Expresso Espresso

Grant Dubroc                

3/4/2015

MKTG 480 – A

Expresso Espresso

        Expresso Espresso was a new coffee shop that opened in March 2006 in Mobile, Alabama.  It was located across the street from the University of South Alabama and catered to the students and professors there.  Although the business had only been in business for 12 weeks, the dynamic entrepreneur, Todd Sylvester, was already making plans to expand into the mid-town area of the city.  He thought the business model would be successful anywhere, and to achieve his long-term goals, he felt growth was imperative.  The case illustrates the importance of strategy implementation for new ventures.

Situation Analysis

Internal Environment

        As a manager, Todd treated his employees as family.  This gave the business the benefits of loyal, capable employees who were willing to work for relatively low wages and no tips.  However, it was not clear if he could maintain this environment as the company grew.  The growth was an imperative for Todd because he intended to use the proceeds from the business to send his eight children to college.  The main objective of the case is how to reach Todd’s goals within the existing corporate culture.

Customer Environment

According to the NCA (National Coffee Association), 54 % of adults in America consumed coffee daily, with over 18 % buying specialty coffee beverages. Specialty coffee buyers were generally more affluent, well educated, and worked in urban areas. Research indicates that individuals with college degrees purchased almost 50 % more specialty coffee more than those without college degrees. The link to education was even greater for people with some postgraduate education. In addition to education, households with two working parents and kids were more likely to purchase specialty coffee. Accordingly the market was an educated urban resident with disposable income to spend on fine coffee. 

External Environment

        The market Expresso Espresso is currently in is mainly dominated by Starbucks. However, Todd made sure to lower his prices by ten percent in order to differentiate his company from others. The coffeehouse business is increasing rapidly, especially in the college atmosphere. Because of the initial location of the company, the main groups of people Expresso Espresso targeted were college students, faculty and staff. People are constantly busy and social trends suggest college females are the biggest consumers of coffeehouse products.