Evelna Kamzole

SWOT analysis for Costa Coffee

Strengths

Weaknesses

1. Splendid brand name and brand

visibility 1
2. Reputation for quality that is
actually worth the money2
3. Wide variety of products3
4. Quality of service is high4

Opportunities

1. Located in relatively few countries

worldwide5
2. Only few stores in each country 6
3. Because of high prices not available
to all classes7

Threats
8

1. Broaden their target market

2. Merging, taking over, or forming
strategic alliance with other coffee
companies9
3. Continuously expanding10

1. Rising prices of coffee beans and

dairy products11
2. Supply disruptions12
3. Increased competition from local
cafes and other coffeehouse
chains13

1 Their brand name is like their signature. The name Costa stands for excellence,
luxury and perfection. Also, as their logo and premises are in warm tones, their
atmosphere is more warm and pleasant.
2 The prices of all the products are relatively high (big Cappuccino LVL 2.10). But the
quality of coffee is also very high, as they are using only one kind of coffee beans - Costa
Mocha Italia beans, also they use special equipment for coffee making (for additional
information - http://www.coffeenation.lv/musu-kafija.html)

3 In Costa Coffee stores it is not only possible to buy all kinds of ice and normal
coffees, frappes and other drinks, but it is also possible to buy food, which is made
especially for Costa.
4 The service is fast, baristas are always very polite and always suggest some new
things to try
5 Located in only 35 countries (source: http://en.wikipedia.org/wiki/Costa_Coffee)
6 Only 10 stores are in Latvia, and they all are located in Riga (2 of them- in airport),
that means that people, for example from Liepaja, are not able to get an everydayexperience of Costa.
7 For example, if they have a Cappuccino for LVL 2, 10, than their main competitorsCoffee inn, has cappuccino for about LVL 1, 80 or something like that, and new
coffee store- Caif Caf, also has cheaper coffee. But as they have clarified their
target group is youth in the middle and higher income groups ( middle class, upper
middle class, privileged class) (source:
http://www.scribd.com/doc/17693007/Marketing-Plan-of-Costa)
8 For example, have some cheaper coffees that would be available for lower
classes, of course, still maintaining quality.
9 They could merge, for example, with Starbucks, as they are also very known
coffee company. In Latvia they could merge or make alliances with Coffee inn, or the
new Caif Caf.
10 Expand to more countries, have more stores, because then they could have
more customers. For example, more to Eastern countries.
11 If price for dairy products and coffee beans will raise, they will need to higher
their price per one cup of coffee, that means, that less people will be able to afford
this coffee
12If because, for example, policy of customs would change against them, then they,
for example, could not import their special coffee beans.

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4. Policy change14

13 For example, in Latvia would come Starbucks, that would mean, that there is
much higher competition. Or if Costa coffee or Caif cafe would expand, than if they
are more available to people, they would be more known and more popular
14 Because of some policy change or political conflicts between countries
government could ask them to shut down their stores. Or if the government would
give out a law, that would put on them some kind of restrictions, that would mean,
that they have to adapt to them, and in some cases it could be not beneficial for
them.

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Conclusion
In my opinion, Costa Coffees SWOT analysis shows, that they have
established a pretty strong enterprise. They have more strengths than weaknesses,
and that is good. Of course, they could expand their coffee stores, as they are
located in relatively few countries, and even there they are mostly concentrated in
one region, so they would gain more customers. Also, they could adapt their prices
so that this coffee would be more available for all social classes, but as their main
target market doesnt include lower classes and it is their policy, as they see
themselves as luxury product providers, than that is their choice whether to do it or
not. Also looking at opportunities, they mostly results from their weaknesses and
the way they can improve their weaknesses. They should overview this list, and
then assess whether to use these opportunities and change their brand or stay the
same, as their company is well-enough created. But if we talk about threats, the
only way how to avoid them, is to develop a good system of flexibility, that would
mean, that they should be ready for changes in market, policy, conflicts. They
should be ready to be able to cope with these threats in any time and place. So, if
they havent thought about these threats, they should overlook them and decide
how they would deal with them if they would come true.