Costa Coffee Company and Reflection on Teamwork

Introduction

Currently, Costa Coffee is considered as the fastest growing and largest coffee shop chain business of UK. The organisation is operating in the UK since 1971, and currently, they have more than 3200 stores in the country (Costacoffee, 2019).

This report has been formulated with the purpose of identifying the core issue that Costa Coffee is facing in recent time. It has been found from the market analysis and current business situation of Costa Coffee that the firm is fronting issue with the maintenance of a proper sales rate (Theguardian, 2019), because the organisation’s sales rate decreased by 1.5% in November 2018.

Key issue and recommendations for Costa Coffee

Strength

• A huge number of stores across the UK
• Second largest Coffee shop chain business of the world

Weakness

• Falls in the sales rate
• Lack of promotional activities

Opportunities

• Strategic alliances with local companies
• Expansion of business in other nations

Threat

• The decrease in brand value
• Lack of manpower or wealth to compete with Starbucks, the largest coffee shop chain business

Market analysis of Costa Coffee has shown the issue of sales rate falls in the last quarter of 2018. Till 30th November 2018, the organisation’s sales rate from coffee shop chain was decreased by 1.5% which is quite good till the end of August. It is identified that the organisation has included online ordering options and Costa express machine.

Owing to the reason, the organisation has observed growth of 6.7% in the sales through Costa Express Machine, a coffee shop vending machine (Theguardian, 2019). The current coffee shop chain market of UK is presenting the attractiveness of customers towards online order and purchasing of coffee from the vending machine. This has also affected Costa Coffee as their sales rate through vending machine increased but the sales rate of brick and mortar shop reduced (BBC, 2019). Customers’ ease of purchasing products from the vending machine and online order are the main reasons associated with the current market situation of Costa Coffee. Savings of time is also a reason behind the customers’ attraction to the new procedure of coffee purchase.

According to the four variables theory of sales, the organisation is required to focus on certain elements of business like product, promotions, price and active distribution. The theory named as four variables is about the consideration of price, product, promotions and active distribution aspects for the successful business of the product. On the basis of the theory, the organisation should categorised products for vending machine and stores. By selling a certain amount of products through a vending machine, the organisation can enforce customers to buy coffee from their stores. Provision of discount for store products should also be introduced by Costa Coffee to increase sales rate. In accordance with the promotion variable of four variables theory, the company should also arrange special promotional activities for exposing the special discount to the customers. Special promotional activities of the organisation should be arranged in big events where the company can able to promote products ahead of a big sized population.

Benefits of CSR projects

CSR or Corporate Social Responsibility refers to the activities that organisations adopted or conducted for the social, economic and environmental welfare of the society. Before making a link between CSR and strategy, an organisation is required to understand or identify the business goal first.

Main importance that is laid behind the linking of CSR and strategy is the provision of assistance or service to the stakeholders. For this reason, an organisation like Costa Coffee is required to identify the stakeholders first. Linking between CSR and strategies are important to run a business by aiming at the development of stakeholders (Gallardo-Vázquez & Sanchez-Hernandez, 2014).

Example of the adapting CSR activities for biasness operation has been found in Costa Coffee as the organisation established the Costa Foundation for providing educational support or assistance to the children of coffee bean farmers (Costa UK, 2019). This a beneficial factor for the underdeveloped society of Africa and children of Coffee bean farmers to develop in the future career.

Most of the coffee seeds are produced in the underdeveloped locations of Africa, so the provision of assistance to the society is helping them to spend a better life. Further, the provision of education to the children is providing a better future opportunity for the next generation. The link between CSR and business strategy is also important for maintaining the environmental regulations and providing a better contribution to the environment (Saeidi, et al., 2015). By linking CSR and business strategy, an organisation can manufacture environmentally friendly products that can provide benefit to the communities and future generation. The effectiveness of including such an aspect has been found in Costa Coffee. Because, the organisation is selling coffee using paper cups which is providing benefits to the communities involved in the production (Costa UK, 2019). It is also securing the future of the next generation as pollution due to plastic is impacting on the environment as well as the life of individuals.

The possible impact of BREXIT on Costa Coffee

Proposal of BREXIT has shaken the business situation and activities of the UK as it has enhanced concern among companies. Because, implementation of BREXIT would create issues for business organisations by increasing the taxation rate, labour shortage etc. In the case of Costa Coffee, the incidence of BREXIT would create an issue for the organisation to work with a sufficient number of workers. Many workers in the UK are from other nations of Europe who have occupied a huge percentage of workforces in the nation (Theguardian, 2019). Thus, implementation of BREXIT means the workforce would not be any more legal to work in the country. The occurrence of the situation can make an impact on Costa Coffee to work with a sufficient number of workers. The organisation’s provision of service is entirely depended on the presence of employees. So, Costa Coffee’s store business can be ruined by the issue of BREXIT.

Supply chain related problem is also an issue that can raise after the implementation of BREXIT. Current supply chain activities between the UK and other European nations involves smooth procedure of transportation as special permission does not require to take for transporting products from other nations to the UK (BBC, 2019). But, implementation of BREXIT would create a problem for Costa Coffee to maintain smooth procedure of receiving resources. This could create an issue of stoppage in service delivery that would lead to the downfall of sales.

Group presentation-individual reflection

As a part of group work activity during the course, I have participated in a group presentation where I along with my 3 peers has given a presentation on the business of Costa Coffee. During the preparation of the presentation, I had a wonderful experience as I have an interest in researching information and news. Owing to the reason, with my interest I was involved in searching procedure of Costa Coffee’s current business situation and external environment factors related to the business. Following the completion of the presentation, I was involved in the provision of delivering the group presentation with my peers. At the starting of the presentation, I had faced a problem as I was feeling a little bit nervous. However, the influence of my peers and the assistance of tutors have helped me to present my part of the presentation.

During the work under team, I think the best benefit that I have received was working in a collaborative manner. This was beneficial for me to reduce the work pressure from myself. However, collaborative decision making was a problem which I had faced throughout the preparation of the presentation as my friends were not coming to a point for making a collaborative decision. Following the delivery of the presentation, I have realised that I need to improve the skill of time management. I have realised that during my chance of delivering the presentation as 3 minutes time was allocated for me which I exceeded.

Conclusion

From the above study, it is concluded that the issue of sales rate decrease is becoming a problem associated with the business operation of Costa Coffee. This issue would create a further problem for the company too after the implementation of BREXIT. However, the organisation’s business can get benefits from the adapted CSR activities. In the end, I feel my entire work with the group as big learning for my career.

References

BBC, 2019. Costa UK coffee sales fall by 2%, says owner Whitbreadq. [Online]

Available at: https://www.bbc.com/news/business-44625877[Accessed 20 March 2019].

BBC, 2019. How has business been affected by Brexit so far?. [Online]

Available at: https://www.bbc.com/news/business-47063405[Accessed 23 March 2019].

Costa UK, 2019. Costa Foundation. [Online] Available at: https://www.costa.co.uk/responsibility/costa-foundation/[Accessed 27 March 2019].

Costa UK, 2019. Great taste without the waste. [Online] Available at: https://www.costa.co.uk/responsibility/environment/[Accessed 15 March 2019].

Costacoffee, 2019. A drop of history in every cup. [Online] Available at: https://www.costacoffee.ae/costa-coffee/a-drop-of-history/[Accessed 15 March 2019].

Gallardo-Vázquez, D. & Sanchez-Hernandez, M., 2014. Measuring Corporate Social Responsibility for competitive success at a regional level. Journal of Cleaner Production, 72(1), pp. 14-22, DOI: 10.1016/j.jclepro.2014.02.051.

Saeidi, S. et al., 2015. How does corporate social responsibility contribute to firm financial performance? The mediating role of competitive advantage, reputation, and customer satisfaction. Journal of business research, 68(2), pp. 341-350, DOI: 10.1016/j.jbusres.2014.06.024.

Theguardian, 2019. Costa Coffee loses its froth as sales fall. [Online]

Available at: https://www.theguardian.com/business/2018/jan/18/costa-coffee-loses-its-froth-as-sales-fall[Accessed 04 April 2019].

Theguardian, 2019. Costa Coffee owner welcomes plan for 'barista visas' after Brexit. [Online] Available at: https://www.theguardian.com/business/2017/apr/25/costa-coffee-barista-visas-brexit-labour-shortages[Accessed 02 April 2019].

Cite this page