning, and intensive
marketing campaigns, all of which are reflected in the SWOT analysis. The lack of international
experience could cause problems when entering new markets, but there are other

shortcomings as well. It is impossible to control all of the external threats. But based on their
high level of profitability and large market share in the domestic market, the researchers think
that the company is ready to go abroad at this moment.
Costa Coffee and Starbucks are only two of the many chained coffee shops in the UK. There is
potential for saturation of branded coffee shops in London, although the coffee retail industry
appears to be experiencing exponential growth - 37% in the past five years, according to Caffè
Nero Group PLC's financial report for May 2003.
PEST analysis of Caffe Nero
PEST is an acronym that stands for
"political, economic, social, and
technological" analysis. This type of
analysis is conducted from the outside
and looks at the indicators of a
country's economy, government, and
society.
The United Kingdom of Great Britain
and Northern Ireland is a country that
spans a total land area of 244,820 km2
and is home to a total population of
60,587,300 individuals. It can be found
in the far northwestern corner of the European landmass.
Source: Internet
Political Factors
The United Kingdom became a member of what is now known as the European Union in 1973.
However, the United Kingdom is not a member of the European Monetary Union at this time.
There is a possibility that terrorist attacks will be carried out in Iraq as a result of the
involvement of the United Kingdom in the military operation that is being conducted in Iraq by
the United States, as well as Iraq's economic and political significance on a worldwide scale.
Economic Forces