Coffee Bean Management

1. INTRODUCTION

The Coffee Bean and Tea Leaf is a coffee chain company that started in Southern California since 1963 by Mona and Herbert Hyman. On September 1963, the first store was located in the neighbourhood of Brentwood in Los Angeles. Over the years, the company made progression and it grew bigger and today, it is one of the largest family-run coffee and tea companies in the world (Coffee Bean, n.d).

Most of the stores that are located outside of California are franchises. Co-owner and CEO of Coffee Bean and Tea Leaf Asia Pacific, Victor Sassoon, opened more than one hundred stores in Singapore and Malaysia. It then expanded to 550 stores over countries in Asia and Middle East (Inside Retail, 2015).

The Coffee Bean and Tea Leaf boast a variety Western based cuisine ranging from all-day breakfast, ala-carte menu, salads, sandwiches, pastries and catering or also known as party packs. They also retail varieties of their coffees, tea products, tumblers and home use coffee machines.

This report will be a PESTEL analysis faced by The Coffee Bean and Tea Leaf in Singapore.

2.0 PESTEL ANALYSIS

PESTEL analysis is one of a useful tool used by companies to analyse and monitor the macro-environmental factors, be it in a beneficial way or non-beneficial way. It is break down to six different factors – political, economic, social, technological, environmental and legal. This will also help companies to reach their goals and achieve what they want.

2.1 POLITICAL

According to the Political and Economic Risk Consultancy, PERC, Singapore has the lowest political risk in Asia (Trade Chakra, n.d). Singapore is a democratic country, Singaporeans will vote whoever they think that is qualified to lead the nation. Ever since they gained independence in 1965, Singaporeans appreciate political stability. Now, this stability has meant peace and also a better way of life which increment business open doors for interest in Singapore.

Before the Coffee Bean and Tea Leaf further their global expansion, political stability is one of the main factors that was taken into consideration.

2.2 ECONOMIC

Singapore is ranked one of the world’s strongest and competitive economies. The Economic Development Board (EDB) assumed a key part in building up Singapore's economy, making riches and employments for the populace.

Economy in Singapore have slowed down due to the global economy development. According to Ministry of Trade and Industry Singapore (MTI), the economy’s development for Singapore in 2017 is unobtrusive (Tang, 2016)

With this state of economy, consumers will now spend their money wisely and the revenue of The Coffee Bean and Tea Leaf might get affected. Also, knowing that there are other cheaper alternative for them to choose from.

2.3 SOCIAL

In terms of social, Singapore resembles other Eastern nation. Despite everything, it still follows traditional family values. But without a doubt, the younger generation tends to take after western cultures and values.

Teens and young adults are more likely to spend on coffee joints like this as they find the prices affordable for them to enjoy and appreciate the astonishing taste of rich and fresh coffee and “picture worthy” enough for them to post on their social medias. Even though it is a coffee chain, it is not necessary for them to order a cup of macchiato. The Coffee Bean and Tea Leaf provide various type of beverages other than just coffee.

Changes in lifestyle and healthy eating are the few of the factors that are affecting the social factors of Singapore. By promoting the goodness of minimising caffeine consumption will affect the growth and income of The Coffee Bean and Tea Leaf. With aging population on the ascent and birth rates plunging throughout the years, changes sought after by customers will be inconsistent.

2.4 TECHNOLOGICAL

In a 2016 article, Lim discussed about the Singapore government presenting variety of new research and advancement programmes as a part of the Smart Nation activity. It is important to polish skills as it is not only for professional growth but also to evaluate how emerging technologies can benefit and continue benefitting organizations and businesses crosswise and overseas.

Book Keeping Express (2016) shared a few technologies for coffee shops and restaurants. Management software like having a modern POS system to easily select customers order and track data to review sales history, having a merchant processor to accept different payment types and inventory software to keep track of stocks. It is also important to track and manage finance - accounting software and sales report will be beneficial for most businesses.

This will help The Coffee Bean and Tea Leaf to deliver a great customer experience and reducing the time to complete many paper works.

2.5 ENVIRONMENTAL

The Coffee Bean and Tea Leaf produces their own coffee beans and tea leaves hence environment is an important factor for the company even though they do not grow their crops in Singapore. Global warming and unpredictable climate change can affect the quality of crops they harvested.

The Coffee Bean and Tea Leaf took part in the Earth Hour every year. Earth Hour is a global event organized by World Wild Fund for Nature (WWF). Encouraging everyone to turn off their lights to show support to battle against environmental change (Rinkesh, n.d).

By being environmental friendly, they will get trust and faith of their consumer.

2.6 LEGAL

The Coffee Bean and Tea Leaf obey the local laws and regulations of the countries they are expanding to. By meeting the criteria for licensing of operating in food and beverage industry and paying attention to the changes of regulations on employment labour.  

3.0 PORTER’S FIVE FORCES ANALYSIS

The food and beverage industry is highly competitive, which is why it is essential to be proficient, stay updated regarding nutritional trend and customers tastes. Understand the challenges and opportunities in both the industry and market for good manufacturer (McKewen, 2016)