9th November 2014

SWOT Costa Coffee

Strengths
-

Market leader- key to decisions in Marketing Strategy. Clear leader above

Starbucks and Caf Nero. 40%.
Lots of products cross-selling (ie. with coffee get muffin)
Italian roasting company employs the only three Italian master roasters
in the UK
Growing market for coffee high demand. Opened 186 new stores in
2012, whilst pubs were closing 18 per week.
Taste high quality.
Have the variety of products desired by the consumer. Innovative,
research into bringing the customer more.
Have brand recognition- everyone knows Costa.
Dont have specific demographic have larger target market. Successful
positioning.
o Less of an issue if one demographic decides not to go to Costa
aymore.
High quality of service baristas.

Weaknesses
-

mass market looked down on by those who prefer independent coffee

companies.
o fear of looking like bullying market leader
Dont cater for the specialist niche markets
High prices limit market.
not very international dependent on a small number of markets, cant
spread the risk out.

Opportunities
-

Grow more- high demand, can have more stores

Increase target market- more price variety.

Threats
-

Market challengers
Market nicher as coffee drinkers become more educated, may find niche
they like more and buy coffee from them.
Dependency- dependent on specific Italian beans. If they were to become
unavailable?

a) Does the organisation do something far better than its rivals? (If it does,
this is known as a competitive advantage and this can lead to a
competitive edge)
b) It has the most stores, so it is easiest for the consumer to find one. Its
name is so well-recognised that people know what theyre going to be
served and it will always be high quality.
c) What is its competitive positioning?
Market leader
d) What do you consider to be the key strategic marketing goal for Costa?
e) To bring high quality Italian coffee to the mass-market
f) Which of the organisations weaknesses leave it competitively vulnerable?
Why?
Price enables other smaller companies to undercut them. Theyre doing
well at the moment due to financial crisis people are spending more on
little treats (ie. coffee) rather than bigger treats (ie. holidays) but once the
recession is over Costa could fall down.
g) Should Costas strategic intent be attacking or defensive? Why?
Defensive as they already are the market leader, and it is only being
threatened lightly. Starbucks secured their own demise with tax scandal.
They are a nationally recognised brand so they neednt waste money
getting their name more recognised. Attacking could make them more
enemies as its perceived as more controversial
h) Which opportunities can be pursued? Does Costa have the necessary
resources and
capabilities to exploit them? How could it do this?
Continued growth in UK and potentially abroad. There is the demand, and
they have increased financial resources as demand has grown for Costa
Coffee. Increased diversification of products, more varieties of coffee,
more price variety so as to increase market.