University of Northampton - MKT3031: Root Coffee Strategy Report

This report provides a strategic analysis of Root Coffee, a small coffee café business in the UK. The report begins with an introduction to entrepreneurial strategy, emphasizing the importance of well-developed business strategies for success. The main body includes a situational analysis using the PESTLE framework, examining political, economic, social, technological, legal, and environmental factors affecting Root Coffee. The report also critically reviews Root Coffee's strategic choices, including Porter's generic strategies such as cost leadership, cost focus, differentiation focus, and differentiation leadership. Finally, the report offers recommendations for Root Coffee to improve its business strategy and achieve better outcomes in the competitive coffee market. The analysis is supported by various models and frameworks, providing a comprehensive overview of the company's market position and strategic options.

ENTREPRENEUR
STRATEGY

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
Situational analysis......................................................................................................................3
Critical review of strategic choices..............................................................................................6
Vertical and Horizontal strategic.................................................................................................8
Recommendations........................................................................................................................9
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Entrepreneurial strategy is a business strategy which has followed by different entrepreneurs
in the market for achieving very appropriate outcomes. Currently those businesses or companies
are able gain great profit in the market which has various well-developed business strategies
(Kitsios and Kamariotou, 2018). This report discusses entrepreneurial or business strategy of
Root Coffee. There is Root coffee is a small coffee café business, situated in Liverpool United
Kingdom, which currently has an effective customer base in its market segment. There are some
key models and frameworks also has been used in this report for perfectly conducting the
situational analysis of Root Coffee in. On the other hand, there are critical review of Root
Coffee’s strategic choices and proper recommendations also has been given in this report for the
company.
MAIN BODY
Situational analysis
Situational analysis of Root Coffee is very necessary task to a company, because analysing
different situations of market, any company or business can simply make different strategies for
itself to gain excellent profit in the market. Currently top-level management within every
company is taking various decisions towards analysing different situations of the market. After
analysing various situations of market, there are Root Coffee also will be able to get the proper
idea of making different effective and efficient strategies of business. Of course, this business
already has used various productive strategies of business, but it still needs to be developed own
business strategies after conducting situational analysis. With the support of own effective
strategies of business, this company has succeeded in productively running its business
operations in its area. This is the main reason that, currently this coffee cafe business has very
large customer base in Liverpool, UK.
According to different business experts, top-level management within every company
including Root Coffee should be conducted the situational analysis by suing various frameworks
and models, like PESTLE, because PESTLE analysis model is too necessary to Root coffee for
achieving its objective of excellent outcomes in the market. Currently most companies in the
market are putting their huge efforts for gaining huge profit, in which conducting analysis of
market situations is the most favourable deal to every company for gaining huge profit margins
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(Vaznyte and Andries, 2019). Top-level management of Root Coffee have completely
understood this basic thing that, market competition in continuously increasing, so that top-level
management of this coffee cafe company tries to develop such business strategies which can
provide it the great competitive advantages in the United Kingdom’ coffee cafe industry.
There are PESTLE analysis framework or model has been used below that can effectively
support to the management of Root Coffee for perfectly achieving its objective of analysing
different market situations.
PESTLE Analysis
PSETLE analysis is a very productive model or framework that helps to different
organisations and companies to achieve their objective of effectively analysing different market
segments. This framework mainly projects six key external factors of different companies’
business environment which can affect a company in both terms positively and negatively. In
this situation, top-level management of Root Coffee has also required to take decision towards
using this framework or tool within its business operations for effectively analysing various
situations of the market. PESTEL term generally indicated six key external factors, like;
political, social, economic, legal, technological and environmental, in which these all factors
have been discussed below for achieving objective of analysing market situations for the Root
Coffee.
Political factors
Currently political factors of the United Kingdom and also of many other countries where
Root Coffee operates are highly affecting to this company’s business environment, so that upper
management within Root Coffee should be taken some appropriate steps towards perfectly deal
with the impact of these political factors (Ndungu and et.al., 2017). For example; There are
government of the United Kingdom also has imposed the taxation formality on various
businesses, so that there are upper management of every company including Root Coffee should
be fulfilled the taxation formality for properly running their business operations in the country
the United Kingdom.
Economic factors
Economic factors of country also highly affect the business environment of Root Coffee
in the market. For example; when a country has well-developed economic conditions, in which
this company can simply achieve great profit in the market. On the other side, when a country
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not has well-developed economic conditions, in which it should be putted its huge efforts for
selling its various products and services in that country. The economy factors of Root Coffee’s
home country UK are positively affecting it, because the United Kingdom has well-developed
economic conditions. Currently this coffee café has opportunity to simply sale its various coffee
cafe products in this country, because most people within the United Kingdom has high living
standard, and they can simply afford products and services which has offered by Root Coffee
here. High inflation rate in economic system is a threat to this small business.
Social factors
These factors of the UK also very positively affecting this company in the market,
because social factors of this country are completely favourable to Root Coffee. Reason is, most
people of the UK believes in buying only those products and services which really has good
quality. In this situation, there are Root Coffee has an opportunity to provide very excellent
quality of coffee cafe products, so that’s why these factors are very positively affecting to this
company in the market. Existing coffee café businesses also try to produce quality products, so
this threat to root coffee café. On the other hand, many of people within this country are
completely aware about the implications of corporate social responsibility, so that they very like
to purchase various products and services from only those businesses or ventures which mostly
fulfils their CSR (corporate social responsibility on time (Chan and Lean, 2018). That’s why this
social factor affects to this coffee cafe company for always fulfilling its CSR on time.
Technological factors
Technological factors can support to Root Coffee for effectively increasing its
productivity and performance in the market. Basically, technological factors of the UK are very
favourable and appropriate to this company in the market, because by using various
technological machineries, gadgets and other equipment this business can simply increase own
productivity and performance in the UK’s coffee cafe industry. There are upper management of
Root Coffee should take decisions towards taking lots of advantages through the technological
factors of the United Kingdom. Of course, there are various competitors of this company also has
used various technological gadgets and machineries within their daily busines operations, so this
is a threat to this business. In this situation, Root Coffee has opportunity for always using
different technologies within its daily business operations for gaining very appropriate outcomes
in the market.
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Legal factors
There are upper management at Root Coffee is fully responsible to adhere various legal
and ethical considerations within its workplace while running its business operations in many
countries. Basically, these factors give opportunity to this company for effectively maintaining
an ethicalness within its workplace. There are government of the United Kingdom also has
passed different legislation, standards and regulations which existing management of Root
Coffee should be adhered within its workplace (Ying, Hassan and Ahmad, 2019). For example;
there are employment law is also a part of legal factors, so that upper management of this coffee
cafe company responsible to implement the employment law within its business operations for
getting opportunity to provide a legal framework to its various employees. Deeply Understating
all laws is very tough and complicated task, so this is like a threat to this small coffee café
business.
Environmental factors
These factors influence Root Coffee’s upper management for taking steps towards
protecting the natural environment. Currently there are various rules and regulations has passed
by different organisations which mainly works for natural environment protection. In these rules
and regulations, they generally mentioned that, no business has right to harm the natural
environment while conducting own various operations of business. In this situation, Root
Coffee’s upper management should be ensured that, it’s any business activity or operation is no
harming the natural environment. By following environmental regulation, this company can get
opportunity to simply protect the natural environment. However, day by day reduction of
natural resources is very big threat to company, because coffee is also a key resource of nature.
These all are key factors of market which can affect Root Coffee in both manners
negatively and positively (Berglund and Sandström, 2017). That’s why upper management of
this company should take some appropriate decisions towards easily deal with these all factors
and situations of the market. By using this model, root coffee café business will able to achieve
its objective of making different effective business strategies as well.
Critical review of strategic choices
Porter’s Model of Generic Strategic: - Porter suggested 4 different generic business strategies
which could be adopted by the company to competitive advantage gain.
Cost leadership: -
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Cost leadership strategy objective is to provide the lowest cost producer in the industry,
and Root Coffee is focused in providing the low-cost product and company’s own brand name
product to get more of the customer. In traditional method and strategy, the objective is to
produce large scale to enable the economic scale of business.
Cost leadership is important as it require cooperation with all the functional areas of the
company. To lower the cost producer, company like to achieve the following: Increase level of
productivity, High utilisation, Utilisation of the buyer’s power to negotiate the lower in price for
inputs production, Lean method production, Effective use of technology for production process.
This factor help the company in getting more product of low cost leadership.
Cost Focus: -
Cost focus refer to the business seeker to lower cost of advantage in a particular market
segment. They are the product similar to higher price product and market leader product
(Planque,2020). Root Coffee as one of the biggest coffee cafeers in UK supermarket
focus in providing the best product to all its market segments customer which shows the
exact targeted customer to be associated with a target strategy for that particular market.
If some product is of high price then Root Coffee works on those products to supply the
product with mee too products which are the same product with lower cost in prices. Cost
focus is important and Root Coffee focus on all the ways to reduce the cost according to
the market needs and the customer economic condition. Cost focus helps in finding the
minimum cost of the product which can cover more audience and customer to itself and
help the company in the business goals.
Differentiation Focus: -
Different focus shows the strategy with aim within one and small target number and
market segment (Schermuly,2019). These products are for special customer to the target
market with segmentation and the product are totally innovative and different from their
competitor which help the company to work better. The important issue for Root Coffee
to adopt the strategy to make ensure the customer and their different needs and wants.
Root Coffee focus on customer satisfaction and to complete those needs they provide
work and service to the customer to get the satisfaction by the product and service Root
Coffee is giving to customer in different ways other than their competitor.
Differentiation leadership: -
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This strategy is to target the business in large market to aim for competitive advantage to
the whole new level in the industry. This strategy includes one and more criteria of the buyer and
their market with the positioning to meet the criteria, its mostly used in the associated to
charging the premium price of product. The extra price and the additional features to the
customer.
Root Coffee provide the leadership strategy to capture the best of the audience in the market and
providing them the best of services with different focus and leadership to the market to the
customer orientation.
 Providing the quality and durability to the product and Root Coffee is focused in its
market value and provide the best of quality to its customer.
 Branding and loyalty are important and Root Coffee as top coffee cafeer brand work on
loyalty.
 Distribution of product in all major channels of industry.
 Promotional support.
Vertical and Horizontal strategic
Horizontal business model: -
The horizontal integration to increase the diversity of their product and the size of the
company. It also to achieve the scale of economies and reduce the competition.
Even the horizontal integration sense from business standpoint, there are many downsides to
horizontal integration to the market and especially when they do succeed. Root Coffee choose
vertical model and they focus less on horizontal as working is such a big platform and market
need to consider proper management and for that they can’t take risk for their success in the
market as they are the leading brand in UK super market coffee cafeer industry.
Vertical Business model: -
Vertical business model include the autocratic leadership and it also shows the
management to the top-level rules and the boss oriented in which the boss makes the command
and employees follow (Mungai,2017). The company undergoes to this style of strategy model to
acquire the process of production in same industry, it helps in strength the company supply chain
and reduce in production cost to the company. Root Coffee prefer the vertical model as it is more
to the industry of coffee cafeer and it increase the deduction in production cost and increase the
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supply chain which helps Root Coffee in getting the business objective. Vertical also helps the
company from its newly operations by selling its product and services to the customer directly,
and helps in cut down to the deals in delivery and transportation.
Vertical structure of model includes the top-level management into their decision and it
flow from top first then middle and then low and in Horizontal, employees are given leeway to
choose the decision on their own based on the company and its guideline.
In practical terms of business, the vertical structure shows autocratic leadership style which
work in boss oriented and boss command and the employees need to follow. In the horizontal
structure they show visionary approach of leadership and allow to make decision and work
accordingly and the boss feel that the employees are creative and efficient to make calls
(Islami,2020).
Recommendations
Currently the Root Coffee is one of the prime coffee cafe brands of the United Kingdom, in
which there are upper management of this company is fully responsible to always maintain this
same position of the company in the future as well. Currently market competition of within the
coffee cafe industry is continually increasing, so that it should be develop some productive
strategies of business for gaining excellent competitive advantage in the market (Stojceska,
Serafimova and Gjorgjioska, 2019). Effective business strategies will positively affect to Root
Coffee in the international market, so that it should always adopt and implement effective
business strategies in its business operations.
CONCLUSION
The report explains the comprehensive situational analysis of company which shows the
working of company in the coffee cafeer industry and maintaining the top position with all the
hard work. Further in report discussed the porter generic model explaining the cost leadership
and cost focus of the organization regarding the market segmentation and its target market.
Leadership and focus are important to work in the coffee cafe market and company work in that
with all the knowledge of the customer and their needs & wants. Root Coffee use the vertical
model to increase the production and decrease the production cost to more to the profit for the
company. Report have mentioned the recommendation to the strategies and choices.
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REFERENCES
Books and Journals
Berglund, H. and Sandström, C., 2017. A new perspective on the innovator's dilemma-exploring
the role of entrepreneurial incentives. International Journal of Technology
Management. 75(1-4). pp.142-156.
Chan, J. and Lean, H. H., 2018. Measuring entrepreneurial orientation of firms in the creative
and cultural sector.
Islami, X., Mustafa, N. and Latkovikj, M.T., 2020. Linking Porter’s generic strategies to firm
performance. Future Business Journal. 6(1). p.3.
Kitsios, F. and Kamariotou, M., 2018. Open data hackathons: an innovative strategy to enhance
entrepreneurial intention. International Journal of Innovation Science.
Mungai, E. and Ogot, M., 2017. Generic strategies and firm performance: An investigation of
informal sector micro-enterprises in Kenya. International Journal of Business and
Management. 12(3). p.148.
Ndungu, S., and et.al., 2017. Moderating role of entrepreneurial orientation on the relationship
between information technology competence and firm performance in
kenya. International Journal of Professional Business Review: Int. J. Prof. Bus. Rev.
2(2). pp.1-22.
Planque and et.al., 2020. Comparing the horizontal and vertical approaches used to identify
foraging areas of two diving marine predators. Marine Biology. 167(2). p.25.
Schermuly and et.al., 2019. Developing an industrial IoT platform–Trade-off between horizontal
and vertical approaches.
Stojceska, G., Serafimova, M. and Gjorgjioska, E., 2019. Entrepreneurial education as strategy
for economic development.
Vaznyte, E. and Andries, P., 2019. Entrepreneurial orientation and start-ups' external
financing. Journal of business venturing. 34(3). pp.439-458.
Ying, Q., Hassan, H. and Ahmad, H., 2019. The role of a manager’s intangible capabilities in
resource acquisition and sustainable competitive performance. Sustainability. 11(2).
p.527.
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