Thesis (Master in Management) -- University of the Philippines Mindanao, April 2019

The subject of this strategic management plan is Kopi Luwak Specialty Coffeeshop which was established on April 8, 2013. The coffee shop is primarily known for its coffee made from the coffee beans excreted by local civets. It is conveniently located along the national highway in Tibanga, Iligan City and also offers different varieties of beverages and meals. Currently, the coffee shop has built partnerships with coffee bean farmers and is formulating ways to improve its brand and become competitive in the market. This paper will help in facilitating s strategic management plan for Kopi Luwak Specialty Coffeeshop by generating appropriate strategies to help them create a competitive brand and grow. The generation of strategies to be implemented for the coffee shop follows the strategic management framework outlined by David (2011). The framework consisted of strategy formulation, strategy implementation, and strategy evaluation stages. Each stage has a significant step that needs to be accomplished to have a logical transition and to design a comprehensive strategic plan. Quantitative and qualitative data analysis and gathering techniques were also employed to support the strategies for the coffee shop. The quantitative approach was complemented by a survey questionnaire in order to find the factors that affect customers to be loyal and employees to be engaged and satisfied. In the qualitative approach, tools like the sociological, technological, economic, environmental, and political (STEEP) analysis, Porter's five forces model, strengths-weaknesses-opportunities-threats (SWOT) matrix, strategic position and action evaluation (SPACE) matrix, Boston consulting group (BCG) matrix, grand strategy matrix, and the quantitative strategic planning matrix (QSPM) were utilized. These tools were essential in crafting a strategic program that suits best for Kopi Luwak Specialty Coffeeshop. External environment analysis showed that high-quality coffee consumption in the Philippines is expected to grow annually by 5.5% compounded annual growth rate (CAGR) from 2019-2023. Advancements in technology and the increase of possible client base also showed likely impact towards the overall success of Kopi Luwak Specialty Coffeeshop. Though overall, it was presented that the coffee industry is in a relatively stable market, a strong competitive pressure exists with rising threats of substitute products seen. The EFE score assessment of the coffee shop is at 2.22. the score indicates that Kopi Luwak Specialty Coffeeshop is not responding well to its external factors and in seizing opportunities. Internal environment analysis showed that the costs of running Kopi Luwak Specialty Coffeeshop are rising with a yearly average increase of 17.17% while profit margin being unstable in the last five-year period. The negative profit margin from 2013 to 2014 and 2017 affected the overall profitability of the coffee shop. There is also no one knowledgeable enough to effectively manage the financials of the business and the owners lacked time to handle it. Their marketing and inventory management are also not established which makes them less likely to be competitive among other coffee shops. Though this is the case, it is also good to note that the coffee shop has a two-way quality management process and a favorable liquidity ration and good debt to equity ratio since its establishment. A survey made among its employees also showed that the coffee shop has a strong company culture and engaged employees. The IFE score assessment of the coffe shop is at 2.38. the score goes to show that Kopi Luwak Specialty Coffeeshop is not effective in terms of capitalizing its strengths in addressing its weaknesses. The identified strengths and weaknesses of Kopi Luwak Specialty Coffeeshop were matched and analyzed to specific opportunities and threats in order to pinpoint the most attractive and relevant strategic options for implementation. Based on prioritization and the relative impact of the strategic option of the immediate goal of sustained profitability for the coffee shop, the market penetration strategies 1 (internal process improvement) was chosen as a primary strategy and the market penetration strategies 2 (branding and marketing campaigns) was chosen as an opportunistic strategy for implementation. There were seven crafted activities under the market penetration strategies 1 (internal process improvement) and two crafted activities under the market penetration strategies 2 (branding and marketing campaigns). A strategy evaluation and control systems were set for Kopi Luwak Specialty Coffeeshop to keep track of the progress in implementing its strategic options. These ensure the primary means of obtaining information on what is working and what is not. An information system tool for performance monitoring and evaluation were also set up to check for the variances between targets and the actual results and to devise corrective actions for the improvement of the activities implemented.