Espresso Mushroom Company: A Business Strategy Report

This report provides a comprehensive analysis of the Espresso Mushroom Company, focusing on its innovative business model and entrepreneurial journey. It begins with an executive summary and an introduction that highlights the company's success in the food industry, particularly its environmentally friendly approach to mushroom cultivation using coffee waste. The report then delves into a detailed situational analysis, employing the 5C model to examine the company, its customers, competitors, climate, and collaborations. Furthermore, it utilizes the business model canvas to dissect the nine key elements of the company's operations, including key partners, activities, value proposition, customer relationships, segments, resources, distribution channels, cost structure, and revenue streams. The analysis also includes recommendations for Ann Miller's Speciality Mushrooms Ltd, suggesting strategies to emulate Espresso Mushroom Company's success, emphasizing the need for new investors, economical production methods, and a stronger value proposition. The report concludes by summarizing the key findings and insights, offering a valuable resource for understanding the company's business strategies and market position.

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Title: Espresso Mushroom Company
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Executive Summary
Innovation and business strategy are the new approach to attain success in the market. There
are many new innovative ideas that are being utilized for creating a niche an organization. In
the same way, the organization Espresso Mushroom Company had an innovative idea and the
two brothers went ahead with this plan and finally established a successful enterprise the
Espresso Mushroom Company. In the same way a small organization wants to copy the
success method of the Espresso Mushroom Company to make a mark in the market. The
organization is Ann Miller’s Speciality Mushrooms Ltd.

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Contents
Introduction................................................................................................................................3
Situational Analysis...................................................................................................................4
Business Model Canvas.............................................................................................................5
Recommendations....................................................................................................................10
Conclusion................................................................................................................................10
References................................................................................................................................12

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Introduction
The organization Espresso Mushroom Company has been established after numerous
trial and error. The organization has utilized an innovative and creative approach that has
helped the organization to introduce a new business startup in the food industry that has also
inspired many other small business food companies to adapt to such innovative ideas. The
brothers Alex and Robbie have a strong conviction in their idea and worked hard facing all
the barriers that come under their way. The major help which they received was from the
Sussex Innovation Center, after winning the entrepreneurship competition. They were to
utilize the financial and resource aid effectively, which helped in the establishment of the
organization. The other thing that helped the organization was their environmentally friendly
production methods which helped the organization in developing a credible image in the
market. The organization’s utilization of the business model canvas in the early stage, helped
in understanding the nine important aspects that are very crucial for the growth and
development of an organization. The organization focused on the key aspects and worked
over them to build strong bonds with the customers and the key partners that helped in further
flourishing the business. Till now the organization has created a name for itself as an
organization is environmentally inclined. The methods that are utilized are very costly and
thus to expand the business it is very difficult to find investors, as in the current market, all
the investors are focused towards making the profit and very few will understand the values
of the organization Espresso Mushroom Company. There is an organization in
Aberdeenshire, Ann Miller’s Speciality Mushrooms Ltd that is very inspired by the
development and the success of the Espresso Mushroom Company and wants to emulate it in
their organization for this a detailed analysis of the organization Espresso Mushroom
Company is required.

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Situational Analysis
The situational analysis of the organization will be conducted so that the organization Ann
Miller’s Speciality Mushrooms Ltd understands the position of the organization and its
relationships with the customers and the investors. For the situational analysis 5C model-
 Company
The organization Espresso Mushroom Company has the main focus on producing
high quality mushroom that has a longer shelf life and is produced with the help of
environment friendly methods. The organization produces different types of
mushroom that are grown through the coffee waste and this innovative idea helped in
the foundation of the organization. The organization now conducts delivery in the
entire United Kingdom and also supply their products overseas1.
 Customers
The organization is tied up in contract with some of the finest restaurants in the
United Kingdom. Also, the organization has major customers who promote food
products that have been grown with eco-friendly methods. Though, the target market
of the organization are all the customers who enjoy high quality food, but it has been
able to successfully attract people who have high conscious standards towards the
environment2.
 Competitors
The competitors of the Espresso Mushroom Company are Rustic Mushroom
Company, Back to the Roots, Fungi Futures, and GroCycle. All these organizations
are giving a tough competition to the Espresso due to the new innovative ways of
1 Abu Choir, 'MEMETAKAN JASA PENDIDIKAN JURUSAN PAI FITK IAIN SURAKARTA MELALUI
BUSINESS MODEL CANVAS' (2014) 15 Jurnal Ilmiah Didaktika.
2Yana Erlyana and Henny Hartono, 'Business Model In Marketplace Industry Using Business Model Canvas
Approach: An E-Commerce Case Study' (2017) 277 IOP Conference Series: Materials Science and Engineering.

Espresso Mushroom Company 5
production. Also, some of them use methods that are less costly in comparison to
Espresso, providing them with a bigger profit margin3.
 Climate
The Espresso Mushroom Company has a good reputation in the market due to their
environment friendly ways, but the organization is open to vulnerable attacks from
any external macro environmental factor4.
 Collaboration
The organization has collaborated with the health fit stores and the Urban Outfitters,
to expand their business and target a bigger market. The organization has created a
place for itself, but for higher development, the organization is in an urgent need for
bigger investors5.
Business Model Canvas
The business model canvas will further help in understanding the nine pillars of the
organization Espresso Mushroom Company that will be very inspiring and will provide a
better understanding to the organization Ann Miller’s Speciality Mushrooms Ltd that they
can copy for the development of their business. The business model canvas is a step by step
approach that helps in understanding the different segments in details. The nine pillars of the
business model canvas are-
 Key Partners
The key partners of the organization Espresso Mushroom Company are the Sussex
Innovation Center that provided the organization with the financial aid. The other key
partner of the organization is the University of Sussex that helped the brothers and the
3 . Hartatik and Teguh Baroto, 'Strategi Pengembangan Bisnis Dengan Metode Business Model Canvas' (2017)
18 Jurnal Teknik Industri.
4 Seán F. Keane, Kathryn T. Cormican and Jerome N. Sheahan, 'Comparing How Entrepreneurs And Managers
Represent The Elements Of The Business Model Canvas' (2018) 9 Journal of Business Venturing Insights.
5 R. S. Khizhnyak, 'Entrepreneurial Approach to the Business Incubator: A Business Models Based Of «Shared
Value Canvas» And «Diversified Markets Canvas»' (2018) 3 Business Strategies.

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organization with the knowledge that helped them upgrade their production standards
that helped in increasing the shelf life of their products. The organization is also
connected with ten coffee cafes that provide them with the espresso wastes and the
organization collect around a ton of coffee waste every month. But with the expansion
of the organization, there are need of more partners that can help in the development.
The main motivating factors amongst the key partners and the organization is the
protection of the environment which is the main concern of the organization and the
key partners6.
 Key Activities
The key activities that are needed for the organization Espresso Mushroom Company
to undertake are for increasing their target market. It is very important because the
competitors of the organization are targeting multiple segment customers, but the
organization Espresso Mushroom Company has a limited supply that to only to the
people who are interested in organic food. The organization has to implement better
plans that target multiple segments and utilize different distribution channels that have
a larger reach to the customers in the remote areas of the United Kingdom. The
organization has to increase their target customers by implementing better customer
relationship strategies7.
 Value Proposition
The organization is fulfilling the customer’s needs of high quality products by
providing them with mushrooms that are of high standards. The organization most
famous mushroom products are the pearl oyster and hot pink mushrooms. The
organization is fulfilling the need of the customers appropriately. But the value
6Peter Lindgren, 'Business Model Innovation Leadership: How Do SME’S Strategically Lead Business Model
Innovation?' (2012) 7 International Journal of Business and Management.
7 Budi Mulyana, Arief Daryanto and Agus Purwito, 'Business Model Development Strategy of Padjadjaran
University with Canvas Business Model Approach' (2018) 3 Asian Business Research Journal.

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proposition of the organization “Grow your own oyster mushrooms in two weeks”, is
exciting but it does not exhibit the unique traits of the organization clearly, so it is
important that the organization publicize their attributes more prominently, this will
also help in staying ahead of the competitors an achieving a bigger market size8.
 Customer Relationships
The customer of the organization Espresso Mushroom Company, expects the
organization to fulfill their corporate social responsibilities and fulfills the need and
demands of the customers ethically. The Espresso Mushroom Company has a
reputation of being an organization that utilizes environmentally friendly methods, so
it is the duty of the organization to continue the same methods and build a relationship
with the customers on the same grounds. The organization should try and building
loyal customers that will help in marketing the organization. A loyal customer is the
true brand ambassador of the organization9.
 Customer Segment
The main target audience of the organization Espresso Mushroom Company is the
people who mostly buy organic food or food products that are produced through
environmentally friendly methods. There is an emergence in the market of the
customers who only indulge in food products that are produced organically. But, the
organization has to cater to multiple segments and for this, it is important to target
multiple segments and the organization should utilize the differentiation strategy in
which the organization should inform the customers about the different attributes of
their products and why they are better from their counterparts10.
 Key Resources
8 Raouf Naggar, 'the Creativity Canvas: A Business Model for Knowledge and Idea Management' (2015) 5
Technology Innovation Management Review.
9 Marek Pierścieniak, 'The Business Model Canvas – Narzędzie Zarządzania Dla Start-Upów' (2016) 8
Przedsiębiorstwo i region.
10 Rizka Yura Regina and Farah Alfanur, 'Business Model Analysis Of TKD Consumer To Consumer (C2C)
Online Marketplace By Using Business Model Canvas' (2016) 22 Advanced Science Letters.

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The key resources of the organization include the initial financial aid that was
provided by the Sussex Innovation Center. Also, the personal saving of both the
brothers that helped in starting this business. The other aid which was provided to the
organization Espresso Mushroom Company was by the University of Sussex, helped
them with the resource of knowledge to improve the quality of the product. The
organization has effectively utilized all these resources, but in the current scenario, it
is in need of better distribution channels and also new investors that will help the
organization in attaining bigger heights11.
 Distribution Channels
The organization Espresso Mushroom Company has formulated very effective
distribution channels by creating alliances with the various health food stores and also
with the Urban Outfitters. The organization has formed a market base with both these
channels. Another distribution channel that the organization has successfully utilized
is their online website. In the current scenario, the distribution channel of the
organization has increased and stretched in the entire United Kingdom and also to the
foreign countries. The organization has easily accessible channels that have made it
convenient for the customers to get their mushrooms easily. The organization is in
talks with the bigger brands of the United Kingdom that will help the organization in
expanding more12.
 Cost Structure
The production of mushroom through the coffee waste and the utilization of
environment friendly ways have made the cost of production of the organization
Espresso Mushroom Company very costly. The organization requires more improved
11 Retno Setyorini and Randy Oktavianry Rey, 'Analisis Model Bisnis Pada Eighteen Nineteen Laundry Dengan
Pendekatan Business Model Canvas' (2017) 1 Journal of Secretary and Business Administration.
12 S. Shahand, J. van Duffelen and S. D. Olabarriaga, 'Reflections On Science Gateways Sustainability Through
The Business Model Canvas: Case Study Of A Neuroscience Gateway' (2015) 27 Concurrency and
Computation: Practice and Experience.

Espresso Mushroom Company 9
methods that are economical for the organization as it is very important for earning
profits for the organization. The Espresso Mushroom Company does not believe in
compromising with its production methods and what affects the cost of production,
even more, are the methods that are time taking and the wait for the outcomes13.
 Revenue Stream
The organization earns their revenue through their Kitchen Gardens, Seedbombs, Gift
Bundles, and the Tea Towels. The organization earns revenue through the special
hampers that are created on special occasions. The revenues generated by the
organization, though helps the organization in earning less profits as the profit margin
of the organization is very less, due to its expensive production methods and
distribution channels14.
Thus, the business model of the organization Espresso Mushroom Company helps in
understanding the nine important segments and the key elements around which they revolve.
For the organization Ann Miller’s Speciality Mushrooms Ltd, it is important to analyze and
examine all these factors in detail to utilize the strategies that will enable them with sure
success15.
Recommendations
From the complete analysis of the organization Espresso Mushroom company, this
can be formulated that the organization is in an urgent need for new investors, but the
environmental values of the organization that makes the production method very costly, is the
main hurdle. For the organization Ann Miller’s Speciality Mushrooms Ltd, it is important to
conduct a detailed research on the production method and come with new methods that are
13 Esra Sena Türko, 'Business Plan Vs Business Model Canvas in Entrepreneurship Trainings: A Comparison of
Students’ Perceptions' (2016) 12 Asian Social Science.
14 Virginie Vial, 'A Business Model Canvas For Social Enterprises' (2016) 8 Sains Humanika.
15 Achmad Arief Wicaksono, Rizal Syarief and Ono Suparno, 'BUSINESS MODEL IN ELECTRICITY
INDUSTRY USING BUSINESS MODEL CANVAS APPROACH; THE CASE OF PT. XYZ' (2017) 3
Indonesian Journal of Business and Entrepreneurship.

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economical and helps the organization in generating higher revenues. Also, it is important for
the Ann Miller’s Speciality Mushrooms Ltd, to formulate a better value proposition for the
organization that is targeted towards multiple segments and helps the organization in
attaining a bigger market size. The organization Ann Miller’s Speciality Mushrooms Ltd,
should implement a business model canvas as this will help them in understanding the
different requirement that has to be fulfilled for the nine main segments of an organization.
The organization Espresso Mushroom Company implemented the business model canvas at
the start of the company that facilitated in the huge success that the organization has achieved
as it provided effective directions to follow. To emulate the success of the Espresso
Mushroom Company the organization Ann Miller’s Speciality Mushrooms Ltd have to
follow the same footsteps but with few alterations16.
Conclusion
Thus, this can be concluded from the case study that innovation and business strategy
go hand in hand. For a business to survive in the current market it is important to utilize an
innovative plan that focuses on implementing new methods of development that are rare and
unique. The approach of the organization Espresso Mushroom Company was unique, though
there were some who were contemplating with the ideas, but the brother went ahead with it
and worked hard towards it. The knowledge of a business model canvas further helped them
in examining the nine segments in detail and also understanding the position of the
organization in different departments. This helped in utilizing the continuous development
process which facilitated huge success for the organization.
16 Craig Soderberg, 'Book Review: Organic Mushroom Farming And Mycoremediation' (2016) 18 International
Journal of Medicinal Mushrooms.

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References
Choir A, 'Memetakan Jasa Pendidikan Jurusan Pai Fitk Iain Surakarta Melalui Business
Model Canvas' (2014) 15 Journal Ilmiah Didaktika.
Erlyana YH Hartono, 'Business Model In Marketplace Industry Using Business Model
Canvas Approach: An E-Commerce Case Study' (2017) 277 IOP Conference Series:
Materials Science and Engineering.
Hartatik .T Baroto, 'Strategi Pengembangan Bisnis Dengan Metode Business Model Canvas'
(2017) 18 Journal Teknik Industry.
Keane S, K CormicanJ Sheahan, 'Comparing How Entrepreneurs and Managers Represent
the Elements of the Business Model Canvas' (2018) 9 Journal of Business Venturing Insights.
Khizhnyak R, 'Entrepreneurial Approach to the Business Incubator: A Business Models
Based Of «Shared Value Canvas» And «Diversified Markets Canvas»' (2018) 3 Business
Strategies.