Strategic Plan Purdue Global University Constance Dent Strategic Plan ✓ Solved

Company Overview: Costa Coffee, a global coffeehouse chain founded in 1971, has undergone multiple ownership transformations, including its acquisition by The Coca-Cola Company in January 2019 for $5.1 billion.

Current Markets: Costa Coffee operates in various regions across Europe, Asia, and Africa, with notable markets including the UK, Poland, Russia, Spain, and more. The company has identified an opportunity to expand its presence in the African market, particularly in Nigeria.

Financial Performance: In the fiscal year of 2018, Costa Coffee recorded an annual revenue of £1,292 million, representing a 7.5% increase from 2017. The UK contributed £1,131 million, while overseas branches accounted for £161 million. The company's return on capital was 46.0%.

Mission, Vision, and Value Statements: Costa's mission is “to save the world from mediocre coffee.” This statement, while impactful, could benefit from providing specific characteristics that differentiate Costa's offerings. Its vision is to become a recognized leader in hospitality, and the value statement emphasizes the importance of its employees as fundamental to the business, although it lacks specificity on how it will benefit stakeholders.

Product Offerings: Costa Coffee specializes in a range of products including cold drinks, pastries, hot drinks, and savory snacks. The company also provides Costa Express machines, enhancing convenience for customers.

International Market Expansion: To penetrate the Nigerian market, Costa Coffee should engage in partnerships with local businesses to establish Costa Express machines, further increasing accessibility to its products. A thorough assessment utilizing SWOT and PESTEL analyses will guide the company’s strategy in navigating this new market environment.

Opportunities versus Threats: Expanding into Nigeria promises several opportunities, such as revenue growth and increased market share. However, Costa Coffee must also contend with potential threats, including political instability and cultural barriers.

Strategic Approach: A transnational strategy, focusing on local adaptation while maintaining global efficiencies, is essential for Costa Coffee’s success. By adjusting products to local tastes while retaining brand identity, Costa Coffee can resonate with Nigerian consumers.

Resource Allocation: Entering a new market necessitates robust resource investment including physical infrastructure, human capital, and financial assets essential for operations.

SMART Goals for Entry: Costa Coffee's objectives in Nigeria should include capturing at least 30% market share in the first year, establishing key partnerships, completing three substantial acquisitions, and generating revenue of $300 million.

Global Sourcing and Logistics: Strategic partnerships and joint ventures can facilitate Costa Coffee's market entry, allowing for shared resources and enhanced competitive positioning.

Diversification Strategy: By expanding its product range, Costa Coffee can reduce risks and maximize returns in the Nigerian market.

Evaluation of Diversification: Costa’s focus on product variety, including cold drinks and snacks, positions it favorably to attract a diverse customer base and enhance overall revenue.

Conclusion: With a strategic expansion plan in place, Costa Coffee is poised to successfully tap into the Nigerian market, leveraging its brand reputation and product innovation.

Paper For Above Instructions

Costa Coffee, established in 1971, has evolved into a global coffeehouse franchise recognized for its unique offerings. The chain’s recent acquisition by The Coca-Cola Company marked a significant milestone, enabling further international growth.^{(Costa, 2019)} Operating in various regions, including Europe and Asia, Costa has identified significant potential in the African market, particularly Nigeria, where economic growth offers promising opportunities.^{(Zahonogo, 2016)}

The 2018 financial year underscored Costa Coffee's robust performance with an impressive revenue of £1,292 million, a testament to its market leadership.^{(Costa, 2019)} The delineation of missions, vision, and values serves to enrich its brand identity. The mission statement encapsulates the brand ethos, aiming “to save the world from mediocre coffee.” However, a more precise description of ‘mediocre coffee’ could clarify its value proposition.^{(Costa, 2019)}

The company's vision aims to position Costa as a leader in the hospitality sector, emphasizing quality and customer service. Nevertheless, this statement lacks specificity regarding the attributes that set Costa apart from competitors.^{(Buckley & Ghauri, 2015)}

The product portfolio is diverse, ranging from hot beverages to pastries, appealing to a wide demographic. The inclusion of Costa Express machines further enhances customer accessibility. This innovative approach could significantly benefit its expansion plans in Nigeria, particularly with partnerships in local distribution channels.

The nascent Nigerian market presents both opportunities and challenges. The country's economic landscape, bolstered by a GDP of $397.47 billion, signals a lucrative market for coffee consumption, yet security concerns and political instability remain as potential risks.^{(Živković et al., 2015)} By employing SWOT and PESTEL analyses, Costa Coffee can navigate these complexities effectively.

Utilizing a transnational strategy will allow Costa Coffee to adapt its offerings to local tastes while maintaining efficiencies. This approach not only optimizes operations but also fosters consumer loyalty through tailored products.^{(Lasserre, 2017)}

Establishing SMART goals is crucial for successful market entry. By targeting a 30% market share within the first year and generating estimated revenues of $300 million, Costa Coffee can solidify its presence.^{(Fatima & Shehzad, 2014)} Additionally, forming strategic partnerships will enhance distribution networks and foster brand recognition.

Resource allocation is fundamental for operational success when entering new markets. Costa Coffee will require substantial financial investments, alongside physical and intellectual resources to support its operations.^{(Noe et al., 2017)} Collaboration and potential mergers with local entities can streamline market entry and bolster the customer base, ultimately leading to increased market share and profitability.

Diversification is another strategy that Costa Coffee should integrate into its business model. Expanding the product mix not only mitigates risk but enhances the brand’s appeal across varying customer segments.^{(Kim & Rasheed, 2014)}

In summary, Costa Coffee's contemplative expansion strategy into the Nigerian market fuses a robust understanding of local dynamics with the brand’s established identity. The commitment to quality and customer experience will act as pivotal drivers for the company’s long-term success in Africa.

References

• Buckley, P. J., & Ghauri, P. (Eds.). (2015). International business strategy: theory and practice. Routledge.
• Costa (2019). Full Menu. Retrieved from [Accessed July].
• Costa (2019). Home. Retrieved from [Accessed July].
• Fatima, T., & Shehzad, A. (2014). Analysis of Impact of Merger and Acquisition of Financial Performance of banks: A case of Pakistan. Journal of Poverty, Investment and Development, 5, 29-36.
• Kim, K. H., & Rasheed, A. A. (2014). Board heterogeneity, corporate diversification and firm performance. Journal of Management Research, 14(2), 121.
• Lasserre, P. (2017). Global strategic management. Macmillan International Higher Education.
• Noe, R. A., et al. (2017). Human resource management: Gaining a competitive advantage. New York, NY: McGraw-Hill Education.
• Zahonogo, P. (2016). Trade and economic growth in developing countries: Evidence from sub-Saharan Africa. Journal of African Trade, 3(1-2), 41-56.
• Živković, Ž., et al. (2015). Analytical network process in the framework of SWOT analysis for strategic decision making. Acta Polytechnica Hungarica, 12(7).