Strategic Marketing Report: Coffee Bean & Tea Leaf Case Study

This report provides a comprehensive strategic marketing analysis of The Coffee Bean & Tea Leaf company. It begins with a background of the company and outlines its marketing objectives, which include maximizing market value and delivering a contemporary customer experience. The report then delves into competitive strategies, utilizing SWOT and Porter's Five Forces analyses to assess the company's strengths, weaknesses, opportunities, threats, and competitive landscape. The SWOT analysis highlights the company's unique management, strong marketing strategies, and effective supply chain, while also pointing out weaknesses like limited market share and threats from intense competition. The Porter's Five Forces analysis examines the threats of substitutes, new entrants, competitive rivalry, and the bargaining power of suppliers and buyers. Finally, the report explores the company's marketing strategy, focusing on product, price, place, and promotion strategies, and concludes that Coffee Bean & Tea Leaf's marketing strategy supports its position as a leading coffee house chain. The report also includes financial objectives of the company from 2018 to 2020 before and after applying blue ocean strategy.

Running head: Strategic marketing
Strategic marketing

Strategic marketing
Table of Contents
Background of the company........................................................................................................................3
Marketing objectives...................................................................................................................................3
Competitive strategy....................................................................................................................................5
SWOT analysis........................................................................................................................................5
Porter five forces analysis........................................................................................................................7
Marketing strategy.......................................................................................................................................8
References.................................................................................................................................................12
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Background of the company
The coffee bean & Tea leaf is an American coffee chain incorporated in 1963. The company is
operated and managed by international Coffee & Tea, LLC. The company’s headquarter is
located in Los Angeles, California. The organization has around 1000 own stores in the United
States and 31 stores in other countries. There are approx 12,000 employees employed in the firm.
Tea, coffee and food are included in the main product list of the company (Coffee Bean & Tea
Leaf, 2018).
Marketing objectives
There are two main objectives that are maximizing its market value and maintaining its
operational activities. The main objective of the company is to be global and modern leader by
delivering a contemporary customer experience in the marketplace. Furthermore, the company
aims to seek and find new opportunities in coffee and tea industry. The other objectives of the
company include the following.
 To be global and modern leader by delivering a contemporary customer experience in the
marketplace.
 To satisfy the needs, demands and requirements of the customers all over the world.
 To maximize the profitability of the firm by minimizing the cost of tea, coffee and food
products (Paharia, Avery & Keinan, 2013).
 To attain long term mission and vision of the firm.
 To increase the sale and revenue of the firm by providing delicious products to the
consumers across the world.
 To make a good image in the minds of the consumers by fulfilling the requirements and
needs.
 To overcome and beat the competitors by analyzing and identifying the plans, policies
and strategies of the competitors (Coffee Bean & Tea Leaf, 2018).
The annual report and the forecasting process before applying the blue ocean strategy, it has been
found that the total revenue of the company would be increased from $ 253 in 2018 to $ 306.13
in 2020. On the other hand, the profit of the company has been enhanced by 10% per year from $
112 to $ 135.52 in 2018. It explains about the better performance of the company in near future.
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However, on the basis of the annual report and the forecasting process after applying the blue
ocean strategy, it has been found that the total revenue of the company would be increased from
$ 275 in 2018 to $ 332.75 In 2020. It explains that the total revenue of the company would be
enhanced by 5% per year. On the other hand, the profit of the company has been enhanced by
10% per year from 2018 to 2020. It explains about the better performance of the company in near
future.
The table below indicates the financial objectives from 2018 to 2020
before applying blue ocean strategy.
Coffee Bean and Tea Leaf
Company ( All amount
shown in $ Million)
Forecast
2018
Forecast
2019
Forecast
2020
Revenue
$
253.00
$
278.30
(+5%)
$
306.13
(+5%)
Profit
$
112.00
$
123.20(+10%
)
$
135.52
(+10%)
Market Share 25% 30% 34%
The below indicates the financial objectives from 2018 to 2020 after
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applying blue ocean strategy.
Coffee Bean and Tea Leaf
Company
Forecast
2018
Forecast
2019
Forecast
2020
Revenue
$
275.00
$
302.50
(+5%)
$
332.75
(+5%)
Profit
$
115.00
$
126.50
(+10%)
$
139.15( +1
0%)
Market Share 28% 35% 39%
On the basis of the evaluation, it has been recognized that the blue ocean strategy is better for the
company. The company should accept the strategy to manage and enhance the performance of
the company. These are included in the marketing objectives of Coffee Bean and Tea Leaf
Company. The company wants to achieve all these marketing objectives to become a global
leader in the international market.
Competitive strategy
Competitive strategies are used by the company to beat the competitors and to make a dynamic
position in the global market (Jang, Kim & Lee, 2015). There are various competitive strategies
include SWOT analysis and porter five forces analysis. The competitive strategies are discussed
in detail below.
SWOT analysis
Strengths Weaknesses
 The company uses strong and unique
management to produce new coffee, tea
and food products in all over the world.
 The organization has the regional office
in Singapore. It is one of the significant
strengths of Coffee Bean & Tea Leaf
 The company is more focused to
working adults, and youth as their
target market. This may leads to some
lose of the potential market.
 Furthermore, the, market share of the
organization is very limited.
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Company. This strength can provide
recruitment and training programs to
the regional countries that have the
retail café.
 The organization uses significant
marketing strategy to attract and retain
the customers in the global market.
 Franchise communication and strategy
is also strength for the firm. This
strategy helps to find and get right
information about the products and
services.
 By providing unique and attractive
products, the organization has been able
to build and enhance the loyalty and
trust of the consumers.
 Effective supply chain management is
used by Coffee Bean and Tea lean
company.
 The higher standards and policies are
kept in mind by the company to provide
good quality of products.
 Weak acquisition and brand name that
could affect the profitability and
sustainability of the firm adversely.
Opportunities Threats
 Coffee Bean and Tea Leaf Company
can introduce new and innovative
products in the international market to
maximize the number of the consumers.
 New and latest technology can be
initiated by the firm.
 Intense and high competition in the
marketplace.
 The government regulation is one of
the significant threats for the
organization.
 Bad economy also affects the success
and growth of the firm.
 Political risk and volatile cost are also
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included in the business operations and
activities.
 Substitute’s products can be a threat for
the company.
Porter five forces analysis
One of the competitive strategies is porter five forces analysis that used by Coffee Bean & Tea
leaf company in global market (Harith, Ting & Zakaria, 2014). This model analysis helps to
overcome the competitors worldwide. Furthermore, it has been noted that porter five forces
analysis helps to make a strong goodwill in the international market. The porter five forces
analysis of Coffee Bean & Tea Leaf Company is elaborated in the list shown below.
Threats of substitutes: One of the significant forces of porter five forces analysis is threats of
substitutes that could affect the business activities and operations of the firm. It is one of the
significant challenges for the company. The threats of substitute’s products include tea, soft
drinks, smoothies and juices. These products are also being produced by rivalries such as Peet’s
coffee & Tea, Caribou Coffee and Farmers brothers are main competitors of the firm. Therefore,
the similar products are also offered by the competitors in the international market. The firm
needs to focus on the threats of substitutes to differentiate its coffee and tea products from the
competitors (Rothaermel, 2015).
Threats of new entry: This is a very minor threat for the firm as it is very much difficult to pose
threats by the new rivalries of the industry for such as well established firm like Coffee Bean &
Tea leaf. If the rivalry poses threats to this firm, it must be a company having a strong and
unique financial background. High economies of scale and brand awareness also affect the
sustainability and effectiveness of the firm. There are various new entrants that have entered in
the marketplace including Peet’s coffee & Tea and Caribou Coffee. The company should focus
on the threats of new entrants to overcome the rivalries in the global market (Läderach, Oberthür,
Cook, Iza, Pohlan, Fisher & Lechuga, 2011).
Competitive rivalry: The major and primary rivalry posed by the rivalries of the industry that
includes Caribou Coffee and Peet’s coffee & tea. These competitors are producing the similar
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coffee and tea products in the rivalry market. It has noted that the company should focus on the
strategies, plans and policies of the rivalries to differentiate its products and services from the
competitors (Igami, 2012).
The bargaining power of suppliers: The bargaining power of suppliers is low in coffee bean &
Tea Leaf Company. The suppliers did not have the bargaining power because of the business
strategies and tactics adopted by the company. Due to these tactics and strategies, the company is
able to impress various types of consumers, which made the suppliers not to bargain with the
firm. The major portion of the sales of the coffee and tea is accounted by the company Coffee
bean & Tea leaf. The company maintains a contract with the suppliers to provide products and
services to the customers (Vining, 2011).
The bargaining power of buyers: Generally, buyers did not maintain bargaining if they had one
option of the products and services of Coffee Bean & Tea leaf Company. The whole businesses
of the company were in such way that it really reduced and minimized the bargaining power of
the consumers approaching the company. Once the target market is determined and evaluated, it
is essential of the company to know and understand the position on which its needs to be
positioned in the target market segmentation (E. Dobbs, 2014).
It has been analyzed and measured that porter five forces analysis is most significant competitive
strategy of the company that is used to stay in the rivalries market. It will also help to maximize
the outcomes and returns globally.
Marketing strategy
Coffee Bean & Tea leaf Company’s marketing strategy supports the company’s positions as the
leading and growing coffee house chain in the world. The marketing mix strategies are used by
the company to identify and analyze the main component of marketing plan. With the strongest
brand in the industry, the company has been able to develop and build an effective brand image
in the marketplace. The marketing mix strategies of Coffee Bean & Tea Leaf have been stated
below.
Product strategy: This strategy plays a fundamental role make a strong position in the
international market. The company produces unique quality of products for the consumers.
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Coffee bean and & Tea Leaf is well known for their quality of coffee bean. The company also
has a very huge commitment to the coffee bean and Tea leaves that they produce and sell. By
using product strategy, the organization gets to know quality of competitor’s products in the
international market. The main products of the company include coffee, tea, and food products.
The main objective of this strategy is to provide unique and attractive products to the consumers.
Coffee Bean & Tea Leaf Company is not only making coffee and tea products for the consumers;
it also contributes in the welfare of the society. The organization should use product strategy to
earn maximum profit in the marketplace. Fairprice must be used by the organization to maintain
high quality and low prices in terms of product strategy.
Price strategy: The main objective of the fairprice to maximize its market value and share. One
of the significant strategies of marketing is pricing strategy. This strategy helps to differentiate
the prices of the company from the competitor’s products and services. Pricing strategy provides
competitive advantages to the organization by offering good quality of products at appropriate
prices in the marketplace. The organization’s coffee and tea products are more expensive as
compared to competing products. Through this effective and dynamic pricing strategy, Coffee
bean &Tea lead maintains its high end specialist image in the global world. The company should
set the suitable prices of the coffee and tea products after considering the prices of the
competitors (van Wijngaarden, Scholten & van Wijk, 2012). For this purpose, professional and
special experts shall be hired by the firm to negotiate the cost of the products. Along with this,
discounts and special offers must be given by the company to increase sales and boost profits.
Place strategy: The organization offers most of the products through its cafes. This element of
marketing mix determines and evaluates the venues at which consumers can access and sell the
products in the global market. The organization uses cafes, online stores and retailers to sell the
products. With the help of internet, the company has been able to offer products through the
online. The firm also uses various types of App to allow the consumers to place their order. Place
strategy shows that how the company adapts to changing times, market conditions and
technologies. It has been further noted firm should use effective supply chain management to
determine the effective supply of the products. Under fairprice strategy, the organization should
focus on the online stores to flourish the business globally. Along with this, blue ocean strategy
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shall be implemented by Coffee bean & Tea leaf Company to promote the sale and outcomes of
the firm.
Promotion strategy: Coffee Bean & Tea Leaf Company promotes its coffee and tea products
through advertising and promotion. This element of the marketing mix refers to the
communication and collaboration strategies used to disseminate information about the company
and its products. The company’s promotional mix includes advertising, sales promotions and
public relations. It has been analyzed that advertisement campaigns shall be done by the
company to encourage the products in the marketplace. This strategy helps the company to make
attractive and unique its products in the rivalry market. In terms of sales promotion, the fairprice
can consider maximizing the volume of advertising to encourage coffee and tea products as to
attract and retain the target market. Digital advertising strategy, mobile phone App and facebook
must be used by the organization to encourage the coffee and tea products in the international
market.
People strategy: One of the effective strategies that help to increase and enhance the sale of the
company is people strategy. The organization focuses on the managers and employees to produce
innovative products in the marketplace. A team with unique skills shall be appointed by the firm
to fulfill the demands and needs of the consumers. The employees of Coffee Bean & Tea Leaf
should collect feedback and reviews from the customers to improve and enhance the quality of
the coffee and tea products (Gao & Peng, 2011). Proper training and learning must be provided
to the workers to improve and enhance the overall quality of the products. Along with this,
rewards and incentives shall be provided to employees to increase and enhance the morale and
job satisfaction of the workers.
Physical evidence strategy: It is an important strategy for the company to get information about
the quality and features of the products. Physical evidence and facts shall be given to the firm to
promote the products of the organization. This strategy helps to maintain a reciprocal
relationship between consumers and employees (Igami, 2015). Physical evidence can monitor on
two features that include in-store and fairprice. In store, the eye catching display will help to
improve and enhance more effective buying. In the online store, the firm should create a
comparison technique that can permit customers to distinguish two products price between
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fairprice and another market and display details of the coffee and tea products such as quality
and ingredients in order to attain customer’s preferences.
Process strategy: The process strategy is specially emphasis to enhance and improve the
efficiency and effectiveness of fairprice. Thus, fairprice must increase the effectiveness of
service and checkout. It has been stated that effective processes, procedures and technology shall
be used by the when producing new and innovative products at the workplace. This will help to
overcome the competitors in the international market (de Luca & Pegan, 2014). Effective
payment machine should be used to improve and enhance the efficiency of the entire process.
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References
David, F. R. (2011). Strategic management: Concepts and cases. Peaeson/Prentice Hall.
de Luca, P., & Pegan, G. (2014). The Coffee Shop and Customer Experience: A Study of the US
Market. Musso F. e Druica E., a cura di. Handbook of Research on Retailer-Consumer
Relationship Development. IGI Global, 173-196.
E. Dobbs, M. (2014). Guidelines for applying Porter's five forces framework: a set of industry
analysis templates. Competitiveness Review, 24(1), 32-45.
Gao, C. Y., & Peng, D. H. (2011). Consolidating SWOT analysis with nonhomogeneous
uncertain preference information. Knowledge-Based Systems, 24(6), 796-808.
Harith, Z. T., Ting, C. H., & Zakaria, N. N. A. (2014). Coffee packaging: Consumer perception
on appearance, branding and pricing. International Food Research Journal, 21(3).
Igami, M. (2012). Oligopoly in International Commodity Markets: the Case of Coffee Beans.
Igami, M. (2015). Market power in international commodity trade: The case of coffee. The
Journal of Industrial Economics, 63(2), 225-248.
Jang, Y. J., Kim, W. G., & Lee, H. Y. (2015). Coffee shop consumers’ emotional attachment and
loyalty to green stores: The moderating role of green consciousness. International
Journal of Hospitality Management, 44, 146-156.
Läderach, P., Oberthür, T., Cook, S., Iza, M. E., Pohlan, J. A., Fisher, M., & Lechuga, R. R.
(2011). Systematic agronomic farm management for improved coffee quality. Field
Crops Research, 120(3), 321-329.
Paharia, N., Avery, J., & Keinan, A. (2013). Framing the Game: How Positioning Brands in
Competition Can Be Strategically Used to Increase Brand Value. ACR North American
Advances.
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