Issues Halo Coffee London Ltd faces
With the intention to introduce capsule coffee product, the company is faced by several issues that needs to be analyzed critically in order to ensure successful introduction. Some of the issues facing Halo coffee include:
Lack of identity and a dull competitive edge
With the growing number coffee shops found in every corner of the major cities, coffee company finds it challenging to find their unique identity. Although, Halo coffee company have manage to identify himself with customer segment, the company is now planning to introduce capsule coffee product as means of stepping up the competition. The company risk facing identity crisis which will result from doing everything. Also, many coffee company offer the same products to same customer segment. This means that the Halo coffee faces competitive edge.
Inventory and pricing snafus
Many coffee companies including Halo coffee London Ltd are face with the challenge of setting the appropriate prices. Currently, Halo Coffee introduced capsule coffee product and the major headache facing the management is to establish the appropriate price for the product that is competitive and acceptable to customers. Due to fluctuating price of coffee beans, the company finds it challenging to set up a price that remains constant.
Customer service headache
Currently, the customer continues to demand for capsule coffee product and the Halo coffee company have embarked on research. This means that the company is facing a lot pressure to provide the customers with all their needs. Also, customer segment dynamics continuously changes and the company is required to be informed about this changes so that they align their operations to meet this demand.
Strategic capabilities of any company forms the basis for competitive advantages which are the aspects that the company requires to implement in order to win. The strategic capabilities must be distinctive from those of the competitors and meaningful to the customers as well as being a source of economic advantage. Strategic capabilities are categorized into two types: those which help the organization in the present and adaptive capabilities which help the organization learn, adapt and thrive over time(David, 2011). Based on the analysis of Halo Coffee London Ltd, the company applied the two strategies since needed the first to help the company expand and the second strategy was needed for the company to learn the and adapt capsule brands. Studies have indicated that capsules is currently controlling the coffee market and the company needed to introduce capsule in order to remain competitive advantage.
Based on Roger Martin’s Choice framework: What is our winning aspiration? Where will we play? How will we win? What capabilities must be in place? What management systems are required?
What is our winning aspiration?
The winning aspiration for Halo Coffee London Ltd was the growing demand for capsule version of coffee by the customers and clients. The fact that the number of clients asking for capsule coffee was increasing significantly, the company needed to take to introduced capsule version in their coffee in order to satisfy customers’ demands(Moldoveanu, 2009). The move by the founders to extensively carry out research in order to determine how capsule version is performing in the market was important in ensuring the product was introduced based on the informed information driven by market research.
Considering that the guiding aspiration of Halo Coffee London Ltd was to offer their clients and customers the rarest coffee with complex and secret flavor, carrying out extensive research and bring on board former Nespresson Director and capsule expert was one step towards succeeding(Andrew, et al., 2009). The market research indicated capsule version was growing significantly in the market as well as in the retail sector. Therefore, the company was eager to embrace and adapt a revolutionary biodegradable capsule.
Furthermore, Richard had a wealth of experience about the complex flavors and secrets of the coffee beans which is the key aspect in production of capsule version. Although, other companies had adopted the sale of capsule version of coffee in the market, the company needed to critical analyze the performance and flavors of capsule version coffee in the market in order to identify means of producing their own capsule version of coffee that is unique and competitive as compared to their competitors. Among the companies that Halo Coffee London Ltd was competing in the market for capsule version coffee included Nepresso and Lavazza. However, Nepresso was the main competitor considering that the company produces variety of capsule version of coffee brands in the United Kingdom.
Where will we play?
The strategy that the company needed to employ in this case was to maintain the current customer base and reach out for new customers. The geographical location and product categorization enabled the company to thrive well in the current location. It is important also to note that current customer segment is favorable strategy that the company needed to maximize by offering them with the best flavor in the market(David, 2011). Having served these customer segment for quite some time, the company have gathered enough knowledge and experience to understand their needs and demands.
Nonetheless, the management needed to explore other option which include opening the coffee shop in different parts of United Kingdom. Although, the company is likely to face stiff competition from already established coffee shops in the region such as Costa, the company was likely to thrive by producing unique products and coffee brands that are superior in quality as compared to those of their competitors.
Since the company was introducing new brand of capsule version of coffee and the current customers had not experienced the taste of similar product produced the company, it was important for the company roll out the product to the existing customer segment before contemplating to expand to other regions. This is the strategy that allowed the company to address any eventualityhence boosting customers’ competence and increasing competitive advantage of the company.
How will we win?
The Halo Coffee London Ltd partnered with Nils Leonard in order to ensure that they succeed in the introduction of capsule coffee product. Nils Leonard came into the company as an equal equity partner, who had considerable experience and skills to the creation of the brand strategy and marketing and advertising of Halo(Moldoveanu, 2009). Partnership is important in business if the individual coming into the business have unique resources that help the expansion and growth of business. In this case, Nils Leonard did not bring in considerable experience and knowledge required in creation of brand strategy, but also resources for advertising and marketing of Halo.
Halo Coffee London Ltd was introducing new brands into the market in the form capsule coffee product, which included the seven capsule coffee products with Halo’s signature. The blended capsule coffee products were Standard, Strong, Mild and Decafwhich were all retailing at one pound each. The specialty range capsule coffee products were Jamaican Blue Mountain which retailed at five pounds and Kopi Luwak which was manufactured using coffee originating from Indonesia and it was retail at fifteen pounds(David, 2011). The introduction of several capsule coffee products was a strategy of offering customers a wider range of products to choose from. This ensures that the company become competitive by providing range of products with superior quality and the customer would get all these products from one company. With the growing number of capsule coffee products, the company also needed to carry out extensive advertising and marketing campaign.
What capabilities must be in place?
Some of the capabilities that the company possessed was the ability to ensure that coffee beans were sourced either sourced directly from the farmers or through green bean merchants. Analysis indicated that direct sourcing from the farmer some fails to give the superior quality needed to produce specialty coffee(David, 2011). In addition, direct sourcing from coffee farmers affects supply chain. Therefore, green bean merchants and roaster play vital role in ensuring that quality coffee beans are delivered to the company, since they have established strong and good relationship with the coffee societies and Sacco’s across the world.
By ensuring that highest standards are maintained throughout the product line and in all the products the company was able to remain competitive. Additionally, the company was capable of making sure that coffee beans used were certified organic and ethical standards such as fair trade was observed and having their products being certified by UTZ and rainforest alliance.
Furthermore, Halo Coffee London Ltd was capable of incorporating unique design features in the product process hence making their capsule coffee products unique from the biodegradable capsules found in the current market(Andrew, et al., 2009). The unique design feature was in accordance with the invention of Gabriele DegliEspostic who is the Italian capsule expert from Bologna. This ensures that Halo Coffee London Ltd produced better capsule products with superior quality as compared to its competitors.
Lastly, the company had a very strong team that led the sales strategy. Headed by Nils Leonard with vast experience of creating successful brands and generating sales. Halo Coffee London Ltd categorized their coffee products into two; Halo Signature and Halo Specialty(Moldoveanu, 2009). The two coffee products will be available in the online and elsewhere. This ensures that all the products are accessible to as many customers in the vast market as possible.
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