Reference no: EM132644626
HANNA CAFFERefer to Strategic Value Analysis:
Value Search Hanna Caffe (HNC) was an Italian coffee bar and restaurant chain which had operations in Arba Minch, a small tourist city of Ethiopia. HNC used to operate in good traffic locations such as tourist spots, popular shopping malls, and central prime districts. HNC provided comfortable venue decorated with a theme of Ethiopian lifestyle, relaxed, and friendly atmosphere. HNC provided a variety of coffee full of Ethiopian cultural sentiments - strong, carefree, and passionate. The specially brewed liquored coffee menu (e.g., Caffe corretto, Patriota cocktail) was particularly loved by customers. HNC's crispy mini pizza, creamy homemade ice-cream cones, and special chocolate truffle gift sets were the hot items in the shelves.
Hanna, the founder of HNC, has started her coffee career as early as her 20s. In more than 30 years of history in coffee making, she developed a very sophisticated, delicious, and unique blended coffee brewed in a specially designed coffee making machine. Customers were fond of the taste. She kept the recipe for himself and his three sons. The recipe was the shop's most important intangible asset.
She had a very stable crew who were loyal and joyful. Hanna loved them and was friendly to her staff and customers. Hanna knew the importance of a trustworthy crew in this service industry, whose helpfulness, cheerfulness, and friendliness attributed to customer loyalty and business prosperity. She liked simple operations. She delegated work and insisted shop managers to be responsible for profits. She installed an accounting software to keep track of daily sales, cash on hand, and weekly operating performance of each shop. This software was employed by her ten shops in the city. In fact, Hanna traveled every week to meet her staff and customers.
Hanna was proud of her coffee which, in her view, was far better than Starbucks. In fact, her coffee was highly recognized by the public, and a local press has named it a star restaurant in the 2005 regional survey.
After the financial tsunami in late 2000s, Hanna looked for a business opportunity in China. Hanna paid a few visits to Hong Kong and Shanghai in 2012 and conducted several field research studies. She firmly believed a good prospect in the China market because of high GDP growth and the rise of middle class. The most important message she got was that Chinese young generations were curious about Ethiopian lifestyle. She thought this was her last chance in her lifetime.
In 2014, HNC started operations in Hong Kong. Hanna replicated the entire operation at home including shop decoration, coffee menu, and gift shops. She believed "the unique Ethiopian taste and lifestyle" was its selling point. She was obsessed by the belief that "if Starbucks could do, could do it better." She intentionally set up shops nearby Starbucks with price comparable to its rival.
In 2 years', time, HNC opened five shops in Hong Kong. Two shops offered full product ranges and three provided coffee only. All shops were breakeven within 6 months. She had a strategic plan to open five more shops in Hong Kong in the next 2 years. Similarly, she planned to open shops in China from 2016 with a speed of ten shops per year in Shenzhen, Guangzhou, and Shanghai.
In view of the huge capital funds and the lack of China market experiences, she planned to invite local business partners for this venture.
Problem 1: Examine HNC's strategic position, establish corporate goals, and suggest key strategies to achieve the goals. Suggest key directives for the detailed strategic plan