Success and Critical Issues

Ajay and Pradhan the young entrepreneurs of Nepalese have analyzed the potential in the Nepal market.Over the period of time, till 2013, the Nepal market has tremendously showed the potential for coffee consumption, which is now restricted to Niche market only.Since Nepal has been regarded as the low economic growth region with lowest GDP as per UN grading, it has remained a leastpreferred market for the Nepalese entrepreneurs.The country is based betweenIndiaandChina, with the tallest mountain in the world-K2.This location depicts the high opportunity to attract the tourist from both the countries in Nepal.In addition, the coffee consumptionpattern has also shifted and many players havealready laid the base to capitalize the market opportunity of high coffee consumption.However, the political issues and regional restrictions are among India and chinawhich has restricted and hindered the business market of Nepal.In addition, the internal issues of Nepalare also positing great threat to the business operation in Nepal.Since there is a shortage of gasoline and patrol, the electricity is a great issues in the region, which makes the operations difficult inmarket, along with the lowdisposable income and spending pattern of customers and low GDP growth rates in 2012.These are some of the critical issues positingthe risk and also openingthe opportunities in the Nepal market.
Kaffeine the Nepalese Café Opportunity Harvard Case Solution & Analysis

Situational Analysis

Internal Analysis

Kaffeine is a coffee producing company to be launched in Nepal. The two partnersare facing the issuesin decidingthe right marketing mix, pricing structure and breakeven point. However, under the SWOT analysis (Exhibit:1), it can be analyzed that the company has strong knowledge of the Nepal market, which allows it to penetratein the marketeffectively with less threat of failing due to misalignment. In addition, the companyalso has the supply chain to procure the coffee beans from international market.The company can utilize the strengths to develop the strong market entry strategy in Nepal.

External Analysis

However, on the other hand, the politicalsituation and instability is identified as one of the weakness of the company. It is because, since Nepal is located in the middle of India and China, and the turbulence in relationship between the two countries directly hit the country, disturbing the business market of the region.In addition, the country is also deprived of skilled labor, low GDP, scarcity of electricity which has made theNepalese market unprofitable for the business, shrinking the business profit margins.Apart from this, the Nepal market has shownpotential for the coffee consumption and the increasing demand of the customer towards drinkingcoffee.This is an opportunity for the company as it will allow the company to penetrate the market through marketpenetration strategy anddevelop the businessin cost leadership.Lastly, the company has a fierce competition from the other 65 competitions in the market and since the market is already limited therisingcompetition may restrict the company’s profit margin and hence makethe operationsunsuccessful.Also, the political instabilityandno-uniform production facilities to produce coffee bean posit the threat to sustain the operation in Nepal........................

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