Many assumptions will have to be made due to a lack of good market data, typical of the non-transparent Russian business operating environment.
An anecdotal SWOT analysis and literature review was conducted to find solutions to the difficult economic conditions confronting COFFEE HOUSE in the global recession. Marketing strategies and business models from North America were examined. Local competition was surveyed and the target market consumer was profiled. Although the North American market leaders have a dominant world position, they have also suffered during the recession. Not all the strategies and tactics are applicable in the Russian market; but some techniques were adapted with some reservation.
COFFEE HOUSEs strength lies in its long history adapting to local market conditions, close contact and development of loyal customers. An evolving strategy must respond to deteriorating purchasing power of consumers and possible loss of market share to new competitors. A shift away from food-based price discounts towards value-based espresso drinks is recommended.
The retail hospitality industry is generally vulnerable to downward swings in the economy. Coffee retailers in specific exist in an extremely competive environment and need a strong strategy to survive. The retail coffee market is generally susceptible to fickle consumer tastes and highly price sensitive.
Russian coffee and tea franchises are relatively young and it is assumed that much can be learned from experiences in the international arena where a longer track record is evident. Additionally, the hotter competitive scene in mature markets may provide excellent examples for where the Russian market can expect to evolve. Coffee establishments in North America, Europe and Australia have already weathered economic downturns and have applied creative tactics to maintain profitability. These examples, if carefully selected fit unique Russian consumer demands, may provide a attractive pathways