Cafe Xaragua Harvard Case Solution & Analysis

Introduction and Initial Planning Phase

Back in the year 2011, Rob Lehnert at the age of 21, was in the final year of his graduation and was looking for a potential opportunity to grab.  In his final year he got an opportunity to visit Haiti (a Caribbean country). In Haiti he observed the presence of immense potential in terms of economic development and found this country full of some exceptional resources. Moreover, this place wasn’t even effectively explored by the private sector which develops the actual interest of Lehnert. As he came back, he quickly decided to take his two friends on board regarding this opportunity and left for Haiti with a truck. Before leaving they conduct an internet based research and found the coffee segment quiet interesting and full of potential. In the southern Haiti they came across some exceptional quality coffee beans, probably best in the world. In September 2011 these three friends imported their first burlap and outsourced the procedure related to Roasting.  Within a short span they sold their entire product in Lehnert’s home town of and generated handsome revenue of around $20,000. After this they planned to expand further by introducing it as a brand. Therefore, they planned to come up with a cafe named “Cafe Xaragua”.

cafe xaragua case solution

cafe xaragua case solution

Haiti’s Situation

Haiti was discovered by Christopher Columbus back in the year 1942. From the initial phases Haiti has been found quiet famous for producing exceptional coffee beans and by the year 1788 successfully fulfilled the 50% need of the entire world. As the time passes due to some serious political and atmospheric instability in Haiti, the coffee industry faced numerous issues. Back in 1990s the industry shows an exceptional comeback and by 1949 become the 3rd largest coffee supplier in the world.

Cafe Xaragua and Expansion

As the planning for the cafe goes further ahead, these business partners came up with a mission statement. They clearly mentioned there approach of giving a certain value to the Haiti’s culture and a promise for meeting the needs of local people. They designed a goal which is highlighted a motivation for the local people that they can grow the best coffee beans in the world. As the time passed the company successfully wrote the accomplishment stories and planned a further expansion to strengthen the brand. Canada was selected as the country to be targeted for expansion purposes with an idea of importing the coffee directly from Haiti to Canada.

Target Market and Pest Analysis

After conducting some initial research Calgary was selected as the potential market and upon its success, Alberta was the next in line. Calgary was found relatively expensive and found well established in terms of economy. Each and every thing approximately sounds feasible after analyzing Calgary because its GDP was accounted for around 23% of the total province's economy, which is a massive figure from a business point of view. Its entire population was around 1.4 million and posses’ the exceptional trend of maintaining the outstanding lifestyle. The unemployment rate was around 5.7% as of July 2011. As far as the Alberta’s economy is concerned, so it is quite stable due to the strong presence of petroleum industry. It has an exceptional GDP of around $286.6 million and lead from the front in terms of economic growth across the Canada.

  • Political

Canada possesses a federal system of parliamentary administration with a solid democratic traditions followed across the country. Moreover, Canada enjoys a multi-party structure in which numerous legislative practices of the country originate from the unwritten agreements set by the Westminster Parliament of the United Kingdom's. The two prevailing and leading political parties of the Canada are, Liberal Party of Canada and the Conservative Party of Canada. There are also several other parties that operate in Canada, which includes the Green Party of Canada and the New Democratic party. These parties are relatively small but can show their influence over the political practices and procedures. In general the political situation is quite stable and sounds favorable for business purposes. Politically, they might have no issues with opening a Cafe in Canada, specifically in Calgary and in Alberta.

  • Economical

The Canadian economy is actually considered as one of the wealthiest in the world and is dominated by the service sector.  Canada is the member of the G8 and the OECD (Organization of the Economic Cooperation and Development). Canada’s unemployment rate was around 7.0% and possesses an enormous GDP of approximately $1.825 trillion...............

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During a visit to Haiti, the student entrepreneur to realize the potential for economic development in a country that was rich in certain resources and virtually unexplored in the private sector. Entrepreneur decided coffee as a business opportunity, and he and his three partners to import them first bag burlap. In November 2011, the product was offered for sale - premium coffee from Southeast Haiti with a brand focused on helping the Haitian reconstruction and stability of the coffee industry. After the product has met the success of the entrepreneur and his partners were willing to make additional investments. They believed that the cafe focused on their own brand Haitian coffee would be a great way to drive sales and further develop their product offering before contacting the grocery store strategy. However, they also know that such investment would be risky. "Hide
by Mary Heisz, Robert Lehnert Source: Richard Ivey School of Business Foundation 8 pages. Publication Date: Aug 08, 2012. Prod. #: W12121-PDF-ENG

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