Cafepod Coffee Co. Business Analysis

Small Business Management LSBM305

Company description

Cafepod Coffee Co. is a London based small coffee company established in the year 2011. The founders of this company are Brent Hadfield and Peter Grainger. They serve the customers with the compatible capsules of the coffee. Its products are available on the online platforms as well as in super-markets. Their product range are compatible aluminium pods, ground coffee, Instant roast, Ristretto, Decaf Expresso and so on. They perform the functions of sourcing, blending as well as roasting the coffee they sell. They provide the delivery serving in the United Kingdom as well as in the international market (Cafepod, 2021).

Vision, mission and values and current strategy

The vision of the Cafepod is that to becomes the top company into the UK market of coffee business with its diverse range of coffee and their experiences.

The values of Cafepod are to challenge the top companies into the Coffee business using the David verses Goliath.

The mission of the Cafépod as the brand of coffee to make difference and innovate in the exhausted at – home sector of coffee and empower the people (Growth Elite, 2018).

The current strategy of Cafepod is the new product development as well as the market penetration in the United Kingdom as well as the foreign market.

Market analysis

The Cafépod Coffee’s target markets are the coffee - lovers in the UK as well as internationally. The geographical segmentation of target market of this company involves the North America, Europe, South America, Asia, Middle – East as well as Africa (Fortune business Insights, 2020). It serves the customers of different age groups with its unique coffees. Its’ different coffee products and range are available in the super – market stores as well as on the online on its website. It delivers the product to the target market in the domestic market that is the United Kingdom as well as in the international market, the delivery is provided. Due to the pandemic of Covid – 19, there was lock - down and the business suffered a huge loss due to the closure of all transportation services to deliver in international markets as well as domestic market. After the lock – down, Cafépod Coffee started delivery in the domestic market fully but their international deliveries were impacted the most due to restrictions. Though it is delivering in certain countries internationally now but not fully (Cafepod, 2021). Due to the regulations of the UK government in the market because of the pandemic, the services of delivering their online orders are slowed down.

Competitor analysis

Cafépod has different competitors like Nespresso and Tassimo.

Business models

Nespresso:

Key Partners Manufacturer of coffee machines E- commerce Partners Finance partner	Key Activities Procuring Producing Marketing Maintenance	Value Propositions Easy to use expresso	Customer Relation Club is developed called Nespresso Club	Customer Segment Office buyers Home buyers
	Key Resources Patents of cup Distribution network		Channels Website
Cost Structure Procuring cost of coffee Manufacturing cost Distribution cot Marketing cost		Revenue Streams Through sales of cups Through sales of machines

Tassimo:

Key Partners E- commerce Partners Finance partner	Key Activities Procuring Production Marketing	Value Propositions Easy to use T - discs	Customer Relation Through website Through social sites	Customer Segment High -end customers Organizational segment
	Key Resources Staff Distribution channel		Channels Website
Cost Structure Procurement expense Production cost Distribution cot Marketing expense		Revenue Streams Sales of coffee

Nespresso Coffee and Tassimo offers the coffee capsules to its buyer and their sales and revenue got affected due to the pandemic because of transportation restriction.

Organisation and management

Cafépods is an organization which is into the retail operation of coffee. Management of this company is running by the CEO and handling the departments like finance department, marketing department and retail department operates. Under the leadership of Peter Grainger who is the chief executive officer as well as co – founder of the Cafepods Coffee Co., the management and employees are operating. He is the transformational leader which is helping company to come up with new coffee products. The focus of the management is on the innovation and unique ideas. The current team members are Peter Grainger and Brent Hadfield who are running the management as well as its operations (Cafepod, 2021). The strength areas of the leadership of Cafepods are that it is focusing on maximizing the market of business. The leaders are adopting the new technology and innovation like LML technology for enhancing the coffee’s quality and enhancing their manufacturing process of coffee capsules. The weakness areas of the leadership of Cafepods are that the relationships with suppliers are not good which is leading towards the improper supply of the raw material like coffee. The leadership is not taking decisions related to diversifying into the new product which restricts growth.

Marketing plan

The marketing plan of the Cafépods involves the marketing mix strategy which is discussed below:

• Products: Cafepods serve its customers with the diverse coffee products such as the compatible aluminium pods, Brunch blend, ground coffee, Instant roast, Ristretto, Decaf Expresso, Super Charger expresso in different types of pack. It provides the wide ranges of unique flavours of coffee to the coffee – lovers.

• Price: Cafepods sells its product at the high prices which follows the premium pricing strategy in domestic as well as international market. As it offers the high - quality coffees which is a lifestyle product, the price is higher. They ensure that their products’ prices are competitive in the market.

• Place: It sells its products in the North America, Europe, South America, Asia, Middle – East as well as Africa market which is developed distribution channel. Its products are available on online platforms like Amazon. The online distribution channel is also wide – spread using their website and e – commerce partners.

• Promotion: Cafepods promotes its products on the website and the online platform where its products are available with product discounts and promo codes. It utilizes the social media and print media for launch of new product in a market (Bui,et. al., 2017).

Financial analysis

The Cafepods Coffee is small business which is funded by the Angel Investment network as well as Blue Wire Capital. In the year 2015, it has acquired company called ‘Bog cup Little cup’. This helped in the expansion as well as the growth of the business by enhancing its resources and capabilities through acquisition (Crunchbase, 2021). In the year 2018, the revenue of this company was about 43,77,930 pounds. According to the financial reports, the Cafepods, EBITDA was about 35,490 pounds, the total liabilities value was about 2 million pounds as well as the net worth was about 182,351 pounds in the year of 2018. The total cash of the company was about 34,527 pounds, the total asset value was about 2 million pounds in the year of 2018 (Global Database, 2021). During the lockdown due to the pandemic of COVID – 19, the business of the Cafepods Coffee has suffered the loss due to closing of business and the restriction of trade and transportation nationally as well as internationally affected the sales and revenue of company. The financial position of this company is negatively impacted due to the loss of business from the international delivery in the certain countries where demand is high of its coffee products because of the government’s Covid – 19 restrictions. The profit has also decreased as the selling of the products of this company is low. The share prices and market value of this company has impacted negatively. This company need to take the investment decisions by taking care of the current financial situation. After the end of lock – down, the company is facing problem to stand out financially in the market. The expansion as well as growth decisions are on the hold due to the economic crisis in the United Kingdom as economic growth is disturbed due to the inflation.

SWOT analysis

Below is the SWOT analysis of the company called Cafepod Coffee:

Strengths of Cafepod Coffee	Weaknesses of Cafepod Coffee
Cafépod Coffee is the well - known brand of coffee in the United Kingdom. The leadership is focusing on becoming top player in coffee sector. The core strengths of this organization that its focus is on the enhancing the quality and production of their coffee capsules with the LML technology.	There are weak relations with the diverse suppliers of this company due to which there is an inadequate supply for raw materials in the given time. This directly hampers the production of its products. The lack of the latest technology in the production is restricting the company to produce different products.
Opportunities of Cafepod Coffee	Threats of Cafepod Coffee
By using the innovation approach and latest technology in their production of coffee will help to produce best products. There is a scope to build strong bond with the suppliers to ensure the uninterrupted production through timely supply of required raw materials (Santosa, 2020).	The competition from the Nespresso and Tassimo affecting the business growth and sales. Covid – 19 spread is affecting the business in the international market due to the restrictions in trade.

Pivot Strategy

The pivot strategy involves making the small and gradual changes or introducing the new products into the new market. This pivot strategy of the Cafépods Coffee will be emphasizing on the attracting the new customers, utilizing the new technology in business operations as well as using the new revenue model. The different recommendations will help in the pandemic of COVID – 19 as well as the threat of the lock – down because of it. It will help this company to survive on the short – term as well as growth in a long term (ET, 2020). Following are the recommendations for the Cafepods Coffee based on the above analysis and the pandemic of the COVID – 19 are as follows:

• The Cafépods needs to align with the new long – term trends due to the COVID – 19 such as the limiting the supply – chain by shortening and ensure the social – distancing in delivering and manufacturing process.

• The Cafépods coffee needs to pivot by laterally extending its existing capabilities and strategy. The company can use hyper-local delivery for its coffee product delivery.

• The pivot must help in ensuring the profits and value of the Cafepods brand in the customer’s mind using of the latest technology in the manufacturing of the coffee.

• This company can re-position its image in the mind of customer by selling low price coffees by serving the new market of customer belong to a middle class.

• The Cafepods coffee can only focus on the digital platform for taking the orders in order to avoid the human contact to restrict the spread of COVID – 19.

• The automation can be carried out in the production plant of coffee of the Cafepods to reduce the human contact for health and safety such the Artificial Intelligence – AI as well as the robotic technology.

• For ensuring the proper supply of the raw materials, this company can the develop good relations with its suppliers by communicating through electronic medium for conducting meeting and placing the orders.

• The Cafepods Coffee can encourage the payment acceptance from its customers as well as clients in thorough UPI and online payments. Similarly, for the payments to the suppliers, this company can use this similar method to reduce the physical contact at the time of payment.

• The staff working at the Cafepods Coffee can be provided with the required PPE suits and ensure the sanitization at the work – place. The staff can be training to ensure safety during this pandemic situation, in the production, selling as well as dealing with their customers (Guillen, 2020).

• To ensure the financial position, the Cafepods Coffee can monitor their strategy of pivot by monitoring the sales reports, financial reports, profits, performance level of company on the weekly basis.

• It is also vital for the Cafepods Coffee to encourage the programs of learning the new skills to tackle the pandemic situations in near future other than COVID – 19 by introducing the use of new technology.

Thus, this strategy will help this business to survive in the lock – down and the pandemic situation.

References:

Bui, T.Q., Nguyen, H.V. and Pham, N.T., 2017. The Effects of Selected Marketing Mix Elements on Customer-Based Brand Equity: The Case of Coffee Chains in Vietnam. PRIMA: Practices & Research in Marketing, 8(1).

Cafepod, 2021. About. [Online] Cafepod. Available at https://www.cafepod.com/pages/our-story [Accessed on 8 February 2021]

Cafepod, 2021. Delivery & shipping. [Online] Cafepod. Available at https://www.cafepod.com/pages/delivery-shipping [Accessed on 8 February 2021]

Crunchbase, 2021. Financial. [Online] Crunchbase. Available at https://www.crunchbase.com/organization/cafepod/company_financials [Accessed on 8 February 2021]

ET, 2020. Pivot is not just a startup word anymore. [Online] ET. Available at https://economictimes.indiatimes.com/small-biz/startups/newsbuzz/pivot-is-not-just-a-startup-word-anymore/articleshow/78459443.cms?from=mdr [Accessed on 8 February 2021]

Fortune business Insights, 2020. Cafe Pods Market. [Online] Fortune business Insights. Available at https://www.fortunebusinessinsights.com/industry-reports/coffee-pods-market-100786 [Accessed on 8 February 2021]

Global Database, 2021. Cafepod. [Online] Global Database. Available at https://uk.globaldatabase.com/company/cafepod-limited#div_financials [Accessed on 8 February 2021]

Growth Elite, 2018. Cafépod. [Online] Growth Elite. Available at https://growth.elite-network.com/en/content/news/peter-grainger-co-founder-ceo-cafepod-looking-back-my-five-year-journey-entrepreneur-0 [Accessed on 8 February 2021]

Guillen, M., 2020. How Businesses Have Successfully Pivoted During the Pandemic. [Online] HBR. Available at https://hbr.org/2020/07/how-businesses-have-successfully-pivoted-during-the-pandemic [Accessed on 8 February 2021]

Santosa, P.B., 2020. Business Development Strategy for Young Coffee Entrepreneurs in Batang Regency, Indonesia (SWOT Analysis Approach-Fuzzy Analytical Hierarchy Process).