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Gloria Jean's Coffee: Business Analysis

Categories Business, Coffee, Industry

Analysis, Pages 8 (1992 words)

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Analysis, Pages 8 (1992 words)

Introduction

Gloria Jean’s Coffee is a popular franchise trademark in the beverage industry. Established in Chicago, the US in 1979, Gloria Jean’s Coffee developed significantly in Australia with more than 460 coffee shops. Nowadays this trademark has more than 1000 coffee houses in 39 countries in the world (Bomkamp, 2017)

Rising the Demand for a Healthy Beverage

Recent customers like to consume healthier products, which provide nutrition, healing benefits such as protein or antioxidants (Coffee at a Crossroad: 3 Industry Trends to Watch in 2019, 2019). In the beverage industry, coffee is seen as a potential functional food by its benefits like avoiding obesity, improving physical performance, providing nutrition, and the biggest sources of antioxidants (Gunnars, 2018)

Rising the Request for Sustainable Development

Sustainability means the producers have responded to the environment and coffee communities at origin.

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Sustainability guaranteed the benefits of producing coffee and farmer. With the closely link between production and community, companies can share their value with the customers (Coffee at a Crossroad: 3 Industry Trends to Watch in 2019, 2019)

Rising of Single-Serve and Take Away

Recent customers mostly buy beverage when they are going from place to place and drink while they are at work.

The requite of easy to carry out cup increased overtime (Mark, 2016)

Selling by Technology Tools

Recent customers can easily buy beverages via the internet, and the drinks will be delivered to their place without going to the coffee shop. By beverage delivery at the office or home, people can save more time instead of going to a coffee shop.

Data Information for Decision Making

THE REVENUE OF THE COFFEE AND SNACK SHOPS INDUSTRY IN THE UNITED STATES FROM 2002 TO 2016

Source: (Coffee Consumption Trends Worldwide In 2016, 2016)

The line chart illustrates the revenue of the coffee and snack shops industry in the United States from 2002 to 2016 (Coffee Consumption Trends Worldwide In 2016, 2016).

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There was a significant rise from 16.65 billion USD to 32.46 USD after 14 years. The reasons for the development of coffee shops may include the increase in demand to drink beverage of people and the capturing trends in the beverage industry.

Overall, the trends mentioned before can affect to decision making the process of management.

Firstly, the demand for healthy beverages means that the Company needs to be cautious before making any health-related claims to consumers. For instant, the website of Gloria Jean\’s coffee provides nutritional information about each beverage like energy, fat, protein, carbohydrates, and sugar.

Regarding sustainable development, Gloria Jean’s should focus on the quality of products and work closely with suppliers and employees to maintain the valuations of the brand.

In terms of self-serve and take away trend, the Coffee shops can provide more ways to sell products such as take-away cups, Gloria Jean’s instant coffee belong with traditional selling method.

The trend of selling by the digital platform can change the way to access customers. People can use delivery mobile apps as Uber Eats to buy Gloria Jean’s coffee at home instead of going to the Coffee shop.

Assess Approach

Employees and culture

Gloria Jean’s coffee has flexible recruitment policy, so they have the large scare of employees. The Company provides opportunities for employees to be collaborative, enthusiasm and they can also work to maintain their life. Employees can get special discount and healthcare options (Gloria Jean’s Coffees Application Online: Jobs & Career Info, 2019)

Monetary Usage

Gloria Jean’s Coffee is one of the outstanding brands of the economy in Australia (Gloria Jean’s Coffees doubles roasting capacity to meet export demand, 2013). The majority of income comes from franchising brands, selling coffee products and substitute products. The Company use revenue mostly to reinvest to infrastructure, marketing, and paying for employees.

Location

With about 1000 coffee houses in 39 countries in the world (Bomkamp, 2017). This is an advantage because the Brand can widen influence of trending and reputation in the located place. The most coffee house has modern designs to make customers feel a vibrant store atmosphere.

Critical Evaluation for Disruptive and Sustainable Decision

By all consideration of assets (employees and culture, monetary profits and locations) Gloria Jean’s can make more disruptive and sustainable decisions such as providing high quality of coffee products, building various methods to motivate employees at work like reward or good collaboration environment, and upgrading the modern design to make to the customer be comfortable and interesting. If the Company can use assessment effectively, the brand can become “the most loved and respected coffee company in the world” (Our story, 2019).

Porter’s Five Force Analysis and Dynamic/Innovative Approached for Organization

Porter’s Five Force Analysis

The threat of New Entrance Is New Coffee Brands

People nowadays can easily set up a coffee shop and make similar products after buying brewing technology. This can be a threat to Gloria Jean’s Coffee because there is no barrier to prevent new brands entry the coffee industry.

The bargaining power of buyers is switching to drink in another way.

Belong to the various brands of coffee and instant coffee and beverage, consumers can have comparison and be more sensitive to choose what and where they want to drink. The customer of Gloria Jean’s can easily shift to other competitors like Starbucks and make coffee by themselves.

Bargaining Power of Suppliers is rising of material cost

In the coffee industry, the weather and quality of the beans can determine supplying coffee. For example, transportation cost could be rise if it is bad weather such as snow, long rainy days. Because the demand of coffee rise overtime, suppliers are having higher bargaining power.

The threat of Substitute Products and Services is instance coffee

The average for Gloria Jean’s could be considered by threat of substitute products. For example, people can choose instant coffee or other beverages, that they do not have to go to a shop to have a cup of coffee.

The intensity of Rivalry among Competitors is similar quality brands

Gloria Jean’s Coffee is facing many competitive competitors such as Starbucks and Coffee Club that provide similar quality products. The brands have various marketing strategies, and they are threats to the development of Gloria Jean’s Coffee.

Approaching for Organization

Gloria Jean’s is still considered an attractive market even though the five forces analysis shows medium to high threats. To facing the five forces threat, Gloria Jean’s can erect barriers to entry by creating and exploiting economies of scale, by product differentiation, contrived deterrence or using government policy to deter entry. Gloria Jean’s can build its brand around quality and pricing to increase its customer base and customer loyalty. Because the material cost could be rise, the close connection with suppliers is important. If Gloria Jean’s has good relationship with suppliers, they can get a good deal and be prioritized to get quality products than competitors who have the same supplier. Finally, building and sustaining quality of products and values of Gloria Jean’s Coffee is the most necessary works because it is a good solution to the market and overcome the threat from competitor and substitute products.

PEEST Analysis and Critical Evaluation for Long Term Sustainability

PEEST Analysis

Political analysis

Gloria Jean’s Coffee has various policies to ensure the benefits of employees and customers such as private policy (Privacy policy, 2019), shipping policy (Shipping policy, 2019). The strict franchise policy ensures its coffee products’ quality whole the world. The Company also has encouragement from governments to set up coffee shops in their countries.

Economic analysis

In 2014, Gloria Jean’s was worth A$163.5 million and has more than 400 coffee houses in Australia (Gloria Jean\’s master franchise for sale, 2015). Gloria Jean’s is one of the outstanding brands of the economy in Australia (Gloria Jean’s Coffees doubles roasting capacity to meet export demand, 2013).

Environmental analysis

Gloria Jean’s have some environmental policies by their own responsibility to save the environment. The coffee shops need to find a solution to take-away cold drink, which consumed plastic cups. Another significant environmental problem of the Company is the waste of processed products. Because of strict policy to ensure food safety, foods such as a sandwich, cupcakes will be thrown away if it is not sold.

Social Analysis

In general, Gloria Jean’s coffee is a worth company for employees to work for, which provides intensive staff training programs. Specifically, Gloria Jean’s has a high rate employee satisfaction level. The Company also has a humanitarian strategy such as charity activities like Coffee with heart (Coffee with Heart, 2016).

Technological Analysis

Gloria Jean’s should pay attention on digital platforms such as web site, social media, and delivery mobile apps like Uber eats (Gloria Jean\’s Coffee, 2019). The Brand is advertising by website and social network, which have a billions number of people using recent years. This is a low-cost and fasted ways to achieve potential customers.

Critical Evaluation for Long Term Sustainability

The PEEST analysis as mentioned before can be a good vehicle to impact Gloria Jean’s Coffee in the future. The reasons of Gloria Jean’s development are coming from good policies for employees, customers, the encourage from local govern They can be opportunities or threats, which depends on the vision and decision of the Company. Gloria Jean’s is a sustainable brand, that the Company have close connection of society, economy and environment.

The most significant problem could be harm sustainability is the wasting of foods because the short-time preservation, and they will be thrown away if nobody buys. To tackle this problem, Gloria Jean’s Coffee can sale foods at half-price at the end of days and gives it for staff or dominate it for poor or homeless people. This solution can reduce the redundancy from contained foods, and an efficient marketing strategy because it can prove the Brand’s response to the environment and society, belong to the economic growth.

SWOT Response Diagram and critical evaluation for disruptive innovation decision-making

Strengths and Weaknesses

  • Brand recognition and positioning
  • Excellent management
  • Strict franchisee criteria
  • Fewer varieties than competitors
  • No customer incentives
  • Lacking niche target market
  • Opportunities Threats
  • Marketing and selling by technology
  • New support services
  • New markets at high consumption coffee countries
  • High threats of new entrants
  • Coffee prices may keep rising
  • Threat from competitors

With regards to internal factors, in some situations, strength can be a weakness and weakness can become a strength. For example, strict franchisee criteria are a vehicle to ensure the values and products’ quality over the world. However, they can be a weakness because some countries are not adaptive enough to adapt same market. Having a niche target market is a weakness that managers need to focus on. In Vietnam, for instance, Gloria Jean’s must to close all the coffee shops in 2017 by poor revenue and strict competition from domestic brands.

In terms of external factors, using technology to advertise and sale products is the most significant opportunity to achieve potential customers. However, the competitors and easily copy marketing and selling methods because the information of the Organization on the internet mostly is pubic and can be hacked. Obliviously, this can be a threat to Gloria Jean’s, belong with the increasing of new entrances.

The SWOT analysis shows the methods that affect Gloria Jean’s decision making, rely on this information, the organization can widen the target market in high consumption countries, focus more to culture and social trend to make unique products, using the digital platform effectively and carefully to do business and keep raising standards to become more sustainable.

Conclusion

The report of Gloria Jean’s Coffee provides the global trend, Porter’s five forces and SWOT analysis, which are useful information for Gloria Jean’s coffee to identify clearly the internal and external factors that affect to the Company’s performance to approach and make decisions disruptively. The report uses assess approach and PEEST analysis to have critical evaluations, to help managers do sustainable decisions. The report is valuable material for Gloria Jean’s Coffee to have an effective decisions and be more developed in the future.

Cite this essay

Gloria Jean’s Coffee: Business Analysis. (2020, Nov 14). Retrieved from https://studymoose.com/gloria-jean-s-coffee-business-analysis-essay

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