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Strategic Planning for family businesses.

MBA family businesses courses and/or executive education courses that focus on family businesses. The case can be used in introductory sessions related to family business strategy.

This case tells the story of two generations of coffee plant growers at Hacienda Flandes in Colombia’s coffee region. It describes external and internal factors that affected the family business from 1970 to 2013. The case presents antecedents and consequences of environmental circumstances and family members’ decisions that drive this business from boom to decline and later on to its potential reinvention. Through an analysis of this family-owned coffee plantation across generations, students are expected to understand the importance of strategic planning in family businesses, in a changing and competitive environment. Family businesses in emerging economies are the most common type of businesses. In Latin America, most of family businesses might be younger than those in Europe and even in North America. Therefore, family businesses in these economies can be going through or will soon go through a succession. Succession success rate is low, regardless of the culture or country in which the family business develops. This case deals with the preparation (or lack of preparation) of the next generation in family businesses management and its consequences and helps students suggest alternatives and better decisions to run family businesses in an emerging economy.

Students will be able to know and explain the concept of a family business as a dynamic system: firm, family and individuals, each one with actions and outcomes; analyze opportunities for and threats to family businesses across generations; and formulate strategies that balance business and family demands.

The teaching note has specific reading materials to support class discussion.

An interview was conducted with the general manager and semi-structured interviews with Likert scale to the main clients, collaborators and suppliers to establish the key competencies of the firm. Secondary information was collected through the organization’s historical and strategic documents.

At the end of the case study, students will be able to learn international marketing, innovation, strategic management, international business strategy; analyze the brand equity construct through the associative neural network model for decision-making; determine the internationalization strategy using the dual pressures model and sources of competitive advantage for international marketing management; and propose the innovation of a product by applying creativity techniques or innovation models to enter international markets.

Café Galavis is a family business leader in the production and commercialization of roasted and ground coffee for 103 years in Colombia. The new chief executive officer recovered the financial stability during his management during the period from 2015 to 2019, implementing internationalization processes. However, the sanitary crisis caused by the COVID-19 pandemic in 2020 in Colombia, generated an economic recession, which led to a decrease in coffee consumption. How to innovate in the development of a product or service in times of pandemic? What internationalization strategy implement? These are the challenges that the new management and its collaborators will confront.

The teaching case is aimed at students of postgraduate academic programs in areas Management or MBA. In the modules of Marketing the case allows the orientation of the concepts of brand equity or branding. Likewise, in the modules of International Management, the definition of the internationalization strategy through the analysis of dual pressures and sources of competitive advantage. Finally, in the modules of Innovation different methodologies or techniques for innovation can be applied such as: SCAMPER, Design thinking or the Stage Gate Model.

Teaching notes are available for educators only.

CSS 5: International Business

Upon completion of the case study, the students will be able to analyze the brand equity construct through the associative neural network model for decision-making; identify prospective scenarios through the Delphi method for the construction of strategic plans in organizations; and propose the innovation of a product by applying creativity techniques to enter international markets.

Cafe Galavis was one of the leading family businesses in industrial development and had the highest business recognition, with a century of experience in producing and commercializing roasted and ground coffee in Cucuta, Colombia. In 2015, the diplomatic crisis between the governments of Colombia and Venezuela led to the indefinite closure of the Colombian–Venezuelan border, which caused an increase in income from smuggled coffee. In addition, the presence of different competitors and traditional brands negatively impacted the level of sales, which considerably affected financial stability. Likewise, internal difficulties of family nature and administrative management led to the change of senior management. By 2016, Juan Yáñez was appointed chief executive officer (CEO) and was in charge of avoiding the company’s closure. In January 2023, he received feedback from his consulting team, and upon evaluation of the new market challenges with his collaborators, he realized a great challenge that merited the search for a priority alternative solution. How to design a new product considering the loss of brand identity in the face of the generational change of its consumers? These were some of the challenges posed by the CEO that consequently required starting a strategic management process of innovation.

The teaching case is aimed at students of postgraduate academic programs in the areas of knowledge of innovation, product design, industrial design, marketing or MBA. In the modules of marketing, strategic management, brand management and strategic foresight, the case allowed for the orientation of the concepts of brand value or branding as well as the analysis of the value chain for the implementation of strategies that promote competitive advantages of companies. Similarly, in the modules of product or service design, creativity and innovation and complex thinking, the case allows one to approach a complex problem and apply creativity techniques for its solution.

Teaching notes are available for educators only.

CSS: 8 Marketing.

Upon completion of this case study, students will be able to identify the main conceptual foundations of strategy in international business, determine the strategy of entry into a country through the analysis of dual pressures and propose the mode of entry into a country by analyzing the sources of competitive advantage in a firm’s value chain.

Café Galavis stood out as one of the most outstanding family businesses in industrial development, with a century-long trajectory in the production and sale of roasted and ground coffee in Cucuta, Colombia. However, in 2015, the diplomatic, humanitarian and economic crisis between the governments of Colombia and Venezuela led to the indefinite closure of the Colombian–Venezuelan border. As a result, the illegal coffee trade increased, and competition from traditional brands significantly affected sales, leading to financial difficulties and an urgent need for change in senior management. In addition, the demise of the manager who had been leading the company until 2018 exacerbated the business situation. Juan Francisco Yáñez, the new manager, joined the management of an emblematic company. From his first years of management, he implemented different strategies related to organizational policies, production, innovation and export of products to achieve stability. For the year 2023, the challenges for the new CEO were to lead a brand with more than a century of tradition and business roots and to enter new markets, owing to the high dependence on the Venezuelan market. Which countries should they enter in the internationalization process? Furthermore, what type of strategy and entry mode should Café Galavis implement to penetrate new markets? These were some of the challenges faced by the CEO; therefore, he required objective information to make decisions in consensus with his collaborators.

This case study is suitable for students of postgraduate academic programs in knowledge areas of international management, international business or MBA.

Teaching notes are available for educators only.

CSS 5: International business.

Founded in 1971 and acquired by CEO Howard Schultz in 1987, Starbucks was an American success story. In forty years it grew from a single-location coffee roaster in Seattle, Washington to a multibillion-dollar global enterprise that operated more than 17,000 retail coffee shops in fifty countries and sold coffee beans, instant coffee, tea, and ready-to-drink beverages in tens of thousands of grocery and mass merchandise stores. However, as Starbucks moved into new market contexts as part of its aggressive growth strategy, the assets and activities central to its competitive advantage in its retail coffee shops were altered or weakened, which made it more vulnerable to competitive threats from both higher and lower quality entrants. The company also had to make decisions on vertical integration related to its expansion into consumer packaged goods.

Understand how strategy needs to be adapted to new contexts. Understand how to manage tradeoffs involved in growth. Be able to identify possible threats to competitive advantage as a result of growth.

Established in 2010, Mellower Coffee has 40 exquisite chain stores and three branches, namely Mellower Coffee Sales, Mellower Business Management and Shanghai Mellower Roasting Factory. Positioned as a premium coffee brand in China, Mellower Coffee has realized the integrated operation and management of the whole industrial chain from raw coffee trade, roasting factory, coffee retail products, specialty coffee chain, office coffee to coffee academy. It has a vision to attract and cultivate more and more coffee lovers by constant innovation coffee culture promotion.

The main pedagogical objectives of the case are: illustrate how Latin American companies dedicated to the production and harvesting of commodities can be vertically integrated to gain a larger share of the value created throughout the production chain. Understand how futures and options contracts in commodities can be used to hedge price risk on long and short positions in the underlying products. Understand how option contracts add value by hedging risk in those contexts where the counterparty has optionality. Discuss the implications of Fair Trade for commodity traders and producers.

In the case, Hernan Arosamena, CFO of The Specialty Coffee Trading Co. (TSCT), faces the challenge of designing an effective strategy to hedge the price risk caused by the increasing demand of the so-called Fair Trade coffee. Hernan Arosamena decides to review how the company has typically managed the price risk in its business transactions using future contracts to then incorporate the additional elements that trading Fair Trade coffee may entail. The typical price risk hedging strategy involves the use of coffee future contracts in long and short positions to ensure that the company obtains the desired margin in its coffee trading negotiations. To hedge the exposure to the risk of fluctuations in the price of coffee when the company sells Fair Trade coffee requires the additional use of put options.

The case is appropriate for students enrolled in courses or specialization programs at both the undergraduate and graduate levels.

Teaching notes are available for educators only.

CSS 5: International Business.

From 2002 to 2011, coffee-machine manufacturer Keurig Incorporated had grown from a privately held company with just over $20 million in revenues and a plan to enter the single serve coffee arena for home consumers, to a wholly owned subsidiary of Green Mountain Coffee Roasters, Inc., a publicly traded company with net revenues of $1.36 billion and a market capitalization of between $8 and $9 billion. In 2003 Keurig had introduced its first At Home brewer. Now, approximately 25 percent of all coffee makers sold in the United States were Keurig-branded machines, and Keurig was recognized as among the leaders in the marketplace. The company had just concluded agreements with both Dunkin' Donuts and Starbucks that would make these retailers' coffee available for use with Keurig's specialized brewing system. The company faced far different challenges than when it was a small, unknown marketplace entrant. John Whoriskey, vice president and general manager of Keurig's At Home division, had to consider the impact that impending expiration of key technology patents and the perceived environmental impact of the K-Cup® portion packs would have on the company's growth. Whoriskey also wondered what Keurig's growth potential was, and how the new arrangements with Starbucks and Dunkin' Donuts could be leveraged to achieve it.

At midnight on Thursday, 26 March 2020, the South African government ordered a three-week lockdown in response to the COVID-19 pandemic and subsequently extended this lockdown for a further two weeks until the end of April 2020. Among other measures, businesses not classed as “essential” had to cease operation. This meant that Jonathan Robinson, founder of the Bean There Coffee Company had to close his trendy Cape Town and Milpark coffee shops, as well as the company’s hospitality and corporate business. At the same time, Bean There’s costs increased by 25%, as the rand: dollar exchange rate worsened substantially. A glimmer of hope was that the company was able to continue roasting coffee and supplying its retail clients. Unlike most captains of industry, Robinson was not driven by the bottom line and clamouring shareholders. His corporate strategy was driven by a single, simple purpose: to achieve ethical sustainability aspirations while still running a profitable business. The question for him now, however, was how to ensure that his company could survive in the short term, so that it could achieve these goals in the longer term, and whether he could take this opportunity to think about whether his business was best positioned to achieve these goals when things returned to normal.

The learning outcomes are as follows: conduct a thorough analysis of a specific company and its industry, including its markets, competitors, and other aspects of the internal and external business environment, using a range of tools, including a Business Model Canvas (BMC), SWOT analysis and PESTLE analysis; analyse and explain the market outlook of a company; identify and analyse a company’s competitors; discuss and explain a detailed implementation plan showing the way forward for a company, considering its current challenges, including integrating a range of conceptual and analytical fields of knowledge to assess a management dilemma, and arrive at a creative and innovative management solution; and be able to present information and defend substantial insights and solutions to a management dilemma in oral and written modes, appropriate in standard for both the academic and business communities to analyse and appreciate.

Postgraduate Diploma in Management, MBA, Masters in Management, Executive Education.

Teaching notes are available for educators only.

CSS 11: Strategy.

International Development Enterprises (iDE), a non-profit organization, won numerous awards for its poverty alleviation efforts through the sale of low-cost irrigation technologies to the Base of Pyramid (BoP) farmers around the world. This case discusses iDE’s entry into Nicaragua and the challenges this global social enterprise faced in bringing drip irrigation and other water technologies to the rural subsistence coffee farmers in Nicaragua. It presents the tough decisions it faced in 2012 regarding the future of its for-profit social business, iDEal Tecnologias, in Nicaragua. This case captures the tension in hybrid social enterprises.

This case was developed through the following primary sources as well as some secondary sources. Primary: discussions with iDE’s CEO Doerksen, Urs Heierli (Coordinator of iDE’s operations in Nicaragua), and Skype conversations with iDEal Tec’s Country Director, Nadja Kränzlin. Secondary: documents provided by the company and other publicly available sources.

This case is intended for use in undergraduate, graduate, and executive courses in: social entrepreneurship, non-profit management, and managing sustainable businesses. It may also be used in the sustainability module of courses in international business/management/marketing, and business strategy and policy. It would be best to position this case toward the middle or latter half of the course as it is an integrative case that challenges students to evaluate the sustainability of a social enterprise from multiple perspectives.

The theoretical bases for this case are: defining and implementing a sustainable strategy in hybrid social enterprises. Serving BoP customers with a vision of enabling prosperity.