Strategic Analysis
Strategic Analysis
STRATEGIC ANALYSIS
MAD KOFFEE
Table of Contents
1. INTRODUCTION 2
2. STRATEGIC POSITION 2
2.1 Pestel 2
2.2 Porter's Five Forces Analysis 3
2.3 VRIO Analysis 4
2.4 SWOT Analysis 5
3. STRATEGIC CHOICES 7
3.1 Using Ansoff's Matrix 7
3.2 International Entry Mode Strategies for Mad Koffee's Global Expansion 8
4. STRATEGY IN ACTION 9
5. CONCLUSION 10
REFERENCES 12
1. INTRODUCTION
2. STRATEGIC POSITION
2.1 Pestel
This PESTEL
analysis investigates the major external variables influencing Mad Koffee's operations:
Political:
• Government Policies and Stability: Political stability is critical for economic growth
and corporate stability (Acemoglu & Robinson, 2019). Mad Koffee must keep a close eye
on political events in Bangladesh and examine their possible influence on its activities.
Furthermore, government e-commerce rules and trade agreements can have a
substantial impact on cross-border transactions, especially if Mad Koffee decides to
grow worldwide (Chaudhury, Mukhopadhyay and Sinha, 2023)
Economic:
Social:
• Target population: Understanding and catering to Mad Koffee's target population,
especially Millennials and Gen Z in Bangladesh, is critical to its success. Mad Koffee must
modify its product development and marketing tactics in response to changing societal
trends and rising demand for sustainable and ethically produced items (McKinsey &
Company, 2021).
Technological:
• F-Commerce Dependence: Mad Koffee's reliance on technology, particularly social
media platforms such as Facebook, exposes it to technical interruptions and failures.
Keeping up with advances in e-commerce platforms, payment gateways, and digital
marketing technologies may improve productivity and consumer engagement (Cham et
al., 2022). Cyber attacks, on the other hand, represent a substantial danger to its online
activities (Centre for Strategic and International Studies, 2023).
Environmental:
• Sustainable Practices: The environmental effect of Mad Koffee is impacted by its
suppliers and production partners. Implementing sustainable practices and following to
environmental standards are becoming increasingly vital in the context of worldwide
expansion, particularly when working with global partners and customers that value
eco-friendly products (World Bank, 2023)
Legal:
• Compliance & Regulations: Mad Koffee prioritises compliance with local and
international laws. This involves protecting intellectual property rights for designs,
following to labour regulations and manufacturing safety requirements, and complying
with consumer protection laws. When expanding into new areas with possibly varied
legislation, the legal environment gets increasingly complex ((Lemley, 2014)
• Although Mad Koffee's established reputation for quality and innovative designs offers
it some clout with consumers, the recent issue with faulty T-shirts has marginally
enhanced buyer power owing to unfavourable press (Zabeen, Ara and Sarwar, 2013)
• Finding suppliers that share Mad Koffee's dedication to eco-friendly methods and
worker safety, particularly for overseas markets, is difficult (Villena and Gioia, 2020)
• The latest incident with faulty T-shirts emphasises the necessity for stronger quality
control techniques with suppliers.
• While Mad Koffee's strong brand recognition and customer loyalty provide
competitive advantages, the surge of new competitors at competitive prices heightens
competitiveness.
• Local preferences for purchasing at cheaper rates from street sellers exacerbate the
danger of replacements, particularly in a price-sensitive market (Islam, 2018)
• Mad Koffee confronts competition from both domestic brands and well-funded foreign
players, heightening competitiveness.
• Due to a recent drop in sales and the advent of competitors offering cheaper prices,
Mad Koffee must rethink its pricing and marketing strategy.
Force Description Rating
Buyer bargaining power Low entry hurdles Moderate
for new entrants
into Bangladesh's F-
commerce sector
Mad Koffee's name
provides some
clout, but recent
quality difficulties
have increased
buyer power
Supplier bargaining power Difficulty finding Low
suppliers
committed to
sustainability and
worker safety,
particularly for
foreign markets
Numerous garment
factories in
Bangladesh A
recent incident
involving defective
T-shirts emphasises
the need for
improved quality
control.
Threat of new entrants little entry barriers High
and little initial
investment. The
brand familiarity of
Mad Koffee
provides some
protection, but new
rivals providing
cheaper pricing
enhance
competition
Threat of substituents Many local and Significant
international firms
provide alternative
clothes and leisure
goods In a price-
sensitive market,
local desire for
cheaper choices
from street sellers
exacerbates the
danger
Competitive rivalry In Bangladesh's F- Intense
commerce market,
competition is
fierce. Mad Koffee is
up against both
domestic and well-
funded overseas
opponents. Recent
revenue declines
and competitive
pricing pressure
need strategic
changes.
Value:
• existing Online Presence: Mad Koffee's existing online presence via social media
platforms and e-commerce websites provides a useful route for reaching a larger
audience (Cham et al., 2022).
• Brand Image: Mad Koffee's reputation for innovative and trendy designs has helped to
build a strong brand image and consumer loyalty (Studocu, 2022; ResearchGate, 2021)
Rarity:
• Distinctive Design Team: Mad Koffee's devoted design team generates distinctive and
inventive designs, which contribute to the brand's uniqueness and distinction (Islam,
Khadem and Sayem, 2012)
• Online Platforms and Garment Suppliers: While online platforms and garment
suppliers are prevalent, Mad Koffee's unique ties and alliances may be less common,
contributing to its total competitive advantage.
Imitability:
• Design experience and Sustainability: Due to the time and money necessary to
establish such skills, rivals will find it challenging to swiftly mimic Mad Koffee's design
experience and dedication to sustainable practices (Bhamra and Beck, 2017)
• Online Platforms and Garment Suppliers: Competitors will find it reasonably easy to
replicate Mad Koffee's online presence and supplier ties, emphasising the necessity for
further differentiation initiatives (Hossain, 2021; Gerpott et al., 2021; McKinsey, 2023).
Organisation:
• Quality Control: The recent incident with faulty T-shirts emphasises the need for
improved organisational procedures, notably in quality control, to avoid similar
problems and retain consumer trust (Hossain, 2021; Gerpott et al., 2021; McKinsey,
2023).
Strengths:
• Strong Brand Identity: Mad Koffee has a distinct brand image that is renowned for its
innovative and trendy designs, which contributes to client loyalty (Islam, Khadem and
Sayem, 2012)
• Online Presence: The company has a strong online presence, taking advantage of
social media and e-commerce platforms to attract a larger audience and assist online
sales (Cham et al., 2022).
• Design Expertise: Mad Koffee has a great design team that generates new and
appealing designs, which distinguishes it from competition (Forbes, 2021)
Weaknesses:
• Quality Control Issues: Recent reports of faulty T-shirts point to flaws in quality
control methods, harming the brand's reputation and customer confidence (Hossain,
2021; Gerpott et al., 2021; McKinsey, 2023).
• Limited Physical Presence: Because the business relies on online channels, it may miss
out on customers who prefer in-person purchasing experiences
Opportunities:
• Global Expansion: Mad Koffee can enter overseas markets in order to reach a bigger
client base and diversify income streams (Acemoglu & Robinson, 2019).
Threats:
• The fashion industry is highly competitive, and Mad Koffee is continually threatened
by new and existing competitors (Hossain, 2021; Gerpott et al., 2021; McKinsey, 2023).
• Global, natural, and geopolitical calamities can disrupt the supply chain, disrupting
output and inventory
• Changing customer tastes and trends: If Mad Koffee can't adapt quickly to market
changes, it could be at risk (Forbes, 2021).
3. STRATEGIC CHOICES
Market penetration:
• tactics for the Bangladesh Market: Mad Koffee can expand market share in Bangladesh
by increasing marketing efforts, offering promotions, or adjusting price tactics (Hosseini
& Al-Lafi, 2019). Targeted digital marketing strategies can gain a greater part of the
local fashion market by leveraging its strong online presence (Cham et al., 2022).
Market development:
• Regional Expansion: By carefully building locations or working with local retailers,
Mad Koffee can explore new markets within adjacent regions (Root, 1994). This growth
should be supported by extensive market research in order to understand the tastes
and trends of the new client base (Czinkota & Ronkainen, 2007).
• E-commerce Expansion: By using its existing platform, Mad Koffee may promote and
sell its products in neighbouring regions via targeted digital marketing and logistical
networks (Pearson and Grandó n, 2005)
Product Creation:
• New Designs and Collections: By launching new designs, collections, or limited-edition
goods, Mad Koffee may innovate and diversify its product offerings (Urban & Hauser,
1993). This strategy adapts to the changing desires of the existing consumer while also
keeping the brand fresh and intriguing.
Diversification:
• Entering New Markets: Mad Koffee might explore diversifying by entering completely
new markets, either geographically or by researching other client categories (Ansoff,
1957). This might include establishing a new apparel brand for a different audience or
expanding into related lifestyle items.
Exporting:
• Direct exporting: This entails selling items directly to overseas markets, which allows
for more control over brand image and quality (Cavusgil & Knight, 2015). Direct
exporting might be facilitated via online platforms, wholesalers, or sales reps.
• Indirect Exporting: Handles the export process through intermediaries such as agents,
distributors, or trading businesses, minimising logistical complexity but relinquishing
some control (Root, 1994).
Licencing:
• Brand Licencing: Allows overseas partners to exploit Mad Koffee's brand name,
designs, or technologies, providing a low-risk, low-investment entrance approach.
Constant monitoring, however, is required to guarantee brand consistency and quality
management (Gremyr et al., 2021)
Venture Partnerships:
• Local Partnerships: Forming joint ventures with local enterprises offers access to local
knowledge and existing networks (Kogut & Singh, 1988). This method distributes risks
and benefits while encouraging a more localised approach and addressing cultural
idiosyncrasies.
• Joint Ventures: Joint ventures feature joint ownership and decision-making, providing
a strategic alliance to traverse regulatory hurdles, cultural differences, and market
complexities (Geringer & Hebert, 1989).
Mad Koffee's form of international entry should be consistent with its worldwide
expansion goals, risk tolerance, and available resources. The ideal plan for successful
entry into the global arena will be informed by a thorough examination of target
markets, regulatory conditions, and competitive landscapes.
Mad Koffee is evaluating and implementing growth and international market expansion
strategies.
The SAFe (Strategy in Action Framework) provides a systematic way to navigating the
hurdles of growth and foreign market development for organisations. Mad Koffee may
use this framework to methodically examine, execute, and monitor its strategic choices,
promoting a holistic and long-term approach to its goals.
• Regulatory Risks: Understand and adhere to the various regulatory contexts found in
overseas markets. To negotiate complicated regulatory environments, work with legal
specialists (Rugman & Verbeke, 2004).
• Joint Ventures: Collaborating with local enterprises reduces the risks of entering
unknown markets, allowing for a smoother introduction and faster adaptation to local
conditions (Kogut & Singh, 1988).
5. CONCLUSION
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