Professional Documents
Culture Documents
Illy Analysis
Illy Analysis
P2016
1. CAGE analysis
Country
Cultural
Distance
Administrative
Distance
Geographic
Distance
Economic
Distance
Brazil
Speaks
Portuguese
2nd largest
consumer
coffee
market
9054 km
away
Flight time
12 hrs. from
Brasilia to
Rome
Low per
capita
consumption
They used to
drink tea
Customers
prefer to eat
while
drinking
coffee and
dont like
bitter taste
of espresso
Interest in
espresso and
specialty
drinks
Hard to run
the business
High
competition
Difficult
franchising
system
8147 km
away
Flight time
11 hrs. from
Beijing to
Rome
736 km
away
Flight time 2
hrs. to Rome
15% per
capita
decline in
consumption
Sixth largest
producer of
coffee in the
world
Interest in
espresso and
specialty
drinks
Exposure of
Western
lifestyle
More growth
opportunity
for hoy
beverages
Ranked highly
on ease of
doing
business
Aggressive
competition
and high
concentration
High
competition
among other
coffee brands
Franchise
success but
young
5929 km
away
2nd fastest
economy in
the world
Over
bureaucratic
Difficult to
franchise
Innovation of
the product
and its
packaging
seen as key
to growth
Diverse
demography
Cultural
obsession
High
saturation
High
competition
China
Germany
India
Japan
United
Kingdom
6138 km
away
Flight time
13 hrs. to
Rome
Ranked 3 as
coffee
importer
893 km
away
Flight time 3
hrs. to Rome
Recent
growth of 6%
remained
stable
United States
Interest in
premium
coffee
Few
restrictions to
franchising
1st consumer
of the 25%
worlds
coffee
Easy of doing
business
Hugh
saturation
4497 km
away
Flight time 9
hrs. to Rome
High
disposable
income
2. SWOT analysis
Strengths
Great brand
Quality product
Italy is centrally located
Already global
Viewed as authentic
Opportunities
Global expansion
Growth in coffee culture in
developing countries
Growth in espresso culture
Weaknesses
Expensive
Relies on an urban
customer
Viewed as an Italian brand
High-end product
Threats
Lots of competition
Affected by economy
Product differentiation
difficult
Competitive
Position
High
Medium
Low
Market
Growth
High
Low
Market attractiveness
high
medium
Brazil
China
Germany
US
Japan
UK
India
Relative market share
high
Low
Brazil
India
China
UK
Japan
Germany
US
Low
India
Germany
Japan
China
Direct franchising.
Same as UK, Direct franchising.
Sequential Franchising and Joint Venture
partnership depending on the area.
Partnership with local companies in order
to thrive in a complex environment
Direct Franchising would work because
the minimum liability and low
investment.
Joint Venture, because of the differences
between the Italian style preferences
than the Japanese ones.
Regional partnership and as in japan, the
product needs to be localized.