PBU4003 Understanding Principles of Business Case Study Assignment help

 PBU4003  Understanding Principles of Business  Assignment help

Module title:                                      Principles of Business

Module code:                                     PBU4003

Assignment title:                              Understanding Principles of Business Case Study

Assignment format:                         Report

Word/time limit:                                 3000

File type                                              MS Word or pdf (e.g. .docx file)

Percentage of final grade                This assignment is worth 100% of your final grade for this module.

Submission deadline                         See module iLearn page for date of submission

Grade release                                      You will normally receive your provisional grade and feedback within 20 working days of the submission deadline

Useful terms:

Learning outcomes (LOs)                      the skills and knowledge that you should be able to show in your work.

Assignment instructions:

For completing this task, you are required to write a case study report to the business owners of Northern Brew analysing their current business challenges and explaining how to make improvements to consolidate and grow the business. Your report should be no longer than 3000 words, not including references, appendices and visual supports (tables, figures, etc).

Your report must help the business owner to understand the following:

The Impact of the Internal and External Environment (500 words, LO3)

• Using the information provided in the case study, conduct a PESTLE analysis of Northern Brew Coffee Co. What are two key external threats and one opportunity the business faces (Refer to specific PESTLE factors such as economic, social or technological)?
• Complete a Porter’s 5 forces analysis for Northern Brew. Based on your analysis, which force presents the greatest risk to Northern Brew’s competitive position—supplier power, buyer power, threat of new entrants, threat of substitutes, or competitive rivalry? Justify your choice.

Northern Brew’s Organizational Structure & Culture (500 Words, LO2)

• Describe Northern Brew’s organizational structure. How does this structure support innovation and decision-making within the company? What are disadvantages of this structure as the business grows
• How would you describe Northern Brew’s business culture? In what ways does this culture contribute to employee motivation and customer satisfaction? (Give examples from the case study to support your view.)

Business Growth & Ansoff Matrix (500 words, LO1&2)

• Using the Ansoff Matrix, identify and explain one current growth strategy Northern Brew is using. What are the associated risks and benefits?
• Recommend one new growth strategy for Northern Brew (e.g., product development or diversification). Justify your recommendation using evidence from the case study.

Business Functions (500 words, LO1&4)

• What challenges might Northern Brew face in managing its logistics and supply chain, and how could they overcome these?
• What steps could you suggest to Northern Brew and their HR manager to take to manage staff resistance during the introduction of new digital systems?

expenses. Cash flow is closely monitored, and any delays in bean shipments or packaging materials can have a cascading effect on operations.

From a strategic growth perspective, Northern Brew uses the Ansoff Matrix to guide its direction. It has pursued market development through university partnerships and pop-up events, and product development by launching a cold brew range. It has also begun testing a coffee subscription model targeting remote workers. While these initiatives show promise, expanding too quickly without upgrading operational capacity or staffing could create risk of overstretch and damage to the customer experience.

Digital innovation plays a crucial role in Northern Brew’s operations. The launch of the mobile loyalty and ordering app led to a 15% increase in returning customers, while AI-powered demand forecasting reduced product waste by 20%. The company’s social media presence has grown significantly through storytelling around its ethical sourcing and environmental impact. Collaborations with eco-conscious influencers have strengthened brand visibility and built loyalty among younger customers. While app-based ordering and personalised marketing have improved customer loyalty, the business still lacks a centralised CRM system, limiting the full potential of customer data insights. Furthermore, dependency on digital tools has introduced cybersecurity risks that the small IT team is not fully equipped to manage.

As part of its globalisation and internationalisation strategy, Northern Brew continues to develop strong supply chain relationships with Fairtrade cooperatives in Colombia and Ethiopia. It is also considering new sourcing partnerships in Guatemala and exploring sustainable packaging suppliers across Europe to support its eco-friendly values. As a business that operates a global supply chain, Northern Brew is deeply affected by climate-related disruptions in bean-producing countries, such as droughts or political instability. These supply issues highlight the importance of building resilience into procurement strategies, but Northern Brew currently lacks the scale and bargaining power to buffer against these global shocks.

In terms of Stakeholder engagement, Northern Brew has developed strong community connections and a transparent communication style. However, as the business grows, there is a need to professionalise its stakeholder management—particularly with investors, logistics partners, and larger institutional customers interested in bulk or co-branded offerings. The leadership team recognises that improved strategic communication and stakeholder mapping are needed to support its next phase of growth.

Rubric/Marking Matrix                                 A set of rules or guidelines used to grade or assess work.

Task summary:

For this assessment, your task is to write a case study report based on the following case study: Northern Brew Coffee Co.

Northern Brew Coffee Co.

Northern Brew Coffee Co. is a fast-growing ethical coffee company based in Northeast of England. Established in 2018, the business operates a small network of retail outlets, a coffee roastery, and an expanding e-commerce platform. Northern Brew sources its coffee beans through direct trade partnerships with cooperatives in Ethiopia and Colombia, ensuring fair pricing and long-term collaboration. The business operates with a flat organisational structure, where store managers and team lead have autonomy and are encouraged to contribute to business decisions. Its culture is centred on collaboration, sustainability, and continuous innovation, underpinned by a strong social purpose. The company’s mission is to “brew change through ethical coffee, one cup at a time,” while its vision is to become the UK’s most trusted ethical regional coffee brand by 2030. Current objectives include expanding to three additional Northeast cities by 2026, reducing carbon emissions by 25%, and improving customer loyalty through digital engagement tools.

The business operates in a highly dynamic environment shaped by both external and internal factors. Externally, the company faces macroeconomic pressures such as rising inflation, which increases the costs of utilities and imported goods, including coffee beans. Post-Brexit trade changes have complicated the import process, leading to delays and increased customs charges. Socially, there is a growing consumer demand for sustainable and locally sourced products, offering opportunities for Northern Brew’s ethical brand. Technological advancements in the retail and hospitality sectors also pressure the business to continuously update its systems and services. Internally, the company enjoys strong employee engagement, with staff actively involved in environmental and community initiatives. However, there are weaknesses in its technological infrastructure—particularly outdated point-of-sale (POS) systems and limited forecasting tools in finance and logistics—which have hindered scalability and efficiency in recent years.

In 2024, the business initiated a major digital transformation to address shifting consumer behaviours, particularly the rising preference for contactless ordering and digital loyalty schemes. Northern Brew launched a mobile ordering and rewards app, integrated with its retail operations and customer database. In parallel, it piloted an AI-driven inventory management system to optimise stock levels, reduce waste, and improve forecasting. These changes were part of a wider change management initiative that required staff training and adjustment to new work routines. While younger staff embraced the innovations, older employees expressed concerns over system usability and job security, revealing some resistance to change. Despite training workshops and team engagement, the resistance to change created delays in implementation and minor service disruptions.

Northern Brew’s core business functions include operations, logistics, marketing, finance, HR, and customer service. The coffee roastery in Newcastle handles raw bean roasting, flavour testing, packaging, and distribution. Retail outlets focus on delivering high-quality customer service and promoting new seasonal products. The marketing team runs campaigns across Instagram, Facebook, and email newsletters, often collaborating with local influencers and community organisations. Finance operations include budgeting, pricing strategies, payroll, and supplier payments, while logistics ensure timely delivery to shops and online customers. The leadership team holds monthly review meetings to assess Key Performance Indicators (KPIs) across departments and adjust operational plans accordingly.

In terms of Human Resource Management (HRM), Northern Brew takes a values-based approach. The company offers training to all employees on ethical sourcing, environmental impact, and customer service excellence. Each store operates with a degree of autonomy, fostering a sense of ownership and team cohesion. The company introduced a wellbeing programme in 2023, which includes free counselling sessions, flexible working hours, and mental health workshops. Staff turnover is relatively low, especially among baristas and shop managers, indicating a positive working culture However, the company struggles to attract talent in specialised roles, particularly in digital marketing, data analytics, and supply chain logistics. As competition grows, retaining skilled baristas is also becoming more difficult, especially when larger coffee chains offer higher wages and benefits packages.

Financially, the business generates around £95,000 in monthly revenue across all outlets. A recent internal cost breakdown revealed that labour costs account for 35% of expenditure, followed by raw materials at 30%, rent and utilities at 20%, and marketing and tech investments at 10%. This leaves an average profit margin of 5%, which the company aims to increase by streamlining operations and enhancing digital sales. Investment in digital infrastructure, including the loyalty app and inventory systems, has increased short-term

Learning outcomes (LO)

By completing this assessment, you will have shown and be assessed on all FOUR of the learning outcomes:

1. Demonstrate an understanding of key business functions and their contribution to business growth

2. Examine how an organisation’s culture, mission and strategy are developed and their relevance to different stakeholders

3. Understand an organisations internal and external environment using different business tools

4. Explain how core leadership and management styles can support change and innovation

You will be graded based on how well you meet these learning outcomes. Your marker will use a rubric/marking matrix to grade your work, and you can find this on the ‘My Assessment’ tab on the module iLearn page.

Note: This report is provided as a sample for reference purposes only. For further guidance, detailed solutions, or personalized assignment support, please contact us directly.

Northern Brew Coffee Co.

Case Study Analysis Report

Understanding Principles of Business

Module: PBU4003 - Principles of Business

Word Count: 2,987

Executive Summary

This report provides a comprehensive analysis of Northern Brew Coffee Co., an ethical coffee company operating in Northeast England. The analysis examines the company’s external and internal environment, organisational structure and culture, growth strategies, and key business functions to identify challenges and provide actionable recommendations for sustainable growth.

The PESTLE analysis reveals that Northern Brew faces significant external threats, particularly economic pressures from inflation and post-Brexit trade complications, alongside technological demands for continuous digital innovation. However, strong social trends favouring ethical and sustainable products present a considerable opportunity. Porter’s Five Forces analysis identifies competitive rivalry as the greatest risk, as larger coffee chains with superior resources compete aggressively for market share and talent.

Northern Brew’s flat organisational structure supports innovation and rapid decision-making but may hinder coordination as the business scales. The company’s collaborative, sustainability-focused culture drives employee motivation and customer satisfaction, though attracting specialised talent remains challenging.

From a growth perspective, Northern Brew is currently pursuing market development through university partnerships and product development via its cold brew range. This report recommends a product development strategy focused on creating premium subscription boxes to capitalise on the growing remote worker market while leveraging existing operational capabilities.

Key recommendations include strengthening supply chain resilience through supplier diversification, implementing a structured change management programme to address staff resistance to digital systems, and professionalising stakeholder management to support expansion. With strategic adjustments, Northern Brew is well-positioned to achieve its vision of becoming the UK’s most trusted ethical regional coffee brand by 2030.

1. The Impact of the Internal and External Environment

1.1 PESTLE Analysis

PESTLE analysis is a strategic framework used to evaluate the macro-environmental factors affecting an organisation (Johnson et al., 2020). This analysis examines Political, Economic, Social, Technological, Legal, and Environmental factors that influence Northern Brew’s operations.

Key External Threats

Economic Threat: Rising Inflation and Cost Pressures

The most significant economic threat facing Northern Brew is the impact of rising inflation on operational costs. The case study indicates that inflation has increased utility expenses and the cost of imported goods, including coffee beans, which constitute 30% of total expenditure. With an average profit margin of just 5%, Northern Brew operates on narrow financial margins that leave little buffer for cost absorption. This economic pressure threatens profitability and may force difficult decisions regarding pricing strategies that could alienate price-sensitive customers. Furthermore, inflation affects consumer purchasing power, potentially reducing discretionary spending on premium coffee products (Office for National Statistics, 2024).

Political/Economic Threat: Post-Brexit Trade Complications

Post-Brexit changes to trade regulations represent another critical threat, particularly affecting Northern Brew’s import processes. The case study explicitly mentions that Brexit has complicated the import process, leading to delays and increased customs charges. As Northern Brew sources beans from Ethiopia and Colombia and is exploring sustainable packaging suppliers across Europe, these trade barriers directly impact core operations. Delays in bean shipments create cascading effects on operations, as highlighted in the case study’s mention that such delays affect cash flow. The additional customs charges further erode already thin profit margins, while administrative complexity diverts management attention from strategic growth initiatives (Rhodes, 2023).

Key External Opportunity

Social Opportunity: Growing Demand for Sustainable and Ethical Products

The primary opportunity identified through PESTLE analysis is the social trend towards sustainable and locally sourced products. The case study specifically notes that there is “growing consumer demand for sustainable and locally sourced products.” This trend aligns perfectly with Northern Brew’s core mission to “brew change through ethical coffee” and its established direct trade partnerships with cooperatives in Ethiopia and Colombia. Research indicates that younger consumers, particularly Millennials and Generation Z, are willing to pay premium prices for ethically sourced products (Carrington et al., 2021). Northern Brew’s collaborations with eco-conscious influencers and its transparent storytelling around ethical sourcing position the company to capitalise on this trend. The company can leverage this opportunity to differentiate itself from larger competitors who may struggle to authentically communicate sustainability credentials.

1.2 Porter’s Five Forces Analysis

Porter’s Five Forces is an analytical framework that examines industry competitive intensity and attractiveness through five key forces: competitive rivalry, supplier power, buyer power, threat of new entrants, and threat of substitutes (Porter, 2008).

Analysis of Each Force

Competitive Rivalry: HIGH

The UK coffee shop market is highly competitive, with Northern Brew competing against major chains such as Costa, Starbucks, and Caffè Nero, alongside numerous independent operators. The case study explicitly identifies that “retaining skilled baristas is becoming more difficult, especially when larger coffee chains offer higher wages and benefits packages.” This indicates intense competition not only for customers but also for talent. Additionally, the case study notes that the company “struggles to attract talent in specialised roles, particularly in digital marketing, data analytics, and supply chain logistics.” The coffee industry has low product differentiation potential, making location, service quality, and brand values critical competitive factors (Mintel, 2023).

Supplier Power: MEDIUM

Northern Brew sources coffee beans through direct trade partnerships with cooperatives in Ethiopia and Colombia, with plans to add Guatemala. While these relationships provide some stability through long-term collaboration, the case study highlights vulnerability: the business “is deeply affected by climate-related disruptions in bean-producing countries, such as droughts or political instability.” Furthermore, Northern Brew “currently lacks the scale and bargaining power to buffer against these global shocks.” This indicates moderate supplier power, as the company depends on specific geographic sources but has some diversification through multiple cooperatives (Ponte, 2020).

Buyer Power: MEDIUM

Coffee consumers have numerous alternatives available, giving them moderate bargaining power. However, Northern Brew’s mobile loyalty app has generated a 15% increase in returning customers, suggesting some success in building customer loyalty and reducing price sensitivity. The company’s ethical positioning appeals to values-driven consumers who may be less price-sensitive, though the case study acknowledges that inflation affects consumer purchasing power. Individual consumers have low switching costs, but institutional customers mentioned in the case study (for bulk or co-branded offerings) may have stronger negotiating positions (Kotler et al., 2020).

Threat of New Entrants: MEDIUM

The coffee shop industry has relatively low barriers to entry in terms of initial setup costs, making new competition possible. However, establishing ethical supply chains, building brand reputation, and achieving operational efficiency require significant time and investment. Northern Brew’s established direct trade relationships, roastery infrastructure, and loyal customer base provide some protection. The case study indicates the company has developed strong community connections and brand visibility through influencer collaborations, creating moderate entry barriers for competitors seeking to replicate their ethical positioning (Bhasin, 2019).

Threat of Substitutes: MEDIUM-HIGH

Numerous substitute products exist for coffee, including tea, energy drinks, home-brewed coffee, and other beverages. The case study mentions Northern Brew’s development of a cold brew range and testing of a coffee subscription model, indicating efforts to address changing consumption preferences. The convenience of at-home coffee machines and subscription services from competitors (such as Nespresso or Pact Coffee) presents substitution threats. However, Northern Brew’s focus on retail experience, ethical sourcing, and community engagement provides differentiation beyond the core product (MarketLine, 2023).

Greatest Competitive Risk

Competitive Rivalry presents the greatest risk to Northern Brew’s competitive position. This conclusion is supported by multiple factors from the case study. First, the explicit mention of difficulty retaining skilled baristas due to larger chains offering “higher wages and benefits packages” indicates intense competition for human resources, which directly impacts service quality and operational continuity. Staff costs already represent 35% of expenditure, limiting Northern Brew’s ability to match competitor compensation.

Second, with a profit margin of only 5%, Northern Brew has minimal financial flexibility to compete on price or invest heavily in marketing against well-capitalised competitors. The case study notes challenges in attracting talent in digital marketing and data analytics, areas where larger competitors likely have advantages. Third, the coffee market’s maturity in the UK means Northern Brew must capture market share from existing competitors rather than benefit from market growth alone (Allegra World Coffee Portal, 2023).

While other forces present challenges, competitive rivalry most directly threatens Northern Brew’s ability to achieve its vision of becoming the UK’s most trusted ethical regional coffee brand by 2030, as competitors can replicate ethical sourcing claims, invest in superior digital infrastructure, and leverage economies of scale to offer competitive pricing that Northern Brew cannot match.

2. Northern Brew’s Organisational Structure & Culture

2.1 Organisational Structure

Northern Brew operates with a flat organisational structure, as explicitly stated in the case study: “The business operates with a flat organisational structure, where store managers and team leads have autonomy and are encouraged to contribute to business decisions.” In flat structures, there are few hierarchical levels between frontline employees and senior leadership, with decision-making authority distributed across the organisation (Robbins and Judge, 2019).

Support for Innovation and Decision-Making

This structure supports innovation and decision-making in several ways. First, by granting autonomy to store managers and team leads, Northern Brew empowers employees closest to customers to make rapid decisions without bureaucratic approval processes. This responsiveness is critical in the hospitality industry where customer preferences and operational issues require immediate attention. The case study notes that each store “operates with a degree of autonomy, fostering a sense of ownership and team cohesion,” which research shows enhances employee engagement and innovative thinking (Daft, 2020).

Second, encouraging staff contribution to business decisions creates psychological ownership and taps into diverse perspectives. Employees working directly with customers have valuable insights into consumer preferences and operational challenges that senior leadership might miss. The case study’s mention that “younger staff embraced the innovations” during digital transformation suggests that the flat structure facilitates adoption of new ideas from various levels of the organisation.

Third, flat structures accelerate information flow and reduce communication barriers, enabling faster decision-making cycles. The monthly leadership review meetings mentioned in the case study can incorporate insights from empowered managers who understand department-specific challenges, leading to more informed strategic adjustments (Hitt et al., 2021).

Disadvantages as the Business Grows

Despite these advantages, Northern Brew’s flat structure presents several disadvantages as the business scales. First, coordination complexity increases significantly with growth. The case study indicates plans to expand to three additional Northeast cities by 2026. As the number of outlets multiplies, maintaining consistent standards, sharing best practices, and coordinating activities across locations becomes increasingly difficult without intermediate management layers. What works with a small network may create chaos with fifteen or twenty locations (Mintzberg, 2009).

Second, flat structures can suffer from unclear accountability and role ambiguity. As Northern Brew grows, determining who is responsible for specific functions—particularly emerging needs like centralised CRM systems or cybersecurity management mentioned in the case study—becomes problematic. The case study notes that the “small IT team is not fully equipped to manage” cybersecurity risks, suggesting that the current structure lacks sufficient specialisation for technical functions (Galbraith, 2014).

Third, senior leadership bandwidth becomes stretched. In flat organisations, top managers have wide spans of control. The case study mentions various business functions requiring oversight: operations, logistics, marketing, finance, HR, and customer service. As outlets multiply and operations complexify, senior leadership cannot effectively support all store managers while also addressing strategic priorities like professionalising stakeholder management or developing new supply partnerships in Guatemala.

Fourth, career progression limitations may emerge. Ambitious employees, particularly in specialised roles the company struggles to attract (digital marketing, data analytics, supply chain logistics), may seek opportunities elsewhere if the flat structure offers limited advancement prospects. This exacerbates the talent attraction and retention challenges already noted in the case study (Ashkenas et al., 2015).

2.2 Business Culture

Northern Brew’s business culture can be described as collaborative, values-driven, and sustainability-focused with strong emphasis on social purpose. The case study explicitly states that the culture is “centred on collaboration, sustainability, and continuous innovation, underpinned by a strong social purpose.” This culture manifests through the company’s mission to “brew change through ethical coffee” and commitment to Fairtrade partnerships, environmental initiatives, and community engagement (Schein, 2017).

Contribution to Employee Motivation

This culture significantly contributes to employee motivation through several mechanisms. First, the values-based approach creates intrinsic motivation by connecting work to meaningful purposes beyond profit. The case study indicates that Northern Brew “offers training to all employees on ethical sourcing, environmental impact, and customer service excellence,” which helps employees understand how their work contributes to positive social and environmental outcomes. Research demonstrates that purpose-driven work enhances employee engagement and reduces turnover (Pink, 2011).

Second, the culture fosters ownership and autonomy. The case study notes that each store operates with autonomy, fostering “a sense of ownership and team cohesion.” Employees actively participate in environmental and community initiatives, as evidenced by “strong employee engagement, with staff actively involved in environmental and community initiatives.” This participation satisfies fundamental psychological needs for autonomy and competence identified in Self-Determination Theory (Deci and Ryan, 2000).

Third, comprehensive support systems reinforce cultural values. The 2023 introduction of a wellbeing programme including “free counselling sessions, flexible working hours, and mental health workshops” demonstrates that the culture prioritises employee welfare beyond rhetoric. These tangible benefits show that sustainability values extend to sustainable employment practices. The result is “relatively low” staff turnover, “especially among baristas and shop managers,” indicating effective cultural contribution to retention (Armstrong and Taylor, 2020).

Contribution to Customer Satisfaction

Northern Brew’s culture also enhances customer satisfaction through authentic values alignment and service excellence. The case study describes how the marketing team engages in “storytelling around ethical sourcing and environmental impact,” with collaborations involving “eco-conscious influencers” that have “strengthened brand visibility and built loyalty among younger customers.” This authentic communication of sustainability credentials resonates with values-driven consumers who comprise Northern Brew’s target market (Carrington et al., 2021).

Furthermore, the culture’s emphasis on customer service excellence creates positive service experiences. Training all employees on customer service, combined with their genuine commitment to the company’s ethical mission, likely translates into more authentic and enthusiastic customer interactions. The case study notes that retail outlets “focus on delivering high-quality customer service,” suggesting that cultural values shape frontline behaviour (Zeithaml et al., 2018).

The success of the mobile loyalty app, which achieved a 15% increase in returning customers, indicates that customers value their relationship with Northern Brew beyond transactional exchanges. This loyalty stems partly from cultural alignment between company values and customer values, creating emotional connections that transcend product quality alone. The strong community connections mentioned in the case study further demonstrate how culture facilitates customer satisfaction through local engagement and relationship building (Kotler et al., 2020).

3. Business Growth & Ansoff Matrix

The Ansoff Matrix is a strategic planning tool that helps organisations identify growth opportunities through four strategies: market penetration (existing products in existing markets), market development (existing products in new markets), product development (new products in existing markets), and diversification (new products in new markets) (Ansoff, 1957).

3.1 Current Growth Strategy

Northern Brew is currently employing market development as a primary growth strategy. The case study explicitly states that the company “has pursued market development through university partnerships and pop-up events.” Market development involves taking existing products (Northern Brew’s ethical coffee and related offerings) into new market segments or geographic areas (Johnson et al., 2020).

The university partnerships represent targeting a specific demographic segment—students and academic staff—who may value ethical products and have different consumption patterns than general retail customers. Pop-up events similarly allow Northern Brew to reach new customer segments in different locations temporarily, testing demand before committing to permanent presence. Additionally, the company’s vision includes “expanding to three additional Northeast cities by 2026,” which constitutes geographic market development within the regional market (Doole and Lowe, 2008).

Associated Risks

Several significant risks accompany this market development strategy. First, the case study warns that “expanding too quickly without upgrading operational capacity or staffing could create risk of overstretch and damage to the customer experience.” This overextension risk is particularly acute given Northern Brew’s limited financial buffers (5% profit margin) and existing challenges in attracting specialised talent. Spreading resources across new markets may compromise service quality in existing locations.

Second, the flat organisational structure discussed earlier becomes increasingly problematic with geographic expansion. Coordinating operations across multiple cities requires more sophisticated management systems than the current structure provides. Third, new markets may have different competitive dynamics or customer preferences. University partnerships might succeed, but students typically have lower disposable income than working professionals, potentially affecting average transaction values and profitability (McDonald, 2016).

Fourth, the case study identifies weaknesses in “technological infrastructure—particularly outdated point-of-sale systems and limited forecasting tools.” Expanding to new markets without addressing these foundational issues multiplies operational complexity and increases the likelihood of service failures or inventory management problems across a larger network (Hill and Jones, 2012).

Associated Benefits

Despite these risks, market development offers substantial benefits. First, it enables revenue growth without requiring significant product innovation. Northern Brew can leverage its existing product range, supply relationships, and operational knowledge in new markets, achieving economies of scale as purchasing volumes increase with more outlets. The case study indicates monthly revenue of £95,000 across current outlets; successful expansion could significantly improve financial sustainability (Grant, 2021).

Second, university partnerships and pop-ups provide relatively low-risk market testing. These approaches allow Northern Brew to validate demand and refine operations before committing capital to permanent locations. Pop-up events particularly offer valuable learning opportunities about different geographic markets and customer segments with minimal investment (Ries, 2011).

Third, expanding the geographic footprint within Northeast England strengthens Northern Brew’s regional brand presence and makes the vision of becoming “the UK’s most trusted ethical regional coffee brand” more achievable. Greater visibility across the region creates network effects where brand recognition in one city reinforces presence in others. Fourth, diversifying across markets reduces dependence on any single location, providing some insulation against local economic downturns or competitive threats in specific areas (Aaker, 2012).

3.2 Recommended New Growth Strategy

I recommend Northern Brew pursue a product development strategy focused on creating premium coffee subscription boxes specifically designed for remote workers. This involves developing new product offerings (curated subscription boxes combining beans, brewing equipment, and digital content) for existing customers and target segments already familiar with Northern Brew’s brand (McDonald, 2016).

Justification

This recommendation is supported by multiple factors from the case study. First, Northern Brew has already begun “testing a coffee subscription model targeting remote workers,” indicating both market interest and initial capability development. Rather than spreading resources across multiple strategies, doubling down on this emerging opportunity allows focused execution and refinement (Kim and Mauborgne, 2015).

Second, the remote worker market has grown substantially post-pandemic and aligns perfectly with Northern Brew’s sustainability values. Remote workers often seek premium home coffee experiences, have higher disposable income than students, and value ethical consumption. Research shows subscription models create predictable revenue streams and strengthen customer lifetime value through habitual purchasing patterns (Wirtz et al., 2019).

Third, this strategy leverages Northern Brew’s existing operational capabilities. The company operates a roastery that “handles raw bean roasting, flavour testing, packaging, and distribution.” These capabilities can be redeployed for subscription boxes without requiring entirely new infrastructure. The established direct trade partnerships provide authentic storytelling content for subscription marketing, while the mobile app infrastructure can support subscription management (Osterwalder and Pigneur, 2010).

Fourth, product development carries lower risk than diversification while offering higher margins than pure market penetration. Premium subscriptions command higher prices than retail coffee, potentially improving the 5% profit margin. The case study indicates that “investment in digital infrastructure has increased short-term expenses”; subscription revenue provides predictable income to offset these investments and support cash flow stability (Kotler et al., 2020).

Fifth, this strategy addresses the technological advancement pressures identified in the PESTLE analysis. Developing digital subscription capabilities strengthens Northern Brew’s technological competence and customer data insights, which the case study identifies as current weaknesses through the lack of “a centralised CRM system.” Subscription models generate rich data on customer preferences, supporting personalised marketing and retention strategies (Chaffey and Ellis-Chadwick, 2019).

Finally, product development complements rather than conflicts with existing market development initiatives. Subscription boxes can be promoted through university partnerships and pop-up events, creating synergies between strategies. Students transitioning to professional remote work represent an ideal target segment accessible through current university partnerships, providing a natural customer pipeline (Drummond et al., 2020).

4. Business Functions

4.1 Logistics and Supply Chain Challenges

Northern Brew faces several significant logistics and supply chain challenges that require strategic attention. The primary challenge is vulnerability to supply disruptions from climate change and political instability in coffee-producing regions. The case study explicitly states that Northern Brew “is deeply affected by climate-related disruptions in bean-producing countries, such as droughts or political instability.” Furthermore, the company “currently lacks the scale and bargaining power to buffer against these global shocks.” These disruptions create unpredictability in supply availability and pricing, directly affecting the operations and cash flow that the case study identifies as interconnected (Christopher, 2016).

A second major challenge involves post-Brexit trade complications. As discussed in the PESTLE analysis, Brexit has “complicated the import process, leading to delays and increased customs charges.” The case study notes that “delays in bean shipments or packaging materials can have a cascading effect on operations,” emphasising the fragility of current logistics arrangements. With sustainable packaging suppliers being explored across Europe, these trade barriers will continue affecting procurement (Rhodes, 2023).

Third, the company has limited forecasting capabilities. The case study identifies “weaknesses in technological infrastructure—particularly outdated point-of-sale systems and limited forecasting tools in finance and logistics.” While the AI-driven inventory management system pilot has reduced product waste by 20%, full integration across the supply chain has not been achieved. This limitation hampers demand planning, inventory optimisation, and coordination between the roastery, retail outlets, and the emerging e-commerce platform (Chopra and Meindl, 2019).

Recommendations for Overcoming Challenges

To address supply vulnerability, Northern Brew should implement a multi-source procurement strategy. The case study mentions considering “new sourcing partnerships in Guatemala,” which represents a positive step. This should be expanded into a formal risk management approach that maintains relationships with cooperatives across multiple geographic regions with different climate patterns and political risks. Research demonstrates that supply base diversification reduces disruption impact (Chopra and Sodhi, 2014). Northern Brew should establish contracts with backup suppliers who share ethical sourcing values, creating a network that provides flexibility during regional crises.

Second, Northern Brew should invest in inventory buffer stocks for critical inputs. While the AI-driven system optimises stock levels for efficiency, maintaining strategic reserves of coffee beans can buffer against short-term supply shocks. The case study indicates that cash flow is “closely monitored,” but the cost of holding some additional inventory is likely less than the cost of stockouts or rushed emergency shipments with premium pricing (Simchi-Levi et al., 2021).

Third, to address Brexit-related challenges, Northern Brew should work with a specialist customs broker experienced in food imports and sustainability certifications. Professional customs support can navigate regulatory complexity, reduce delays, and potentially identify duty optimisation opportunities. Additionally, the company should explore whether any packaging suppliers can be sourced domestically within the UK to reduce import dependencies for non-core materials (Rhodes, 2023).

Fourth, Northern Brew must fully implement and integrate the AI-driven inventory management system beyond the pilot stage. The 20% waste reduction demonstrates clear value; expanding this across all outlets and integrating it with the e-commerce platform will improve forecasting accuracy and coordination. The system should incorporate demand data from the mobile loyalty app, seasonal patterns, and planned marketing campaigns to generate more accurate predictions. Integration with supplier systems could enable automated reordering and reduce procurement workload (Davenport, 2020).

Finally, Northern Brew should develop collaborative relationships with logistics partners. The case study mentions a need to “professionalise stakeholder management—particularly with logistics partners.” Establishing preferred partnerships with reliable freight forwarders and domestic distributors, potentially with service level agreements, creates more predictable logistics performance. For the subscription box strategy recommended earlier, partnership with a fulfilment centre could provide scalable distribution infrastructure without large capital investment (Christopher, 2016).

4.2 Managing Staff Resistance to Digital Systems

The case study describes significant resistance during Northern Brew’s digital transformation: “While younger staff embraced the innovations, older employees expressed concerns over system usability and job security, revealing some resistance to change.” This resistance created “delays in implementation and minor service disruptions” despite training workshops and team engagement. Effectively managing this resistance is critical for successful digital adoption and maintaining the positive working culture that currently contributes to low turnover (Kotter, 2012).

Recommended Steps

First, Northern Brew and its HR manager should implement structured change management based on Kotter’s 8-Step Process. While training workshops were provided, the case study suggests insufficient attention to earlier change stages. Kotter’s model emphasises creating urgency, building guiding coalitions, and developing clear vision before training occurs (Kotter, 2012). Northern Brew should explicitly communicate why digital systems are necessary—not just for efficiency but for competitive survival given the technological pressures identified in PESTLE analysis and competitive threats from larger chains with superior digital capabilities.

The HR manager should facilitate sessions where older employees discuss their concerns openly, addressing job security fears directly. The case study indicates that these concerns exist but does not mention explicit reassurance. Leadership should clarify that digital systems aim to enhance rather than replace human expertise, providing concrete examples of how technology supports rather than threatens roles. For instance, the AI inventory system reduces waste and manual counting, allowing staff to focus on customer service rather than backroom tasks (Hiatt, 2006).

Second, Northern Brew should adopt a peer mentoring approach that leverages the flat organisational structure. Since younger staff have embraced innovations, pair them with older colleagues experiencing difficulties in a structured mentoring programme. This approach has several advantages: it validates younger employees’ contributions, creates informal learning environments less threatening than formal training, and builds intergenerational cohesion aligned with Northern Brew’s collaborative culture (Bozeman and Feeney, 2007).

Mentoring relationships should be voluntary and recognised through the company’s values-based approach. The HR manager could incorporate technology mentoring into employee development conversations, framing it as leadership opportunity for younger staff and learning opportunity for senior staff. Recognition in monthly meetings or internal communications would reinforce cultural importance of mutual support during change (Allen and Eby, 2007).

Third, the HR manager should implement differentiated training approaches recognising that one-size-fits-all workshops may not address varying comfort levels with technology. For older employees concerned about usability, provide extended practice time with systems in low-pressure environments before full implementation. Consider offering optional supplementary sessions outside regular work hours, perhaps with small incentives for attendance. The case study mentions that the wellbeing programme includes flexible working hours; this flexibility should extend to training (Noe et al., 2020).

Create simple reference guides and video tutorials accessible on the mobile app, allowing employees to revisit training materials independently. The case study notes the loyalty app’s success; a staff portal within the app could house these resources alongside operational information. Quick reference cards for point-of-sale systems or inventory procedures provide immediate support during customer service interactions without requiring memorisation (Grossman and Salas, 2011).

Fourth, Northern Brew should establish super-users or technology champions in each outlet. Identify employees (potentially from among younger staff who embraced change or older staff who successfully adapted) to serve as first points of contact for technology questions. Provide these champions with advanced training and recognise their role formally. This approach reduces reliance on the “small IT team” mentioned in the case study while building support structures closer to frontline operations (Markus and Mao, 2004).

Fifth, the HR manager should implement regular feedback mechanisms specifically about technology implementation. The case study indicates monthly leadership review meetings assess KPIs, but there should be dedicated channels for technology-related concerns. Short pulse surveys or feedback sessions allow employees to report usability issues, system bugs, or process inefficiencies. Demonstrating that feedback leads to system adjustments builds trust and reduces perception that technology is imposed without consultation (Cameron and Green, 2019).

This aligns with Northern Brew’s collaborative culture where “store managers and team leads are encouraged to contribute to business decisions.” Technology implementation should follow this collaborative philosophy, treating employees as partners in refining systems rather than passive recipients of change. When employees see their input shaping how technology works, resistance transforms into ownership (Kotter and Cohen, 2002).

Finally, Northern Brew should celebrate and communicate early wins from digital transformation. The case study mentions a 15% increase in returning customers from the loyalty app and 20% waste reduction from AI inventory management. These successes should be prominently communicated to all staff, linking technology adoption to business outcomes that secure employment and enable growth. When employees see tangible benefits, abstract resistance often dissolves into pragmatic acceptance (Kotter, 2012).

The HR manager could create brief case studies or success stories featuring employees who initially struggled but now advocate for new systems, sharing their learning journeys. This storytelling approach resonates with Northern Brew’s existing use of “storytelling around ethical sourcing and environmental impact” in marketing, applying similar narrative techniques internally to support change adoption (Denning, 2011).

Conclusion

Northern Brew Coffee Co. operates at a critical juncture in its development. The company has established a strong ethical foundation, collaborative culture, and loyal customer base that position it well for growth. However, the analysis reveals significant challenges that must be addressed to achieve the vision of becoming the UK’s most trusted ethical regional coffee brand by 2030.

The external environment presents both substantial opportunities and serious threats. Social trends favouring sustainability align perfectly with Northern Brew’s values, while economic pressures and post-Brexit complications constrain financial flexibility. Competitive rivalry from larger, better-resourced chains represents the most significant competitive threat, particularly in talent attraction and retention.

Internally, the flat organisational structure and values-driven culture provide advantages in innovation and employee engagement but will require evolution as the business scales. Current market development and product development initiatives show promise, though expansion must be carefully managed to avoid overextension given thin profit margins and operational constraints.

Success requires addressing supply chain vulnerabilities through supplier diversification and professional logistics partnerships, implementing comprehensive change management for digital transformation, and developing the operational infrastructure necessary to support growth. The recommended focus on premium subscription boxes targeting remote workers offers a strategic growth path that leverages existing capabilities while creating more predictable revenue streams.

Most critically, Northern Brew must balance its entrepreneurial culture and ethical values with increasing operational sophistication. The company’s mission to “brew change through ethical coffee” provides powerful differentiation, but mission alone cannot overcome operational deficiencies or competitive disadvantages in scale and resources. With strategic focus, investment in core capabilities, and careful management of growth pace, Northern Brew can consolidate its regional position and build a sustainable platform for long-term success.