Swot analysis of costa coffee. Costa Coffee is a UK coffeehouse chain brand. Sergio Costa and Bruno brothers were the founders of Costa Coffee, and they laid the foundation of the coffeehouse brand in 1971. The headquarter of the company is in Dunstable, England.
Costa Costa has been under various ownership like Whitebread acquired the company in 1995, and Whitebread sold it to the Coca Cola Company in 2019 for 3.9 billion British pounds. According to an estimate by Statista, the annual revenue of Costa Coffee in 2019 was 1.34 billion British pounds. Approximately 18412 employees are working for the company.
Some of the main products and services of Costa Coffee are Gennaro Pelliccia, canned coffee, Christmas drinks, chocolate brands, snacks, pastries, cakes, sandwiches, tea, ice drinks, and cold drinks.
Today, we’ll discuss swot analysis of Costa Coffee. It’s going to analyze the internal strengths and weaknesses of the coffeehouse brand, and external opportunities and potential threats. Here’s the swot analysis of Costa Coffee as follows;
Strengths of Costa Coffee
When we talk about coffee, then Costa Coffee is a globally recognized brand with a strong brand reputation and brand identity. The coffeehouse chain brand has a network of 3820 stores in more than 31 countries across the world, out of which 2420 stores are in the UK. The company launched a state-of-the-art roastery in 2017 in the UK; and it’s the world’s sustainable building and biggest in Europe.
The coffeehouse brand has established a strong database of loyal customers by providing them quality products; and they visit the company’s stores daily to buy coffee. The stores of coffeehouse brands offer such a pleasant atmosphere where customers like to spend some time there. The more time customers spend at its coffee shops, it would amplify the chances of the company’s sales.
The food items, hot and cold coffee, and drinks that the coffeehouse brand offers; they’re special and their focus is precisely on the customers. The atmosphere and quality they get here, they can’t get it anywhere else.
Costa Coffee is cautious about sourcing and processing coffee beans, and the company does it in the 100% Rainforest Alliance Certified farms. It shows the brand’s commitment to ethical values, business, and the customers.
All of these small things add up and they make a significant to the service quality of the company. For instance, Baristas are easy to serve to the customers, and they want something else along with it; and it amplifies the company’s sales.
The product portfolio of Costa Coffee is well-diversified comprising chocolates, drinks, hot/cold coffee, snacks, coffee, tea, sandwiches, cakes, pastries, and much more. It offers a great variety to the customers to choose from.
Strong Parent Brand
Coca-Cola acquired Costa Coffee in 2019 for 3.9 billion pounds. Coca-Cola is the world’s leading cold drink brand, it has a great market influence along with brand reputation. However, having a strong parent brand at its corner offers great opportunities to the company in terms of growth, sales, and profitability.
Weaknesses of Costa Coffee
Limited Market Presence
Most of the stores of Coffeehouse brand are in the UK and other developed countries; and the brand doesn’t have a lot of stores in other counties. It seems like the company is heavily relying on the developed market as its main source of income. However, if the sale decreases somehow in those markets, then it would badly impact the company.
The coffeehouse brand offers its products at premium prices, and they’re much higher than other competitive small brands. It doesn’t matter however quality or service you offer, it would be just a coffee at the end of the day. The price-conscious customers won’t spend a lot of money on coffee.
High Sugar Coffee
Many health-conscious customers don’t consider the company’s products healthy, especially its high sugar coffee. The sale of sugar coffee has declined significantly due to the healthy diet trends; and they’re moving into the other healthier brands.
Opportunities available to Costa Coffee
Acquisition & Alliance
The coffeehouse brand should consider making alliances with other brands in the food and beverage industry. It would help the company in various ways in terms of market expansion, portfolio expansion, learning opportunities, and others. The brand should also consider offering the same quality products at low prices.
Costa Coffee should expand its target market by entering into the global market; and it would certainly increase the company’s revenue. Globalization has amplified the probability of growth rate in developed countries. The company should take advantage of the growth rate there.
The coffeehouse brand should expand its product portfolio by adding healthier products in the category of caffeine. It would allow the company to target diet conscience customers. The company can also offer coffee-making equipment, coffee beans, and other similar products.
Threats Costa Coffee has to face
Running a coffeehouse business has become very challenging in recent years. Some of the main competitors of Costa Coffee are Caffe Nero, Starbucks, and others. However, they’re global brands and they spend a lot of money on marketing and promotion. Their presence in the market makes it difficult for the company to maintain its position.
Along with the world’s leading brands, there are some smaller brands also there in the market; and they’re offering the products at a much cheaper rate. They’ve attracted a great portion of the price-conscious customer market.
The worldwide economic recession has decreased the purchasing power of ordinary working-class people. When people have limited income, then they would prefer cheaper products rather than premium products.
Conclusion: SWOT Analysis of Costa Coffee
After an in-depth study of swot analysis of Costa Coffee; we’ve realized that the coffeehouse brand is the world’s leading coffee brand in developed countries. The company should focus on its strengths to capitalize on opportunities and work on its weaknesses in order to avoid threats.
Ahsan Ali Shaw is an accomplished Business Writer, Analyst, and Public Speaker. Other than that, he’s a fun loving person.