Costa
Q:1
“Standardization versus Adaptation, two different strategic
approaches which may be used for the marketing and running
of business operations of international Coffeehouses.” In your
point of view, which is better for Costa strategy for global
expansion? Discuss your reasons while citing practical
evidence from Costa Coffeehouse chain to support your
answer.
Answer:
From my point of view, I see that Costa coffee could benefit
from utilizing adaptation strategy for global expansion and for
marketing and running of business operations and my reasons
behind are the following:
As Costa coffee expands globally it faces different
cultures with different consumer preferences and beliefs
that reflect on its product mix as Costa coffee services
high quality sandwiches some may contain pork meat in
some countries that is prohibited in Islamic countries and
that pushes the company to adapt its product mix to
cultural differences.
When it comes to coffee its difficult to impose a single
taste on different cultures, So Costa should adapt coffee
drinks and products it offers to different cultures that was
seen in introducing Turkish coffee at Costa Coffee
Arabia.
Changes made in product mix such as printing special
events and ceremonies related to each culture ex.
Ramadan print of coffee cups in Arabic counties,
introducing new year gingerbread inspired coffee drinks
on the menu all these physical changes in marketing
products make customers of each country feel valued and
feel that Costa coffee is part of its culture.
Tailoring social media pages such as FB, Instagram to
suit cultural ceremonies with posts and cover photos
changes is another adaptation aspect followed by costa
coffee in its marketing efforts.
Costa was one of the leaders in adaptation strategy in
coffee house business as a part of Coca-Cola that
introduced “think local act local” global marketing
strategy in 2000 following this strategy Costa commonly
overlook cultural differences during expansion to
international markets.
Q:2
Costa Coffeehouse chain are owned by Coca-Cola group.
Acquisition and Integration should yield benefits and reduce
inefficiency of firms’ operations. Discuss this statement and
analyze the benefits which may be enjoyed by Costa through
its Acquisition by a strong well-known brand ‘Coca Cola’.
Answer:
Coffee is a big business with many formats and also a
very fragmented business that no single company has a
strong foothold across all parts of it and here comes the
opportunity for such a huge corporation like Coca-Cola
to enter that market through partnership with Costa
coffee.
That partnership held the potential for both companies
to supercharge their growth as it seems difficult for a
single company to navigate in isolation.
As coffee investments are becoming increasingly
profitable, large conglomerates such as Nestle and JAB
holding are striving to invest in such promising market.
For Costa, Coca-Cola has the capability to expand
coffee industry faster and more economically as it has
previous experience in canned and cold coffee products
with extensive research and development capabilities
such adding new revenue sources for Costa.
Coca-Cola allowed Costa to enter huge markets such as
Chinese one that needed huge capital.
Coca-Cola has its global supply chains that allowed for
superior operational efficiency for Costa.
Cola-Cola has superior global marketing strategies and
tactics that allowed for Costa introduction into various
cultures with the strategy “think local, act local” Costa
managed to have high agility, make a unique finger
print in each country and enter new countries where
Coca-Cola has already strong presence.
Q:3
Costa Coffeehouse chain is improving in consumer
engagement through social media platforms. Discuss this
statement and suggest to Costa some new marketing ideas to
effectively engage consumers with its brand.
