Company/Industry

COMPANY PROFILE:
San Francisco Coffee House (SFCH) is the first American-style coffee house in Croatia. Jasmina Pacek and Denis Tensek after spending six years in America decided to enrich their home country Osijek with a completely new concept: they opened San Francisco Coffee House – a unique place in Croatia where one could enjoy the original atmosphere of an American city coffee house.
The California-style coffee house offers the quality, service, product assortment, ambiance and efficiency found in sophisticated coffee shops in developed markets, at a locally affordable price.

Problem
Although San Francisco Coffee House has been a major success, one of the key challenges the couple now face is how to grow nationally. Specifically, should they consider franchising over organic growth? If so, how should they go about franchising in a country where the market is developing and where franchising is under-regulated, underdeveloped and not completely understood.

Strategic Options
The major strategic option that the coffee house now has is which business model it should choose in order to expand in the market. Should Tensek and Pacek consider franchising or should they choose organic growth? An important factor that could decide what model they choose depends upon the threat that they could face from the competitors.
Another strategic option to improve their profile is that they could work upon their brand name recognition by better marketing, advertising and promotions.

Recommendations In order to grow and expand their business the company should:
 Choose franchising over Organic Growth as it will help them grow faster and dominate the market. The franchising decision can also help them to cater the large population who are already aware of San Francisco Coffee House.
 Invest in marketing and advertisement to improve brand awareness. They could carry out promotions in various cities of Croatia and work upon building strong relationship with their potential customers.