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The Local Lion Coffee Shop Case Solution & Answer

The Local Lion Coffee Shop Case Solution  

Introduction to the Local Lion Coffee Shop:

Local Lion Coffee shop located in Boone, North Carolina is owned by Josiah. The shop is located on a busy street where Appalachian State University is located. Boone is also North Carolina’s busiest and common tourist destination.A new Starbucks has opened in the same area and more university students and visitors are heading towards it.

SWOT Analysis of Local Lion Coffee Shop Marketing Strategy:

SWOT is a strategic planning framework and a valuable tool for planning and management. It helps the organization in identifying its existing resources, capabilities, inefficiencies, vulnerabilities, opportunities, and threats. SWOT analysis has two dimensions of internal dimension (strengths and weaknesses) and external dimensions (opportunities and threats).

Strengths Weaknesses
·         Unique mountain coffee experience.

·         Online Store for online delivery.

·         Fresh coffee from local farmers.

·         Highly motivated staff.

·         Close relations with customers.

·         High-quality products like roasted coffee.

·         Dependence on manual or old machines.

·         Limited sales area coverage. Local Lion Coffee Shop only targeted the Boone area of North Carolina.

·         Little brand awareness.

·         Strong competitors nearby.

·         Many other substitute products available in the market.

Opportunities Threats
·         Develop a customer relationship culture.

·         Attract new customers through special offers.

·         Providing special discount vouchers for university students.

·         Add a variety of new products.

·         Build brand awareness.

 

·         Competitors targeting key customers / grabbing market. In this scenario, university students and visitors are going towards Starbucks rather than the Local Lion Coffee Shop.

·         Strong buying power of the buyers.

·         Competitors providing added value.

·         Multiple strong competitors in one area like Starbucks.

·         Increase in supplier costs.

 

The Local Lion Coffee Shop SWOT analysis is the initial phase for the business planning process and does not provide the Coffee shop with a detailed analysis that could lead to a stable decision. Apart from this it only defines the vulnerabilities or issues but doesn’t priorities them. SWOT analysis doesn’t provide any direction on how the key aspects can be identified and it provides equal weight to each identified factor regardless of their impact.

Forces Driving Industry Competition

Porter five forces model

Bargaining power of buyer

The bargaining power of buyer is high force due to the presence of many players in the market such as Hatchet Coffee, Espresso Coffee and recently opened outlet of Starbucks, which in turns makes the bargaining power of buyer strong. Additionally, the buyer switching cost to competing products is low.

Bargaining power of suppliers

The suppliers bargaining power is moderate force because there are many suppliers of tea and coffee all around the globe which in turn lower the influence of suppliers. But, the strong relationship and brand loyalty among suppliers towards leading multinational coffee providers tend to posit a threat to the company, due to which the company would need to strengthen its relationship with suppliers to lead the market.

Threat of new entrant

The threat of new entrant is low force because of the number of barriers such as product differentiation, brand loyalty, economies of scale, high startup cost, access to distribution channel, strong supplier relationship and so forth. These barriers makes the threat of new entrant low force in the market.

Threat of substitutes

The threat of substitutes is high force because of the availability of many competitors and their offerings in the market. The high availability of substitutes in the market makes it easy for buyers to buy these substitutes products instead of Local Lion Coffee. Additionally, the cost of switching from one competitor to another competitor is low. The low cost of switching further strengthens the threat of substitutes…………………

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