Case Study Description of Local Lion Coffee Shop: Marketing Strategy
In 2012, in the small mountain town of Boone, North Carolina, an entrepreneur launched a premier coffee shop called Local Lion. Boone was both a home to a state university and a popular tourist destination and Local Lion provided a unique coffee experience. This experience included responsibly grown coffee, homemade doughnuts, and locally made artwork and jewelery; however, customers were heading to the recently opened outlet of the global coffee chain Starbucks. The Local Lions owner wondered what he could do to preserve his business and retain his current customer loyalty. What options should he explore? Lubna Nafees and Neel Das is affiliated with Appalachian State University.
Swot Analysis of "Local Lion Coffee Shop: Marketing Strategy" written by Lubna Nafees, Neel Das, Robert Nelson includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Coffee Lion facing as an external strategic factors. Some of the topics covered in Local Lion Coffee Shop: Marketing Strategy case study are - Strategic Management Strategies, Competition, Entrepreneurship and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Local Lion Coffee Shop: Marketing Strategy casestudy better are - – wage bills are increasing, challanges to central banks by blockchain based private currencies, geopolitical disruptions, there is backlash against globalization, increasing transportation and logistics costs, there is increasing trade war between United States & China, increasing government debt because of Covid-19 spendings,
increasing inequality as vast percentage of new income is going to the top 1%, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of Local Lion Coffee Shop: Marketing Strategy
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Local Lion Coffee Shop: Marketing Strategy case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Coffee Lion, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Coffee Lion operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Local Lion Coffee Shop: Marketing Strategy can be done for the following purposes –
1. Strategic planning using facts provided in Local Lion Coffee Shop: Marketing Strategy case study
2. Improving business portfolio management of Coffee Lion
3. Assessing feasibility of the new initiative in Sales & Marketing field.
4. Making a Sales & Marketing topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Coffee Lion
Strengths Local Lion Coffee Shop: Marketing Strategy | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Coffee Lion in Local Lion Coffee Shop: Marketing Strategy Harvard Business Review case study are -
Organizational Resilience of Coffee Lion
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Coffee Lion does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to recruit top talent
– Coffee Lion is one of the leading recruiters in the industry. Managers in the Local Lion Coffee Shop: Marketing Strategy are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Effective Research and Development (R&D)
– Coffee Lion has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Local Lion Coffee Shop: Marketing Strategy - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Strong track record of project management
– Coffee Lion is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Successful track record of launching new products
– Coffee Lion has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Coffee Lion has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Highly skilled collaborators
– Coffee Lion has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Local Lion Coffee Shop: Marketing Strategy HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Diverse revenue streams
– Coffee Lion is present in almost all the verticals within the industry. This has provided firm in Local Lion Coffee Shop: Marketing Strategy case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Ability to lead change in Sales & Marketing field
– Coffee Lion is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Coffee Lion in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Coffee Lion digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Coffee Lion has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Sustainable margins compare to other players in Sales & Marketing industry
– Local Lion Coffee Shop: Marketing Strategy firm has clearly differentiated products in the market place. This has enabled Coffee Lion to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Coffee Lion to invest into research and development (R&D) and innovation.
Superior customer experience
– The customer experience strategy of Coffee Lion in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Cross disciplinary teams
– Horizontal connected teams at the Coffee Lion are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Weaknesses Local Lion Coffee Shop: Marketing Strategy | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Local Lion Coffee Shop: Marketing Strategy are -
Aligning sales with marketing
– It come across in the case study Local Lion Coffee Shop: Marketing Strategy that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Local Lion Coffee Shop: Marketing Strategy can leverage the sales team experience to cultivate customer relationships as Coffee Lion is planning to shift buying processes online.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Local Lion Coffee Shop: Marketing Strategy HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Coffee Lion has relatively successful track record of launching new products.
Increasing silos among functional specialists
– The organizational structure of Coffee Lion is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Coffee Lion needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Coffee Lion to focus more on services rather than just following the product oriented approach.
High operating costs
– Compare to the competitors, firm in the HBR case study Local Lion Coffee Shop: Marketing Strategy has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Coffee Lion 's lucrative customers.
No frontier risks strategy
– After analyzing the HBR case study Local Lion Coffee Shop: Marketing Strategy, it seems that company is thinking about the frontier risks that can impact Sales & Marketing strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Local Lion Coffee Shop: Marketing Strategy, it seems that the employees of Coffee Lion don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Coffee Lion is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Local Lion Coffee Shop: Marketing Strategy can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Skills based hiring
– The stress on hiring functional specialists at Coffee Lion has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Local Lion Coffee Shop: Marketing Strategy, in the dynamic environment Coffee Lion has struggled to respond to the nimble upstart competition. Coffee Lion has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Capital Spending Reduction
– Even during the low interest decade, Coffee Lion has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Slow decision making process
– As mentioned earlier in the report, Coffee Lion has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Coffee Lion even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Opportunities Local Lion Coffee Shop: Marketing Strategy | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Local Lion Coffee Shop: Marketing Strategy are -
Developing new processes and practices
– Coffee Lion can develop new processes and procedures in Sales & Marketing industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Coffee Lion can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Local Lion Coffee Shop: Marketing Strategy, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Using analytics as competitive advantage
– Coffee Lion has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Local Lion Coffee Shop: Marketing Strategy - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Coffee Lion to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Sales & Marketing industry, but it has also influenced the consumer preferences. Coffee Lion can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Coffee Lion can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Loyalty marketing
– Coffee Lion has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Leveraging digital technologies
– Coffee Lion can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Buying journey improvements
– Coffee Lion can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Local Lion Coffee Shop: Marketing Strategy suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Coffee Lion is facing challenges because of the dominance of functional experts in the organization. Local Lion Coffee Shop: Marketing Strategy case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Better consumer reach
– The expansion of the 5G network will help Coffee Lion to increase its market reach. Coffee Lion will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Coffee Lion to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Coffee Lion to hire the very best people irrespective of their geographical location.
Creating value in data economy
– The success of analytics program of Coffee Lion has opened avenues for new revenue streams for the organization in the industry. This can help Coffee Lion to build a more holistic ecosystem as suggested in the Local Lion Coffee Shop: Marketing Strategy case study. Coffee Lion can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Coffee Lion can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Threats Local Lion Coffee Shop: Marketing Strategy External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Local Lion Coffee Shop: Marketing Strategy are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Coffee Lion in the Sales & Marketing industry. The Sales & Marketing industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Regulatory challenges
– Coffee Lion needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Sales & Marketing industry regulations.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Coffee Lion business can come under increasing regulations regarding data privacy, data security, etc.
Consumer confidence and its impact on Coffee Lion demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Coffee Lion will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Increasing wage structure of Coffee Lion
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Coffee Lion.
Shortening product life cycle
– it is one of the major threat that Coffee Lion is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Coffee Lion in the Sales & Marketing sector and impact the bottomline of the organization.
Stagnating economy with rate increase
– Coffee Lion can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Environmental challenges
– Coffee Lion needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Coffee Lion can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Coffee Lion with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Local Lion Coffee Shop: Marketing Strategy, Coffee Lion may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Sales & Marketing .
Weighted SWOT Analysis of Local Lion Coffee Shop: Marketing Strategy Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Local Lion Coffee Shop: Marketing Strategy needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Local Lion Coffee Shop: Marketing Strategy is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Local Lion Coffee Shop: Marketing Strategy is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Local Lion Coffee Shop: Marketing Strategy is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Coffee Lion needs to make to build a sustainable competitive advantage.