Illycaffe case summary

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About illycaffe
Based in Trieste, Italy, illycaffe produces and markets a unique blend of espresso coffee under a single brand leader in quality. Over 6 million cups of illy espresso coffee are enjoyed every day. illy is sold in over 140 countries around the world and is available in more than 50,000 of the best restaurants and coffee bars. illycaffe employs around 700 people and has consolidated turnover of EUR 246 million.(2006 results) illy buys green coffee directly from the growers of the highest quality Arabica through partnerships based on the mutual creation of value. The Trieste-based company fosters long-term collaborations with the world‘s best coffee growers -- in Brazil, Central America, India and Africa -- providing
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Italian espresso and coffee bars have left a great impression on people all over the world.
• What were the difficulties Illycaffe faced when expanding abroad? How did these impact its choice of entry mode?
As you know, Illycaffe is a well-established company which produces not only the high quality Espresso coffee, but also represents a high quality lifestyle.
Due to the fierce competitions in the drinks market, illycaffe is without exception faced some difficulties when expanding abroad. For instance, when it puts its steps into America drinks market, it will be surely faced with the competitions from American Coca-Cola company, the biggest drinks company in the world. What’s more, the Starbucks coffee company is also a well-known coffee company which has a great many costumers, therefore, illycaffe also has to compete with it. Apart from these two biggest competitors, there are various brands of drinks especially in China. Besides these, it will face several obstacles, such as cultural and social barriers, political barriers and tariffs and trade restrictions. These difficulties will impact its choice of entry mode. It depends what country it goes into and what obstacles it may have. For example, it may set subsidiary in the country where there are a lot of persons who are rich enough and enjoys Espresso coffee. It may choose licensing as the best way to enter foreign
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