UK Coffee Industry Case Study Example | Topics and Well Written Essays - 1500 words

UK Coffee Industry - Case Study Example Dominance of instant coffee is attributed to a combination of aggressive marketing and branding campaigns by brand manufacturers, as well as the price consciousness and brand loyalty characteristic of coffee drinkers. However, instant coffee growth rates lag behind ground and roast, increasing only by 11.1% from 2003-2005, compared to 13.6% for the latter, which can be attributed to the development of new pod technologies and the decreasing prices of coffee machines, which allows consumers greater convenience in home brewing; and the prevalence of repertoire drinkers2, indicating an increase in consumers drinking both instant and ground coffee. The market is also highly segmented with distinct divisions in terms of age groups, geography, and consumer behaviour. Demographically, consumption increases with age as majority of heavy coffee drinkers in both sectors found among the 35-64 groups, with 76% drinking instant coffee and about 43% drinking instant exclusively. With respect to ground coffee, consumption is concentrated in more affluent regions of the country, indicating price consciousness among drinkers. Only a few manufacturers do... Base: adults aged 15+ All users % Heavy users % Medium users % Light users % Non-users % All 76.1 37.1 25.1 13.2 23.9 Men 75.6 38.0 24.4 12.6 24.4 Women 76.6 36.3 25.8 13.7 23.4 15-24 52.2 20.2 20.0 11.5 47.8 25-34 73.1 35.1 22.7 14.8 26.9 35-44 78.3 42.8 21.1 14.0 21.7 45-54 81.7 43.9 23.7 13.4 18.3 55-64 85.1 44.9 25.7 13.7 14.9 65+ 84.4 35.8 35.8 11.9 15.6 Taken from the TGI survey of around 25,000 adults (Source: Mintel 2006) table 3: Usage of fresh ground coffee, by demographic sub-group, 2005 Base: adults aged 15+ All users % Heavy users % Medium users % Light users % Non-users % All 36.4 8.2 11.2 16.1 63.6 Men 36.5 9.5 10.9 15.3 63.5 Women 36.3 7.0 11.6 16.9 63.7 15-24 23.8 3.6 7.6 11.1 76.2 25-34 34.5 7.2 10.8 16.0 65.5 35-44 40.0 8.9 12.4 18.0 60.0 45-54 42.7 10.1 13.1 19.2 57.3 55-64 41.5 10.6 13.0 17.4 58.5 65+ 35.6 8.8 10.5 15.1 64.4 Taken from the TGI survey of around 25,000 adults (Source: Mintel 2006) Only a few manufacturers dominate the coffee market. For instant coffee, the market is dominated by Nestl (56%) through its Nescaf Original Blend (33%) and Gold Blend (15%) - the two highest-selling brands - followed by Kraft (22%), and Own-label products (11%), while other manufacturers made up the remaining 11% in 2005. There are no dominant suppliers for ground and roast. However one company, Douwe Egberts, had the highest market share at 12%, followed by Cafdirect, Taylors, and Lavazza, with 8% market shares each. Own-label manufacturers for ground and roast coffee, however, possess 40% of the total market. table 4: Market share of instant coffee, by producer, by value, 2003 and 2005 2003 2005 (est) %

Financial Markets and Bank Management Essay Example | Topics and Well Written Essays - 1000 words - 1

Financial Markets and Bank Management - Essay Example The banks are faced with credit risk that involves change in net asset value due to changes in the ability of the counter-party to meet the contractual agreements (Thomas 2005). Performance risk includes the possible loses that may emanate from dishonest employees while operational risk include costs such as inability to meet regulatory requirements or settlement failures (Rao 1999). The bank’s net profit margin for 2012 was negative due to lack of growth of the non-customer interest income. The net profit margin was positive in 2013, but the current low interest environment prevailing in the market will continue maintaining the net interest income growth rate low. This means that the bank should divest the low-yielding non-core assets like investment securities portfolios in order to scale up the bank’s net interest margin. The operating margin was too low to generate substantial increase in net profits in 2013. The return on invested capital growth rate stagnated thus demonstrating imprudent investing strategy due to low returns from the non-core business segments. The improvements in return on assets and return on equity were low while the leverage position declined slightly due to injection of additional capital through rights issue. The stringent regulatory environment forced the bank to improve on its capitalisation and implement measures of lowering its leverage. Some of the measures implemented include the rights issue and reduction in the risk-weighted assets (RWAs) (Gregory 2011). Barclay’s loan to deposit ratio stood at 110 percent in 2012, but the ratio declined to 101 percent in 2013. The deposits were almost equal to the customer loans thus demonstrating increased prudence in retail lending. The investment banking business segment is funded by a high proportion of liabilities. The bank should have sufficient liquid assets to withstand any market and internal stresses (Mehta and Fung