Hypothetically speaking...

If a company from the U.S. wanted to start doing business in Costa Rica (such as partnering with an existing Costa Rican company and expanding), they would need to know a few things about the way Costa Rica works. For my own purposes, I'm going to use the previously mentioned company Café Britt.

Café Britt is a Costa Rican company that produces coffee, as well as chocolates and gifts. Although they do not grow their own coffee, they buy beans from local farmers and roast them in their own facilities, where they are packaged and then distributed to one of their 140 stores in 10 countries (or sold online). Their employees are a specific breed. Particularly, they have to be enthusiastic and highly motivated to put the customer's needs first. They are rewarded by various incentives, ranging from prizes to opportunities for upward mobility within the company. These employees go through a complex group interview process, rather than a traditional one, to better see if they can work in a group the way that Café Britt needs them to.

Challenges:
1.Finding employees that fit the "Café Britt" aesthetic.
2. Expanding into the United States; Why should Americans buy this coffee as opposed to any other coffee?
3. Marketing to locals; Why should Ticos buy this gourmet coffee as opposed to the other lower quality brands that are available at a much lower price?
4. How can they practice more sustainable methods of production?
5. How can they increase their overall profit?

Recommendations on how to overcome them:
1. Café Britt uses a specific type of employee. As they expand, they obviously need to hire more and more employees that are highly motivated and are customer-centric. The interview process is time consuming. My recommendation is that the  hiring process be simplified for the starting positions and they will still have the remaining incentives to work harder, such as prize/bonuses and opportunity for upward mobility.
2.  At this moment, Café Britt has one store in the United States (in Miami). In order to reach more of the population, they need to expand further into the US. Since they already have stores in airports, it would make sense to put more Café Britt stores in airports around the country. However, they should have elements that are geared towards the American market. For example, Americans love seasonal flavors (hello, pumpkin spice latte?). My recommendation is to create some seasonal varieties to market to Americans in particular.
3. Ticos generally don't buy Café Britt coffee; it is a tourist attraction. How does one convince them that gourmet coffee is what they should be drinking, rather than normal coffee? My recommendation is to market the coffee as less of an experience; Ticos aren't looking to experience the Tico lifestyle, they already live it. Instead, make the coffee seem more like a family brand to them, to make it more appealing.
4. Café Britt is a roaster and a producer of coffee. However, they do not do this in the most environmentally effective way. During our visit to iCafe, we saw many methods of sustainable fuels that could be implemented at Café Britt's factory to better this. I recommend this because it will help not only the environment, but likely their sales. It doesn't hurt a company's reputation to be known for being environmentally friendly, and it will make them more competitive against those who are already sustainable.
5. In order to increase profits and decrease costs overall, the company has a few options, but I recommend product extensions. This would help with problems 2 and 3. If new products were created and sold, in addition to the current products, it could potentially allow them to penetrate new market segments and increase profit overall.

Quality > Quantity

Today we went on a tour of the National Theater. We also visited Cafe Rey, a local coffee roaster and distributor. They buy their coffee beans from local farmers, however they usually buy the lower quality beans that are left over after the farmers have sold the higher qualities to large exporting coffee companies. They roast the beans and sell their coffee mostly in Costa Rica, however they do export some.

The coffee industry is very important in Costa Rica and has provided many economic benefits for the country over the past two centuries. The relative economic stability of the industry has led to the creation of many jobs. In addition to growing, roasting, and distributing coffee, tourism has become increasingly popular. Companies such as Cafe Britt have a very well thought out tour of a coffee plantation, even though they're a roaster and distributor, not a grower (they buy their coffee beans from other farmers). However, since Costa Rica is not a large country and many coffee producers don't have the same production levels as their competitors, there is a huge focus on quality over quantity, in order to be taken seriously as an international competitior.

As I mentioned earlier, much of the higher quality coffee is exported, leaving the Ticos with the lower quality leftovers (as is the same case for many fruits that are exported from here, like pineapples and mangos). In my experience, I've tried local Costa Rican coffee (from Cafe Rey) and fruit (for breakfast almost every morning) and if what I've tried is considered low quality, I'd love to try high quality. Both the fruit and the coffee that I've had here have been fantastic and nothing close to sub-par, so I don't think the Ticos are missing out on much by exporting their higher quality products to make more money.

Teamwork makes the dream work

Today we visited Coopedota. Coopedota is a cooperative made up of several different coffee farms in the same region. The farms all grown arabica coffee and contribute coffee beans to coopedota, where they are sorted by color, size, and quality, and and then roasted and packaged accordingly. The farms average about two hectares in size, with some smaller and some much larger. All are paid equally based on what the contribute (EX- a 2 hectare farm and a 30 hectare farm both make $3 per box of coffee beans).

By pooling resources and expertise, Coopedota has certain advantages over traditional companies. For example, the workers in this cooperative are all valued and compensated equally. This contributes immensely to the business's efficiency and profitability.

However, Coopedota's cooperative business model has certain disadvantages as well. For example, they are costly to run and maintain because of the equality of workers and contributors. Larger contributors may feel that this is unfair and try to leave in order to achieve a higher profit. Some will be successful, since there isn't anything (incentive or regulation) to keep them from leaving.

Without Coopedota, the community of Dota wouldn't be as well connected. Also, the multiple smaller coffee farms would likely be worse off, since they don't have the resources to sort and roast their coffee as they currently do. Since tourism isn't a large part of Dota's income, coffee is very important to the community as a whole.

Wait, there's rules for this stuff?

Today, we went to iCafe and Doka. iCafe (Instituto del Cafe de Costa Rica) produces coffee, but for sale; they do research and experiments on different varieties of coffee in an attempt to create a better and more resilient plant for farmers to use. Doka is a coffee exporter (for both roasted and unroasted coffee beans).

The coffee industry is not heavily regulated, but there are some regulations that must be followed. For example, iCafe wants to make sure that only arabica coffee is being grown in Costa Rica, because it's a higher quality than robusta. While Costa Rica's government is pushing to neutralize their carbon footprint, there aren't any real regulations that enforce this for coffee; it's more or less a strong suggestion. When it comes to coffee exportation, the government's largest role appears to be in dealing with the FDA and or other country's regulatory agency.

When exporting coffee, there are a few issues that the coffee producer must confront.

• They often have to deal with a different currency. From an economic standpoint, the could potentially make or lose money depending on which currency (assuming there are two different currencies being used in the transaction) is valued higher (or devalued, for that matter). 
• They may encounter tariffs (taxes on imported goods). This would make the product more expensive and therefore less attractive to consumers. 
• They may also encounter trade agreements. Hypothetically, if the trade agreement is between the US and Europe, that's great for them, but doesn't really help Costa Rica. It would make it more difficult for Costa Rica to trade with these countries.
• Taxes also make it more expensive for the coffee producer to generate a profit.

If there was a decrease in government regulation, I don't think there would be a substantial effect on the coffee industry. The only thing that could change would be the introduction of robusta coffee, but since arabica is better quality anyways, it wouldn't make sense to switch. Since there are so many different varieties of arabica coffee and so many producers, roasters, etc., monopolies aren't a concern.

Goats and pigs and chickens, oh my

Today was our last day in Monteverde and we  spent it at a farm called Life Monteverde. This farm is focused on not only being sustainable just on their own farm, but promoting the same sustainable practices at neighboring farms.

We had a firsthand look at the life of a Tico farmer. At Life Monteverde, they have pigs, chickens, and goats that all need to be fed and taken care of. These animals are kept very humanely; they have lots of space and are well cared for and are used for their eggs or milk. Additionally, the methane gas that comes from the pigs' waste is used to power the house. The farmers keep the animals happy and healthy because it makes the animals more efficient, in addition to making their eggs   or milk healthier.

Life Monteverde also grows coffee, in addition to many other plants (carrots, cilantro, basil, plantains, and cabbage, just to name a few), and these must also be cared for in a sustainable way. Everything in their garden was organic, which means no pesticides. They also use rain water that has been collected to water these plants.

One challenge to Tico farmers, particularly if they are aiming for organic products and sustainability, is pests. Since they can't use pesticides, they have to find creative ways to keep animals from eating their plants. Another problem to sustainable Tico farmers, is making sure that not only their farm is practicing sustainable methods, but neighboring farms are doing the same. For example,  if one farm is using pesticides, that effects the neighboring farms, as well as anyone downstream from them.

The farmers that we talked to today love their animals. In addition to taking excellent care of them, many of the farmers are vegetarians because of their love and appreciation for their animals.

Life Monteverde seemed to run very efficiently and I couldn't find anything that I think they could change for the better.

Gringo style

Today we went on a hike in the cloud forest in Monteverde. We got a firsthand look at the plethora of animals, insects, and plants that live there.

The cloud forest serves as an important tourist attraction for the area. As a country, Costa Rica has a large ecotourism industry. Foreigners in particular provide a large market for the ecotourism industry. Gringos and other tourists make up a majority of the market segment. Particularly the gift shop, which is full of knick knacks with "Pura vida" written on them.

On the bus ride to the cloud forest, we passed many fields of cows and eventually we passed a cheese factory. This is an important industry for the area as well. Agriculture (especially coffee, but also cows) is an essential component of the Costa Rican economy.

... Mañana

Yesterday, we arrived in Monteverde. It took a little while to figure out the WiFi, so that's why this post is late.

The drive from San José to Monteverde took a few hours, and I was asleep for a decent part of it. I noticed that the as soon as we got out of San José, it became more rural.  The parts of the journey that I was awake for were through rural areas. There were lots of smaller towns and fields of cows. At one point, we also saw the Pacific Coast, which was a stark difference from the streets of San José.

Something that stood out to me was how many people actually live and work in Monteverde. Because it's a town on a mountain, I expected there to be much less going on. However, there's a decent sized town with many stores (mostly targeted at tourists) and restaurants.

When we originally arrived in Costa Rica, I was a little surprised. The city of San José wasn't like I expected. It was dirtier and the streets and sidewalks, as well as many of the buildings looked old and worn down. When I pictured Costa Rica before that, I pictured more picturesque scenery, with a lot more green.  My expectations before the trip weren't entirely wrong, seeing that Monteverde basically fits that description.

Robot coffee?

Today, we went to CINNO at Veritas and participated in an activity in the FabLab. One of the most notable things today was all of the 3D printers in the lab. I'd never actually seen one print something before so it was fascinating to watch.

Technological advances could certainly revolutionize the coffee industry, but it would be at a cost.

The traditional way of producing coffee in Costa Rica is a long process involving many hours of difficult, manual labor. During one part of the process, workers must rake the beans every hour during the day. There could be process enhancement through automation, but it would cause the workers to lose their jobs to a machine.

During the manufacturing process, technological advances could also be utilized. 3-D printing is a very efficient way to create packaging (from both economic and environmental standpoints). 3-D printers don't create a lot of waste and the input materials are inexpensive, so they could be used to improve the coffee manufacturing process.

In the distribution process, drones could be useful as well. Drones could make distribution more efficient by bringing the coffee directly to the retailer or the customer themselves. Unfortunately, this could also result in the loss of jobs as a step in the supply chain could be skipped or made obsolete.

However, there are some instances where the traditional methods are better than the new, technologically advanced ones. For example, when harvesting coffee beans, it is best done by hand. The beans ripen at different rates, so if a machine was used to harvest all of the beans at once, many would go to waste because they weren't ready. The traditional method is actually better in this case because it provides a way to harvest only the beans that are ripe, even though it's a time consuming process.

Somewhere between a coffee bean and a Starbucks (or Cafe Britt)

Today we went on our first coffee tour at Cafe Britt. Cafe Britt is a company that tourists love, but Ticos don't usually drink because it's relatively expensive. Cafe Britt doesn't grow its own coffee, but they purchase coffee beans from farmers and roast them to sell in their own retail stores (129 stores in 13 different countries) . In addition to coffee, Cafe Britt manufactures and sells chocolate-covered fruits and coffee beans, as well as t-shirts and other souvenirs.

From a management prospective, Cafe Britt is a particularly successful company for a couple of reasons:

• They view customer satisfaction as a top priority. They have a tour that's marketed very clearly towards gringo tourists, full of American pop culture references and jokes. Also, a decent portion of their budget is allocated to give-aways and free samples from their various retail stores. There is also a one year freshness guarantee for their coffee products. They want the customers to walk away satisfied with the entire experience; whether they went on a tour and then to the gift shop or purchased coffee from a Britt store in the airport. 
• They carefully select employees that they believe will promote customer satisfaction. The hiring process itself consists of group role playing,so they can see how the applicant works with others, as opposed to a traditional one-on-one interview. Also, the structure for employees is organized like a ladder; if you do your job well, there is a good possibility that you will be promoted to the next rung. After starting out as a "BSP" (sales representative), you could potentially move up to a supervisor, country manager, retail manager, and then operations manager (all with increasing responsibilities as you move up the ladder). In addition to the incentive of upward mobility, employees are motivated by various competition-based incentives. For example, the current top five sales representatives will get tickets to a final soccer game.
• They have multiple cost reduction strategies in place. First, they are vertically integrated. This means that they are responsible for more than one part of their supply chain. In the case of Cafe Britt, they roast their coffee as well as sell it in retail stores, making them both a manufacturer and a retailer. They also don't own the buildings that their factories are in, they lease them.

In my opinion, Cafe Britt is a successful company and I agree with their practices. They're growing at a good rate and have ambitious goals for the future and for their expansion. However, I think that it would be interesting and possibly profitable if they created a product that was marketed towards Ticos, rather than gringos. If they introduced a new product (or extension/refinement of an existing product) at a cost that the locals agree with, I believe that it would have the potential to become more profitable than they already are.

50 meters west of the Burger King that used to be a church, San Jose, Costa Rica

In Costa Rica, there are very few street signs and addresses are relative to a land mark that may or may not be familiar. For example, an address usually sounds something like "300 meters east of the gym. Brown house in front of the old building". Unfortunately, this system makes it somewhat difficult to locate things.

I can't necessarily speak for the Ticos, but as a foreigner, this makes finding your way around really difficult. It's not easy to meet up at a fellow student's house when the address is based off of land marks that you can't locate. And even if you are able to locate it on your phone and use your GPS, it's not of much use once you get out of range of wifi (since most visiting gringos opt out of expensive data plans). I'd imagine that Ticos that have lived in the area for a while don't have much of a problem with the system. However, if they're new to the area, it may take some time to figure it out.

There are some street signs, and since the streets are laid out in a grid, the system isn't too complicated. However, it doesn't seem to matter. I've yet to hear a Tico give directions or refer to a location with any mention of an actual street name. In my opinion, the Tico-style directions seem to fit in with the positive stereotype of being friendly and talking to people; it certainly provides a reason to connect with and talk to each other. Also, this seems to fit in with the idea of "pura vida", since the same, not-entirely-functional, relaxed system has been in place for many years.

As far as businesses are concerned, I think that they experience similar problems caused by this system. Shipments may be lost or late because the delivery person couldn't find the right address to drop them off. This would result in lost revenue for the business, which is obviously not ideal. I think that this problem may also be growing in scale, seeing that Costa Rica's economy is growing. I can't imagine that the post offices and delivery people (among others) would be able to keep up with the growing number of Tico-style addresses.

Tico Values

Today was our first full day in Costa Rica. We went on a bus/walking tour of the capital city, San Jose. During the tour, many of the cultural stereotypes discussed in our Costa Rica book were confirmed. For example, the Ticos are very interested in us gringos. Many of them whistled or waved at us, as we were very clearly foreigners. But everyone has been super friendly, which is another stereotype from the book. In addition to the whistling and waving, people often said hello, and were very welcoming. My host family in particular has been very friendly and enthusiastic about their American students.

Also mentioned in the book, was that the Ticos place a strong emphasis on family. This was proven to be accurate during the tour, as we drove past parks full of families taking pictures together, playing soccer, and spending time together.

The Ticos also highly value religion (another value mentioned in the book). Most of the country is Catholic, and this made sense as we drove past several large, beautiful Catholic churches on our bus tour today.

Something that I found interesting (that was not mentioned in the book) was that most of the houses had some form of tall fence with barbed wire on the top. The tour guide mentioned this was because the Ticos enjoy the security and peace of mind provided by the fence. However, we drove past the current president (Luis Guillermo Solis)'s house, which was interesting because not only did he live in a relatively normal looking area, but the only form of protection that was visible was a fence and a single police officer. 

Starbucks

A couple of weeks ago (Friday, April 1st), our group visited Starbucks. In particular, we discussed how Starbucks relates to supply chain management, as well as what various aspects of supply chains they use. We also talked to the store manager, Robin. She said that the most important thing about Starbucks was the atmosphere, which makes sense if you think about it. Have you ever been in a Starbucks that feels different from any other Starbucks? They're all relatively consistent in terms of atmosphere. Robin also discussed the importance of various jobs and responsibilities for employees. This helps make the process run smoothly and more efficiently.

Starbucks's supply chain begins in Africa and Australia, where the coffee beans are grown and eventually make their way into the coffee that is sold in stores.

I thought that this opportunity to speak to the manager of Starbucks was interesting because it was a nice way to ease us into the ideas of supply chains and supply chain management; taking a relatively familiar company and using it as an example.