CASE STUDY:

COFFEE 2016
Samantha Ortiz, Margaret Santos, Justine
Claroniño
 I
VIEWPOINT
 Andrea Illy

Chairman of the family coffee business, Illycaffè

ILLY CAFFÉ
 II
TIME CONTEXT
The time
context of
this study is
in the year,
2016.
III. CASE FACTS
According to Van De Wall (2020), coffee is
one of the most popular beverages in the
world. Illy’s company of coffee has been
big, and prosperous. However, in the year
2016 changes occur due to the changes in
climate that had a great impact in the
coffee industry of Illy’s. Also, the company
faced difficulties because of competitor
with their coffee businesses. One bad
harvest of coffee beans may lead to
dropping of price, and hunger of the
coffee growers. Also, this disadvantage will
lead to consumers question whether they
have purchased a good quality coffee.
III. CASE FACTS
In addition, the quality of the
coffee that is being produced is
being questioned because of
what is happening. And even in
good times, the growers were not
able to improve their job because
they only receive little incentives.
Also, growers are clueless of how
the coffee beans were transferred
into the cups of customers for the
reason, that they only have the
slightest contact of information
getting from the roasters.
IV. Statement of the Problem
The original goal of Illy was to provide best coffee to customers, but the good
quality coffee does not necessarily mean responsibly produced coffee. So many coffee
growing countries use unethical growing practices which reduces the price of 1 kg of
coffee from the farmer but, jeopardizes the company ́s ethical image. Andrea Illy needs
to balance three aspects: quality, profitability, and ethical aspect, which is a difficult
problem, since it involves the whole supply chain and for the company of such scale of
operation to solve this problem will be extremely difficult (140 countries on 5
continents). Plus, this challenge is also industry driven and all big coffee companies are
moving towards sustainability of supply chain and greater awareness of the customers
about these issues nowadays can give a coffee company additional competitive
advantage.
V. Objectives of the Case
The objectives of the case, is, to start taking appropriate actions in
order not to lose its position in the coffee market. Imitation by the
company’s large competitors will result in the loss of Illy Caffe’s
competitive advantage. Further steps need to be taken, in order, to stay
competitive in the market, and different strategies might be of help for
the company. Since Illy Caffe’s most important criterion is high quality of
its coffee, company could concentrate on that. However, this would
contradict company’s CSR’s strategy, which is aimed at paying premiums
to the farmers without it affecting prices of an end, product.
VI. ALTERNATIVE COURSES OF ACTION

01 02 03

Focus on formulating Analyze the trend and Expand the business

strategies that will use it as a guide in to serve customers
attract more making changes in the internationally.
customers. business.
VII. RECOMMENDATIONS
Illycaffé, is a well-known brand in Italy. It is recognized as the third-biggest coffee maker
in the country. However, as competitors arise in the coffee industry, the company should be
up to date with regards to the competitors’ status from time to time. Aside from its goal of
making customers satisfied with their products, another objective that is common to every
business, is to make the company grow and be popular among the rest. For this reason, the
best recommendation is to expand the business to serve customers internationally.

When it becomes international, it will be more accessible for many customers around
the world. It will be known and therefore will have the opportunity to gain new consumers. As
customers increase, feedbacks from people also escalate. Through these responses, the
company will be more motivated to maintain the customers’ loyalty to the business and
consequently will invent new strategies in making the products’ quality better. In addition,
feedbacks will also help the company see the gaps in their business which will give
opportunity to the business to learn, grow, and make changes.
ACTION PLAN
ACTION PLAN NO. TASK PEOPLE INVOLVE TIME FRAME

Researchers,
Seek for alternatives
Managers of the
in sustaining coffee
company, and the 6 Months
1 beans in, the midst
growers of the coffee
of, climate change.
beans.
ACTION PLAN
ACTION PLAN NO. TASK PEOPLE INVOLVE TIME FRAME

Share information or
Managers of the
reports to the
company and the
growers of how the Every 3 Months
2 growers of the coffee
beans is being made
beans.
and sold.
ACTION PLAN
ACTION PLAN NO. TASK PEOPLE INVOLVE TIME FRAME

Growers of the coffee

Increase in incentives Every Month of the
beans, and the
3 of growers. Year
compensators
ACTION PLAN
ACTION PLAN NO. TASK PEOPLE INVOLVE TIME FRAME

Provide varieties of The producer of the

4 6 Months
coffee beans. company.
ACTION PLAN
ACTION PLAN NO. TASK PEOPLE INVOLVE TIME FRAME

The CEO and

Expand the branches
managers of the
of the business in to,
5 company, and the 2 Years
different country, and
growers of the coffee
places.
beans.
REFERENCES

● https://som.yale.edu/case/2016/coffee-2016

● https://www.healthline.com/nutrition/best-time-to-drink-coffee