A Case Study on Cafe Amadeo Development Cooperative (CADC)

Date

12-2024

Degree

Bachelor of Science in Agribusiness Management

College

College of Economics and Management (CEM)

Adviser/Committee Chair

Jeanette Angeline B. Madamba

Committee Member

Jennica Amielle M. Mora, Remund Jordan D. Labios, Juan Paulino S. Trespalacio, Junior, Dia Noelle F. Velasco

Restrictions

Restricted: Not available to the general public. Access is available only after consultation with author/thesis adviser and only to those bound by the confidentiality agreement.

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Abstract

This study provided a comprehensive assessment of the current performance and strategic opportunities for Café Amadeo Development Cooperative (CADC), a multipurpose cooperative in Brgy. Dagatan, Amadeo, Cavite, established in 2002 to uplift the coffee industry in the country. CADC, which started with 20 members and has grown to 532 members by December 2023, is known for its signature Pahimis Blend, a mix of Robusta, Arabica, Liberica, and Excelsa. The name of their signature coffee blend came from the annual festival celebrated in Amadeo. CADC’s product offerings not only focus on their coffee beans and coffee grounds, but also include freshly made beverages by their baristas, and non-coffee goods, such as local delicacies and souvenir items.

The primary objectives of this study were to present CADC’s current background, evaluate its internal and external environment, assess its performance across its functional areas: marketing, operations, human resources, and finance, analyze the identified business issue of the cooperative along with the alternative courses of action to solve it, and ultimately to recommend actionable strategies to be implemented.

The study utilized a mixed-methods research design, incorporating both quantitative and qualitative approaches to gain in-depth insights into CADC’s performance. Primary data were collected through observations in the store building and processing facility and through interviews and survey questionnaires distributed to the cooperative’s member employees and customers. Secondary data, including financial statements provided by the Cooperative Development Authority and other cooperative documents, gave additional context. The case study involved examining global, national, and local coffee industry trends, PESTLE Analysis, Porter’s Five Forces, Competitive Profile Matrix, vertical and horizontal analysis, financial ratios, Internal and External Factor Evaluation Matrices, SWOT Analysis, and Quantitative Strategic Planning Matrix. The information gathered from the cooperative is limited to what they were willing to provide. This study's data collection focuses on the period up to May 2024. Consequently, any changes or developments in the cooperative's operations or market conditions that occur after this date are not addressed in this study. Furthermore, a more in-depth analysis of community dynamics, technology adoption, and environmental impacts was beyond the scope of this research.

Politically, the cooperative benefits from government funding, and support for MSMEs facilitated by local government units and national government agencies. Economically, the presence of industrial estates and economic zones in Cavite provides opportunities for local trade, while crop production remains crucial to the cooperative’s supply chain. Socio-demographically, Filipinos' strong coffee consumption habits and the prominence of coffee in households create a robust market. Events like the annual Pahimis Festival further promote the local coffee culture and enhance community engagement. Technologically, the Internet of Things demonstration farms improve agricultural practices and productivity. Legally, compliance with regulations and agrarian reform laws ensures adherence to standards and governance requirements. Finally, coffee farmers are adapting their practices to maintain long-term productivity and sustainability in an evolving environment. The Five Forces analysis reveals high competitive rivalry in the market and high significant threats from new entrants due to low barriers and evolving trends. Substitute products pose a moderate challenge. Supplier bargaining power is high due to reliance on external sources, highlighting the need for effective supply chain management. Customer bargaining power is moderate, influenced by price sensitivity, but CADC's strong reputation and cooperative model enhance its position. Comparatively, competitors like Gourmet Farms and Café Agapita outperformed Café Amadeo, excelling in factors such as product quality and consumer safety.

The Internal Factor Evaluation (IFE) matrix shows that the cooperative’s greatest strength is its signature coffee blend while its key weakness is the high bargaining power of suppliers. CADC achieved a total weighted score of 3.10 in the IFE matrix, suggesting that it is performing above average internally. The External Factor Evaluation (EFE) matrix on the other hand reveals the increasing demand for coffee among Filipinos as the top opportunity for the cooperative, while a potential shift in consumer preferences was regarded as the most significant threat. CADC’s total weighted score from the EFE matrix was 2.53, indicating that it has been responding to external factors on average.

While their Facebook page serves as a platform for member announcements, their digital engagement can be improved to attract a wider audience through more effective promotional content. In operations, leveraging its large network of coffee farmers more effectively could increase in-house production, while addressing equipment inefficiencies would improve production timelines and product quality. Greater member engagement in general assemblies would strengthen communication and collaboration, fostering a stronger sense of community. Financially, focusing on controlling rising expenses and improving cash flow consistency would help stabilize the cooperative’s budget and resource planning.

CADC struggles to maintain a stable financial foundation due to the misalignment between expenses and revenue generation. Collectively, CADC’s core issue of disproportionate revenue growth with its increase in higher levels of expenses underscores the need for targeted strategies to support long-term growth and resilience.

Strategic alternatives to counter the cooperative’s core problem were outlined in the SWOT matrix. Four feasible approaches that align with the core problem of CADC were identified. These strategies include developing an instant coffee version of the Pahimis blend, expanding into new geographic markets, launching a full-scale local heritage campaign to promote Amadeo’s coffee industry, and collaborating with suppliers to develop co-branded products tailored to CADC customer preferences. Although the alternatives generated from the SWOT matrix are not mutually exclusive, they are presented and evaluated separately to determine which alternatives to prioritize.

The QSPM identified collaborating with suppliers to create co-branded products as the most attractive alternative. The cooperative may ideate other products or take into consideration the recommendations of a coffee gift set and/or Pahimis blend-inspired pastries. Moreover, it was also recommended that the cooperative reconstruct its organizational chart and establish a marketing committee. Overall, implementing these recommendations is expected to support CADC.

Language

English

LC Subject

Coffee industry, Cooperative societies--Management

Location

UPLB College of Economics and Management (CEM)

Call Number

LG 993 2024 M17 C38

Notes

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Document Type

Thesis

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