Business Performance of Costa Coffee

in Global Market

Table of Contents

1.0 Introduction.......................................................................... 11.1 Research Background........................................................................................................... 11.2 Research Rationale................................................................................................................2

2.0 Issues of Trading Across Borders....................................... 22.1 Trading Across Borders.........................................................................................................2

2.1.1 Deal with Different Cultures......................................................................................32.1.2 Diversified Approaches Possible...............................................................................42.1.3 Standardize Products/Service.................................................................................... 52.1.4 Organizational Structure............................................................................................62.1.5 Employee Management............................................................................................. 7

3.0 Competitive Position of Costa Coffee.................................83.1 Porter Five Forces Analysis..................................................................................................9

3.1.1 Threats of New Entrants............................................................................................ 93.1.2 Threats of Substitutes...............................................................................................103.1.3 Suppliers’ Bargaining Power................................................................................... 113.1.4 Customers’ Bargaining Power................................................................................. 11

3.2 Generic Skills......................................................................................................................123.2.1 Cost Leadership....................................................................................................... 123.2.2 Differentiation..........................................................................................................123.2.3 Focus........................................................................................................................13

4.0 Critical Evaluation on Costa Coffee’s Business

Management Issues.................................................................. 144.1 Evaluation on Major Business Management Issues...........................................................14

4.1.1 Evaluation on Organizational Management............................................................ 154.1.2 Evaluation on Entrance Strategy............................................................................. 16

5.0 Conclusion........................................................................... 17

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1.0 Introduction

1.1 Research Background

Costa Coffee is a multinational coffeehouse headquartered in the UK, and a wholly

owned subsidiary of Whitbread (Adam 2013). It is now the world second largest

coffeehouse chain after Starbucks. Costa, opening its first International shop in 1999

at Dubai, UAE, grows with its other 79 stores which are opened in the Emirates

within 12 years. At first, Costa was only a coffee rostery which was opened in 1971 at

the Lambeth area of London (Rankin 2014). The feature of Costa coffee at that time

lied in that it was a kind of supplied coffee and the coffee was with the slow roasted

mocha Italian blend. Later on, in 1978, they had their own creative ideas and soon set

up the first retail store in Vauxhall Bridge Road, London. In 1995, it was purchased by

the Whitbread company, growing rapidly with 1700 stored opened in all around the

word, as a branch (Whitbread 2009; 2014). Now, John Derkach and Adrian Johnson

are the managing director and Chief Operating Officer respectively.

Up to January of 2011, 1175 outlets of Costa Coffee have been opened in the UK

which makes it become the biggest coffee shop chain in Britain. As to the abroad, it

has 442 stores in 28 countries. People can find them in the airports, Tesco stores,

Marriott Hotels, WHSmith, Moto, Pizza Hut branches, RoadChef motorway services,

Odeon Cinemas, as well as the bookstores of Waterstone (Thomas 2014). In addition,

it opens some small sub-units in the airports and railway-stations in UK. Furthermore,

in places like out-of-town business parks which are near the food retailers, there are

these stores opened. As to the biggest store, it should be the one set up in Dubai which

can accommodate about 320 people at the same time (Costa 2014).

Costa Coffee can be regarded as the largest coffee chain in the world and it nearly

opens one store in each large town in UK (Hunter 2014). Every day, thousands of

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people come to consume here. Whitbread, a large restaurant and hotel company,

purchased Costa chain in 1995 (Carter 2014). This move actually helps Costa to grow

better and makes it the largest coffee chain in Britain and the second one in the world,

after Starbucks. With the core market in Britain, Costa has other branches in other 28

countries in the world. Among them, the largest one should be the one in Dubai which

can serve 320 people at the same time. The logo of Costa is easy to recognize so

people can see the store easily. Its logo is a coffee bean which implies that the long

history of Costa (Costa 2013).

1.2 Research Rationale

It is easy to see that the market of coffee shop in UK is going to expand at a rapid

speed. As the Costa Coffee is doubtlessly the most popular brand in this market and is

considered a significant profit resource of Whitbread Company, it is of much

importance to study it. In addition, with the detailed research about Costa Coffee, it

helps to get to know the general condition of the coffee industry in UK.

2.0 Issues of Trading Across Borders

2.1 Trading Across Borders

Costa Coffee now becomes one of the biggest Coffee chains in the world. There are

1175 outlets Costa shops in UK, which is Costa’s core market, and it spread rapidly

all over the world, including east and west. For instance, Costa has opened its 200th

coffee store in China up to 2012.

Trading across borders is excited, and bring profit and fame to Costa. Overseas

market is attractive and competitive, full of energy and opportunity. However, there

are still something that the company should consider carefully before making a

important decision, like enter a new market.

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2.1.1 Deal with Different Cultures

Dealing with different cultures may be the first difficulties of trading across borders

(Deresky 1994). Coffee culture may be not widely accepted yet in some countries as

part of Costa’s international expansion strategy. We should admit that different

country does has different cultures and customs in drink. There are many reasonable

substitute beverages to coffee, which are mainly tea, sodas, energy drinks and so on.

Even when people truly enjoy coffee, their hobby and taste could be various. some

like Latte while others like cappuccino, some like the creamier while the other like

blander. It depends on country, culture and environment, which should be taken into

concern by the Costa’s management.

It’s required that Costa Coffee should make a change in all respects when meets

different needs abroad. Free Wi-Fi would appeal to young people and the white-collar

who usually use a mobile phone or laptop. High quality and well-designed furniture

would make those who just want to relax themselves feel at home in Costa Coffee. To

set a children corner like McDonald’s has done could also be very useful when a

whole family comes to enjoy a weekday. But that is not enough (Poulter 2013). It is

likely that almost all chains of coffee shops offer similar products, for instance,

various types of coffee, food, snacks. However, it is also possible for Costa to provide

widespread coffee products just like cups, coffee beans, bags, teas, coffee makers and

even a product package.

Therefore, to realize what the customers’ need, their behaviors and demography

changed to provide the most suitable products for them is an important element that

should not be overlooked. On the other hand, Coffee shops might consider to show

customers how good a cup of Costa could be through providing and introducing the

free drinks to customers and let them know what a really good coffee is. That is quite

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an effective way to make the product acceptable and well-known in a new district.

2.1.2 Diversified Approaches Possible

It is good news that Costa now has a great growth potential in further expanding into

the emerging and developing markets. They can leverage their size, experience,

financial prowess and efficiencies to make new market share quickly. There are

various approaches Costa can take to pushing the enterprises' internationalization and

gain market share.

To begin with, operators can further leverage the wide range of occasions associated

with the ritual of coffee drinking. For example, promoting the idea of treating yourself

to a spiced pumpkin latte when you are having a great day or a particularly bad one.

Promoting more diverse reason to encourage usage and establishing a strong

emotional connect. Secondly, maintaining existing buyers turn into customers with

loyalty would be the challenge in the future (Grönroos 2007). In this case, customers

can enjoy 6% off with a prepay card in Costa. In addition, more fresh products such as

caffeine drinks and drinks with lower calories have developed in Costa, found by

Mortimer to attract and satisfy new customers who want to have a shape or worry

about their weight and health since people now are much concern about the health

issue than before. Furthermore, Costa not only enhances the large chains business, but

also delivers a new generation in self-service with embedder Intel technology.

With over 1300 coffee shops in UK and more than 600 internationally, the company

hit a global success, and now Costa Express is the fastest growing part of Costa and of

Whitbread (Wood & Bowres 2011). The attractive design and advanced interactive

features make it possible that the new machine suits more environments—from gas

stations to meeting room, and bring customer an amazing experiences. At the same

time, convinces location plays an important role in satisfying customers’ need in the

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right place (Jones et al. 2003). Costa should concern all customers and bring the sense

of belongings to all of them, and at the same time, offer some specific products and

services for particular users like VIP customers, and each activity depend on their

need and perception. Moreover, it seems that social media is likely to become a

critical skill in lots of companies because new products could be advertising and

shared immediately and it could also maintaining the previous relationship with

existing customers and appeals to more buyers. This could also monitor the

competitor’s activities, pay low cost but get a high respond. Last but not least, Costa

created its new coffee club App for download, which should be a good way to

communicate and interact with customers, and also cultivate some loyalty.

2.1.3 Standardize Products/Service

Creating great coffee has been an art of which requires people to spend time on

practicing this skill to become perfect. Since it has more than four decades’

professional experience, Costa discovered with the best beans and techniques to

ensure every cup makes the grade. But when trading across borders, it’s no longer a

easy case for Costa to standardize its products and services. At present, countless

coffee shops appear in the public already. This includes both the independent shops

and the chain coffee shops. As known that the coffee market is relatively competitive,

because customers are looking forward more such as the price, required services,

quality of the coffee and the atmosphere in the store, which tend to have an impact in

customer behavior. By the way, the speed of ordering and making coffee also matters.

That needs be under control.

Indeed, Costa Coffee is considering as the first coffee chain shop that import coffee

beans from Rainforest Alliance (RFA) Certified farms. This means that all of the

Costa coffee is originally from 100% RFA certified farms but without India. It is

well-known that Costa was the first successful coffee chain shop that controls the

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coffee making procedure throughout from choosing the coffee beans to giving a cup

of coffee to the customer. Costa uses all of their own sources such as blend, roast,

grind and pour. It could ensure the high quality of the Costa product, no matter what

country it’s in.

However, the quality sometimes might difficult to fit with customers’ preferences

(Niederhauser et al. 2008). Concerning about this, Costa tends to teach their staff

about how to make a good coffee, listen to what customers want to improve its

serving quality. It is essential to build up a harmonious relation between the chain

coffee shop and customers. If staff who works in the famous chain coffee shop,

customers will be likely to come back more often because of the friendly and nice

services provided by the staff.

Another necessary element for running a coffee shop is to choose a good location. For

example, since Costa aims at selling coffee to those middle class and high class

customers, it sets their chain shops mostly in prime locations, such as downtown area,

office building and some famous retail shops. In my opinion, Costa Coffee should just

choose big city as its location as the price of their product is high to a certain degree.

What’s more, Costa also has wisely teamed up with Tassimo to bring customer s

fantastic range of Costa at home drinks, creating a delicious cup of coffee in seconds

without fuss or mess.

2.1.4 Organizational Structure

Nowadays, there are some developing markets with foreseen future such as China,

Western Europe and India. On December 9th, 2011, a UK based hotel called

Whitbread PLC separated Costa Coffee ship into four different divisions, which were

monitored by different teams. The Costa Company initially promoted only selling

coffee in the UK with a “Proud To Serve” slogan. Recently, this has been changed to a

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self-service coffee vending machine of which is established by Scott Martin. During

2011, Whitbread has a five-year ambitious plan to make Costa Coffee shop have more

than 3500 chain stores throughout the world by 2016. Whitbread had recently

increased its dividend. But it maybe the Costa’s weakness to Operate globally, it

seems that its presence is located in only relatively few countries worldwide. Besides,

as a global coffee chains, Costa Coffee lacks the flexibility, and doesn’t have a good

control of its empire, despite its IT advantages. That’s really a challenge.

2.1.5 Employee Management

Indeed, Costa is famous for their professional members of staff. Since the staff tends

to provide professional and friendly service, this could be referred that Costa respect

and value their customers. This organizational method has made Costa Coffee shop

ranked the 10th in the top 25 best companies for people to work for. Most importantly,

it has been considered as a Top Employer along with a third year of running. In Costa,

all members of staff share the same values such as genuine, confidence and

commitment.

As a global well-known brand, in order to ensure the unity of the coffee, Costa has

established world-class training institute in the UK, India, China, Russia, the Middle

East and central Europe. There are coffee schools which offer a variety of training

courses, such as the coffee master course. As an international company, Costa always

looks for the most excellent people to work for the shop around the world.

Interestingly, the staff in Costa thinks about what Costa Mocha Italia blends when

they are looking for a job in Costa. The widespread of the chain coffee business

indicates that there are more chances for people to look forward more excellent

coffee.

In addition, Costa educates their staff about how to make a cup of coffee that fits for

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people in different countries with their own preferences and tastes. As for the return,

the working hourly rate starts from £6.36, which relies on the staff’s performance.

Moreover, Costa keeps making every staff in its team get used to share the successful

story of it, which helps Costa to enhance its brand influence. This includes (1)

Appreciating drinks shown on the menu like customers, which does not include the

Costa team since they have rights to have free drinks. (2) A half discount on the food

to make staff keep going. (3) Considering the hours of working, which helps staff to

balance life and work. (4) A reward that recognizes the outstanding team. (5) A great

pension scheme under the Whitbread Company. Staff is likely to get additional 25%

off at Costa and the Inn in their brand corporation, such as Table Table, Taybarns,

Brewers Fayre and Beefeater Grill. As a matter of fact, Costa seems to have a broad

role and responsibility to look for more people who wish to put their valuable skills

and capabilities in work. It is likely that working at Costa could be an interesting

experience.

3.0 Competitive Position of Costa Coffee

For organizations who are seeking for ways of global business in modern times, it is

necessary and important for them have a clear understanding on their own advantages

and disadvantages. In today’s world market, there is an increasing number of

competitors in any kind of industries. This is also the case for coffee industry. Costa

Coffee, headquartered in the UK, is also making efforts to expand its operations

around the world. However, the organization faces the challenges in various aspects.

Based on the knowledge the author has acquired, this essay will take Porter Five

Forces analysis as an approach to analyze the competitive environment Costa Coffee

faces when it plans to enter the world market in coffee industry. The first section is the

discussion on Porter Five Forces Analysis, and the second section is a critical analysis

of Costa Coffee’s business management practices under the guidance of the analysis

method.

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3.1 Porter Five Forces Analysis

Porter five forces analysis is a framework to analyze the level of competition within

an industry and the development of business management (Porter 2008). The five

forces usually determine the competitive strength of an organization, as well as the

potential of a market.

The five forces have a bearing on the ability of an organization to serve its customers

and make profits at the same time. A change at any one of the forces will affect others,

and lead to changes in the business performance of the organization in the industry.

In any industry, companies are seeking for better business performance when they

become capable of applying their core competencies, business model or strategies and

network to achieve higher profits in the market.

3.1.1 Threats of New Entrants

Latest entrants are able to enhance the level of a competition in an organization.

Generally, entrances mainly rely on the barriers to get access to. The higher level of

the barriers, the higher profitability of the opportunity will be. Indeed, the coffee shop

is relatively competitive in the market, which makes the entry barriers low to those

new joined competitors. The entry barriers in this kind of company are shown below:

1) Much higher scale on the economy (i.e. coffee import) along with awareness

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on brand

2) No particular required knowledge (the use of coffee machine)

3) Low funding requirement

4) Barriers on government or on legal problem

5) Additional concentrations required on potential buyer who retry their previous

favorable goods or services

3.1.2 Threats of Substitutes

A good of which gives buyers the same amount of satisfaction towards the end. This

might tell people this company uses a different and distinguished technology or

selling method instead of giving out the substitute product like hot chocolate or tea,

which could probably lower the a company attractiveness to a buyer since it

minimizes its price trying to have more customers. Indeed, a company is supposed to

enable their goods more appealing to their potential customers than the substitute

product that people might purchase.

In general, the threats of substitutes face are as follows:

1) Buyers’ willingness to purchase a substitute product

2) The similar level of price and the function of substitute goods

3) The total money sparing on switching to a substitute

These three challenges an organization faces are critical for it to design proper

products and services which can better satisfy the demands and tastes of customers.

Price is one of the important signs for customers to decide whether to buy a product or

not. As more and more modern people are seeking for high-quality life, the quality of

products and services are also becoming attractive to customers. The competition in

coffee industry is fierce, and Costa Coffee has to make strategic approaches in its

product and service management, so as to improve its management of customers.

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3.1.3 Suppliers’ Bargaining Power

Providers are those suppliers who provide goods to the company. Sometimes, supplier

determines the level of competition in its industry due to the bargaining power. If

there are limited amount of suppliers, but large amount of companies, the industry

will turn into a competitive situation. However, the suppliers’ bargaining power is

relatively low in the Costa coffee shop since there are lots of other brands’ suppliers

from many other countries such as Kenya, Guatemala, Colombia and Vietnam. The

significance of the product from a supplier and the expense to this company causing

suppliers’ switching to the others would be the key segments that affects suppliers’

bargaining power.

3.1.4 Customers’ Bargaining Power

If there are limited customers who chase for famous suppliers more than people who

have more power to affect the industry, people are ready to pay for a product with

reasonable reason. Although customers have an intensive influences on the industry,

they still need to know the buyers have a considerable level of bargaining power. If

one provider or an institution in its industry and a majority of customers wish to

separate the product from the provider instead of buyers who own limited influence,

there will be less competitive opportunity for the buyers. In general, the price

sensitivity is not that enormous for the Costa coffee of which makes customers

change it to another brand. The customers’ bargaining ability relies on whether

buyers’ purchasing ability could have a large purchasing ability and quantity.

Rivalry is an element that produces the competition in an industry. Particularly, the

competition of the coffee shop market is much higher than other market. For example,

the incur expenses on advertising and new product promotion, which means that a

coffee company has to spend lots of money on them. Since the famous coffee

competitors such as Starbucks, Nero, Coffee Republic and lots of other independent

coffee stores spend less money on doing what Costa coffee shop is doing, these have

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made lower profit to them.

3.2 Generic Skills

Michael Porter has said that a firm’s strengths are determined by cost merit and its

distinguished characteristics. After applying these two strengths in either a broader or

a narrower perspective, three generic skills will occur such as cost leadership,

distinguished characteristics and concentration. All of these skills are used at the

business level, being called as generic skills since they do not come from a firm or an

institution.

3.2.1 Cost Leadership

Companies who have ambitions to be a lowest-cost producer in its own industry could

be regarded as a cost leadership skill. Normally, the company with lowest costs but

has highest profits is likely to be sold at a considerable market level price(Murray

1988). Companies and organizations follow this strategy tends to focus on the

reduction of cost in each activity in every value chain. It is significant to mention that

an organization or a company could be a leader on cost but this does not indicate that

the product from this organization or company would have a relatively lower level of

price. For instance, a company can charge a reasonable price if it follows the low cost

leadership skill and reinvest the additional profits in its development, supported by

Lynch (2003). But the risk of following the cost leadership skill tightly would make

the company’s concentration with reducing costs and some potential important

segments.

3.2.2 Differentiation

Whenever a company could distinguish its goods from others, it would be make its

products or services being charged with a higher price in its consistent market (Rosen,

1974). Actually, there are some examples that have better service to its buyers and

much nicer product presentation comparing to the other potential competitors. Porter

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(1980) claimed that if a company has different and outstanding skill in the market,

this probably might be additional cost that this company needs to face with. Those

additional costs are likely to include more expensive advertising on having a more

differentiated brand logo for its product. McDonalds, for example, is differentiated by

its very brand name and brand images of Big Mac and Ronald McDonald.

There are so many advantages on differentiation for the firm of which applies the

strategy to its company. The problem is that some difficulty on the firm to be

considered whether additional costs are needed and required from the buyers due to

the higher level of price. Furthermore, a successful distinguished skill of a company

could appeal to other competitors to input their own characteristics and directly copy

that distinguished goods.

3.2.3 Focus

The focus skill concentrates on a limited segment and it tries to have a cost merit or

distinguished feature. A company with a focus skill is likely to have a higher

customer’s faithfulness, which tends to unwelcome other firms to be honest.

Companies use a focus skill of which have lower volumes because of the limited

market (Zeithaml et al. 2006), which leads to less power of bargain with their own

providers. But when the companies applies their distinguished skill, this will make the

higher expenses on the close substitute goods no longer exist.

Companies will be able to have a better product development ability if they have a

successful focus skill. But there are some existing risks of focus skills that have copy

and changers in the unforeseen things. Moreover, the skills provides a company with

the possibility to cost more money by providing a lower price product to a tiny and

particular groups of customers. Ferrari and Rolls-Royce are classic examples of niche

players in the automobile industry. Both these companies have a niche of premium

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products available at a premium price. Besides, they do not have a large portion of the

market throughout the world. This is considered as a niche players’ trait feature. The

negative on this focus skill is that the niche feature is too tiny to arouse companies’

awareness, because the scale of economy plays a relatively significant part in its

consistent industries. Obviously, the niche feature might fade out in the future since

the customers’ preferences and the business environment are both changeable from

time to time.

4.0 Critical Evaluation on Costa Coffee’s Business Management Issues

Costa Coffee has grown up into a successful world-known coffee chain business. It

has set up a large number of branches around the world world. From developed

countries to developing nations, the company has made great improvements in its

business management and business performance. The discussion on the business

management issues, organizational management and entrance strategy in Chapter 2

and Chapter 3 is very useful for readers to have a clear understanding on the current

business management and performance situation of the company. This article aims to

make a critical analysis and evaluation on the two major business management issues

which have been discussed before, so as to give some suggestions to the organization

on its future business management.

4.1 Evaluation on Major Business Management Issues

In the previous two chapters, chapter 2 and chapter 3, the author mainly deals with the

major business management issues in Costa Coffee. By introducing the current

business performance of the company in the industry (Luttinger & Dicum 2006), the

author comes to the idea of reviewing the specific issues of business management, and

two of the major issues are selected to be the focus of the two chapters. As being

discussed, organizational management is essential for the organization to adapt to the

environments both internal and external, to integrate with its customers, and to

15

manage its employees and products and services. In addition, the entrance mode of

the organization to foreign market is also important for it to gain competitiveness in

the industry around the world (Reinecke et al. 2012). Therefore, the author firmly

believes that organizational management and entrance strategy are two major issues

for the organization to ensure its good business performance, and also two issues for

researchers to analyze and evaluate the organization’s business strategy.

In response, this part will mainly make evaluations on the organizational management

and entrance strategy of the company, so as to critically comment on its business

performance and give some recommendations on its future development.

4.1.1 Evaluation on Organizational Management

When talking about the organizational management of the company, the author has

chosen several sub-aspects to consider and discuss, including industrial characteristics,

customer management, products and service management, organizational structure

and employee management. These issues are essential to the development of Costa

Coffee, and the lack of one of them will lead to great loss in the company’s business

performance.

Costa Coffee, as a growing coffee chain business has made great success in the

industry. Coffee culture has been widely spread to all corners of the world, so there is

great space for coffee businesses to expand their markets. However, people in

different nations have their own understandings on coffee. The coffee products which

are popular in the West may be not that welcoming in the Oriental culture (Courvill,

2003). At the same time, coffee is also rivaled by other kinds of beverages. These

beverages are influential in certain countries sometimes. For example, the Chinese

people like to drink tea in their cultural tradition. Fortunately, this kind of situation in

China is changing and more Chinese young people are embracing coffee in their lives.

This is a good sign for the company to expand its market among young customers (De

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Pelsmacker et al. 2005).

For customer management, Costa coffee should at first ensure its products and

services. Product is important for coffee business. Good coffee can satisfy the

customers and proper taste of coffee will help it retain customers. In service

management, coffee stores under the company, for one thing should clarify their

positioning in certain regions and among specific customers, and for another thing

should be well-trained in terms of corporate culture, values and work processes.

To build a coffee store well, the company needs to train its staffs. For staff

management, Costa Coffee seeks for professional staffs which can create high-quality

products and services. Meanwhile, the emphasis on senior cultivation can help it in

business management.

4.1.2 Evaluation on Entrance Strategy

The analysis of “five forces” is helpful for the organization to have a better

understanding on its entrance to a target market. To clearly understand the situation

which the company is in can assist it in making strategic entrance strategy. Entrance

mode should be differentiated when the company expands it business in different

target markets. On one hand, the organization clearly knows its advantages in the

industry, and on the other hand, it has to understand its disadvantages when entering

another market. At the same time, the understanding on the customers in target market

means the company has to decide what kinds of product and service it will provide,

and how to provide them.

Porter’s five forces analysis is a good way for the organization to understand its

situation when entering a new market (Porter 2008). Apart from knowing its

advantages and disadvantages, the company is also required to integrate with more

customers in new market. Therefore, cost leadership and management will be

conducive to its integration. Of course, lowering the cost of products alone cannot

fully ensure its business success. It should also differentiate its products, services and

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customers. As a result, the company needs to have various focuses in various markets.

Therefore, applying “five forces” analysis in entrance strategy making is useful for

Costa Coffee to make right decisions of business management. The advantages and

disadvantages are what the company should utilize and avoid (Fulmer & Vicere 1996)

and the differentiation in products and services means that the focus on its business in

different markets should be made changes correspondingly.

The evaluations on the two major business management issues, organizational

management and entrance strategy has indicated that Costa Coffee has great potentials

and strengths when entering foreign markets, especially the markets in developing

world. The organizational management makes sure that the company is capable of

going global, and the entrance strategy becomes very critical to its business success in

global market. Therefore, the author believes that the two major management issues,

one for internal, and the other for external, are important to the business performance

of Costa Coffee in the future.

5.0 Conclusion

This assignment mainly deals with the issues of business management in Costa Coffee.

The business management issues discuss here are organizational management and

entrance strategy. Costa Coffee, as one of the biggest Coffee chains in the world.

Today, has operated 1175 outlets Costa shops in UK is expanding its business all over

the world (Giovannucci & Ponte 2005). In the process of its expansion, there are a lot

of issues to consider and analyze. The discussion in Chapter 2 and Chapter 3 indicates

that organizational management and entrance strategy are essential for the

international operations of the organization. Internally, the pursuit to coffee culture,

corporate culture and values, as well as business goals are the tangible wealth of the

organization, and the management of products, services and employees make the

organization capable of doing business and integrating with its customers (Vermeulen

& Seuring 2009). Externally, the analysis of “five forces” shows that Costa Coffee is

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powerful in entering foreign market. However, the analysis is not for all purposes. For

different target markets, the organization should make differentiation in its entrance

strategy, as well as business focus. All in all, the company, if planning to expand its

global business, should make changes in its organizational management and entrance

strategy according to specific situations. Therefore, a clear understanding on

organizational management, as well as external environment is critical for the

international operations of the company.

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