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Value Proposition (XIV). Competing for El Salvador National Coffee Brand: The Coffee Cup company.

Bonjour a tous, wishing you a beautiful week!!!

Today I will like to share another value proposition about coffee. It is another private “coffee shops” company´s effort which can´t be ignored in town: “The Coffee Cup” shops.

Corta de café El Salvador
A woman selects coffee by hand at a Chalchuapa Coffee Farm. Source: EDH

As I mentioned in last week’s posts, El Salvador has not built its own coffee retail chain yet internationally.  And I said it is shameful because we produce excellent coffee. When I returned from Switzerland in the year 2003, it was impossible to find a decent cup of coffee served in a pretty ambiance in San Salvador. Unless you pay the high-end hotels’ prices of course. If you wanted to taste a “cappuccino freshly made from ground coffee” outside the home at that time, I or any tourist had to go to the most expensive hotels in town. The concept of coffee shops was not existing 14 years ago. Given the market empty hole, we have to be fair and give the credits to the initiators of an industry… in consequence, “The Coffee Cup” was the first one to serve quality coffee under the format of a “retail shop” such as the Colombian Juan Valdez Company has done it in Colombia. Between the years 2003 and 2004, I was a full-time professor of business strategy, finance, and ethics at a well-known and excellent university called Escuela Superior de Economía y Negocios, and that was the specific moment where “The Coffee Cup” started to open stores in San Salvador.

Now let me explain the Salvadoran context of “The Coffee Cup” origins: At the beginning of the 2000s, the idea of specialty coffee shops was not even at the top of mind of the people in El Salvador. Ironically the concept of “drinking coffee with sweet pastries” every afternoon at home and in the office has been a heritage tradition since many decades ago.  How could it be that we did not have a national coffee shop retail chain yet at that time?

We can imagine why “The Coffee Cup” owners looked the opportunity, and the company disrupted the market by offering “quality coffee”  and sweet pastries “outside of home”.

The Coffee Shop value proposition 1.0
The Coffee Cup Value Proposition Version 1.0

The Coffee Shop value proposition 1.0 (Click here to download PDF file)

In the year 2010, “Viva Espresso” company elevated the value proposition concept by disrupting the market again as this company introduced for the first time the “barista concept”. Before the year 2010, no one knew what is a coffee “barista”, just imagine!!! In a country that produces one of the ten best coffees in the world. It was incredible.

Apertura de tienda StarBucks
Starbucks first store opening in San Salvador. Source: EDH

And approximately the same year, Starbucks started operations in town with the introduction of the concept of “coffee as an experience”. I do remember when Starbucks opened its first store, there was a long queue similar to the one you see outside “Georgetown Cupcake” Store in Washington, DC.  Juan Valdez company has been the last one to enter the Salvadoran Specialty Coffee market. Juan Valdez appeared in town just 4 years ago. And they have started with several shops in different malls only in San Salvador, the capital of this country.
The Coffee Cup Store Mall Las Cascadas, San Salvador.

Here we are with 4 different companies, with 4 different value propositions and business models even though they sell the same “coffee”: Starbucks, Juan Valdez, Viva Espresso and The Coffee Cup.

Next week, I will continue writing about strategy concepts, models and the most useful frameworks I have used in my consulting activities. I will take you through this strategy journey.  We started talking about long term thinking, value propositions, business models, and now it is time to introduce the theme of the analysis of the industry environment of the firms, and the analysis of resources and capabilities within the firm. Industry analysis is relevant to the formulation of both corporate strategy and business strategy. Next week we will start to dig into the industry analysis of the firm, all external influences which impact the performance, decision making and, profitability of the enterprises.

With love for coffee, I would like to thank you for your precious time gift by reading me, and I wish you a gracious and blessed day.

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