Entrepreneurship Assignment: Innovative & Creative Ideas by CAFEPOD Coffee Co.

Question

Task: You are required to write a report on entrepreneurship assignment detailing the application of the proposed innovation in SMEs operating in different sectors in the UK and how the solution could be implemented in similar company in another city in the EU or International country. You should incorporate the challenges associated with implementing the innovative solution and the expected benefits to all stakeholders.

Answer

Introduction
CAFEPOD Coffee Co. was founded in 2011 as an independent coffee company and the company is an SME with 12 employees situated in the UK (cafepod.com, 2011). The company design premium coffee to be enjoyed at home by enthusiastic coffee drinkers. The company is influenced by London's coffee demand, excitement, and borderline brewing which the consumers love to drink. The company was founded by Peter Grainger and Brent Hadfield. Their mission was to bring pleasure to the everyday lives of people and encourage people to succeed in their daily grind and industry. The NespressoCompatibleAluminium Capsules, Roast Whole Bean, and Roasted Coffee are sold in all large supermarkets and in online stores. CAFEPOD is also available. Brunch Blend, Ristretto, Espresso Supercharger, Extreme Roast, SW18 Daily Grind, and Espresso are the tasty mixes that are served in all supermarkets. In the past, UK supermarkets lacked the enthusiasm and vitality of highway coffee shops and built a variety of thrilling coffee blends for coffee lovers at home(Wieland et al., 2020). The company imports its best coffee beans from multiple countries like India, Central America, South America, and Indonesia. But the company is facing huge trouble in recent times when the whole world is facing a crisis period due to the COVID-19 pandemic. International traveling and flights are being closed as a result the company is facing trouble in importing coffee beans and it is difficult for the company to meet the demands of the market in the UK. The pandemic situation has led to the lockdown of the whole world leading to the change in the political and economic conditions of the UK as well as that of the other countries(Fuglerudet al., 2020). CAFEPOD Coffee Co. needs to find out alternative sources of importing coffee beans in order to fulfil the market demands and the other sources might not be cheap for the company and it will lead to an increase inthecost.

External Audit
Various different options are present for the company which has very positive opportunities but on the other hand, it comes with various difficulties as well. For understanding the opportunities and difficulties it is important for the CAFEPOD Coffee Co. to make a proper analysis of the external environment to get in-depth knowledge.

PESTLE analysis
Political Factor
The EU is an economic and political union of 28 nations which includes Croatia, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Germany, Greece, Ireland, Italy, Latvia, Lithuania the United Kingdom, Malta, Poland, Portugal, Romania, Slovakia, Slovenia, Sweden, and Spain. The Netherlands is also one of the countries that are responsible for this mission. The UK will however, exit the EU at a very early point. This could have significant consequences for both the European Union and the United Kingdom if it does. As regards political stability in the United Kingdom, the 2017 political stability index was 0.26, which for the industrialized world such as the United Kingdom would seem to be a little unpredictable (Mihailova, 2020).The Brexit issue generated some political stability issues, as was one of the big causes. In pursuing this goal, the Union has largely achieved. The main downside of Brexit is its economic growth damage to the United Kingdom. Much of this was due to the confusion over the end product.With the other EU nations,Brexit will end Britain's tariff-free trade status. Tariffs would increase export prices that would harm the U.K. when its products in Europe, exporters get costlier. Tariffs will also lift import rates into the United Kingdom (Achinaset al., 2019). Greater expenses of products will prompt expansion and more unfortunate everyday environments for the UK.

So this will have a direct impact on CAFEPOD Coffee Co. as the company has to face lots of tariffs in both export and import which will increase the cost of the coffee beans that will be imported by the company. This will have a major impact on the price of the products and it will have a negative impact if the company imports coffee beans from other European nations as due to COVID-19 regulations countries like India and Indonesia will not be able to export the coffee beans at low cost as well.

Economic factor
Around 500 million clients and 21 million SME organizations make up Europe's economy. It endeavours by keeping four opportunities that is free progression of products, administrations, assets, and work, to dispense with all obstructions to business in the Member States. Freedom of travel has the most debate though, and the European political groups and many others have opposed it extensively. The EU's GDP for the year 2018 amounted to 18.8 billion dollars. It accounted for about 30.24% of the global economy. The three Member States that produce the greater part of EU GDP are Germany, the United Kingdom, and France (Shatskayaet al., 2017).The United States was the EU's largest export partner and China's 2018 import partner. A weakening of the currencies of the key coffee production states against the US dollar is projected to raise the prices of fertilizers. As reported in a recent press article, Mexico imports the majority of fertilizers used in the farming sector, and record depreciation of the Mexican peso in the second half of 2020 would affect the viability of coffee producers. This lowers their already slim profit margins and leads to fewer resources to spend in improved working conditions.

It should be remembered that in 2018 in excess of 41 percent of EU trades and 31 percent of EU imports represented gear and transport hardware. It is likewise significant that the EU is favoured by certain rivals to the detriment of the more modest Member States. The fundamental drawback of Brexit is its monetary development harm to the United Kingdom. Quite a bit of this was because of the disarray over the final result. The UK's development diminished from 2.4 percent in 2015 to 1.5% in 2018 on account of Brexit's insecurity. The Brexit is expected by the government to decrease UK growth by 6.7% over 15 years (Christodoulou &Cullinane, 2019).It ought to be recollected that in 2018 in excess of 41 percent of EU trades and 31 percent of EU imports represented gear and transport hardware. It is likewise significant that the EU is favoured by certain adversaries to the detriment of the more modest Member States. The fundamental disadvantage of Brexit is its financial development harm to the United Kingdom. Quite a bit of this was because of the disarray over the final result. The Brexit is expected to decrease UK growth by 6.7% over 15 years. In the course of the harvest season, cash payments are still required and certain long-term roast contract arrangements limit the cash flows of exporters and importers. Farmers would definitely be impacted by a lack of investments in farm modernization, which may not only affect mid tolong-term production but also the introduction of labour-related instruments and activities.

So, BREXIT will have a major concern for SMEs like CAFEPOD Coffee Co. as it will lead to the increase in cost of coffee beans if made by the country from the countries of EU as UK is no longer in the EU. Extra tariffs will be imposed leading to increase of product cost which will be a burden for the company in the amid of COVID-19.

Social Factors
The EU is committed to fostering and protecting the cultural heritage of Europe as a whole. The EU is sport inclined where football, hockey, tennis, soccer, rugby, F1, and volleyball is also very popular. It's a sport that is more popular in the rest of the world. Cricket is often played in the United Kingdom while football is common in the EU. Socially, after the election vote, Brexit saw a spike in recorded abuse (Raczet al., 2018). In the mainstream social media, such as Facebook, and Twitter, attacks on race, nationality, and religion are widespread. News on this knowledge erupted worldwide. Later, several reports were wrong, but the way the world saw Brexit was already affected by them. In the social system,population characteristics are also found successful in ensuring improved orientation for businesses.Competitivenessin the UK market is a significant aspect that is close to the future of new businesses.

So, socially implementing BREXIT means that sports lovers will visit the country less which will have a direct impact on CAFEPOD as the sell will decline as the major revenue source of the company to sell coffee products locally as well as to tourists.

Technological factors
In numerous fields like science and innovation, the EU is a worldwide player and has performed amazingly. Germany, Sweden, Finland, Great Britain, and France are among the world's most progressive specialized nations (Düerkop&Huth, 2017). The EU is a science power in each sense and has made a significant obligation to science and innovation. Nonetheless, monetary forces to be reckoned with, for example, the United States and China are behind the EU's innovation and IT business. There is likewise a lack of prepared IT laborers in the EU.

Technological factors is in high end which will allow CAFEPOD to implement technological innovations in order to sort the disruptions in supply chain of coffee bean which can be sorted out with proper technological implementation.

Legal Factors
The EU is regulated by its own law system. It overrides every Member State's public enactment where there is a disparity between public law and EU law (Anand&Mantovani, 2017). Uniform implementation of EU law ensures the regulation is more consistent and available, straightforward, and clear in its understanding and practice. British millennial staff may have been affected by Brexit. By 2030, Germany is relied upon to have 3 million prepared positions in labour deficiencies. Post-Brexit the employees in the UK will no longer have these positions so conveniently accessible. Loosing job due to BREXIT have an indirect impact on CAFEPOD as when people do not have jobs that means it is obvious that the company will have less options to sell the products which will directly impact the revenue of the company and also it will be of great difficulty to import and export coffee beans.

Environmental Factor
There are major environmental problems facing the EU. Air contamination, for instance, is Europe's largest environmental danger to public health. The vast majority of the EU Member States attempted to agree to air quality necessities and the European Commission's activity against nations with contamination controls has likewise not been effective (Vallati&Grassi, 2019). Environmental change, stratospheric ozone consumption, pulverization of biodiversity, worldwide incidents, fermentation, soil disintegration and water pollution, land debasement, and synthetic dangers are other significant ecological issues for the EU.

Environment degradation has led to the climate change that means production of coffee beans will be reduced that means availability of coffee will be less. Coffee production requires mild warm weather which is suitable to be grown in the European nations but due to the increase of global temperature it has direct impact in the European nations to cultivate coffee beans. This means importing coffee beans at lower cost is a very difficult task for CAFEPOD.

Persona Creation
A persona is an imaginary model of an ideal consumer. It incorporates socioeconomics like age, sex, area, and occupation and psychographics like preferences, hates, and different focuses that spur the consumers (Salminenet al., 2020). The key in it is to accumulate as much information as possible which can be used to design a complete persona for each of the target customers. Such exercise of making models dependent on the ideal clients helps unmistakably characterize and fragment them for the promoting reason for the organization (An et al., 2018). The marketing department of a company uses the information to surface and document needs and wants and ultimately helps understand how customers are making purchasing choices. If the data is accurate enough, the persona will help CAFEPOD Coffee Co. to better segment messaging by targeting different groups of persons with the most accuracy and offers. It also helps to develop new products or services based on the needs of key customers and reach the right customers by being qualified to attract the right leads. Yet personas also have an important role in the increasingly essential discipline of customer journey mapping.

3 key customer persona in case of CAFEPOD
1. Coffee Shop lovers- Savvy coffee users are attracted to smartphones. People linger in shops and cafes where specialty drinks and daily coffee cups can be enjoyed alongside an inviting environment instead of getting a cup of coffee (Spiliotopouloset al., 2020). More than 22,000 UK coffee shops produce an annual 12 billion dollars, according to the latest study.

2. Whole bean buyers- Some other target audience is people who consume whole bean coffee at home or at work. These customers call for the beans to be roasted in their shop or for the freshest cup to roast their coffee (Fuglerudet al., 2020). In order to satisfy the different preferences of your clients, this crowd buys whole beans by the pound in different varieties from different locations.

3. Coffee drinkers- The target consumer for this coffee is that customers enjoy those ingredients in their coffee-based drink and are able to pay a premium in order to get what they want (Fergnani, 2019). As a result of consumers becoming more conscious of how they consume specialty coffee and how they are made, this demand continues to expand, according to the Small Business Development Center.

Different consumer personas based on Coffee demands
a. Demographics- It includes factors like age, gender, race and income bracket, and other basic stuff. As a persona, CAFEPOD Coffee Co. needs to dig into the personality of the buyer and focusing on what makes them who they are and what background makes them seek the services and products that are offered (Salminenet al., 2020).

b. Profile- This type of persona represents real customer need, feelings, and common behavior patterns. SMEs like CAFEPOD Coffee Co. can make use of such data in order to make create a strategy depending on these aspects. It can provide a range of budget-friendly options with high-end products during the COVID-19 pandemic when there is a crisis of supply of coffee beans.

c. Goals- It follows a simple business philosophy to devote its innovation to delivercoffee products and services to the target market.

d. The motivation for buyingcoffee beans from CAFEPOD- People who are more conscious about the brand and often they use the same brands for years are likely to stick to the same brand of coffee which can produce better options each year according to need and variety.

e. Pain points-Containment steps on coronaviruses impact farmer mobility and, subsequently, employee availability in the peak season. Labour shortages can threaten coffee production, lead to disruption of coffee supply to the customer countries and impact farmers' profitability, which is already close to bankruptcy as a result of the extremely low coffee prices that have been experienced in recent years. Because of workers' shortages, decreased mobility, and social distancing initiatives, Brazilian coffee harvesting began in May. Bean production is closely correlated with sustainable practices in harvesting and post-harvesting (Jung et al., 2018).Unless a large number of qualified staff are assured, possible harvest errors are more likely and may have an effect on roaster supply chains, raising the likelihood of low quality coffee, which could further impact farmers' and traders' incomes. Uncertain security of supply and fear of disturbances have put more pressure on exporters and importers who have to conclude roaster contracts and speed up shipments from one supplier to the next.Even if coffee is a fundamental market product, coffee consumption, in particular ultra-premium coffee, is definitely costlier and mostly served in cafes, would suffer from economic distress related to the pandemic. The cost of production due to preparation, extra EPIs, and extensive sanitation for manufacturing areas and devices could be improved by more steps to minimize the risk of COVID-19 contagion.

Solution
In Europe and in the United Kingdom, the coronavirus epidemic has taken market rates down by 50% and projected 25%. Roasters buy fewer imported coffee, and markets are pretty crowded. In Europe, many cafés and roasters pay their workers with government subsidies. This raises the probability that they will continue to work and purchase from importers. Worldwide, the activities of the coffee supply chain were affected. Countries like India, South America, North America, and Indonesia are seriously sealed away.Importers are worried that fewer port staff will be present (Nakandala& Lau, 2019). This could impact shipping in due course as courier systems will suffer more drastically since the supply of coffee beans will take a much longer time than expected. So, during the crisis period, it is important for CAFEPOD coffee co. to implement new innovative strategies in order to reduce the overall cost and also maintain a proper supply of the coffee beans for the consumers (Nandi et al., 2020).

Implementing global and local sourcing in the supply chain will help the company to avoid uncertainty and also local sourcing will help the company to have better control of the supply chain. The method is tending to be much easier as CAFEPOD source its supply chain locally. Sourcing locally allows more flexibility and reduces the risk (Barros et al., 2020). Companies are at increased risk of production concerns when sourcing. Domestic manufacturers' procurement eliminates the need for transportation providers for shipping goods across the oceans. By simplifying the way their products go from one location to another, companies can reduce their logistics costs. Reduced imports save shipping and logistics money. Customers prefer products of local origin. Businesses should leverage this rising customer demand by locating their supply chain to improve their brand (Kim & Chai, 2017).Sourcing locally contributes to the local economy by stopping up-stream producers from sourcing abroad. Whilst local markets flourish, corporations benefit from higher customer spending, which is essentially an asset.

International Considerations
CAFEPOD Coffee Co. needs to understand that it is important to keep in mind certain factors when implementing innovation in global sourcing internationally. Transport, customs, and taxes, brokerage activities, bank fees, finance, and insurance are a few of the considerations that must be considered which leads to unintended expenses. CAFEPOD should incorporate costs and local coordination payments in the case of customs wanting to inspect the freight. Performance has to be calculated in order to consider and negotiate with the producer of coffee beans and CAFEPOD consumers (Wieland et al., 2020). The consistency of the goods in a highly productive supply chain. It takes time to supply coffee beans. If the rivalry of CAFEPOD has a more rapid product, this could lead to loss of market share and loss of sales. Your supplier must be open to and willing to adapt. That is critical.

Conclusion
As Britain faces a significant time of crisis, the effect of COVID-19 on UK coffee and tea stores is on the rise of concerns. Coffee culture is evident in the UK and CAFEPOD Coffee Co. products are most demanded in the UK so it needs to be fulfilled with alternating options during the pandemic and these changing preferences can be done using the online ordering systems, grow with the pervasive knock-on effects of the pandemic. During the crisis, it is critical to provide a creative approach to help small and medium-sized businesses in the UK, to allow customers to purchase the goods they need in due time at an affordable price.

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