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Case : Café Xaraygua Case Solution & Answer

Case : Café Xaraygua

Answer no 6

Yes, based on the analysis it could be said that Lehnert must proceed with the investment opportunity because the returns cover great portion of investment in all three scenarios given.

Answer no 7

Yes, based on the analysis, Lehner should definitely proceed with the investment opportunity, also `$250,000 loan would be sufficient for the partners because it would conveniently cover the net cash outflow for the year 1 and with efficient growth and great ROI it would clear the loan in five years for sure. The pricing strategy for the café is reasonable and could attract great amount of population because of lower than average market price of the products.

Answer no 8

SWOT ANALYSIS:

Strengths

  • Both of the Lehnert’s partners have grew up in the region so they have good connection which would be beneficial for the business.
  • Unlike their competitors the partners would be using their own coffee product from the region of Haiti.
  • The partners have the related qualification and education of business depicting their enhanced skills of business knowledge.
  • The brand’s vision to provide environmental and cultural benefits to the farmers from the region, creating win-win situation for both.

Weakness

  • Although the partners have knowledge about the business but they do not have the experience of carrying out an entire business.
  • The partners have very little capital for that they would have seek for investor.

Opportunities

  • The partners have the opportunity to have fixed term loan for their additional capital requirements.
  • The coffee is considered a culture in the region as 65% of the total population consume coffee regularly.
  • Their strategy to focus on an in-house roasted product and not in only cafe’s premises could let them compete efficiently with Starbucks.

Threats

There may arise supply chain issues because of the socio-political instability at Haiti.

Coffee production subjected to the issues regarding extreme weather condition sat Haiti.

The existing threat of competition with big market players like Starbucks.

PESTLE Analysis

Political

The pollical environment at Haiti is very instable and that could have severe impact on the supply of the product from there, the business operations could get badly affected because of it that could turn to decrease the revenues for the café.

Environmental

The business has the vision to provide environmental and cultural benefits to the farmers from the region, creating win-win situation for both. The partners decided to implement their mission with an objective of reforestation on purchases from their brand.

Social                

The Social factor is favorable to the business in a way that coffee is considered a culture in the region as 65% of the total population consume coffee regularly. Besides that, the region is also popular for tourism. With these matrices the business is very likely to appeal great number of populations.

Technological

Technological factor is also favorable to the café business. With eventual technological advancement the owners would require to keep the business technology oriented and bring and introduce new related technologies to attract maximum of population.

Legal

Around many countries of the world, government use to make restrictions over the beverage industry because of their inclusion of caffeine which is commonly found in coffee. But the considered region has never been impacted by this. Also, the consumers of the coffee in the region are increasing.

Economical

Haiti is a one poorest country of Western Hemisphere and it is often subjected to political violence and this could create problems in the café’s supply chain objectives. The partners would require effective planning and decision making to avoid these issues….

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