Strategic Analysis of Baque Cafes Coffee Company

The report discusses the current strategies of Baque Cafes Coffee Company and its competition in the market. It also provides an overview of the coffee industry in Europe and analyzes the effectiveness of the existing strategies. The report concludes with recommendations for future success.

BAQUE CAFES coffee company
Introduction
The report brings about the discussion on fullstrategies analysis in context of Baque
cafes coffee company. The report will discuss about the strategiesof Baque café
coffee a family-owned company with its headquarters in Iurreta (Biscacy) with four
branches in Oiartzun, Madrid, Malaga and LA Rioja. It deals with commercializes
coffee beans, ground soluble capsule-unit dose. Also it supplies machines for the
hotel and since 2012, has a commercial for food products and beverages in catering
establishments of La Rioja and the Basque country. Thus, the report at later part will
highlight strategies and compare with that of competing companies in the
market.It’s vital for the company to ask;what should be done?How to do it?How the
company doing?Why is the company doing well or poorly?
OVERVIEW OF THE INDUSTRY IN EUROPE
The current Europe coffee industry is experiencing changes in various aspects. Speciality
coffees and single serve methods is becoming more popular.Consumer knowledge and
demand for speciality is also growing (Rahmah Sumarwan and Najib 2018). Certification is not
optional as consumers are looking into transparency and traceability of food products.
Also, there is need to address impacts of climate on coffee varieties and disease outbreaks.
Current trends indicate that, roasters are buying directly from growers, cutting out both
the traditional middleman buyers and sellers.Large merged companies take 70% of market
and the remaining 30% consist of smaller coffee importers. As there is growth in the speciality
market, more opportunities are created and this represent an entry point for smaller-sized
companies.Successful companies looked into these aspects and generate tangible solution in
order to fit to the current market.

Current strategy
Internal Environment
External environment
Strategy
Goals and upcoming performance
Strategic Substitutions Evaluation
Way forward
STRATEGIC ANAYSIS
Figure 1: Strategic Analysis
Source: (As created by the author)
Environmental Analysis of Current strategies
As from the company’s history, current operation efficiency is working well, able to accommodate
changes, diversification to other opportunities and globalization for attainment of its objectives.
Current strategies which the company is working on are product development which aims to meet the
ever-changing consumer taste. Loyalty programme like Baque foundation, cycling team and on premise
advertising e.g. Barista area is also Key. The Company is also dedicated in providing the best certified

products. Promotional adsin shops. Implementation of integrated management system for sustainable
quality. The company also use expert coffee producers for highest quality and sustainability and further
exploit new markets. Digital and social media marketing is also key.
COMPETITION
For successful competitive analysis, one should do a research, gather the required
information, analyze the information and determine its strength.
Have concentrate on the first two leading competitors
i. Grupo nestle
ii. Jacobs DouweEgberts
iii. Grupo UCC coffee
iv. Seda outspan Iberia
v. Productussolubles
a) Nestle strategies
1. Targeting nutrition and wellness strategy.
2. Serving the consumer needs.
3. Being efficient
4. Creating values among consumers.
5. Allocating capital cautiously.
b) JDE's strategies
1. To provide global partnership and origin project in addressing involving challenges of
coffee and tea sustainability issues.
2. Purchase verified and certified coffee and tea with internationally recognized
standards.
3. Directlypartnering with suppliers to improve working conditions and caring natural
resource where coffee is grown.
These two companies have been operating for many years and they have joined with other
small-sized companies to hit their targets globally.

Their investment is so keen on efficiency and they allocate capital prudently for the good
return and compete well in the market.
When compared in financial terms, if the same can be replicated in Baque coffee and
globalization taken into consideration, there will be great achievement and the company will
be able to compete well.
Effectiveness of Existing strategies
a) New markets-This has enabled the company to have growth in their businesses.
b) Continuous improvement of processes and products through sustainable quality.
c) Investment in new machines and other assets.
d) Baque café becoming the 1st to hold the ISO 14001 quality standard.
e) Returning back to the society-team building, capacity building for under 23years.
f) Popularity of different brands in the market.
Therefore, the strategies are aligned with the company’s vision, mission and values.
Planning for future success
As per the current strategies there are some other strategies which should be included for more output
in the investment.
a) Use of Incentives for motivational purposes
b) Doing more marketing as there is increase in knowledge.
c) Further development of product portfolio.
d) Working on Loyalty programme to pull consumers to buy more.
e) Identifying the peak season and capitalize.
Recommendation
a) Incentives-The Company should look at investing more and giving incentives to customers who
buys in bulk. Also, sales and marketing team to get incentive after achieving the set targets.
b) Increase product portfolio-Depending on the consumer taste, there is need for development of
new products as per the current market demand.

c) Loyalty programme-To attract daily coffee drinkers, the company should look at providing
something attractive to pull consumers e.g. free 1 cup of coffee(Ingram, 2018).
d) Peak season-Lowering prices in peak season like end of the year. This will enable the company
sell more and achieve more margins within a short period.
STRENGTH
a) Popularity and among the leading coffee roasters.
b) Participation in clubs and associations as a sponsor and collaborator to promote culture,
sporting and social activities.
c) The company is run by professionals.
d) Certification-being the 1st coffee company to get ISO 14001 quality standards.
e) Diversification into catering facilities to spread the risk.
f) Availability of new machines.
WEAKNESS
a) Marketing is still not to the best level more so to the local people.
b) Low Investment on human resource to take the company to a competitive edge and do
globalization.
c) Some brands i.e. Soluble coffee and Unroasted coffee decaffeinated are declining hence not
worth investing in it.
OPPORTUNITIES
a) Availability of market for products as the demandfor speciality coffee is growing.
SWOT Analysis

b) Development of quality high-price products as consumers are ready to take it.
c) Certification places the company at higher level to market and sale its brands efficiently.
d) There is more room to expand the market as there is high demand for knowledge and specialty
brands.
e) Take initiative to counter climatic changes to maintain even production throughout the year
THREATS
a) Climate changes and biodiversity which endangers coffee varieties and affect production of
coffee.
b) Steep competition as there is increased direct trade between producers and small roasters and
retailers.
c) Online partnerships between producers and roasters create very competitive edge in the
market.
d) Demand for specialty coffee and increase in consumer knowledge demand the company to look
at it in an accurate point of view.
Conclusion
To conclude the above analysis, it’s important that the company take quick initiative on current
strategies for its to be able to compete with the current growing competitive market. Therefore, Baque
coffee have a small but growing market share but mainly in it home land. This can be planned to
increase its influence within and other countries.It must also try to add more products for the growing
demand.

References
Adams, B., Gans, J., Hayes, R. and Lampe, R., 2018. Does Organisational Form Drive Competition?
Evidence from Coffee Retailing. Economic Record.
Carvalho, J.M., Paiva, E.L. and Vieira, L.M., 2016. Quality attributes of a high specification product:
evidences from the speciality coffee business. British Food Journal, 118(1), pp.132-149.
Haggar, J., Soto, G., Casanoves, F. and de Melo Virginio, E., 2017. Environmental-economic benefits and
trade-offs on sustainably certified coffee farms. Ecological indicators, 79, pp.330-337.
Helms, M. M., & Nixon, J. (2010). Exploring SWOT analysis-where are we now? A review of academic
research from the last decade. Journal of Strategy and Management, 3(3), 215-251.
Hill, T., & Westbrook, R. (1997). SWOT analysis: It’s time for a product recall. Long Range Planning, 30(1),
46-52.
Hsia, C.C., 2015. Exploring the Three-Step Strategy between Independent Café And Coffee Chain Stores
From the Perspectives of Experiential Marketing.
Ingram, David. Coffee Shop Marketing Strategies. Small Business - Chron.com,
http://smallbusiness.chron.com/coffee-shop-marketing-strategies-10413.html. 29 June 2018.
Jackson, S. E., Joshi, A., & Erhardt, N. L. (2003). Recent research on team and organizational diversity:
SWOT analysis and implications. Journal of Management, 29(6), 801-830
Kokemuller, Neil. What Is the Difference Between a SWOT and a Five-Forces Analysis? Small Business -
Chron.com, http://smallbusiness.chron.com/difference-between-swot-fiveforces-analysis-78277.html.
Accessed 11 December 2018.

Levy, D., Reinecke, J. and Manning, S., 2016. The political dynamics of sustainable coffee: Contested
value regimes and the transformation of sustainability. Journal of Management Studies, 53(3), pp.364-
401.
Marescotti, A. and Belletti, G., 2016. Differentiation strategies in coffee global value chains through
reference to territorial origin in Latin American countries. Culture & History Digital Journal, 5(1), p.007.
Poortinga, W. and Whitaker, L., 2018. Promoting the Use of Reusable Coffee Cups through
Environmental Messaging, the Provision of Alternatives and Financial Incentives. Sustainability, 10(3),
p.873.
Rahmah, K., Sumarwan, U. and Najib, M., 2018. The Effect Of Brand Equity, Marketing Mix, And Lifestyle
To Purchase Decision At Maxx Coffee, Bogor. Journal of Consumer Sciences, 3(2), pp.01-15.
Slovak, Julianne. How to Do a SWOT Analysis. Small Business - Chron.com,
http://smallbusiness.chron.com/swot-analysis-40916.html. Accessed 12 December 2018.
Syahputra, H. and Adam, M., 2016. Coffee Company Performance In Aceh: The Indusstry Attractiveness,
Knowledge Management And The Formulation Of Competitive Strategy, Partnership And Its Implication.
In Prosiding Seminar Nasional Pascasarjana Unsyiah.
Wagner, Nancy. Sample of a SWOT Analysis for a Restaurant. Small Business - Chron.com,
http://smallbusiness.chron.com/sample-swot-analysis-restaurant-73526.html.26 June 2018.