Chapter 5
Case Study: Strategic Growth Planning at Berhan Coffee Exporters
Background:
Berhan Coffee Exporters is a growing, family-owned business based in Jimma, Ethiopia. It
specializes in sourcing, processing, and exporting premium-grade Arabica coffee to Europe and
the Middle East. Despite strong global demand for Ethiopian coffee, Berhan faces recurring
challenges—ranging from foreign currency shortages and supply chain bottlenecks to limited
market access and stiff international competition.
Now, as the company prepares a 10-year strategic plan, the leadership team has outlined several
long-term objectives. Your task is to recommend the most suitable types of strategies—
integration, intensive, or defensive—to help achieve these objectives in the Ethiopian business
context.
Long-Term Objectives (Over the Next 10 Years):
1. Increase annual export revenue by 60%.
2. Reduce operational dependency on third-party suppliers by 50%.
3. Expand market presence into three new international markets.
Your Task:
Berhan Coffee’s executive team has invited your strategic consulting group to propose a way
forward. Your group should:
1. Select the most appropriate type(s) of strategy (integration, intensive, or defensive)
to support each long-term objective.
2. Justify your choice of strategy by considering internal factors (such as capabilities and
resources) and external factors (such as Ethiopia’s trade policy, FX situation,
infrastructure, and global coffee trends).
3. Recommend any combinations or sequencing of strategies (e.g., start with intensive,
followed by integration) where relevant.
Discussion Questions:
1. What types of strategies would best support each of the four long-term objectives? Why?
2. How can Berhan Coffee balance growth ambitions with the risks in Ethiopia’s business
environment?
3. Would you recommend any defensive strategies at this point? Under what conditions?
4. How can the company monitor and evaluate the effectiveness of the strategies chosen
over time?
Answer
Objective 1: Increase annual export revenue by 60%
Possible Strategies:
Intensive Strategy – Market Development:
→ entering untapped international markets like China, UAE, or South Korea. Ethiopia’s
reputation for high-quality coffee can open doors in niche or premium segments.
Intensive Strategy – Product Development:
→ Introducing new value-added products (e.g., drip coffee bags, ready-to-drink cold
brews) to fetch higher prices per unit.
Integration Strategy – Forward Integration:
→ Opening branded coffee shops locally or abroad to capture more value along the chain.
Justification:
Revenue growth can come from deeper penetration into current markets and expansion into new
ones. Given Ethiopia’s global brand in coffee, the opportunity to go premium or branded is
strong.
Objective 2: Reduce operational dependency on third-party suppliers by 50%
Possible Strategies:
Integration Strategy – Backward Integration:
→ Investing in coffee farms or long-term exclusive supply contracts with cooperatives.
Defensive Strategy – Retrenchment:
→ Dropping low-performing supplier relationships to improve consistency and cost-
efficiency.
Justification:
Reducing reliance on smallholder farmers lowers quality inconsistencies and strengthens supply
chain control. Vertical integration allows better traceability, which is also a selling point in global
markets.
Objective 3: Expand market presence into three new international markets
Possible Strategies:
Intensive Strategy – Market Development:
→ Identify countries with growing specialty coffee demand and low competition. This
might include using Ethiopian embassies and diaspora networks.
Integration Strategy – Horizontal Integration:
→ Partner or acquire small exporters with experience or certifications (e.g., organic, fair
trade) that appeal to foreign markets.
Justification:
Market development aligns perfectly here. Strategic alliances or acquisitions can ease entry
barriers in complex or regulated markets.
Additional Thoughts Students Might Bring Up:
Consideration of phased strategy implementation: start with intensive, and then move
to integration once internal capacity grows.
Emphasis on digital strategies: e-commerce or B2B platforms for market development.
Highlighting policy alignment: Ethiopia’s Homegrown Economic Reform Agenda and
incentives for exporters.
Ethical sourcing and sustainability as part of product and brand development strategies.