Costa Coffee Case

Question 1

The two brothers Sergio and Bruno Costa opened in Lambeth, London for their famous coffee Roastery coffee in 1971. They use exciting coffee to supply local restaurants and Italian cafes by using slow-roasted Italian way. But, people can not get enough of it, and it opened in Vauxhall Bridge Road in London in 1978 by the first Costa Coffee. In 1999, the first ever international store opens in Dubai. Until now, the global supply of more than 1,000 outlets. And their major competitor is Starbucks, which is also a very famous coffee shop and many people like it.

Question 2

There are several reasons that Costa internationalise its business. First of all, the saturated domestic industry leaving little opportunities for businesses buying clients. This drives them to look foreign countries for new markets and guests, such as developing countries could provide new sources of revenue abundant opportunity. Finding resources or to create chances for cooperation may also lead to the company’s ability to enter the overseas consumer market, so if Costa has first-mover strength, they can fast set up a strong foreign presence. Secondly, they have geographic advantages. Some organizations like Costa expand internationally in order to develop synergies in expanding the value multiplied resources and strengths on the international market, and to access to new pools of talent is a common effect of motivation. For example, some U.K. enterprises have expanded to the Asian market utilizing technical expertise of local residents to improve their capabilities, while expanding its customer base. By the establishment of an effective global system, their distribution efficiency can also be enhanced. On a worldwide basis, that is specially real for Costa source supplies. Thirdly, it is also can help the risk diversification.

Doing business in many different countries offer higher isolation from a recession or two positions. A company to carry out business in the United Kingdom, Asia and Africa may not be a recession from the US economy, if it is to make up for the better conditions elsewhere suffer from. In this condition , the income of the Costa can be used in other markets gained to maintain and develop its UK business. Moreover, it is easy for “everyone is doing like this”, but, this is a real motive like many organizations to enter foreign markets, it seems a matter of course, and if the conditions permitting, the  company should do the same in this way. If you have a competitive competition in the U.K., your competitors may enter the market through increases brand awareness and recognition where you do not have existing.

Question 3

Political factors include the systems and structures of the ruling class, for the enterprise to grow in this environment needs a free market guarantee. Political stability to make business to grow faster. Costa is the largest potential competitor leading fast food companies like Starbucks and coffee bean. Both of them open my stores all over the world since have similar economies of scale, distribution centers and alike feature. It is easy for them to launch Costa coffee industry and take market share.