Analysis Of Pacific Coffee In Festival Walk

Pacific Coffee is a Hong Kong home-grown coffee brand established in 1992. The mission of Pacific Coffee is to provide the perfect cup anytime, anywhere. Pacific Coffee is active in making contributions to society and communities, while at the same time emphases the importance of protecting environment in their business.

Strength & weaknesses of Pacific Coffee in Festival Walk

Strength analysis:

Based upon observation, I believe that Pacific Coffee in Festival Walk actually has a pretty strong ability to draw customers. The main resources and capabilities that it owns to draw customers include:

Attracting location in the mall: quite close to MTR exits.

Large area: More than 1500 square feet, including both outdoor open area and indoor area.

Nowadays consumers have a higher demand on convenience of this kind of coffee shop since they go these places to spend their leisure time while enjoying delicious coffee and food. So both the convenient location and enough room are important for customers when they choose which coffee shop to go. Also with the large area, Pacific Coffee uses several operating skills to provide excellent customer services and satisfy their customers’ need. Following is some examples:

i. Semi-self-service (more convenient and efficient & customers feel more comfortable and unrestrained);

ii. Reading-book service (make Pacific Coffee a multi-functional place for spending leisure time);

iii. Special seat for people working with their own computers (may not increase revenue in short run but in long run can increase consumer’s loyalty);

iv. Inside area has dark decoration with soft light offering a relaxing atmosphere for customers spending times with families, chatting with friends or working on their own business. But for people who prefer bright environment, they can choose outdoor open area which brings a different atmosphere and feeling.

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Up-to-date technology with long-time partner PCCW: free Wi-Fi service, on-line order service and several computers in the shop are offered for its consumers. No matter for business or leisure, the availability of these services is essential for a great number of consumers.

High-quality employees-crucial human resources: nearly all employees are proficient in both Mandarin and Cantonese while also have at least basic master of English. Employees are smiling and patient when they talk to customers.

Pacific Coffee fully realizes the importance of this crucial resources and offer various training to its employees regularly so that they can provide excellent service and ultimate customers’ satisfaction.

Local brand and good reputation-vital intangible resources: Pacific Coffee has been recognized as the ‘Best Coffee in Hong Kong’ and has won several honor in Hong Kong Magazine’s ‘Readers Choice’. And since Pacific Coffee has always devoted itself to community affairs, environment issues as well as promoting fair trade, it has a pretty good community image and good reputation among customers.

High quality product–professional coffee beans: collecting top plateau coffee beans from all over the world. Today more and more customers are not satisfied with instant coffee anymore and focus more on the quality of coffee. So the quality of Pacific Coffee is quite crucial for its success.

Weaknesses analysis

Lack of uniqueness in product: little distinctive features in its coffee and food product. According to the comments in Open Rice, most customers feel that the food Pacific Coffee offers them is pretty similar to which Starbucks offer, as well as the types of coffee.

Lack of effective promotion: despite having numerous product promotion campaigns such as discount afternoon tea and “buy one and get one free” in specific time period, people are hardly ever know these campaigns. Especially when compared with Starbucks, a huge amount of people are familiar with their campaign through its promotion on Facebook and other social websites. What is more, some special services, for example the quick mobile phone charging services Pacific Coffee in Festival Walk offers, is known by few people. With more effective promotion, the revenue from this kind of service will increase apparently.

Competitive strategies of Pacific Coffee in Festival Walk

Differentiation strategy:

Actually lots of resources and capabilities mentioned in part2 are the representatives of Pacific Coffee’s differentiation strategy, for instance, the high quality product, the excellent customer service, the strong technological capability and the positive brand image.

Although we analyze “lack of uniqueness in product” as one of the weaknesses of Pacific Coffee in Festival Walk, it does not mean the shop is lack of differentiation strategy. When compared with competitors other than Starbuck inside and outside Festival Walk, Pacific Coffee is actually distinct in terms of its high quality product and brand image. People’s enthusiasm to brand image and product quality makes Pacific Coffee’s differentiation strategy pretty powerful and helps Pacific Coffee be in the leading position in its industry.

When it comes to Starbucks, despite the similar products, Pacific Coffee in Festival Walk is special in customer service. Utilizing its capacious space and advanced technology support, the shop offers services which Starbuck does not offer. No matter the semi-self-service or the free-book reading services, the special seat or internet-accessible computers, they all make Pacific Coffee in Festival Walk special and attract a large amount of customers.

Focus strategy:

From observation and analysis, I think Pacific Coffee has used the differentiation focus strategy by focusing on specific customer type – business group like business man and office ladies. There are also two services which have not been mentioned before and exist mainly for the purpose of serving the business group better. The first one is the take-away delivery services. Pacific Coffee will offer free delivery if the order values more than 100 HKD, which is unusual for students but common for business group. The second one is the member card of Pacific Coffee-The Perfect Cup Card. This member card can increase customers’ loyalty to Pacific Coffee¼Œand for its relatively high initial cost and limited credits exchange period, it is worthier for business groups which has a regular consumption on coffee to hold. In addition, there is an office building next to Festival Walk, by focusing on business group and offer them special services, Pacific Coffee can increase their revenue to a large degree.

Cost leadership

Actually since Pacific Coffee emphasizes more on its brand and the quality of its product, low cost is not its main strategy. What is more, its support to fair trade coffee beans also increases its cost. But the influence of brand, product quality and fair trade sign increase the internal value of the coffee, so Pacific Coffee can raise prices to reflect the additional value. However since Pacific coffee has a relatively mature internet-based information management system with its suppliers and franchisor, the cost on this part is kept low.

Integrated analysis of the internal environment & competitive strategy for Pacific Coffee in Festival Walk

Based on above observation and analysis, I conclude the internal environment of Pacific Coffee is quite strong. Owning