Buna Best

New growth strategy for chain of Ethiopian coffee houses

 

About Buna Best

Buna Best is part of a programme of a non-governmental organisation, called DIR Ethiopia. The objective of Buna Best is to initiate social enterprises in Ethiopia on behalf of fragile target groups like former prostitutes, former soldiers and disabled people. Buna (=coffee) Best coffee houses offer jobs to former prostitutes to help them move forward in life. Its concept has already been used in an Ethiopian coffee house in Amsterdam (www.bunabet.com). Today, three Buna Best coffee houses are open in Ethiopa, employing 60 former prostitutes. Furthermore, a small bakery is developed, employing another 15 women, to supply cakes, bread and injera (local food) to the coffee houses. The social impact of Buna Best is:  

 

• local employment and/or income generation
• community involvement
• improving quality of life
• transfer of knowledge and skills

Business case

Since early 2009 Buna Best is hiring a business manager, Mr. Abdeta Debella Robi, to turn the Buna Best coffee houses from NGO programme to an economic sustainable chain. In the first place he asked SharePeople for assistance from a business consultant on how to do become more efficient. The management key expectation was that the business of the existing 3 coffee houses has to become more efficient. Also, the collaboration and supply between the bakery and the coffee houses had to be optimized.

 

In the second place Abdeta asked SharePeople for assistance from a marketeer to help formulate an expansion strategy for the Buna Best coffee houses. The marketing key expectation was an expansion plan for new Buna Best coffee houses. Buna Best wanted to start a fourth Buna Best coffee house on an A-location (like Bole Road in Addis Abeba) to increase sales and social impact.

 

SharePeople matched the SharePeople price winner Aafke van Sprundel (marketing specialist) with Frans Robert Buerman (Human Resource and Quality Management specialist) together on both business cases to improve running business units and to advice on expansion strategy.

 

 

Results

 

Analysis

Local manager Abdeta already had begun with cost price analysis per product. Frans Robert & Aafke added value by improving the profit & loss analysis per business unit:

 

• the 3 different coffee houses
• the coffee production centre
• the injera production centre
• the bakery

Buna Best was able to conclude what their champion business unit is and why. This was very insightful. Furthermore, a market survey and a competitors survey gave insight in the USP of Buna Best.  Also, it became clear that it was possible for Buna Best to raise some prices. This has an impact on profitability of the running coffee houses. It also made very clear that the Buna Best concept is not feasible in the high end market because start up costs are too high and competition is too severe.

 

Advice

• The main advice for Buna Best was to focus on the success formula of the most profitable coffee house. Also, some quick results are made in seeing possibilities for cutting costs on the one hand and raising prices of some products on the other hand. With these advices, profitability for the 3 houses can be achieved immediately.
• The other main advice is to expand the success formula, which is within the Mercato Central consumer group, and not in the high end market. There's room for 1 or 2 coffee houses managed according to the success formula.
• Lastly, in a sales training organised by Aafke, it was possible to draw concrete conclusions like making products more visible and linking customers with sales actions and loyalty cards.

Impact on the partners

The short term impact of the programme is that Buna Best gained insight in what the success formula for Buna Best is. With this knowledge, costs can be reduced and sales can be improved. A second direct impact is that the idea of positioning a Buna Best coffee house in the high end market is changed in the view to expand Buna Best in its own area and to be more successful with that.

 

‘The experts contributed a lot in indicating feasible business strategies. Their advice enabled us to make a choice among significant alternatives we have in currently existing business units.' (Abdeta Debella, manager Buna Best)

 

‘I have learned a lot from Aafke and Frans, especially in adapting simple and workable internal resource controlling mechanisms.' (Abdeta Debella, manager Buna Best)

 

For both Aafke and Frans Robert the biggest insights are to keep things small, to take things step by step and to stay close to the client. That interpersonal contact is more important than business contacts.

 

‘It was very interesting to practice Covey's theories in this case by just making the objectives clear, translated in clear pictures and priorities. I experienced again that it is possible to do a lot within 2 or 3 weeks and give the organisation tools for development.' (Frans Robert Buerman, Human Resource and Quality Management specialist)

 

Follow up

Lots of insights and recommendations will be implemented by Buna Best itself. SharePeople, Aafke and Frans Robert will monitor regularly what steps will be taken.

 

Click here for the weblog 'Expert Programme Aafke van Sprundel'

Click here for the weblog 'Expert Programme Frans Robert Buerman'