case study expresso
Case 2: The Espresso Lane to Global Markets: Write-up
Characterized by quality obsession and a sophisticated system of shipping and crafting coffee, Illy has established its brand as a prime producer of fine tasting coffee. With the rapid growth of the coffee industry in various foreign countries, Illy hopes to implement a plan of expanding the reach of Expressamente, its franchised coffee bar, across certain premium retail markets. To do this, CEO Andrea Illy has designated 7 potential countries: Germany, Brazil, China, India, Japan, UK, and US for possible expansion. To make this decision, Illy will look for key success factors such as coffee consumption/concentration, purchasing power, and ease of doing business. After considering the unique circumstances of entering each market, I have come to a recommendation for Expressamente to implement. In considering viable countries for expansion, I first tried to eliminate countries that I would not recommend. I eventually ruled out four countries in my preliminary analysis: Germany, China, Japan and the US. Both Germany and the US were ruled out due to market maturity. The summary stated that Germany “was characterized by fierce competition and high concentration”, and was also projected to have only a 2% growth in coffee sales from 2011-15. Similarly, the US is an especially mature market with a large number of competitors and only 4% projected growth in the industry. As the primary goal of expansion into the global market is future growth, these countries do not make for viable investment opportunities. China and Japan also did not pose as the best investment options. Firstly, the Expressamente business model is not a great fit for the market environments in the two countries. Japan places a high emphasis on convenience, and much of the coffee market targets consumers of ready-to-drink coffee. In addition, both the Japanese and Chinese market call for certain modifications to the product; whereas Chinese
Characterized by quality obsession and a sophisticated system of shipping and crafting coffee, Illy has established its brand as a prime producer of fine tasting coffee. With the rapid growth of the coffee industry in various foreign countries, Illy hopes to implement a plan of expanding the reach of Expressamente, its franchised coffee bar, across certain premium retail markets. To do this, CEO Andrea Illy has designated 7 potential countries: Germany, Brazil, China, India, Japan, UK, and US for possible expansion. To make this decision, Illy will look for key success factors such as coffee consumption/concentration, purchasing power, and ease of doing business. After considering the unique circumstances of entering each market, I have come to a recommendation for Expressamente to implement. In considering viable countries for expansion, I first tried to eliminate countries that I would not recommend. I eventually ruled out four countries in my preliminary analysis: Germany, China, Japan and the US. Both Germany and the US were ruled out due to market maturity. The summary stated that Germany “was characterized by fierce competition and high concentration”, and was also projected to have only a 2% growth in coffee sales from 2011-15. Similarly, the US is an especially mature market with a large number of competitors and only 4% projected growth in the industry. As the primary goal of expansion into the global market is future growth, these countries do not make for viable investment opportunities. China and Japan also did not pose as the best investment options. Firstly, the Expressamente business model is not a great fit for the market environments in the two countries. Japan places a high emphasis on convenience, and much of the coffee market targets consumers of ready-to-drink coffee. In addition, both the Japanese and Chinese market call for certain modifications to the product; whereas Chinese