Pest Analysis Of Caffe Macro

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CAFFÉ NERO

Introduction

Caffé Nero coffee sells premium Italian coffee with variety of Italian food. Caffé Nero is one of the top three coffee chains in the UK and it has more than 600 stores operating. Caffé Nero ranked as third largest independent coffee retailer the UK (Ethicalconsumer.org, 2014). Research found that Caffé Nero has the best tasting coffee on the high street (the Guardian, 2013). Atmosphere of the coffee shop is very specializing. Caffé Nero decorates each branch store design to has its own character to reflect local community

1. Marketing Environment

External environment will be analysed by using PEST analysis. PEST analysis is a tool to analyse macro environments of the whole industry. There are six considerable
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Since Caffe Nero business is conducted in the UK. Therefore the company has to follow the regulations within the country. For example, the situation where Caffe Nero has a problem about avoiding corporate taxes this could leads to bigger issues (Quinn, 2012).

In case of Caffe Nero, as long as its majority of the operations are in the United Kingdom, it is not hugely vulnerable to inflation rates, as the UK economy tends to be more reliable than most other countries.

Income expenditure of population would be different depending on the location that company operates in. Comsumers in British would think 2.5£ for a cup of coffee is reasonable. However, in Thailand 150 Baht is expensive. This is different consumption due to cross national comparison and local currency.

Exchange rates Caffe Nero used to import coffee bean name “Coburg” from outside country, then roasting to taste the product in the UK (Investegate.co.uk, 2009)
Presently, company changes to growth theirs own coffee to avoid exchange rates.

1.3 Socio-cultural

Socio-cultural are a perception people in UK towards product of
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Café Nero associates with Italian theme by theirs Italian taste of coffee and Italian café decoration theme.

Table1: Cost and Quality of the coffee among three largest coffee chains in the UK.

The perceptual map above has shown the quality and the price of Café Nero compare to theirs main competitors Starbucks and Costa. The graph display Café Nero located below costa in term of price. However, the quality of the coffee Café Nero has the same quality with Starbucks coffee.

4P

Product

- Premium Italian coffee
- Best espresso taste (best tasting coffee by Independent consumer magazine)
- Offering Italian food in coffee shop
- Wide range of products diversify the risk of the firm

Price

Caffe Nero sell reasonable price of coffee with high quality coffee.
The price is very sensitive; it could affect the total revenue of the company. Café Nero seems to have reasonable price cheaper than their competitors. Price skimming strategy can be use to increase sales, since Café Nero already doing well on their reputation and quality product

Table2: Price Comparison Starbucks, Costa, and Café Nero

Caffe Nero sells most of their products in a lower price compared to the main competitors Starbucks and Costa

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