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Coffee Bean

Coffee Bean

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Published by jhennah

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Published by: jhennah on Oct 05, 2009
Copyright:Attribution Non-commercial


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SWOT ANALYSISSTRENGTHRecruitment, training and recognition program
The Coffee Bean & Tea Leaf 
has established a regional office in Singapore to provide training andrecruitment support for the region. The previous owner provides no assistance in recruitment of keymanagers. They were recruited with the assistance of a local consultant. Then each outlet of 
The CoffeeBean & Tea Leaf 
can lead and control by the manager who is suitable enough and have knowledge andexperience about the region. Then they always have the greatest ability to find suitable adaptable strategies.In additional, special training is provided to staff to be more forward in greeting and helping the customers.
The Coffee Bean & Tea Leaf 
has managed to maintain several traditions as secrets of their success, one of which is having their Team Members provide each customer with a Total Quality Experience inspired fromthe company’s Core Values, F.R.O.T.H: Friendly, Respect, Ownership, Teamwork and Honesty. When
TheCoffee Bean & Tea Leaf 
(The Coffee Bean) stores open their doors, they aren’t just opening them tocustomers—they are opening them to new Team Members, too.
Company’s marketing strategy
All the stores of 
The Coffee Bean and Tea Leaf 
were located athigh traffic, high visible locations in each Asian market. That the market entry strategies have found to beused by
The Coffee Bean and Tea Leaf 
in managing their foreign franchisees when expanding into Asiainclude master franchising and company owned-stores. The marketing approach is essential to gain acompetitive advantage for 
The Coffee Bean & Tea Leaf 
in the foreign market. The construct included marketentry, site location, and market positioning. The reason for 
The Coffee Bean & Tea Leaf 
to choose master franchise as its form of franchising is because of that the master franchising was the most popular mode of entry into distant and cultural dissimilar market such as Asia.
The Coffee Bean & Tea Leaf 
found that thesale of a master franchise as a quick “off the peg” method of establishing a franchise operation has oftenencountered problems related to differences in the social, economical and cultural environment of the twocountries which have necessitated substantial adaptations and modifications to the original product, systemsand marketing. Instead of sub-franchising the units, the master franchisees prefer to own and run the entireunit. When the CEO of 
The Coffee Bean & Tea Leaf 
was asked why, he said: “The reason is attributedlargely to be limited size of the marketplace as the products are targeted at specific niche rather than thegeneral public…coupled with the high cost of rent, franchisees will not to be financially viable if theownership is limited to one or two stores.” It entered Singapore, Malaysia, and Taiwan by master franchising. In the other hand,
The Coffee Bean & Tea Leaf 
prefers to use company-owned stores in HongKong, Australia and United States. Whereas for complex markets such as Japan, Philippines and the MiddleEast, franchising is more favored.
Company’s franchise practice
The Coffee Bean & Tea Leaf 
encourage information exchangebetween franchisor and franchisee to get a better understanding about the environment and problems which
faced by the franchisee. Regular communications were made between the franchisor and franchisees duringearly stages of expansion into a region.
The Coffee Bean & Tea Leaf 
also provides franchise training to thefranchisees and key manager. For example, the first master franchisee and key managers spent 6 weekstraining in the United States. Overall
The Coffee Bean & Tea Leaf 
appears to be making few modificationsfor their international franchise agreement, which is the template used for domestic franchising. These smallfirms rely heavily on the professional expertise and advice of their solicitors who specialize in domestic andinternational franchising. Therefore, having an appropriate solicitor who specializes in internationalfranchising will compensate for the lack of the ability to negotiate the contractual modifications and handlecontract enforcement to help
The Coffee Bean & Tea Leaf 
build a good and long-term relationship with itsfranchisees.
Intelligence of the leader
The Coffee Bean & Tea Leaf 
was established by Hymanin 1963 opening its first store in Brentwood, California which continues to operate todayas one of our highest volume and highest profile stores. This achievement comes from theintelligence of the franchisor; Hyman awarded Sunvic the master franchise rights for Singapore, Malaysia, Taiwan and Australia for 20 years. Over the next three months, asix-weeks training was provided in the U.S. to key managers in product knowledge suchas coffee and tea but nothing management in stores. The decision of Hyman to identifythe master franchisee characteristics that is required for success in Asia. However, noresearch has hitherto been done, especially in Asia, in determining desired master franchisee characteristics. The master franchisee characteristics associated with successin Asia are financial strength, entrepreneurial and like-mindedness. The master franchiseeowns a highly successful luxury watch distributorship and regional entertainmentcompany in Asia, owns and operates 63 outlets in Singapore, Malaysia and Taiwan.Hyman came to Singapore for a couple of weeks to assist in the opening of the inauguralstore. This was the first time they had ever set foot in Singapore. Victor recalled thatearly battles that were fought the Hyman over changing menu and operational procedures. As Victor’s recalled: “I wanted to expand the menu to include sandwiches asSingaporeans need to have food with their coffee. I felt the drinks were too sweet for Asians, so I proposed some change. The negotiations were not easy because to tell themit was like an insult- ‘You are a franchisee and you’re telling me what to do?’”For thecurrent owner, Victor undertakes evaluation of government policies on an ad hoc manner  because he believes in unsolicited enquires only. He has extensive knowledge of operating in Asia. Victor cautions that although the Asian youth market is highly brandconscious, they are very perceptive when it comes to food. Victor admits that those
Coffee Bean and Tea Leaf 
outlets in suburbs of middle to high socio economic groups are performing financially better than those of low socio economic groups.In July 1999,Sunvic acquired a substantial stake in the California-based International Coffee and TeaLLC, which own the global franchise. This move has effectively transformed the former master franchisee to franchisor. According to Victor, the move to buy over the businesswas logical one (Koh 2000). “I’ve watch many other businesses were the principals take back the franchisee after you’ve spent all your effort in building up the business. You’reat their mercy, and as your contract gets closer with the expiry date, things will get harder for you,” Victor said.
Company’s business strategy
For the concept of standardization of 
The Coffee Bean & Tea Leaf 
, branding and image are consistent in host markets with that of homemarket. Despite the expectation that cultural differences may affect the demand for their  products and services,
The Coffee Bean & Tea Leaf 
felt that maintaining standardizationwas more important than adaptation. Standardization is enforced by
The Coffee Bean &Tea Leaf 
on branding to ensure that the brand image and value is being perceivedconsistently by its target customers in all markets. Adaptation has also applied to the product offering by
The Coffee Bean & Tea Leaf 
. In its home country
The Coffee Bean &Tea Leaf 
have a limited range of food and beverage items in their outlets. However,
TheCoffee Bean & Tea Leaf 
had included a wider range of hot food items in Asia as Asiansneed to have food with their coffees
Outstanding quality of input and output
Both the good quality of input and output hasbrings a big achievement for 
The Coffee Bean & Tea Leaf 
. The foundation of 
The Coffee Bean & Tea Leaf 
isa commitment to quality.
The Coffee Bean & Tea Leaf 
produces and serves only the finest coffees and teasfrom around the world. Each year 
The Coffee Bean & Tea Leaf 
search out the best harvests from Sumatrato Costa Rica to bring to their tasting room for inspection and sampling and accept only the highest gradesof green coffee and full leaf tea.
All of the beans they import are grown at altitudes of up to 6000 feet because the cooler temperatures at the higher altitudes cause the bean to develop more slowly, which results in amore concerned flavor. As the growing conditions in each geographic region have a significantimpact on the look, taste and smell of the coffee, they travel to many estates in each growingregion to find Simply the Best coffee. Some of the conditions that they judge at each state aregeographic (soil composition/nutrients, proximity to he equator, altitude), climate(seasonal/quantity of rainfall, temperature fluctuation), process/tradition (washed/naturalprocessing, central processing/ small-holder processing, technology/methods, storage conditions

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