Black Canyon Coffee
(10 pages of text)
This case focuses on Black Canyon Coffee, as it begins to develop its strategy for the firm’s second decade. Founded in 1993, Black Canyon had grown to become the largest chain of coffee houses in Thailand in 2003. Over its first decade, it grew from a single location to 78 retail outlets, serving a mix of hot and cold coffee beverages, as well as Asian cuisine. Thus far, the company had been profitable, and had managed the threat posed by local and foreign competitors, including Starbucks. The coffee house market in Thailand was an emerging industry segment that was expected to grow rapidly. While the company was in a strong position in 2003, competition in the industry was expected to become more intense. One key issue was determining what goals and markets the company should pursue in coming years. Managing director Pravit C. Pong believed that the company should strive for a total of 200 stores in the next decade, while business consultant Michael Holland suggested a more ambitious goal of 1,000 locations. Additionally, the company needed to consider the relative emphasis of domestic versus international expansion, as well as the potential to diversify into other markets. Access to capital and supply chain infrastructure were both tied to the growth targets that the firm pursued.
The case is suitable for undergraduate or graduate students in entrepreneurship, strategy, or international business. While most students are unfamiliar with the setting of the case — Thailand — they are typically knowledgable about the industry and some of Black Canyon’s competitors like Starbucks. Key topics addressed in the case include industry structure and attractiveness; assessment of Black Canyon’s strategy and its effectiveness; and establishment of growth targets in small and medium-sized businesses.
The case also examines various aspects of international business. Black Canyon is at an early stage of international expansion, and the case provides an opportunity to perform country analyses of expansion options. The case also serves as the basis for discussing how smaller, less capitalized firms can defend against incursions by larger multinationals.
Accommodation & Food Services
Thailand, Large, 2003
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