Tuesday, May 10, 2016

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.



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