Case Analysis Batdorf & Bronson

Industry overview

Coffee found its way to the Americas only in the 1700's by means of a French infantry captain who nurtured one small plant on its long journey across the Atlantic. Coffee was declared the national drink of the then colonized United States by the Continental Congress, in protest of the excessive tax on tea levied by the British crown.

In the late 1980s coffee industry began to expand rapidly and today, coffee is a giant global industry employing more than 20 million people. This commodity ranks second only to petroleum in terms of dollars traded worldwide. With over 400 billion cups consumed every year, coffee is the world's most popular beverage.

Sales of premium specialty coffees in the United States have reached the multi billion-dollar level, and are increasing significantly on an annual basis.

The coffee industry is highly competitive, that is why it is important for the company to take the following factors into the consideration in order to run a successful business:

* ability to achieve scale economies

* ability to manufacture products that are customized to buyer specification

* well-known and well-respected brand name

* clever advertizing

* national distributions capabilities

* product introduction capabilities

* supply chain management capabilities

Company Overview

Batdorf & Bronson was founded in 1986 in Olympia, WA. In 1990, when it was purchased by Larry and Cherie Challain, the company had only one coffee house and ten local accounts in wholesale division. Since that time, it has grown and now includes one more roastery in Atlanta, GA, that was open in 1994, and several retail locations. The company's success has been based on the commitment to the total quality that owners had created together.

Currently almost 85% of B&B customers are wholesalers. Company uses the strategy of differentiation while focusing on top 25% of individuals and top 33% of restaurants in the specialty coffee...