...1. The Company Costa Coffee is a specialist coffee shop concept that is part of Whitbread, a FTSE-listed British leisure company operating in UK. Costa Coffee has been growing in sales, profits and number of outlets in the past 4 years with 75%, 86% and 39% growth respectively. Table 1.1 Key Financial Ratios 2011-2015 (in GBP Millions) Ratio 2014/15 2013/14 2012/13 2011/12 Turnover 952 805 670 542 Profit (Loss) before Taxation 125 93 87 67 Profit Margin 0.13 0.12 0.13 0.12 Return on Capital Employed 44 35 34 32 Number of Stores 1931 1755 1578 1392 Employees 12645 11432 10031 8196 (Whitbread Annual Reports, 2011-2015) Graph 1.1 (Whitbread Annual Reports, 2011-2015) Competitive Environment UK coffee shop market will exceed 30,000 outlets and £15 billion turnover by 2025, driven by branded coffee chain expansion and non-specialist operator growth. Current market is valued at £7.9 billion (Allegra World Coffee Portal, 2015). Harris + Hoole has been ranked number one for coffee quality. Other players like Starbucks and Caffe’ Nero, food service chains like McDonalds, Subway, Pret a Manger and Paul all compete for the market share. Costa’s customers are mainly mature adults, students and professionals segmented to upper middle and the privileged class. The key challenges will be to retain the leading market share by changing the unique selling proposition of Costa. (Euromonitor International...
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...Internationalization of the Costa Coffee in China By Student’s Name Code+ course name Instructor’s Name University Name City, State Date Internationalization of the Costa Coffee in China Internationalization is a modern business trend that enterprises are using to enlarge their markets and therefore increase profits. It involves expanding the enterprises’ activities in foreign countries after a thorough market analysis. A company has to consider a number of factors before investing internationally. Barriers to trade have in the recent past decreased with many countries getting involved in economic integrations. Costa coffee is a UK company that has now expanded its activities in many foreign countries; China is one of the countries where it has been doing very well (Liberman 2013) Costa coffee moved to China in 2006 and since that time it has been doing very well, its aim is to make China the second biggest market of its coffee by ensuring that it takes a third of the total production. This may be achieved because since then there are already more than 250 stores of Costa coffee. The determinants of internationalization include the availability of a market, nature of competition, availability of willing local partners to do business with; local conditions such as the locals culture and beliefs (Clarence-Smith 2003) Availability of market for a particular product is mainly influenced by the population of a country, China is known for its high population...
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