TCHIBO COFFEE

Tchibo

Tchibo

Introduction

Tchibo Coffee has progressed from a simple retailer of coffee in germany to a multi-product, diversified retailer/manufacturer. Created in 1949 by Carl Tchilling-Hiryan and Max Herz as a business aiming to supply a rare commodity of that time (coffee) to the german consumers. It evolved in to a 'mail-order' business in a short time, this proved very profitable and, in 1955 the first German coffee shop was created where customers could buy and drink coffee at the same place. By 1958, the company had over 77 stores, and the gold mocca brand became the best seler in Germany. It soon started to deliver free products (mugs/cans) as compliments with the purchase of coffee, but unfortunately, in 1972 a law prevented them from doing so anymore and they resorted to selling these products at symbolic price at their stores. Later on, Tchibo expanded its operations by; collaborating with traditional retailers to sell its poducts, founding a sister company (Tchibo Direct) to sell products online, gradually diversifying - mobile services, travel packages, banking and insurance products and an ecological energy product. Various media outlets were used to advertise Tchibo's newly launched services. As the years passed by, Tchibo grew in to a multi-channel retailer and consumer goods company providing a diverse range of non-food item, food items , and services; which were accessible both online and through stores. Although diverse in its product offering, Tchibo's image is still that of a coffee shop where customers can buy daily life products and cool gadgets along with their coffee. It offers 30-40 varities of items each week (renewed assortment each week) in the non-food items to its customers, this surprise factor adds to its demand. This also goes in line with the company's slogan “a new experience every week, is onlyavailable at Tchibo”.

Literature Review

According to the number of coffee houses operating in 2007, Tchibo was the second largest gourmet coffee house that was company owned (in Germany). But, soaring losses and diminishing stock price resulted due to a competitive market and law actions on store managers.” Tchibo managed to create 'competitive advantage' in their operations by adding 'new experiences' for their customers, but it was debateable if they could sustain and use it to enhance their growth strategy (Simon 2009, pp. 1).

Tchibo is dedicated to crafting an exceptional experience for its customers, which is done by merging excellent customer service, a unique coffee house environment, and high quality products; this is what differentiates it in the industry for coffee houses. The creation of strong human capital lies at the core of this differentiation strategy. The matter to analyze here is Tchibo's efforts regarding the development of human capital and whether it will facilitate them to attain sustainable 'competitive advantage'; keeping all the threats and competition that they are facing, in mind. Tchibo has developed a strong capacity for recruitment, development, and retainment of their employees, however, this can be imitated by competitors and its not enough to maintain their advantages on its ...