Strategic Analysis of Costa Coffee Market Entry to Azerbaijan

The chosen country is Azerbaijan which is located in Southwestern Asia, bordering the Caspian Sea, between Iran and Russia, with a small European portion north of the Caucasus range. (CIA 2012). It is of utmost importance that the company finds the niche factors that will guaranty its successful entry in Azerbaijan. Initial to the process is a research that analyzes the market. Objectives to be met are: a) to discover any advantage Costa Coffee may have over its competitors. b) To find if there is an unmet need or underserved needs of customers. and c) find the right segment. To complete the analysis, use of Michel Porter’s model of analysis is prescribed.
1. Consumer Demographics. Azerbaijan has a total population of 9,643,000 as of 2011 (CIA). It is composed of 3,436,459 females and 3,307,88l males in the bracket of ages 15-64 and a male population of 227,172 and 367,675 bracket of 65 years and above. Population is composed of Azeri 90.6%, Dagestani 2.2%, Russian 1.8%, Armenian 1.5%, other 3.9% (1999 census). Population growth rate is 1.017% with a rank of 114 in world comparison. Baku, its capital holds 1.9 million people.
2. Product/service. Tea and coffee remain to be the favorite hot drinks in Azerbaijan. Euromonitor (2012) reports tea is consumed by almost 100% of its citizens, while coffee remains to be one of the stable areas in hot drinks, Multinationals strongly positioned here are Nestle, Unilever, and Ahmad due to the popularity of their brands. Brand loyalty is very strong in coffee. Their business structures are general partnership agreement with an LLC for Nestle, a trading company for Unilever, and corporation for Ahmad coffee.
3. Distribution channel. Hot tea and coffee products are sold in supermarkets and independent stores.&nbsp.