PROJECT REPORT
Group Members:
Section:
Submitted to:
Course:
Date:
(Roll no.)
Mohammad Bilal Khan 17I-1528
Muzammil Shakeel
17I-1525
Haider Malik
17I-1527
AF-B
Sir Hassaan
Business Strategy
27.12.20
Contents
PROJECT REPORT ..................................................................................................................................... 1
Introduction ................................................................................................................................................. 3
Mission Statement ....................................................................................................................................... 3
Vision Statement ......................................................................................................................................... 3
Core Values.................................................................................................................................................. 3
Hierarchy ..................................................................................................................................................... 4
Portfolio ....................................................................................................................................................... 5
Interview ...................................................................................................................................................... 6
Interview with Branch Manager (Mr. Munawar Abbas).................................................................... 6
Communication Channel............................................................................................................................ 7
Matrices ....................................................................................................................................................... 8
SWOT ANALYSIS ................................................................................................................................. 8
INTERNAL FACTOR EVALUATION (IFE) MATRIX .................................................................... 9
EXTERNAL FACTOR EVALUATION (EFE) MATRIX ................................................................. 9
COMPETITIVE PROFILE MATRIX (CPM)................................................................................... 10
Coffee Planet’s Porter Five (5) Forces Analysis ..................................................................................... 10
SPACE MATRIX .................................................................................................................................. 15
GRAND STRATEGY MATRIX (GSM)............................................................................................. 17
BOSTON CONSULTING GROUP’S (BCG) MATRIX ................................................................... 19
QUANTITATIVE STRATEGIC PLANNING MATRIX (QSPM) .................................................. 20
Recommended Strategies ......................................................................................................................... 22
Page | 2
Coffee Planet
Introduction
Coffee Planet was first started as a coffee venture in 2005, when the local coffee-landscape in the
UAE was very different and somewhat ordinary. With the goal to help people experience the
finest global Arabica coffee, it was set out to look at how coffee was being made, who was
growing what and how it could develop our own great tasting blends.
Launching Coffee Planet on the Arabian Peninsula made perfect sense to us, since what better
place to learn from the past 500 years of Arabica coffee roasting and apply our modern approach.
In 2009 Coffee Planet launched their first franchised cafe concept in the UAE, while 2011
witnessed our global expansion of franchised cafes into other international markets.
Another Franchised Cafe Coffee Planet I8 Markaz started their business on 29th September, 2017
as a franchise business. “Their mission is to provide their customers with the best global Arabica
coffee, roasted and delivered perfectly every time” As there are Coffee Lovers in I8 who had to
go to other sectors to avail their service, keeping that in mind Coffee Planet decided to open a
branch in I8 under the leadership of Mr. Abid. The main competitor of Coffee Planet is Gloria
Jeans. Since the opening in I8, the market share of Gloria Jeans has been divided.
Mission Statement
Our mission is to provide our customers with the finest global Arabica coffee, roasted and
delivered perfectly every time. At Coffee Planet we take great pride in our coffee. We want all of
our customers to experience the joy of a fabulous cup of coffee every time they choose Coffee
Planet. We hope that we can do our bit to help customers around the world demand a betterquality coffee experience.
Vision Statement
Our vision is to cater an increasing number of consumer with our 360-degree approach to coffee
solutions for the foodservice industry.
Core Values
The company’s core-values explains the brand of Coffee Planet and combination of all the core
values give the business its unique recognition:
Page | 3
Coffee Planet

Solution Focused – Profits are better than solutions because efficient solutions can
generate more profits.

Finest Arabica Coffee – Arabica Coffee of the highest standard is used.

On-call – We are determined to give our services even on-call.

High standards and Fair – These are the rules which we always abide by.

Work hard – Working hard and having fun always go side by side for us.
Hierarchy
Managing Director: The Managing Director (MD) sets the goals for the business and then those
goals are communicated down the hierarchy. If any information regarding the communication of
business is required then contact is made with the head office and they are asked with the
queries, other than that, other MD’s of different branches of Coffee planet all around Pakistan
are contacted to gather information. There is master franchiser which basically keeps check of all
the branches of coffee planet, so if franchisers need to ask something relevant to the business
then they is also contacted in such situations.
Branch Manager: The Company’s goals and plans are frequently communicated to the branch
manager. He is kept up to date about the current situation of business. These goals and plans
include forecasted sales, target customers etc. This information is communicated to him via
occasional meeting with the MD.
Manager Operations believe that his effective communication can help in achieving the goals of
the business. In case where the Branch manager requires any information regarding the business
that he is not aware of, he contacts the Managing Director to ask for information. The Manager
Operations believes that the communication via brochures is an effective way contradicting to
the claims of MD who believes that the brochures don’t have such a significant impact.
Shift Manager: The Shift Manager wants to get any information; he contacts his branch
manager directly. The shift manager spends a lot of time on paper work i.e. inventory recording
as first he has to record the inventory manually.
Cashier: According to the cashier, every employee has information about company’s directions
and goals. If he wants to find information about company, he searches the information on
internet because he believes that the information is universal. He spends a lot of time on
Page | 4
Coffee Planet
inventory count, balance sheet, Daily Sales Report (DSS), other financial statements and expense
summary.
Training: The employees are given training time to time because there is no compromise on
quality. The standard of every branch is consistent as vendors, trainers and auditors of every
branch are the same.
Portfolio
Coffee planet is just not limited to the cafes around the world but there are other diverse
investments which are held by the company. The company covers a wide variety of market when
it comes to the products, as it has a share in the foodservices, retail and other businesses around
the world.
The company was first known for making unique and special coffee beans. Moving on, the
company then started to supply coffee to other businesses around the Middle East. Furthermore,
the company moved towards making coffee machines and equipment, along with that, the
service and maintenance is also provided. Training of the staff in using the coffee and the
machines is also given in order to enhance the experience.
Hotels, airlines and other business are also key customers, as they use the coffee of coffee planet.
Supermarkets and retail stores also became customers later.
The first café was opened by the company in 2007 in UAE. Moving on to other countries by
2011, coffee planet expanded to international markets and became a global chain. It is now a
multi-million-dollar business, as it has become one of the best places to go for coffee lovers.
Different parts of the portfolio are the following:

Coffee Machines and equipment

Coffee related consumables

Training for staff

Machine Service and Maintenance

Coffee supply to retail stores and supermarkets

E-commerce

Foodservices: Hotels, restaurants, catering companies, airlines
Page | 5
Coffee Planet

Franchising
Interview
Interview with Branch Manager (Mr. Munawar Abbas)
Q: What is Communication Channel of Coffee Planet?
I) Communication through Social Media
The MD at Coffee Planet believes that their communication via media is excellent. They have
positive response and big fan following on social media (Facebook and Instagram) the MD
believes that the communication via menu is also good as customers are able to communicate
while ordering the food. The only problem they face is that sometimes their new customers find
it difficult to identify food items. The communication via brochures is poor as there was no
impact of brochures. This is mainly because customers prefer internet rather than print media.
2) Communication through One to One Person
Not every branch has access to the main website of Coffee Planet. Some of the employees don’t
even know about the website. The MD rated the efficiency of internal announcements as
excellent. Internal announcements (under set SOPs) take place via a WhatsApp group and
through one to one communication where communication takes places through word of mouth.
Under certain circumstances, when the internet is unavailable and one to one person
communication is not possible the MD communicates with Branch Manager via phone and the
Branch Manager then carries on the communication further.
Q: How do you believe Coffee Planet can have a better marketing campaign?
The MD believes that the advertising of Coffee Planet needs improvements. They have planned
to install streamers because they are eye catching and can grab customer’s attention.
Q: Is there any customer feedback process?
There is no sort of contact with customers via email. They prefer verbal and feedback cards
communication
Q: Does Coffee Planet have any competitors?
Page | 6
Coffee Planet
The main competitor of Coffee Planet is Gloria Jeans. The competitive edge that Gloria Jeans
has over Coffee Planet is they arrange different musical nights and other interactive events in
order to socially communicate with customers to gain long term customer loyalty. Employees
have input in the decisions made by the top management. There exists a significant amount of
transparency between the employees and the top management and this is how their internal
communication practices hold validity.
Q: Can there be any improvements be done in Coffee Planet I8-Markaz?
The franchise has externally communicated to the government for a legal allotment permit for
utilizing the external space for a seating arrangement. Their initial contact is via email but if it’s
unresponsive, then they communicate via phones and other alternative mediums. Image building
and branding can be improved via bench marking; a thorough analysis of the competitors can be
done with the help of bench marking and so their competitive edge over the Coffee planet is
found and by working on that research the business can improve itself. Any change on site is
open and the relevant information is passed down in the ` hierarchy, the information is passed
down from the Managing Director to the branch manager and then to the Shift manager and this
process of communication is continued until the information is passed down to every employee
concerned.
Communication Channel
The Shift Manager believes that the communication of Coffee Planet via media is good but it still
needs improvement. If the Shift Manager wants to get any information, he contacts his branch
manager directly. The shift manager spends a lot of time on paper work i.e. inventory recording
as first he has to record the inventory manually.
The shift manager ranks the communication objectives as follows:
1) Generating Sales lead
2) Building Company’s brand in market
3) Helping Adapt to organizational change
4) Creating materials to help workers understand where the company is heading and how
they can work towards the goals
Page | 7
Coffee Planet
5) Providing sales tools to salesman to help in selling
The Shift Manager believes that the number one priority of the communication director should
be to set example through leadership. According to his point of view, the biggest area for need of
communication is in strategy formulation.
Matrices
SWOT ANALYSIS
Strengths:
1. Coffee Planet has many successful and popular product lines.
2. It has built one of the strongest brand loyalties of any company in the business of selling
consumable products.
3. Company has access to high-quality Arabica coffee bean.
4. Coffee planet offers variety of flavors with no use of chemical flavoring.
5. It uses a vertically integrated supply chain, which means the company is involved in
every step of its supply chain process.
6. Strong brand image is responsible for increasing the market size and building a firm
financial muscle.
Weaknesses:
1.
2.
3.
4.
5.
High Prices of Products.
Overextension of Product Portfolio.
High Cost for Expansion.
Lack of Marketing and Advertising.
Limited and Mixed Quality Staff.
Opportunities:
1. Advancement of Technology, as its supply chain largely depends upon its technology.
2. Reaching Emerging Markets, where consumers are willing to pay premium price for
specialty or gourmet coffee.
3. Promoting the Product by Launching more Promos, Deals, Coupons, etc. for higher sales.
4. Establish Joint Venture with Hotels, Airlines, and Retailers, serving premium coffee in
the hotel rooms or during the flights.
5. New Product Developing or Innovating Products, as there is a high growth potential for
flavored coffee in Pakistan.
Threats:
1. Increasing Competition from Local Competitors and New Entrants, offering low-cost
coffee in emerging markets.
2. Increasing Price Sensitivity of Customers.
3. Imitation of Products.
Page | 8
Coffee Planet
4. Increased Shipping and Operating Cost.
5. Changing Consumer Spending Patterns.
INTERNAL FACTOR EVALUATION (IFE) MATRIX
Key Internal Factors
Strengths
Successful and Popular Product Line
Strong Brand Image and Brand Loyalty
Premium High-Quality Arabica Coffee Beans
Strong Supply Chain Management
Variety of Flavors
Weaknesses
High Prices of Products
Overextension of Product Portfolio
High Cost for Expansion
Lack of Marketing and Advertising
Limited and Mixed Quality Staff
Total
Weight Rating (1-4) Weighted Score
0.15
0.1
0.1
0.1
0.05
4
4
4
4
3
0.60
0.40
0.40
0.40
0.15
0.15
0.1
0.09
0.1
0.06
1
1
2
1
1
2
0.15
0.20
0.09
0.10
0.12
2.61
Evaluation:
Based on IFE Matrix provided, Coffee Planet’s major strength is its successful and popular
product lines while on the other hand, high prices of their premium beverages is its major
weakness. The IFE Matrix has resulted in a final score of 2.61, which scores slightly above the
average score of 2.5 meaning that with its current strategic orientation, Coffee Planet is only
marginally able to respond to internal factors.
EXTERNAL FACTOR EVALUATION (EFE) MATRIX
Key External Factors
Opportunities
Advancement of Technology
Reaching Emerging Markets
Promoting Products Promos, Deals, Coupons, etc
Joint Ventures with Hotels, Airlines, etc
Product Development and Innovation
Threats
Competitors offering low-cost coffee
Increasing Price Sensitivity of Customers
Imitation of Products
Increased Shipping and Operating Cost
Fluctuation in Consumers’ Spending Patterns
Total
Weight Rating (1-4) Weighted Score
0.07
0.2
0.08
0.04
0.11
3
4
3
3
4
0.21
0.80
0.24
0.12
0.44
0.2
0.08
0.045
0.15
0.025
1
1
1
2
2
2
0.20
0.08
0.09
0.30
0.05
2.53
Page | 9
Coffee Planet
Evaluation:
The EFE Matrix has resulted in a final score of 2.53, which is very close to the average total
weighted score meaning that with its current strategic formation, Coffee Planet is only
marginally able to defend itself against threats.
COMPETITIVE PROFILE MATRIX (CPM)
Coffee Planet
Critical
Weight Rating
Success
Factors
Brand Image
0.11
4
High-Quality
0.10
4
Products
Pricing
0.15
2
Cost for
0.10
2
Expansion
Customer
0.10
4
Loyalty
Geographical
0.11
3
Coverage
Customer
0.12
4
Service
Operating Cost
0.10
2
Ethical
0.11
4
Standards
Total
1
Gloria Jean’s
The Coffee Bean &
Tea Leaf
Rating Weighted
Score
Weighted
Score
Rating
Weighted
Score
0.44
0.40
4
4
0.44
0.40
3
3
0.33
0.30
0.30
0.20
3
2
0.45
0.20
4
3
0.60
0.30
0.40
3
0.30
2
0.20
0.33
4
0.44
2
0.22
0.48
2
0.24
2
0.24
0.20
0.44
2
4
0.20
0.44
3
3
0.30
0.33
3.19
3.11
2.82
Evaluation:
Using major strengths and weaknesses in the industry and comparing Coffee Planet with its
competitors: Gloria Jean’s and The Coffee Bean & Tea Leaf, the weighted score for Coffee
Planet came out to be 3.19 compared to its competitors’ score of 3.11 for Gloria Jean’s and 2.82
for The Coffee Bean & Tea Leaf. According to the CPM, Coffee Planet is more competitor in
the market than its competitors.
Coffee Planet’s Porter Five (5) Forces Analysis
Porter’s model will help Coffee Planet to decide its business outlook and see what is best for the
company and how can the business respond to different threats such as entrance of new competitors
in the market and the business can make its bargaining position strong. By examining the position
Page | 10
Coffee Planet
of the company, Coffee Planet can improve its position and can give assurance of long term
stability
Threats of New Entrants
Factors that will reduce the threats of new entrants for the company



To achieve the cost advantage is difficult for Coffee Planet in the industry in which it is
operating. Only form who are producing at a larger scale can take advantage of this as
this will impose higher production cost for new entrants.
There is a threat if switching cost for customers is high especially when the giants have
built a monopoly.
There is also a threat if new entrants will see an opportunity to have easy access to the
suppliers.
Possible areas that will create threat of new entrants for the company:

Current regulations encourage the entry of new entrants

Weak brand loyalty

High initial investment

New entrants can make easy distribution channel
Ways Coffee Planet can tackle the problem of new entrants

By building a strong relationship with customers by establishing a brand loyalty. This will
put pressure on the customers if they switch the brand.

Can develop the long term relationship with the suppliers, and the distributors to extend
their access to the market that is being targeted.

By investing in research and development ( R&D), Coffee Planet can get access to the
important customers and their needs, they can produce the products according to the needs
of their customers
Substitute products and services
The easy access of substitute products and services will automatically impose threat on Coffee
Planet and other existing firms. Because there are high chances that customers might shift
Page | 11
Coffee Planet
themselves where they get similar quality in the same price. However different components will
decide how much the threat this factor will have on Coffee Planet
Threat increases when substitute product and services

When a product is available at lower cost in another industry.

Switching cost of product shift from one industry to another.

When substitute products offer similar quality.
Ways Company can tackle the threat of substitute products

Higher switching cost of using the substitute products

Customers cannot get same quality and value from the substitute products as they get from
Coffee Planet’s products and services.

It can make its customer believe that products they are offering are better than the ones its
customers are offering.
Competition among existing firms
Competition among existing firms shows will show how much the competitors will give
competition to Coffee Planet and how extreme it can be. Higher competition can restrict the growth
potential of Coffee Planet and the other firms. This will reduce the advantages to the firm because
firms because have sole purpose is to give each other tough competition.
The Rivalry among existing firms will be low for Coffee Planet if;

When there are limited number of firms in the market

The industry is moving very fast

When there is a market leader.

Lower barriers to entry
How can the company tackle the rivalry among existing firms?

This usually happens when the industry in which firm is operating have very few other
firms that can be of large size so if any firm wants to leave the industry it can have no
Page | 12
Coffee Planet
impact on the other firms. The firm can easily move out unnoticed. This will reduce the
rivalry among the existing firms in the industry.

Firms who have high market share usually comes with the competitive advantage and those
who have lower market share will engage themselves in giving competition to those firms.
So there will be higher rivalry in that particular industry.

When the industry is growing it is expected that Coffee Planet will also continue to grow
and make higher profits. Positive growth of industry is likely means that firms will be less
likely to engage themselves in competitive actions because firms no longer are interested
to gain market share from others. This makes competition among existing firms lower
within the particular industry.
Bargaining power of suppliers

The industry in which Coffee and other Coffee companies operate has very few suppliers
whereas buyers has less control over cost because few suppliers usually teams up and raise
their cost of coffee beans and buyers have no option other than buying from them on high
price.

The material that these supplies provide are usually of very easily available from other
suppliers and also it has low switching cost so it gives opportunity to the company that they
can switch their suppliers.

The suppliers don't give a credible threat to in terms of forward integration into the industry
where Coffee Planet operates. This makes the dealing intensity of suppliers a more
vulnerable power inside the business.

Coffee Planet being the important customer in the telecom industry so suppliers will
obviously provide them raw material on good price. Hence making the position of suppliers
weak in the industry.
How Coffee Planet can tackle the problem of having bargaining position with the suppliers

Company can buy raw materials from its suppliers effortlessly. If they see that the raw
material they are getting from their suppliers are not satisfactory they would be able to shift
to a different supplies considering that there is low switching cost.
Page | 13
Coffee Planet

This includes various suppliers within the production network. For instance, company can
have various suppliers for its different functioning areas. This way it can be assure of
productivity within its store network.

Coffee Planet being the important client for its suppliers, can earn profit by developing
good relations with its suppliers where it can benefit both of them.
Bargaining position of Buyers



In the coffee industry there are more suppliers then the ones who are producing the
products and services. This means that the buyers have less option and less control over
prices. This states that Coffee Planet has less buying power in the industry.
Product differentiation is usually high in coffee industry. Which means firms who want to
buy products have difficult because finding products from other firms because they are
not similar?
The item separation inside the business is high, which implies that the buyers can't discover
elective firms delivering a specific item. This trouble in switching makes the dealing
intensity of buyers a more fragile power inside the business.

Quality of the product is very important to the buyers so that is why they are making
frequent purchases of it. This also states that these buyers are not focusing on price rather
they do focus on the quality. Hence weakening the position of buyers in the industry.
How Coffee Planet can tackle this threat of bargaining power of buyers

Coffee Planet needs to focus more on differentiation of the products. By providing the
best quality of the product will lead to more customer generation.

It needs to build a large customer base, due to weak position of buyers, through
marketing mix it can aimed at building brand loyalty.

It can exploit its economies of scale advantage so that it can provide favorable position
and sell at low costs to the business who cannot afford higher price. This way it will
have the option to draw in countless purchasers.
Page | 14
Coffee Planet
SPACE MATRIX
Financial
Position
1
Coffee Planet ROA is 5.56%
2
Coffee Planet ROE is 12.66%
3
Coffee Planet revenue Decreased 7%
4
Coffee planet Net income Decreased 72 %
Total
Industry Position
1
Coffee Planet Stores are placed in multiple cities of Pakistan which
helps to reach out the maximum customers
2
Coffee planet is also having the advantage of selling its retail
products
3
Coffee planet has a competitive advantage of selling healthy and
organic products
Total
Stability
Position
1
Coffee Planet prices are a bit high as compared to other rival
companies, they should compete with rival companies prices
2
Coffee Planet retail products demand should be increased among
customers
3
Coffee Planet Should Increase in the their Research and
Development sector to bring new products in the market
Total
Competitive
Position
1
Coffee Planet provides the premium coffee and beverages are high
in
quality
brewed
by
well
trained employees
2
Coffee Planet Provides a comfortable and high working
environment for the working class
3
Coffee Planet Consider employees as partners and has lowest
employee turnover
4
Coffee Planet is a customer oriented Coffeehouse
Total
Rating
2
4
1
1
8
Rating
6
3
3
12
Rating
-5
-4
-4
-13
Rating
-1
-2
-2
-2
-7
Page | 15
Coffee Planet
Calculations
FP Average is 13/3 = 4.3
IP Average is 12/3 = 4.0
SP Average is -9/3 = - 3.0
CP Average is -6/4 = - 1.5
Directional Vector Coordinates:
X- axis: 4.0 + (-1.5) = 2.5
Y- axis: 4.3 + (-3.0) = 1.3
FP
Conservative
6
Aggressive
5
4
3
2
1
(2.5,1.3)
CP
IP
-6
-5 -4
-3
Defensive
-2
-1
-1
-2
-3
-4
-5
-6
SP
1 2 3 4
Competitive
5
6
Evaluation:
Knowing that Coffee Planet is in an aggressive strategy profile helps the company to know whether
or not it would be a good idea to implement competitive strategies for the future. Coffee Planet is
a strong firm financially and they are also in a very competitive industry. Even though the industry
is competitive it is still stable and continues to grow. Coffee Planet has many opportunities in this
industry.
Page | 16
Coffee Planet
Some of these opportunities are that Coffee Planet can learn from a variety of markets, there is
room to advance with technology in its products and services, and that they could have more
coupons and promos to encourage more people to come to Coffee Planet.
When determining what strategies Coffee Planet should implement they must also look at the
threats in their industry. Some of these threats are that there are an increasing number of
competitors in this market, people desire more luxury items, and routines of international markets
are changing. It is important to look at the threats so that Coffee Planet can know how to prepare
their company for whatever is to come in their industry in the future.
Strengths and weaknesses are also things that a company needs to know before they form a plan
to move forward. Some of Coffee Planet’s strengths are they are well established and their brand
recognition is growing, they are financially profitable, and they have international presence.
The weaknesses of Coffee Planet are the prices are rising; there is a small customer base due to
niche strategy, and lack of international understanding of coffee. Using Coffee Planet’s strengths,
weaknesses, opportunities, and threats the company comes up with strategies for the future.
One of the major issues that Coffee Planet is facing is that their coffee is more expensive that its
competitors. This is in part because they use only high quality coffee beans, which in turn increases
the price. Although the quality of the coffee is better than its competitors there are still people in
the market who are looking for cheaper products that are not as high quality. Another major issue
that Coffee Planet is facing is that they have a poor marketing strategy on advertising. The only
advertising they really have is customers walking around with Coffee Planet cups and other
potential customers seeing it. The third major issue that Coffee Planet is facing is that because they
are concerned about the quality of their product they do not stress having their products in
supermarkets. Because their product is so fresh when it is bought from a Coffee Planet store they
found that when people bought Coffee Planet at the supermarket and brewed it themselves it did
not taste as good because it was not as fresh.
GRAND STRATEGY MATRIX (GSM)
Page | 17
Coffee Planet
Evaluation:
Coffee Planet is currently is located in Quadrant 1 of the Grand Strategy Matrix are in an excellent
strategic position. It is unwise for a Quadrant I firm to shift notably from its established competitive
advantages. When a Quadrant 1 organization has excessive resources, then backward, forward, or
horizontal integration may be effective strategies. When a Quadrant I firm is too heavily committed
to a single product, then related diversification may reduce the risks associated with a narrow
product line. Quadrant 1 firms can afford to take advantage of external opportunities in several
areas. They can take risks aggressively when necessary.
Some Strategies Coffee planet should follow are following:
Product quality and variety
Acquire business that are engaged in the production and selling of highly specialized bread,
pastries, cookies, cakes and the like that will supply its own requirement. Coffee Planet mode of
acquisition can be full integration, or just by entering into a long-term contract.
Price competitiveness
Instead of buying premium coffee beans from outside suppliers at a high cost, the company can
just buy supplies from its competitors at a lower price. Acquire or purchase a portion of its
competitors’ stocks, so that they will have access lower costs of coffee beans and acquire the
necessary competence to become a cost leader.
Customer loyalty
Partnership with the producers of espresso machines to include Coffee Planet products into the
packaging. Diversify into the business of producing its own coffee espresso machines.
Global expansion
Increase market share by selectively opening stores in new and existing markets (including China
and UK) as well as increasing revenues in the existing stores.
Page | 18
Coffee Planet
BOSTON CONSULTING GROUP’S (BCG) MATRIX
Evaluation:
The Boston Consulting Group (BCG) matrix is enhancing a multidivisional firm’s efforts to
formulate strategies. This matrix allows a multidivisional organization to manage its portfolio of
businesses by examining the relative market share position and the industry growth rate each
division relative to all other divisions in the organization. Coffee Planet is measured to identify the
stores strategic position in the Boston Consulting Matrix. The BCG matrix, were included 4
divisions which is Question Marks, Star, Cash Cows, and Dogs. In division quadrant I, shows low
relatives market position, high growth industry. Firms cash needs are high and cash generation is
low.
This division decides to strengthen on pursuing an intensive strategy. Division quadrant II,
identifies best long-run opportunities for growth and profitability. Star division is high relative
market share and high industry growth rate. In convince of substantial investment to maintain or
strengthen their dominant positions. Next in quadrant III, Cash Cows with high relative market
share position but compete in a low growth industry ,while this division will be managed to
maintain strong position for as long as possible
Finally, in quadrant IV Dogs have low relative market share position and compete in a slow or no
market growth industry. This divisional are weak into internal and external position and often
liquidated, divested or trimmed down the retrenchment. Retrenchment can be best strategy to
pursue because many dogs bounced back, after strenuous asset and cost reduction, to become
Page | 19
Coffee Planet
viable, profitable divisions. In contrast, the highest scored is 3.5, and it determinant that relative
share position is HIGH.
Besides that, Coffee Planet Income Statements shows the Net Revenue were consecutively
increased between the years 2003 until 2005. The revenues on the year 2003 is $4075,000, while
$2191,000 in year 2004, $6369,000 in year 2005. Moreover, the industry sales growth rate between
year 2004 and 2005is 56.3%.It determinant HIGH position of industry sales growth rate. In
conclusion, Coffee Planet was identified in STAR division. This division represents the Coffee
Planet long-run opportunities for the growth and profitability. While, this division is in high
relative market share and industry growth rate and subsequently they received substantial
investment. The divisions are forward, backward, and horizontal integration, market penetration,
market development and product development are will be considered.
QUANTITATIVE STRATEGIC PLANNING MATRIX (QSPM)
Key Factors
Reduce Prices
Weight AS
Expand Items
TAS AS
TAS
Opportunities
Increasing the product ranges
0.11
Innovate products and services
0.06
Pakistani market is measured as fastest growing and 0.11
the most powerful market in the world in term of huge
population and the overall rising economic growth.
4
2
4
0.44
0.12
0.44
4
4
2
0.44
0.24
0.22
Extend supplier range
New distribution channels
Expansion of retail operations
0.06
0.03
0.04
2
1
2
0.12
0.03
0.08
3
3
2
0.018
0.09
0.08
0.01
0.15
0.12
1
3
2
0.01
0.45
0.24
4
2
1
0.04
0.3
0.12
0.11
1
0.11
1
0.011
0.04
2
0.08
2
0.08
Threats
Consumer trends towards more healthy life style
High intensity of rivalry among competing firm
Most Pakistani still has stronger preference of tea over
coffee
Gloria Jeans & Mc Café are competitors over Coffee
Planet offering lower prices
Better value offered by local coffee
Page | 20
Coffee Planet
Raw material cost rising-coffee planet is exposed to 0.1
rises in the cost of coffee, labor, and dairy products,
and adverse changes in exchange rates.
1
0.1
2
0.2
Recession or downturn in the economy affects 0.04
consumer spending with less disposable income to
spend. Consumers defect to lower prices venues and
competitors.
Supply disruptions due to political economical and 0.03
weather conditions
Total
1
2
0.08
2
0.038
1
0.03
1
0.03
Strengths
Multiple small scale suppliers low bargaining power, 0.09
lower cost of coffee bean
Strong brand equity with high quality coffee and
excellent customer service
Strong research and development capabilities ensure
product quality
Good reputation among customers
Favorable access to distribution networks
The atmosphere in coffee bars provide customers
with a feeling of sophistication, style and sense of
knowledge.
Have attracted employees who are well educated
and eager to communicate the message of their
product.
It has developed excellent skills in franchise
management.
Due to its specialism in all things coffee, it achieves
high buying volumes, scale economies and
international sourcing, some from fair trade suppliers.
2.33
2.43
3
0.27
1
0.09
0.12
4
0.48
2
0.24
0.09
3
0.27
4
0.36
0.05
0.06
0.07
3
2
2
0.15
0.12
0.14
2
1
1
0.1
0.06
0.07
0.04
3
0.12
3
0.12
0.02
3
0.06
1
0.02
0.07
4
0.28
2
0.14
0.06
0.11
3
4
0.18
0.44
1
2
0.06
0.22
0.04
0.03
0.02
3
2
1
0.12
0.06
0.02
3
1
2
0.36
0.03
0.04
Weaknesses
Coffee itself is a western product for the middle class
Coffee Planet is a premium brand commanding High
(premium) prices
Heavy restructuring and store operating expenses
Lack of patent protection
Coffee Planet is seen as a “Global”, possible
perception that it is
Page | 21
Coffee Planet
A big brand
Over dependency on coffee and coffee related 0.05
products
Total
1
3
0.15
2.86
2
0.1
2.01
Evaluation:
According to the sum of total of attractiveness we analyze that strategy 2 with the attractive score
of 2.43 indicates that Coffee Planet should increase their shelf items by introducing new items to
their product line
Recommended Strategies





As we identified in the GSM Matrix Coffee Planet is in the first Quadrant and should adopt
backward, forward, or horizontal integration to become efficient in the market. Along with
that some strategies recommended to coffee planet are Product quality and variety Price
competitiveness, Customer loyalty and Global expansion.
The BCG Matrix helps us to formulate strategies, some of the recommended strategies are:
market penetration, market development and product development are will be considered.
Through evaluating the scores of QSPM Matrix some recommended strategies are: Coffee
Planet should increase their shelf items by introducing new items to their product line.
With the partnership for distribution with Ahmed Hassan Bilal Trading, Coffee Planet
should to be prepared to handle overhead costs that arise out of the need to have additional
control of its distribution quality to ensure that coffee delivered to customers is fresh.
Besides the concessions at fuel stations, the company should consider drive in outlets that
allow customers to have alternative ways of serving its customers.
The company should also continue with its training programs to ensure that workers can
meet quality expectations and succeed in doing the business as a one-stop shop for
coffee. The need for franchising will increase as the company grows, which will increase
the complexities of operations.
Consequently, Coffee Planet should implement effective strategies to exploit the presented market
opportunities. Coffee Planet’s success in Pakistan’s market has emanated by the fact that it has
nurtured a number of unique resources, core capabilities, and competences. These capabilities have
made Coffee Planet a favorite amongst many customers. The capabilities have also enhanced the
firm’s strengths. In an attempt to survive in the future, it is paramount for Coffee Planet to assess
its threats and weakness and make the appropriate adjustments. The firm should also exploit the
opportunities available in the external business environment.
Page | 22
Coffee Planet