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Transcript: Value Chain Activities Implementation Plan for #1 Assessing Resources and Capabilities Create the ability to expand successfully. No defects allowed through selection (Packaging/six biomechanics). Accept nothing less than absolute excellence. Purchasing Goods. Inventory selected. Promotion of new products. Locations. Coffee bar experience. Customer service. Strategic Group Map Functional Level Differentiation through Production International Level Home replication Core Inadequacies (W/O) Improve brand recognition to capitalize on expansion into new markets. Maximum Exposure (W/T) Improve brand recognition to protect against competitive rivals. Three main competitors were identified: Coasta Coffee, Starbucks, and Tchibo. Overall competitive ratings for each company were fairly close to Illy Espresamente’s. Areas of Operation Leadership and Governance Summarizing Stakeholder Management (BSC) The Five Forces Vision An exclusive destination with an emphasis on quality and aesthetics. Recognized as the only authentic Italian bar chain delivering superior customer satisfaction to premium transit coffee lovers. Arenas The firm is active in a coffee products market that competes internationally. Vehicles Espressamente has been franchising all of its locations. Differentiators Offering customers a different experience from the typical coffee shops. Using the six bichromatic system to provide quality. Economic logic Provides a unique experience plus the company ensures high quality of coffee beans with its advanced technology. Staging The firm is a slow mover. TOWS Analysis Key Success Factors Execution Plan for #1 Present Strategic Profile cont. Capabilities Execution Plan cont. Adding Value to Customers Shared values: Mission statement. Strategy: The company puts high emphasis on the coffee bean quality, a unique high-class environment with affordable rate. Structure: CEO (Andrea Illy) Vice Chairman (Ricardo Illy) President (Anna Rossi Illy) Vice President (Anna Illy) Systems: strict budgeting and quality control systems. six bichromatic system Style: high quality Italian experience. Staff: Loyal employees, forms a career for existing employees. Skills: perfecting the coffee beans by eliminating the defected ones before production. Purchasing and Shipment Quality Control Distribution Retail and Wholesale Consumers: Gains knowledge of the brand therefore impacting their purchase decisions. Employees: Have to adopt to customer’s expectation of brand image. Top Management: •Increase budget of marketing department •Make campaign is well received Large industry, rapidly growing Second most heavily traded commodity in the world behind oil Sales of US $70 billion in 2005 High market saturation / extremely competitive Most companies compete nationally and globally Short distribution channel Little to no vertical integration Location Finance Plant and Equipment Service Competitive Strength Assessment Recommendations Improve brand recognition by adopting an aggressive marketing campaign. Expand product breadth to increase types of customers. Increase locations to compete against stronger competitors. Performance Assessment Internal Alignment (7Ss) Costa Coffee-closest competitor. Nearly 1,400 locations in more than 25 countries. Specializes in coffee and tea products. Espressamente-200 locations in over 30 countries. Stakeholder Impacts Current Industry Framework Beyond the mind Product Development Marketing and Sales Distribution Manufacturing Purchasing Resources Adapting to global demands cultural differences transportation distances Crowded industry competitor strength Leadership and Governance Power Play (S/O) Use product quality as a way to expand into new markets. Defensive Postures (S/T) Use product quality to compete against substitute products. Illy Premium coffee and espresso producer Espressamente High-end coffee bar experience Quality and Geographic Coverage Starbucks is the industry leader High price, high quality. Maintains operations in numerous international locations. Coffee Bean and Tea Leaf, Costa Coffee in same strategic circle. Similar product quality, geographic coverage. Present Strategic Profile CEO: Andrea Illy Vice Chairman: Ricardo Illy President: Anna Rossi Illy Vice President: Anna Illy SWOT Analysis TOWS Analysis cont. Closest Competitor Analysis Linor Elya, David Kenney, Dalton, Joshua Nichols Noto, Jessica Smith PESTLE Analysis Diamond Strategy Illy’s Espressamente Essential Challenges Corporate Level Single Business Innovation and Diversification Business Level Differentiation Strategic Group Map
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