Identify the base of the competition of Cafe De Coral by using Generic Model
Cafe de Coral has been adopted cost-leadership strategy – gaining market share by
emphasizing low cost and value for money to achieve competitive advantage.
Economies of scale
Cafe de Coral is the global largest Chinese fast food restaurant chain in the world with 153
branches. High investment capital can gain competitiveness by spending more resources
on research and development, manufacturing and marketing.
Its mass production and distribution also contribute to lower cost of production.
Hong Kong and Mainland Central Food Processing Center can help Cafe de Coral handle
mass production. Under the centralized production and automation, variable cost is
reduced due to high production capacity, operational efficiencies as well as synergies.
Moreover, the electricity cost is reduced. And it can ensure the food quality and safety.
Lower input costs
Cafe de coral can gain competitiveness by buying and distributing manufactured foods in
lower price, from its own Strategic Business Unit- Scanfoods.
On the other hand, the bargaining power of Cafe de Coral is very high since a significant
quantity of materials for all branches was brought at the same time from suppliers.
Therefore, it can purchase materials in relative low price.
% part time
Experienced
Cafe de Coral has 46 years fast food serving experience. Experienced chefs, well-trained
and employees and technology advancement can lead to excellent food quality and
efficient services. Finally, the cost is reduced.
Product/ Process design
Since Cafe de Coral sold their product directly, no costs need to be paid for middlemen. In
