Cordillera Coffee

IX. External Analysis

A. Industry Definition

The Philippine coffee industry including foreign and local establishments, offer different varieties of coffee, tea, and other kinds of hot and cold beverages, and a selection of food ranging from cakes, pastries, pasta, sandwiches, salads, soups, and rice meals. Some cafй’s also offer products such as coffee mugs, tumblers, and packed roasted or ground coffee. Establishments in this industry are engaged in one or more of the following: (1) roasting coffee; (2) Trade (import/export); and (3) food and beverage preparation.

B. Industry Segmentation

C. Industry Size and Growth

D. Seasonality

E. Stage in the Product Life Cycle

F. Environmental Scan

1. Politico-Legal

• Strict Policy regarding fair trade with local coffee farmers/growers.

• Existing legislation regarding smoking areas.

• Cheaper to import coffee from Brazil and Vietnam

• High costs of fertilizers and pesticides

2. Economic

• Coffee volume sales in retail increased by 6% in 2005 for instant coffee

• Coffee sales in value increased by 13% in 2004 for instant coffee

3. Socio-Cultural

• Cafй’s are seen as social places

• Coffee’s various benefits such as a stimulant and an anti-oxidant.

• Coffee’s health benefits

• Coffee as a part of a daily routine/lifestyle

• Filipino’s staple hot drink

• Children from the Lower-income households also drink coffee

• Brand patronage of instant coffee

• Brand patronage of coffee shops

4. Technological

• New harvesting techniques are developed and are taught to coffee farmers/growers.

• Land development and land rehabilitation for coffee production by the Department of Agriculture (DA) and the National Coffee Development Board (NCDB)

G. Consumer/Customer Analysis along the following lines:

1. Profile of Consumer/Customer

Consumers/customers of Cordillera Coffee are students of the nearby colleges/universities who major in art and music because they are highly appreciative of the cafй’s artistic and culture rich ambiance. Some of Cordillera Coffee’s customers are those who reside near the vicinity.

2. Segmentation of Consumer/Customer

3. Usage Patterns

College students go to Cordillera Coffee during their break and after their class to hang out and dine with their friends. Nearby residents often go to the cafй in the morning for breakfast before going to work or after their morning exercise. Some residents go to the cafй in the evening for desert.

4. Purchase Patterns

Students commonly order pasta, rice meals, and coffee shakes or iced tea during the time of 12nn to 5pm. In the morning, office workers order breakfast meals or sandwiches and espresso or cappuccino coffee and read the newspaper. In the evening, most of the customers are office workers. They order rice meals, pasta and desert. Only a few order coffee. Most of them order other beverages such as softdrinks or iced tea.

H. Industry Trends

A trend in the coffee industry is creating an ideal lounge type cafй where people can either relax, have meetings, mingle with friends, read a reading material, or surf the internet using their laptop. Cafйs are considered as a social place or rather “Second home to relax”. The use of leather sofas and dimmed yellow lightings create a sense of warmth and comfort for customers which make them stay at the cafй. Some cafйs now serve food other than cakes and pastries which give people the impression that it is not just a cafй but a restaurant as well. Another trend is the availability of the WiFi service which enables laptop users to connect to the internet while inside the cafй. This at times, is a major factor to customers when choosing a cafй. Smokers are also