Expresso Espresso Essay

1270 WordsJun 20, 20146 Pages
Expresso Espresso case analysis Analyze and record the current situation a- The Environment The specialty coffee industry had seen steady growth for years and the trend was expected to continue until at least 2015. Of the various segments within the specialty coffee industry, most of the growth was attributable to beverage retailers “Coffee and kiosks”. In 1979 there were approximately 250 specialty coffee retailers. The number quadrupled by 1989 to approx 1000 outlets, and it exploded to roughly 15000 by 2002. Nationally, specialty coffee sales totaled over $ 10 billion in 2005. For specialty coffee beverage services, including coffee, espresso, tea, chai and granite the leading drinks in 2004 were espresso-based beverages with…show more content…
It is a company with revenue of 52.5 M in 2005 with growth 3 % more than 2004. Caribou coffee went public in 2005 reporting sales of $ 191 M in 2005. The firm expects to add 40 new outlets in 2005 and another 130 in 2006. Coffee Beanery was a franchise; with over 200 branches in 2005 expect 40 new stores in 2006. Peet coffee & Tea was another competitor with 111 retail stores. Also there were large restaurants trying to find ways to capitalize on the specialty coffee industry i.e.: Macdonalds, Krisspy, Dunkin, Donuts ….. 2- Threat of substitute product As mentioned above, the specialty coffee industry had seen steady growth for years and the trend was expected to continue. 3- Bargaining power of Suppliers There is no mention of suppliers in the case 4- Threat of new entrants Entering the market requires heavy investment in establishing a name and make lots of outlets. It is a growing market with lots of pioneers that can make branches anywhere and threat the other chain in there selling areas. 5- Bargaining power of buyers There is a threat of bargaining power of buyers as there is a lot of competitors, which give the choice to convert from one chain to another. Moreover, chains are working strongly in the promotion, price, opening branches everywhere, developing the product, and cares regarding quality. It
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