Running head: PROJECT PROPOSAL 1 Project Proposal Olivia Watkins Grantham University 2 PROJECT PROPOSAL Dutch Bros Coffee Introduction Dutch Bros Coffee is a coffee chain in need of global expansion. It is through the establishment of operations in foreign markets that the coffee chain will experience various benefits such as greater opportunities for growth and diversification. Dutch Bro coffee headquarters are located in Grants Pass, Oregon, in the United States with 370 locations. The current target market is Finland for being the highest coffee consuming nation in the world ("Dutch Bros Coffee," n.d.). Targeting Finland, Dutch Bros will have an expanded market and workforce. This proposal is aimed at providing analysis to the firm's growth opportunity in Finland. Company Overview Dutch bros coffee is the largest privately owned coffee chain in the United States. It was founded in 1992 by Dane and Travis Boersma, who are brothers of Dutch descent. The firm began after the brothers closed their dairy business as a result of government regulations. Currently, the firm is the largest privately held drive-thru chain with over 370 locations in 7 states and 12,000 employees ("Dutch Bros Coffee," n.d.). The coffee chain is known for giving away over one million free drinks every year as a way of maintaining its roots. The free drinks strategy is to spread the Dutch connection, "Spreading the Dutch Luv." The company also engages in philanthropic activities donating over $2 million every year to both the local and non-profit organizations, which include the Muscular Dystrophy Association, among others. The firm has an extensive loyal customer base, dubbed the Dutch Bros coffee fostering growth in its business operations, the donations, and love. 3 PROJECT PROPOSAL Finland market Coffee market Finland is a perfect market for the Dutch Bros coffee because of the heavy consumption of coffee by the Finns. In 2017, Finland was classified as the top coffee consumer in the world. Finland is well known for its high consumption of coffee with every person consuming at least 12kg every year or rather 10 cups per day "Coffee in Finland: A Growing Market," 2019). Coffee in Finland is similar to a culture. The Finns are very passionate about coffee. In the early 1700s, The Finnish used coffee as a medicine for curing headaches, depression, and other illnesses. Currently, it is similar to an institution in the nation, with almost everyone consuming it everywhere and at any time of the day ("09 Coffee, tea, maté and spices: Finland," 2019). It is consumed not only to energize them but also to socialize. Serving coffee is regarded as one of the most significant acts of hospitality. Whenever a guest is not served with coffee, he/she is likely to regard it as an insult. In recent years, Finland has experienced rapid growth of various coffee bars that serve quality coffee. The coffee bars offer home-like interiors to make the consumers comfortable even after they have finished drinking their coffee. At times, consumers enjoy the atmosphere is even when they are not drinking coffee. It will be fortunate for the Dutch Bros coffee to enter the Finland coffee market because the major coffee chains have not dominated the market. The industry consists of approximately 11 thousand businesses, which comprise hotels, bars, and restaurants, among other food services "Coffee in Finland: A Growing Market," 2019). The most widely served drink is Filter Coffee, although the cappuccino and expresso are still showing a positive trend. Finland economy PROJECT PROPOSAL 4 Finland's economy is somewhat healthy, with a GDP of $244 billion and a growth of 3.0 percent. The country also has a population of 5.5 million and an unemployment rate of 8.6 percent. The country's economic freedom score is 74.9, making it the 20th freest economy in the 2019 index. The score has increased by 0.8 points following the improved fiscal health, increased government spending, and monetary freedom ("Consolidated Flows, Sector S1 - Total Economy: Finland," 2019). Consumer behavior Finland is a complex market with high standards of living and an adequately educated workforce. The consumer’s purchasing power has recently increased, resulting in increased imports. The consumers are also open to new products and services. The top priority for consumers in Finnish is quality when making selections. The purchasing power for consumers is also promoted by the Finns confidence in their financial situation and the increased debt levels. The most critical factors influencing Finnish consumer behavior is product origin, quality, and safety ("Coffee culture in Finland: a story of togetherness," 2019). A brand is regarded as a strong mark of quality. Finns tend to favor national products and have increased their investment in food quality. Finns are also familiar with technology, and they often purchase products online. Studies have reported that internet retailing is still on the rise, and mobile commerce will be booming in the next few years. Mode of entry The best method of entry for Dutch bros coffee is direct exporting. The coffee chain will sell directly into the Finland market. Once the company establishes a sales program, it will use agents to represent it to the market. The agents will work closes with the company to represent the company's interest. They will act as the face of the company and will be treated PROJECT PROPOSAL 5 as the principal staff person (Singh, n.d). Direct exporting will give the coffee chain full control over the product. The firm will also determine the term of sale according to the competitive trends in the Finland market. The coffee chain will also localize its operations. This is because the chain is already established in the United States, and there is no need to start a fresh one. Since the firm is aware of Finn's preferences, it is easy to localize its operations in Finland. Since the Finland market holds a high value for coffee, comparatively lower prices can increase the reputation for the Dutch bros coffee in Finland. Increased reputation will increase its effectiveness in control over its coffee products. Finland coffee bars are designed to offer comfort to consumers, and the direct exporting method will help the firm in developing an effective after-sale service. The coffee chain can provide efficient after-sales service to utilize the market potential to the advantage that it is directly exporting the coffee. The best method of establishing a path to success is by partnering with the local coffee chains. The local coffee chains have a clear understanding of the coffee industry in Finland. They are aware of the business models and the essential methods for tapping talent pools and how to source for the best products and services. The partner will also have a reputable network of acquaintances that will help the business save valuable time and money. Lastly. Merging with the partner can also be very effective in tapping Finland's local talent pool, which will improve the market power for the business (Singh, n.d). A well-established partner will challenge the coffee chain's ideas and will integrate both commercial acumens with creativity as a method of adding value to the firm's team. 6 PROJECT PROPOSAL References 09 Coffee, tea, maté and spices: Finland. (2019). doi:10.1787/c46fcf15-en Coffee culture in Finland: a story of togetherness. (2019, December 6). Retrieved from https://allthingsnordic.eu/coffee-culture-in-finland-a-story-of-togetherness/ Coffee in Finland: A Growing Market. (2019, April 19). Retrieved from https://coffeebi.com/2018/03/28/coffee-in-finland-a-growing-market/ Consolidated Flows, Sector S1 - Total Economy: Finland. (2019). doi:10.1787/c7e0a86d-en Dutch Bros Coffee. (n.d.). Retrieved from https://www.dutchbros.com/ Finland Economy: Population, GDP, Inflation, Business, Trade, FDI, Corruption. (n.d.). Retrieved from https://www.heritage.org/index/country/finland Singh, N. (n.d.). International e-business expansion and market entry strategies. Localization Strategies for Global E-Business, 28-54. doi:10.1017/cbo9780511920226.003
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