Analyzing Segafredo's Competitive Advantage: An Individual Report

This report provides a comprehensive analysis of Segafredo, a major beverage company in the UK, focusing on its competitive advantages within the industry. It begins with an overview of Segafredo and its key rivals, including Lavazza and Nespresso. The report then applies Porter's Five Forces model to assess the competitive landscape, evaluating threats of substitution, new entrants, and the bargaining power of buyers and suppliers, as well as the intensity of rivalry among existing firms. Following this, the report delves into Segafredo's marketing mix, examining the 7Ps (Product, Price, Place, Promotion, People, Physical Evidence, and Process) to understand its strategic approach. Finally, the report offers recommendations for Segafredo to maintain and enhance its competitive advantage, emphasizing customer loyalty, human resource management, product differentiation, customer service and the adoption of new technologies. The analysis aims to provide a detailed understanding of Segafredo's market position and strategic considerations.

Segafredo Individual
Report

Table of Contents
INTRODUCTION...........................................................................................................................3
1. Overview of Segafredo and its rivals......................................................................................3
2. Identifying competitive advantage of Segafredo using Porter's Five force model.................4
3. Marketing Mix (7P's) of Segafredo........................................................................................7
4. Recommendations in order to maintain competitive advantage.............................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................11

INTRODUCTION
Business environment plays an important role and the present report helps to understand
the competitive advantage of Segafredo. It is one of the largest beverage company in UK. The
report present company's rivals and describe different competitors by using Porter's five force
model. It also describes the functional are of an organization which directly affect the
organization's competitive position and present 7P's of marketing mix. The report also explores
different things that makes company unique or different from other firms in UK.
1. Overview of Segafredo and its rivals
Segafredo is one of the multinational beverage company in UK who offered variety of
products and services to its customers in reasonable rates. Mr. Massimo Zanetti is a founder of
company who was more than two generations in coffee trade business (You and et.al., 2018).
The company not work to maximizes profit but it provides its product and services at low and
affordable price which makes it different and unique from others. Segafredo deals with following
area which include wide range of coffee shops products and the Italian espresso as well as
Segafredo coffee blends from best quality of Arabica and Robusta who always recreate best
flavours of coffee for their customers, provide tea and infusions, chocolate drinks, coffee cream,
Barley and ginseng etc.
Having a brand image in market, face tough competition with Lavazza, Kimbo,
Nespresso which are count in big four company in UK. Now Segafredo faces strong competition
with Coffeeclub UK, Union, Caravan Co. (Segafredo competitors, (2018). The company lead
with highly fragmented market share up to 27.4 percent followed by Caravan Co. who have only
17 percent market share. Because of using new and advance technologies into their business,
Segafredo proves it self-best beverage company in UK.
Rivals of Segafredo
Lavazza: Lavazza gives tough competition to Segafredo and it is considered third largest
beverage company in UK. As per the customer’s survey report on quality of products, Lavazza is
consider as highest quality of beverage company among all beverage firms (Calabrese and et.al.,
2018). To raise customer’s engagement, Lavazza always experimenting with its existing store
and do various promotional activities in its banking store. This competitive strategy attracts wide
number of customers towards it and makes it one of the largest company in UK.

Nespresso: Another largest beverage company in UK who approx. 3000 employees in all
over its shop. The company mainly focus on its promotional pricing strategy which is an
important planning to make itself best among others (Sarfaraz & et.al., (2018). it is operating unit
of Nestle and also uses advance technologies in their business and it serve its products in more
than 69 countries and had annual sales more than 3 billion. The capsules which are provided by
only Nespresso are unique and no other company produce the same.
Segafredo have a brand image in market and even have a strong financial status. It also
tries to expand its existing store among all over the world and it also involved in internet
beverage company in USA. To increase internet service, Segafredo tries to purchase hypermarket
in Poland which become a major move in UK beverage market and again proves itself best
supermarket in the country.
2. Identifying competitive advantage of Segafredo using Porter's Five force model
To determine the competitive advantage of Segafredo, Porter's five force model is used.
The model is also help to evaluate the overall attractiveness of market and this approach consist
five elements which are mentioned below:
Illustration 1: Porters five force model
Source: (Porter's Five Force Model, 2018)

Threat of Substitute products or services (Low): Segafredo faces low threat of
substitution because a company needs a big investment while entering into a new market.
Therefore, a new substitute of have to produce new product with very low range of high quality
to establish its existing in market (Adegbite and et.al., 2018). Whereas, Segafredo sells wide
range of products and they are highly comprehensive but it has been assessing that sometime
small departmental stores creates trouble for a company in order to fulfill the demand of their
customers. But having a brand image in market, Segafredo faces low threat of substitute.
Threat of new entrants (low): Threat of new entrant is also very low in beverage
market. As Segafredo creates a brand value in UK and even reach up to their market share which
no other company reach. To enter in new market, the company has to put extra efforts which is
not possible. The new entrant in beverage store brings innovation and for Segafredo they put
pressure to low their pricing strategy, reduce its products cost. The organization manages all the
challenges and also build an effective barrier to face those competitive edge by focusing on new
innovation products into their existing products and cope up with advance or latest technologies.
Bargaining power of buyers (high): In beverage sectors, bargaining power of buyers
are quite high (Stead and Hastings, 2018). Customers demand a lot and even they buy the best
offers by paying minimum price. Segafredo have strong customer base as well as high
bargaining power of buyers. The company can easily tackle it by using discount voucher and
enhance the sales and production process. Even Segafredo produce new innovative products
which help to attract their customers and can limit the buying power of their customers. It has
been analyses that customers feel attracted towards low price offering products and it is
considered the best strategy to enhance the level of customer’s base.
Bargaining power of suppliers (low): Segafredo faces low buying power of suppliers.
The company has number of suppliers and it overall creates the higher impact of supplier
bargaining power which lower the profitability of beverage company. But Segafredo build
efficient supply chain with multiple suppliers and it always experiment with product design
using different material. The position of Segafredo and its rivals are becoming stronger in order
to obtain the price as low as possible (Bahl and Chandra, 2018). The company has to build a
healthy relationship with market to get the products or services on competitive price.
Rivalry among existing firms (high): It is one the biggest factor that affect Segafredo
and recently the company faces tough competition with Lavazza, Kimbo, Nespresso etc. On the

other side if the rivals are quite strong then they affect the overall profitability and also drive
down the prices of products. But Segafredo tackle intense rivalry by applying differentiated
pricing strategy, by build scale in order to compete better in market. It also collaborates with
competitors to increase market size and provide the best products to their customers (Dolnicar,
Grün and Leisch, 2018).
3. Marketing Mix (7P's) of Segafredo
Segafredo is one of the best beverage company and marketing mix is generally used to
identify what actions did a company use to and implement in order to promote their products and
services to their customers. It consists of seven elements which are mention below:
Product: Segafredo provide a huge range of products to their customers which are Italian
Espresso which is made up of the best quality of Arabica, American Coffee which is famous in
Italy so as to bring best flavor of most coffee beans, provide tea and infusions, chocolate drinks,
coffee cream, Barley and ginseng etc. These all products are available at all stores at minimum
Illustration 2: 7P's of marketing mix
Source: (Marketing Mix, 2018)

price rates as compared to others. Segafredo have different types of stores and the variety of
products are depending on the type of store (Marketing Mix of Segafredo, 2018).
Price: Segafredo basically follow cost leadership price strategy and provides the lowest
price goods with high quality. The company continuously work with the suppliers in order to
improve efficient supply chain which help to reduce the price of their products. The company
provides low and stable prices and even it cut down promotional expenses. Recently the
company conduct a program named Brand Guarantee in which customers get lowest price if
buying more than 10 products from any Segafredo store (Fan, Lau and Zhao, 2015).
Place: Segafredo has main 2 channels of distribution online and offline. Currently, it has
more offline stores in all over the world. Being a globalized company, it offers products to many
countries such as Denmark, Greece, Ukraine, Libya, Morocco, France etc.
Promotional activities: Segafredo has brand image in UK and because of its
promotional activities it is considered one of the most trust able company in a world. Segafredo
uses hoardings, television ads, and many charitable events in order to let people know about their
new offers (Wu and Li, 2018). It also has a loyalty card named as 'Segafredo Club card' which
help a company to target its audience. The club card owners also get many advantages such as
various discounts, coupons etc.
People: There are about more than a thousand of people working in a company.
Segafredo has great number of customer base which plays a significant role in its success. The
employees of a firm also invest huge amount of money in order to provide training sessions for
the well development of their employees. Even the reward schemes are also well for the
employees of Segafredo.
Physical Evidence: it stands as a proof of authentic products which are provide to
customers. These are logos, colors, labels, etc. which are used as evidence by Segafredo. Even its
store is also a physical evidence of a brand and it is also a place of trust with the customers
related to their offers and it uses its logo in its cup which are offered to their customers (Kotler
and Armstrong, 2018).
Process: it refers to activities which are done in order to achieve all defined goals of a
company. The company offers online as well as offline products to their customers. Recently, it
also introduces self-service machines for the convenient of their customers for payment. It is also

designed in such a manner which follow all the company's policies, accessibility and service
feature, etc. which attracts wide number of customers.
4. Recommendations in order to maintain competitive advantage
Segafredo is considered one of the largest big brand in UK and to maintain their
competitive advantage over next five years, company must follow following suggestion which
are mentioned below:
 Loyal customers are long termed assets for Segafredo and even they have an emotional
bond with a store. It is the best method which help to maintain competitive advantage in
market (Dolnicar, Grün and Leisch, 2018). Customer loyalty means a commitment to
customers regarding a products or services offering. By enhancing customer’s loyalty,
Segafredo can easily maintain its best position in market.
 Enhancing a system of HRM can also help to gain strong competition in market. As HR
plays an important role in business and if they recruit best employees for a store it will
help in dealing with customers. But by the way of understanding employee's problems,
developing motivation and provide them better incentives will help to gain competitive
advantage.
 Generally, all beverage store provides same quality of products/ service to their
customers, so Segafredo should start offer unique products which help it to raise its
productivity and fulfilling the demands of customers (Bahl and Chandra, 2018). An
effective information and distribution system will also help to maintain good market
position with long term brand image in UK.
 Another suggestion, is provided the best customer service. For today, customer service is
an integral part in all beverage sectors. All the department of Segafredo are directly deal
with customers so it is necessary to maintain and provide good customer service to the
customers so that they feel positive environment in store.
 Segafredo uses all latest and advance technologies in their store. It is necessary to cope
up with all the latest techniques or technologies because people are depending on digital
markets (Stead & Hastings, (2018). So it is necessary for Segafredo to develop new
innovations in their store for the convenience of a customers. The products design, style
and quality also affect the market extensively so it is necessary to have proper attention
on the products or services which are offered in market.

CONCLUSION
By summing up above report it has been concluded that business environment plays a
crucial role in every small as well as large business. It provides a complete overview of
Segafredo and also describe about its rivals. The report also explains the competitive advantage
by using analytical tool i.e. Porter's five force model and explore Sega redo competitive position
by using 7 P's of marketing mix. It also provide various recommendations which could help a
company to maintain their competitive advantages over the next so many years.

REFERENCES
Books and Journals
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Dolnicar, S., Grün, B. & Leisch, F., (2018). Step 9: Customising the Marketing Mix. In Market
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Fan, S., Lau, R. Y. & Zhao, J. L., (2015). Demystifying big data analytics for business
intelligence through the lens of marketing mix. Big Data Research. 2(1). pp.28-
32.Available at: https://dl.acm.org/citation.cfm?id=2991343.
Kotler, P. & Armstrong, G. M., (2018). Marketing Mix: Selected Chapters From: Principles of
Marketing, Philip Kotler and Gary Armstrong. Pearson.
Sarfaraz, L. & et.al., (2018). Business Environment in the Three Countries. In Entrepreneurship
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Stead, M. & Hastings, G., (2018). Advertising in the social marketing mix: getting the balance
right. In Social Marketing(pp. 29-43). Psychology Press.
Wu, Y. L. & Li, E. Y., (2018). Marketing mix, customer value, and customer loyalty in social
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You, K. & et.al., (2018). Bridging technology divide to improve business environment: Insights
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