Briefly explain the primary business strategy that Avon Coffee uses to compete in the market. Justify your answer using Porter’s Generic Strategy Model with examples (or evidence) from the Avon Coffee case study to support your response.
Avon Coffee Co-op (Avon Coffee) is formed around strong values of fair and ethical ways of doing business. Headquartered in Christchurch, Avon Coffee strives to create a place of belonging for its customers, employees, and producers in the far reaches of the globe, Ethiopia.
For some years as a business, Avon Coffee has been committed to redistributing 70% of the profits back to the producer’s community. This has helped build buildings and fund extra staff at local schools and build teachers’ accommodation in Ethiopia. Avon Coffee displays this progress clearly in their cafés, so the customers can be assured that their purchases contribute to the world. Avon Coffee and its loyal customers see this as not a matter of generosity but as the business’s profits going back to the producers and communities, to where they really belong. This difference made Avon Coffee excel in highly competitive markets. Avon Coffee has successfully expanded to 39 locations across Auckland, Wellington, and Christchurch.
When Covid-19 struck in 2020, Avon Coffee had to move its business online. This created a number of challenges for the company. Therefore, Avon Coffee hired you as a digital business innovation lead. Initially, you suggested launching an app called “Avon”, which customers can order and make payments online to minimise physical contact. The app also provides transparent progress about their redistribution of profits back to the producers as displayed in their cafés like before.
Some of Avon App Functionalities are described below.
- The Avon App is available on both Android and iOS.
- To promote the App use, Avon Coffee offers all registered users a 10% off all hot drinks and freshly roasted coffee beans for home every visit. All that is required is for customers to scan the app at the till.
- Other handy functions on the app include printing or emailing GST receipts (this is very useful for customers claiming their coffees as business expenses), loading credit using your credit card and tracking your transaction history
Briefly explain the primary business strategy that Avon Coffee uses to compete in the market. Justify your answer using Porter’s Generic Strategy Model with examples (or evidence) from the Avon Coffee case study to support your response.
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