Dedication to creating a unique experience for customers by combining high quality products, a distinctive coffeehouse environment, and excellent customer service, differentiates their place in the coffeehouse industry. Creating strong human capital is the foundation for this differentiation strategy. Establishing human capital has enabled Caribou Coffee to create a strong hold between the individual capabilities, skills, knowledge, and experiences of the company?s employees.Caribou follows three main interdependent activities of creating human capital: attracting, developing, and retaining. The most important part of Caribou Coffee?s human capital was their focus on creating operational excellence through extensive training procedures. The training at Caribou Coffee is important and continuous, as they believe it is the employees that created the great products or customer service that differentiated the company.
The training of employees is a key to fulfilling the mission of creating “an experience that makes the day better”. The company implemented this into all of their training practices as one of the company?s core competencies that would create strong commitment in the employees. All new employees were given instructions to become “drink certified?, in-store Certified Instructor Trainers provided ongoing instruction in presentation and service, and courses were offered through Caribou College to improve career skills.
The training at Caribou Coffee was very important and extensive, as they believed it is the employees that created the great products and customer service that differentiated the company.The company also retained their human capital by implementing rewards that are both tangible and intangible. Caribou Coffee follows a pay-for-performance philosophy that allowed the company to identify and reward team members that met high performance standards. Employees would work harder to make their coffeehouse the best since the bonuses for managers and the coffeehouse was based on sales, profit, and customer service. Caribou Coffee maintained a sense of social capital that gave employees the chance to want the best for the company by contributing to human capital.
Caribou Coffee had an organizational culture that allowed a place “Where Entrepreneurial Spirit Roams Free”.The company was not overly structured, which is why employees were able to work on a variety of different projects and take on an extensive range of responsibility. Also, Caribou Coffee had a culture that included a strong belief in promoting from within the company, which created a future to work toward for employees. The company was more on the personal or relaxed side where they would communicate in person rather than through emails and they would have a dress code that was business casual.
These different aspects of organizational culture created social capital that gained employee loyalty for Caribou Coffee.Caribou Coffee had a strong belief that customer service was led by their employees and that their selective hiring practices, extensive training, and low turnover created superior employees. 7.SWOT analysis for caribou coffee: Based on the previously mentioned internal and external analysis. The analysis shows Caribou Coffee’s Strengths, Weaknesses, Opportunities and Threats.
Strengths: Having alliances with other strong and popular businesses is a major plus point for Caribou Coffee as it helps bring in new customers and make business more effective. The company is a respected employer that values its customer services through valuing its workforce.The organization has strong ethical values and an ethical mission statement as follows,” ‘For us, it’s just the right thing to do” The services/products offered by Caribou Coffee are original, meaning many people will return to Caribou Coffee to obtain them. Caribou Coffee?s marketing strategy has proved to be effective, helping to raise profiles and profits and standing out as a major strength. The lucrative location of Caribou Coffee adds to its strengths due to its accessibility.ex.carbou are having franchising in many places like universities,hospitals.
.etc.Most recently having a faranchise in one of the biggest US airports,which have many passengers pass through it.This will give many passengers the taste of caribou coffee.Weaknesses: Caribou Coffee does not function internationally in many countries. They are just functioning in the middle east and south korea,.this has an effect on success, as they do not reach consumers in overseas markets. A limited customer base is a major weakness for Caribou Coffee as it means they have less people to sell or market to.
The challenges that Caribou is facing through the stock declines, company losses, or even the manager demands for overtime pay can possibly weaken their human capital as a source of competitive advantage.Opportunities: Expanding into other markets, Is an opportunity for caribou coffee customer base either geographically or through new products. to expand the Locating away from close substitutes lessens the possibility of consumers making the substitution Looking at export opportunities is a way for Caribou Coffee to reach many customers worldwide selling to them packaged whole bean and grab-and go products through different merchandiser. Forming strategic alliances and franchising is an opportunity for Caribou Coffee to maximize profit and gain new business .Franchising would help caribou in spreading it?s brand name to a great spectrum (brand awareness).Threats: Substitute products available on the market present a major threat to Caribou Coffee. Increased competition from overseas local coffee shops is another threat to Caribou Coffee as it could lead to lack of interest in their products/services.
With the industry leader creating new goals that target to make them almost a monopoly in the world of coffee, Caribou is in danger of losing its competitive advantage. This source of social and human capital is a key source of Caribou Coffee?s competitive advantage, but even that is starting to decline. In order to compete in the industry and even possibly surpass the industry leader Caribou Coffee must have a sustainable competitive advantage. For Caribou to build upon the opportunities it has and avoid threats I suggest the following points:Caribou has to follow a growth strategy for the commercial segment should continue to build the existing relationships with grocery stores and national office coffee providers and add new points of distribution for our gourmet whole bean and ground coffee. It has to increase brand awareness through marketing efforts and introducing new products and promotions It has to continue to strategically expand their coffeehouse locations in their existing markets It has to open new company-operated coffeehouses and partnering with qualified developers to open franchised coffeehouses while adding select international locations through franchising.Refrences:Bridget O?Connor (2009),” Caribou Coffee Makes a Commitment to Energy Efficiency with Litetronics Spiral-PAR CFLs”,smart brief inc.,[ http://www.smartbrief.com/news/aaaa/industryBW-detail.jsp?id=F9095A6B-36F8- 46E8-A928- 95B0DE71EF93] accessed on 21/12/2009 Bruce Finley (2001),” Fair-trade movement brews new hope for coffee growers”, Denver Post,[ http://www.canunite.org/files/fairtrade,nicadenverpost_0.pdf] accessed on 21/12/2009