Question: 2 . 1 . Read the case study below and answer the questions that follow. You might need to do someadditional reading ( e .
Read the case study below and answer the questions that follow. You might need to do someadditional reading eg about Illycaff South Africa Coffee Market, Specialty coffee shops, andSPAR.Case Study: Illycaff by Francesco Illy.Illycaff was founded in in Trieste by Francesco Illy.While illycaff originated in Italy, its presence has expanded to many countries around the world,including South Africa. Illy's journey in South Africa reflects the companys global expansion andcommitment to offering exceptional coffee experiences.Illys introduction to the South African market likely took place in response to the countrysgrowing interest in coffee culture and the demand for premium coffee products.South Africas evolving coffee scene, characterised by a burgeoning coffee culture, the rise ofSpecialty coffee shops, and a discerning clientele, provided fertile ground for Illy to establish apresence. Over the years, Illy has likely formed partnerships with local distributors, coffee shops,and hospitality establishments in South Africa to make its coffee products available to a broaderaudience. Illy has partnered with SPAR to distribute affordable, readytodrink coffee.Today, it is led by the third generation of the family. Andrea Illy is the Chairman, and CristinaScocchia is the CEO. Anna Rossi Illy, Ernestos wife the founders son passed away in ishonorary Chairman. Anna Illy jr continues her fathers work and handles relations with coffeegrowers. Andrea Illy is the CEO of the global premium coffee company that bears his familysname.As one might expect, he is passionate about coffee its science, its health benefits, its taste, andits beauty. Illy also has a dream that someday soon, the coffee market might be transformed intosomething approaching the market for wine.Where connoisseurs discuss the fine points of various origin coffees and blends, where customersare willing to pay a premium for the finest examples of the coffeemaking art, and where thegrowers, roasters and baristas will be compensated fairly for the expertise they contribute toevery cup.Unfortunately, the current coffee market differs from such an ideal. Coffee growers in most partsof the globe work at a bare subsistence level.One bad harvest made all the more likely by the ravages of climate change or a sudden declinein the commodity price of coffee can drop them below subsistence to hunger. Even in good times,growers have little incentive to improve their operation they have minor contact with theroasters or customers and no knowledge of how their crops get translated into the cup. Thisdisadvantages not only the grower but also the consumer coffee sourced from good qualitybeans is hard to find.Illy believes that the solution to the sad state of affairs is to initiate a virtuous circle that drawsthe grower, the roaster, the barista, and the customer together. Growers with better knowledgeof the market will work to improve their crops or experiment with new varieties.Roasters and preparers will educate their customers as to the qualities of various beans, roasts,and preparations. Customers, in turn, will be willing to pay more for the best beans, and thatpremium will be sent back up the chain to pay for even more quality and variety. And so onCertainly, there have been some positive signs. Indeed, many observers argued that a thirdwave of transformation in the coffee market was already starting. The first wave is said to haveoccurred when Maxwell House and Folgers made coffee a mass commodity, and the second wavewas when Starbucks initiated a move to quality and higher prices. Specialty coffee roasters hadworked to build cafes and brands around originbased beans sold directly to the roasters withoutreference to the commodity prices of coffee. With these thirdwave roasters, every coffee camewith a story of its origins, and growers could count on occasionally eyepopping premiums fortheir beans.As yet, Specialty coffee represented a small slice of the overall market, and there were other signsthat it might not ever grow beyond a small circle. New trends like coffeebased drinks and singleportion coffee in pods eg Kcups, Nespresso shifted more of the valueadded towards roasterswithout a premium for growers. A consolidation was taking place among mass roasters that wereeven sweeping up thirdwave roasters in its wake.Observers argued that this could lead to greater uniformity with even less emphasis on originbased, directtraded coffee.Illy hopes that someone would come up with an innovation that would solidify the beginnings ofthe third wave and help reshape the market. Such a change would not necessarily have to involveIllycaff; Andrea Illy believes as the worlds premium brand, an increased emphasis on quality inthe market would only help his company. The most important thing was to make the coffeesupply chain more equitable and coffee bettertasting.In Learning Unit to Learning Unit you examined the concept of business analysis; in doing soyou encountered the concept of business analysis origins, the scope of the business analysis, and the role and responsibility of a business analyst as a strategy analyst in an organisation. Using the above scenario, the guidance of the prescribed book, as well as at least two other crediblesources, you have been asked as a business analyst to establish an innovation strategy that wouldsolidify the beginnings of the third wave and help reshape the market.In your strategy analysis for illycaff you must answer the following questions.Q In the context of South Africas evolving coffee culture, how can illycaff leverage Information Technology to meet the discerning clienteles expectations and also use Information Technology to contribute to maintainingthe companys competitive advantage in the premium coffee market?
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