Developing Growth Strategies: A Case Study of CafePod Coffee Co.

This report provides a comprehensive strategic analysis of CafePod Coffee Co., a South London-based independent coffee company. It assesses the organization's strategic position, highlighting its mission to deliver strong and exciting coffee, its competitive edge through innovative roasting expertise and patented IML technology for coffee capsules, and its revenue of $6 million in 2018. The report identifies key competitors like Tassimo and Nespresso, and examines the macro environment using PESTEL analysis, covering political stability, economic factors, social trends, and technological advancements in the UK market. A SWOT analysis reveals the company's strengths, such as its strong brand and unique product offerings, weaknesses including supplier relationship issues and decision-making processes. The report concludes with recommended growth strategies and discusses managing growth-related challenges. Desklib offers a wealth of similar resources for students seeking assistance with their assignments.

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Table of Contents
PART 1: Organization Strategic Position........................................................................................2
PART 2: Strategic Industry, Market and Competitor Analysis.......................................................4
PART 3: Recommended Growth Strategies..................................................................................10
PART 4: Managing the Growth.....................................................................................................18
References......................................................................................................................................23
Appendices....................................................................................................................................28

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PART 1: Organization Strategic Position
The developments inorganizations are dependent on the quality of the product offerings
and the demand faced by the organization in the different market sections. In this context,
CafePod Coffee Co., has taken steps to develop an independent coffee company which is located
in South London. The organization aimed at developing strong and exciting coffee for the
adventurous coffee drinkers. The organization aimed at developing high quality coffee in order
to continue with the effectiveness of the operation in harmony with the needs of the consumers.
The concerned organization was founded by Peter Grainger and Brent Hadfield with the
objective of developing strong and exciting coffee through professional roasting expertise
(Cafepod.com 2019). The quality of the product offering was based on the needs of the
organization in continuing the effectiveness of the operations in harmony with the changing
tastes and preferences of the consumers.
The mission of the concerned organization is to empower the people to do well through
the exceptional taste of coffee that is being developed by the concerned business. Kowalkowski
et al. (2015) stated that the mission of an organization assists the same in continuing the
effectiveness of the operations while relating to the societal needs. In this context, the mission of
the organization is linked to the upliftment of the local communities. The innovativeness of the
business proposition and the development of the coffee flavors have assisted the concerned
business in achieving a competitive edge over the other players in the market. The revenue of
the concerned organization was $ 6 million as computed in the year 2018 (Cafepod.com 2019).
The different product offerings of the concerned organization are targeted to the coffee lovers
and people liking strong essence of coffee products. It has assisted the business in positioning

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their diverse range of product offerings in harmony with the market demand faced by the same.
Hessels and Parker (2013) stated that the different changes that are facilitated by the
organizations are dependent on the level of competition that is faced by the same while operating
in the diverse markets. Therefore, the enhanced rate of market competition would mandate
frequent R&D operations to retain the competitive edge through frequent innovations.
The major competitors of the concerned organization are Tassimo and Nespresso Coffee.
The competitive edge of the business is dependent on the diverse range of product offerings that
are made by the business over the other players. On the contrary , the quality of the coffee has
assisted in drawing the awareness of most of the target consumers of the business. The concerned
organization employed a series of innovative measures in the roasting expertise in order to
continue with the effectiveness of the operations in harmony with the needs of the consumers
(Greve 2013). The key modifications that are facilitated by the organizations are dependent on
the evaluation of the needs of the consumers while operating in different global economies. On
the contrary , the unique proposition of the concerned organization is dependent on the
evaluation of the needs of the consumers relating to strong flavored coffee. Therefore, it has
assisted the business in achieving a strong market holding in UK. However, the concerned
organization has facilitated limited expansion in the different regions, which has affected the
scope of expansion of the business while operating in the different global economies. Ulaga and
Loveland (2014) noted that the limited scope of expansion affects the capabilities of an
organization in continuing the effectiveness of the operation and drawing the awareness of huge
amount of consumers. Therefore, in this context, the lack of suitable expansion related strategies
has affected the capabilities of the concerned organization in continuing the effectiveness of the
business.

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According to a survey taken by National Coffee Association, the UK population
consumers around 70 million cups of coffee a day computed in 2014, which increased to 95
million cups of coffee a day in year 2018 (Eggers et al. 2013). The growing demand for coffee
among the UK consumers has assisted the concerned organization in targeting huge amount of
consumers towards the product offering. On the contrary , it has been found in a survey that 87%
of the consumers in UK are focused on the quality of the pro duct offerings over quantity or price
(Koryak et al. 2015). Therefore, the enhanced quality of the coffee and innovativeness in the
roasting process has assisted the concerned organization in adhering to the needs of the
consumers while operating in different global economies. On the contrary , the concerned
organization also developed coffee capsules through patented IML technology, which has
assisted the business in achieving a competitive edge over the other players (Cafepod.com
2019). However, the concerned organization faced different issues while continuing suitable
relation with the suppliers due to lack of proficient communication. It has affected the
capabilities of the organization in undertaking proficient inventory management. The
organization is planning to facilitate the utilization of suitable communicative measures in order
to continue with the effectiveness of the operations in harmony with the needs of future
sustainability (Achtenhagen, Melin and Naldi 2013).
PART 2: Strategic Industry, Market and Competitor Analysis
1.1 Macro environment analysis
1.1.1 Political
As far as the political stability in United Kingdom is concerned, it can be stated that the
political stability index in the year of 2017 was 0.26 which seems a bit volatile for a developed

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country like UK (Figure 1). One of the main reason was the Brexit issue that created some
problem in the political stability as well. However, the average political stability between 2010
and 2017 was 0.4 that seemed quite moderate. Besides this, the government effectiveness in UK
is also a significant factor with the value in 2017 was 1.41. A strong and effective administration
creates better business environment in UK (Figure 2). Therefore, it is also obvious that the rate of
corruption is also less in compare to other developed countries. For an instance, the corruption
index shows an average value of 1.75 between 2010 and 2017 that brings more transparency in
to the government practices towards creating effective business environment (Figure 3). Quality
of regulation to safeguard the interests of small and medium corporate firms are also important to
bolster in order to create equal business opportunities for all the corporate business firms
(Parthanadee and Buddhakulsomsiri 2014). As a result of that it becomes a lucrative market for
the different companies irrespective of its size and capabilities to invest in the UK market
(Figure 4). As a result of that CafePod Coffee Co. get adequate opportunity to establish its
business effectively in UK.
1.1.2 Economic
United Kingdom is one of the most developed countries around the world. The report of
Global Economic Forum confirmed that in the global competitive index of 2017-18, UK ranked
8th with a score of 5.51 (Figure 5). Therefore, huge opportunities for the business organizations is
a key features for doing business in UK. Moreover, the Consumer Price Index in the UK market
is stable and moderate with an ascending points of 106.8 in the first half of 2019 (Figure 6). It
creates a lucrative market for the business organizations to deliver more robust market
penetration and maximize the consumers (Ballesteros, Teixeira and Mussatto 2014). As far as the
inflation in the UK market is concerned, the average inflation rate is 2.5 with high government

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control on the inflation rate (Figure 7). As a matter of fact, the government also takes care of
stabilizing the inflation rate intensely (Www3.weforum.org 2018). However, the corporate tax
rate is high due to a developed market but the prevalence of liberal marketing paradigm, the
government tries to decrease the market value of tax by 19 in compare to 23 in the year of 2013
(Figure 8). It can also be seen in case of the consumption rate in UK where the average
consumption growth is 7.93% (Figure 9). It can be stated that the economic growth and the
progress in the UK market creates an advantageous environment for CafePod Coffee Co. to
encapsulate the market effectively.
1.1.3 Social
In the social structure also the demographic features are considered to be effective for
business organization to establish better business orientation. Competitiveness in the UK market
is a key feature that is resembled with the business prospect for the new corporate organizations.
The average value of competitiveness is 5.4 that assists to set a healthy business orientation in
the market (Figure 10). Besides this, there is no such gender biasness in the UK society therefore
the business organization have to respect it and change the course of business towards anti-
discriminatory practices. Higher education among the people facilitates a strong public
awareness and pushes the business firms to set effective framework to do business effectively
(Borrella, Mataix and Carrasco‐Gallego 2015). Female to male ration value in the secondary
education in UK is 1.03 which connotes the effective measure for the business organization to set
business on the basis of anti-discriminatory practices (Figure 11). Furthermore, diversity in
religious practices also influences CafePod Coffee Co.to set effective strategies for different
religious groups. It is also considered to be a strategic advantage for the corporate firms to

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encapsulate the market extensively. The cultural vibrancy and the diversification make the UK
market an effective place for CafePod Coffee Co.to introduce innovation and creativity.
1.1.4 Technological
Technological advancement is referred as a core feature of the UK market. The UK
government always encourages the business organizations to introduce new business innovations
with the help of high technology. The rate of high tech export in UK is amounted $68,625.23
million in the year of 2017 and the trend is growing rapidly (Figure 12). As a result of that the
private companies also put immense focus on introducing and implementing new technologies in
the process of maximizing the market. As a matter of fact, the local communities are also highly
interested to the technological considerations in business organization. It is associated with
developing sustainable framework for the business organizations and developing an environment
friendly framework with the help of technology (Folmer 2014). Therefore, it can be argued that
the purpose of introducing new technologies is associated with the motive to shape a better and
eco-friendly business environment CafePod Coffee Co. The local communities and the private
companies will get equal benefits from this and it will further foster a strategic opportunity for
CafePod Coffee Co.to maximize the market effectively.
1.2 SWOT analysis
1.2.1 Strengths
Cafepod Coffee Co. is one of the renowned companies in UK with a number of products
and huge market capitalization. The mission and vision statement of the organisation is
effectively resembled with the progressive measure. For an instance, Cafepod Coffee Co.intends
to maximize its market and willing to become the 7th largest roast and ground coffee brand in

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UK. Besides this, the mission of the company is coupled with providing high quality coffee to
the consumers (Ferreira 2017). Moreover, the use of LML technology also improves the quality
of the coffee and manufacturing unique coffee capsules (cafepod.com 2019).
1.2.2 Weakness
However, there are several weaknesses that the company is suffering with in terms of
lack of good relationship with the suppliers. As a result of that the company is facing sever
irregularities in raw materials and the company inventory and R&D projects will be affected due
to this issue. In addition to this, top down decision making process is also considered to be a fatal
for Cafepod Coffee Co.as the employees do not participate in the decision making practice.
Moreover, lack of advanced technology is also a severe problem for the organization as it fails to
manufacture unique products. Therefore, the prevalence of product diversification is also halted
in Cafepod Coffee Co.
1.2.3 Opportunities
Despite of the weaknesses there are some positive measures identified as the
opportunities for the company can be found in the dynamic and growing market in UK Coffee
industry. It can be argued that due to huge demand in the market creates huge opportunity for
Cafepod Coffee Co.to maximize its potential consumers. Effective innovation practice with
expanding the market effectively create a sustainable progress for the company to retain its
business orientation in market (Carvalho, Paiva and Vieira 2016). It can be further effective by
procuring an effective relationship with the suppliers and there are still some possibilities for the
organization to expand market with the help of continuous supply of raw materials and
innovation.

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1.2.4 Threats
One of the significant threats is focused on the high competitiveness in the UK market.
The lucrativeness in the market and its growing trend attract a number of companies to penetrate
into the UK coffee market. Moreover, the diverse customer base creates a vulnerable condition
for Cafepod Coffee Co.to continue its business orientation. Henceforth, diversification of
products with the help of innovative ideas and focusing on quality are referred as the most
important part for Cafepod Coffee Co.to get strategic advantages. Besides this, the robust
government interference and presence of trade union curtail the freedom of doing business in UK
(Martinez-Saezet al. 2017).
1.3 Competitive analysis
1.3.1 Importance to customer:
Based on the competitive analysis, it can be stated that the preferences of the consumers
are highly important for the Cafepod Coffee Co. in order to create better marketing exposure. In
this regard, the products, price, quality, service, reliability, expertise, reputation, location,
appearance and image are highly important for the customer for visiting in Cafepod Coffee Co.
For instance, in case of the products, the consumers are trying to find out the uniqueness of the
product. It is highly associated with the innovation and diversification of products. Besides this,
the price of the Cafepod Coffee Co. products leave a direct impact on the consumers. Therefore,
the consumers are imposing great concern for the price and decide to buy the product. Moreover,
quality of the product is also considered to be an important aspect for the organizations in order
to maximize consumers effectively (Ranicet al. 2014). In this context, it can be stated that the
quality of Cafepod Coffee Co. creates a serious concern for the UK consumers because the

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company charges high price for the products. Service is also a core activity of Cafepod Coffee
Co. and the company is willing to provide good quality services to the consumers. It is associated
with the reliability of the consumers to depend on Cafepod Coffee Co. It can be argued that
Cafepod Coffee Co. still tries to create a reliability among the buyers and maximize consumers.
Expertise is associated with the practice of making better framework for the organization to
diversify the products. For Cafepod Coffee Co. it is essential to diversify its products to
encapsulate the market effectively. In fact, the reputation of the company is good along with
Nespresso that assists to bring a competitiveness in the market (Nguyen, Nguyen and Bosch
2015). Moreover, Cafepod Coffee Co. follows a strategic advantage by making effective
measure in location. However, Tassimo continue withs more effectiveness into the process. The
appearance and image of the organization is also play a significant role in order to make some
advantages for Cafepod Coffee Co.(Barrioset al. 2016).However, the image of the company is
inferior toTassimo and Lavazza.
PART 3: Recommended Growth Strategies
The different growth strategies are facilitated by the businesses for continuing
thecompetitive edge of the same. In this context, the different changes that are facilitated by the
organizations are dependent on the evaluation of the market position and completion faced by the
same. The concerned organization has designed the range of product offerings in harmony with
the needs of the consumers. However, lack of proficient technological innovations in the
processes and the enhanced competitiveness in the markets posed a serious threat to the
organizational sustainability (Helfat and Martin 2015). The strategies that might be facilitated by
the organization in this stage is being discussed in this section of the report. It will provide a
clear structure of the different steps that might be facilitated by the organization in three distinct

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stages, which will be supporting the business in achieving a competitive edge among the
competitors in the market.
Stage 1- Market penetration and promotion in the existing markets
The stage aimed at deciphering and implementing the short term strategies for growth of
the business within the next 12 month period. In this period, the concerned organization will aim
at developing the local market prospects through different promotional activities. In this stage the
organization will be utilizing the market penetration strategies for developing consumer
awareness of the propositions in the existing markets. It will be supporting the concerned
organization in achieving a loyal customer base in the local markets and thereby enhance the
goodwill of the same. Vellema et al. (2015) stated that social media promotions assists an
organization in developing consumer awareness of the brand propositions and image of the
same. Moreover, García‐Rodríguez et al. (2013) noted that brand recognition assists an
organization in building a positive brand name for the business. The concerned organization
might take steps to undertake the use of social media platforms like Facebook, Instagram and
Twitter in order to make the consumers awre of the product offerings in the local levels.
On the contrary , the competitive pr icing the sales promotion activities will be
supporting the concerned organization in maximizing the sales revenue. For an example, the
company utilizes a sales promotion technique, which offered the consumers with free UK
standard deliveries on all orders over £45 (Cafepod.com 2019). It has assisted the business in
drawing the awareness of the UK based consumers. On the contrary , the concerned organization
might also make use of diverse range of coupons in order to draw the awareness of the
consumers. Robbins (2013) stated that brand promotions through the utilization of different