Analyzing Business Environments: Costa Coffee's Mexico Expansion

This report provides a comprehensive analysis of the business environment for Costa Coffee's planned expansion into the Mexican market. It begins with background information on Costa Coffee, a British multinational coffeehouse, and then delves into a PESTLE analysis, examining the political, economic, social, technological, legal, and environmental factors impacting the business. Furthermore, Porter's Five Forces framework is applied to assess competitive rivalry, supplier power, buyer power, the threat of substitutes, and the threat of new entrants. The report includes a timeline for the project plan, covering research, location selection, competitor analysis, strategy adoption, review, marketing analysis, and final plan development. The conclusion emphasizes the identification of suitable factors for Costa Coffee's market entry and the importance of the discussed time plan and environmental analysis. Desklib offers similar solved assignments for students.

Business Organisations and Environments in a Global Context
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Table of Contents
Introduction:...............................................................................................................................3
Background to Business Organisation:......................................................................................3
Background to Business Environment:......................................................................................3
Time Plan:..................................................................................................................................5
Conclusion:................................................................................................................................6
Reference List:...........................................................................................................................7
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Introduction:
Before expanding a business in the global market, a particular business organization needs to
judge all the essential factors that have a direct impact upon the process. Costa Coffee is one
of those organizations that have planned to expand their business in the Mexico market.
Therefore, in this report, all the suitable factors related to the business environment of the
organization and time required for making overall business plan is going to be discussed
Background to Business Organisation:
Costa coffee is a British multinational coffeehouse situated at Dunstable in United Kingdom.
From the report published in 2016, revenue generated by the company is around $116.7
million. This is a favoured coffee shop in UK the market, which has managed to expand their
business around the globe (Costa.co.uk, 2018). Recently, the managers and the owner of the
organization have planned to expand their business in the Mexico market. Hence, it is one of
the essential requirements to develop a proper business plan as well as to work accordingly
for that.
Background to Business Environment:
In order o judge the business environment of the organization, PESTLE and Porter’s Five
Forces analysis is going to be discussed.
PESTLE analysis:
Political:
The political environment in the Mexico market is suitable for the external business
organization which are as follows:
 Low trading tax
 High rate of income from the government sectors
 Involvement of the government authorities in the market
Economical:
 Employment opportunity in the market and numbers of start-ups in the market is
adequate for local people.
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 It has been seen that the overall economic condition of the country is suitable for
starting new business, as there development opportunity is more for the companies
Table 1: Economic condition of the country
(Source: Bendell, 2017)
Social:
 Costa Coffee has several opportunities in the market to meet the exact demands of the
customers in the market (Bendell, 2017).
 People in Mexico prefer to enjoy their time in coffee shops and at the same time, they
like to taste innovative flavoured coffee.
 Besides this, the customers in the UK market have preferred the green and ethical chic
followed by the company.
Technological factors:
At the time of starting their business in the Mexico market, the company need to follow all
these factors:
 Coming out with innovative technology
 Introduction of Wi-Fi facility in the coffee shops
 Customers feedback portals
Legal factors:
 Following the exact trading rules and introducing stricter customs
 Proper licensing of the organization
Environmental factors:
 Following the environmental regulations for trading
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 Introducing eco-friendly products and scientific recycling the used products
Porter’s five forces:
Competitive Rivalry:
Being a new company in the market, Costa Coffee need to judge the strategies implemented
by the rival coffee shops for the market (refer to figure 3).
Bargaining power of suppliers:
Suppliers bargaining power is high for the start up organizations in the Mexico market. Apart
from this, the company needs to consider all the following factors for the organization.
 By lowering down switching cost
 Confined size of buyers
Bargaining power of customers:
The bargaining power of the customers for the company in the market is moderately high for
them.
 Adequate numbers of suppliers
 Moderate size of each suppliers
Threat of substitutes:
 The threats of the substitutes of coffee is low still now
 Introducing proper substitutes of coffee shops
 Less cost of the substitutes products
Threat of new entrants:
 There are numbers of new coffee shops arriving the market based on which the
competition is being high/.
 Numbers of new coffee shops in the market
 Moderate supply chain cost
Time Plan:
Research 1-2 week 2-3 week 3-4 week 4-5 week 5-6 6-7
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components week week
Selecting
proper location
and market
Judging the
competitors
strategies
Adopting new
strategies
Reviewing the
overall strategy
implementatio
n
Marketing
analysis
Making final
project plan
Figure 1: Timeline of the project plan
(Source: Created by the author)
Conclusion:
This entire project plan has discussed about the most suitable factors required for Costa
Coffee to start business in the Mexico market. Required time plan, business environmental
analysis and all the necessary factors has been discussed in this assignment.
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Reference List:
Bendell, J., 2017. Evolving partnerships: A guide to working with business for greater social
change. Routledge.
Carroll, A. and Buchholtz, A., 2014. Business and society: Ethics, sustainability, and
stakeholder management. Nelson Education
Costa.co.uk. (2018). The Nation's Favourite Coffee Shop | Costa Coffee. [online] Available
at: https://www.costa.co.uk/ [Accessed 30 Jul. 2018].
Jenkins, W. and Williamson, D., 2015. Strategic management and business analysis.
Routledge
Kew, J. and Stredwick, J., 2017. Business environment: managing in a strategic context.
Kogan Page Publishers
Peer review journal:
Carroll, A. and Buchholtz, A., 2014. Business and society: Ethics, sustainability, and
stakeholder management. Nelson Education
Jenkins, W. and Williamson, D., 2015. Strategic management and business analysis.
Routledge
Kew, J. and Stredwick, J., 2017. Business environment: managing in a strategic context.
Kogan Page Publishers
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