Key Success Factors of Selected Coffee Shops in Calamba City, Laguna

Date

12-2024

Degree

Bachelor of Science in Agribusiness Management

College

College of Economics and Management (CEM)

Adviser/Committee Chair

Jennica Amielle M. Mora

Committee Member

Maria Noriza Q. Herrera, Rei Chino C. Pua, 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.

Request Access

For non-UP researchers, requests for access to this material may be directed to the CEM Library at cemlibrary.uplb@up.edu.ph or to the UKDR administrator at uscs-mainlib.uplb@up.edu.ph

Abstract

According to the Food and Agriculture Organization (2022), coffee is one of the most widely consumed beverages and among the most traded commodities worldwide. Coffee shops have also grown increasingly popular, becoming what Oldenburg (1989) described as a "third place"—a social hub where people gather and connect outside of home and work. Beyond being spaces for socialization, Dewi (2022) noted that coffee shops have evolved into informal workplaces, particularly during the pandemic when individuals looked for alternatives to home office setups and the distractions that came with them.

The rising consumption of coffee has fueled the growing demand for coffee shops, leading to a flourishing industry, according to the Department of Agriculture (2022). This growth has been accompanied by intense competition in the market, making the coffee shop sector a highly dynamic and competitive space.

Key success factors (KSFs) play a role in identifying a business’ competitive edge especially in highly competitive industries. The essential elements or practices required for a business to achieve its goals and to maintain their strategic advantage are the key success factors that serve as a guide towards success (Rockart, 1979). It is focused on the internal and external environment of the business to maintain competitive performance.

This study aimed to assess the challenges faced by coffee shop businesses and the strategies they employed to achieve success and stay resilient during the pandemic. In the context of this research, success is defined as sustaining operations for at least five years.

The general objective of this study was to determine the different factors that influence success in coffee shops in Calamba City, Laguna, which is the top city in Laguna based on economic standing and industries present (Rappler, 2022). Specifically, the research intended to: (1) describe the socio-demographic profile of the owners/managers and the business profile of the coffee shop; (2) assess the significant challenges faced by the coffee shops before, during, and after the pandemic; (3) evaluate the best practices done in regards to the four business functions and external factors that influenced the success of micro and small-scale coffee shops; (4) integrate and analyze the key success factors based on the results from the pre-determined factors; and (5) provide recommendations to the current and future stakeholders of the food and beverage business industry.

The data was collected from six (6) respondents using questionnaires aided with face-to-face interviews and was analyzed by using contingency tables to determine the rate of success depending on the category. Three out of six respondents were considered as successful and the other three respondents were less successful.

For the socio-demographic profile, findings revealed that owner-managers with direct control over their businesses were more successful. Middle-aged owners (31–45 years old) benefited from experience and single managers gained more flexibility. However, personal skills and practices outweighed demographic factors in determining success.

Education was important, with postgraduate respondents demonstrating advanced management skills. Formal education, training, and prior experience contributed to success, which was also complemented by family and peer support. While experience often correlated with success, it was not definitive; for instance, one experienced respondent still faced challenges.

In terms of Personal Entrepreneurial Competencies (PECs), the respondents exhibited strong skills in opportunity seeking, goal setting, information seeking, persistence, and persuasion and networking. However, they showed moderate to low ratings for commitment to work contracts, demand for efficiency and quality, systematic planning, and self-confidence.

The duration of a coffee shop's operations was linked to success, as longer- established businesses had time to improve their strategies. Sole proprietorships offered decision-making flexibility, but ownership structure alone did not determine success.

Key operational strategies included efficient inventory management, standardized recipes, quality control, and sourced high-quality raw materials. They also gave trainings, such as barista skill training, to equip new employees with the necessary skills. Measures to address employee burnout, like bonuses and flexible schedules, increased employee retention.

Financial discipline was critical, with owners and managers maintaining strict budgeting, separating personal and business finances, and utilizing emergency savings. Record-keeping practices, such as manual recording, outsourcing accounting, and regular cash flow reviews, were common. Dine-in services were a primary revenue stream which emphasizes the importance of ambiance and customer experience. Also, Family contributions often supplementing initial capital and credit card reliance was rarely used to avoid accumulating debt.

Marketing strategies highlighted customer loyalty through ambiance, quality service, and product quality. Either the cost-plus pricing or value-based pricing was used by the owners for pricing. Strategic location and a strong market presence played a significant role in gaining customers. Digital marketing strategies, including social media promotions, were frequently used alongside traditional marketing methods like posters and in-store promotions. Social media content that highlighted new products, promotions, and discounts proved effective in engaging customers.

For external factors, changes in socio-cultural trends, like demand for Wi-Fi- equipped spaces for remote work and study, created opportunities for coffee shops to upgrade. Technological advancements, including digital payments and online ordering, became standard, improving customer convenience. Eco-friendly practices attracted environmentally conscious consumers, strengthening brand image.

Political and legal factors presented minimal issues, with respondents already being familiar with permit processes. Limited government support was reported, though online applications provided convenience. Economic challenges like inflation and rising competition pushed businesses to innovate and improve their marketing.

In conclusion, success in coffee shop businesses is linked on personal competencies, strategic operations, and adaptability to external challenges. Aspiring owners should focus on enhancing entrepreneurial skills, using education, adopting innovative practices, and maintaining financial discipline to succeed in a competitive industry.

Recommendations were made for the current and future business owners, especially for those who want to enter the food and beverage industry, and for future studies. The recommendations for the chosen coffee shops were dependent on their needs and underlying challenges that were not thoroughly discussed based on the categories present in this study. Lastly, the recommendations for the future studies were based on what to improve and what were the factors missed out by this study.

Language

English

LC Subject

Coffee industry--Management, Coffee shops, Business enterprises--Philippines

Location

UPLB College of Economics and Management (CEM)

Call Number

LG 993 2024 M17 S25

Notes

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Document Type

Thesis

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