Costa Coffee Business Analysis
|Countries of Current Operations||6|
|Products They are Selling||7|
|Company’s Administrative Heritage||7|
|Motivation for New Target Country||8|
|Overview of Riga, Latvia||8|
|Coffee and Tea Culture||9|
|Starbucks will not enter Latvia market||11|
|Costa Coffee Home Country (UK) Local Advantages||12|
|Factor conditionals: local resources||12|
|Related and Supporting Industries||13|
|Host Country (Latvia) Local Advantages||14|
|Related and Supporting Industries||14|
|Firm Specific Advantages||15|
|Internationally Non-Transferable Firm-Specific Advantages||20|
|Bounded rationality issues||21|
|Bounded reliability issues||22|
Latvia is country with deeply engrained coffee drinking culture, but local tastes are sometimes very different from what offers Costa Coffee, therefore we can observe different menu in home country UK and in host country Latvia.
Another cultural barrier could be Latvians wish to choose local products and local services. As Latvia is small country and local representatives are only 2 millions, there is “unwritten law” to choose local production and help locals with this gesture. Costa Coffee could associate with globalization, export and with “stranger” feeling.
Europe’s and especially North Europe café traditions are entrenched and subtly different from those in UK. For example, in many café in Latvia customers can purchase light lunches and pastries as well as coffee. A lot of people in middle age visit café in general when they visit theaters, concert halls or opera. These traditions contrast with Costa Coffee main “take to go” approach.
Geographic distance has affected Costa Coffee international expansion path. Costa Coffee opened Scotland stores as early as 1980s’ operating them essentially as domestic stores. In its international expansion, Costa Coffee launched its first stores in Dublin, Ireland – country closest to UK, both geographically and culturally.