Northern Brew Coffee Co. Case Study Report & Business Analysis

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 However, there are weaknesses in its technological infrastructure—particularly outdated point-ofsale (POS) systems and limited forecasting tools in finance and logistics— which have hindered scalability and efficiency in recent years.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 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.

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 Organisational Structure & Culture (500 Words, LO2)

• Describe Northern Brew’s organisational 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?
• How might Northern Brew increase its profit margin without compromising product quality or staff wellbeing?

Stakeholders Communication And Globalisation With Ethical Sourcing (500 Words, LO1,2&3)

• Design a basic stakeholder communication plan for the launch of the company’s new subscription service. Include the communication method and message for at least three stakeholder groups.
• What are the risks and rewards of operating a global supply chain for a small business like Northern Brew?

Reflective And Integrative Task (500 Words, LO1&4)  

Reflecting on Northern Brew’s mission, business challenges, and growth ambitions, evaluate whether the business is ready to expand into a new UK city. Recommend whether it should expand now, wait, or invest internally first. Justify your answer using insights from operations, HR, and financial performance.

Business Management Answers: Experts Answer on Above Northern Brew Coffee Case Study

Impact of internal and external environment

Analysis of internal and external environment can be performed using strategic tools like PESTLE, Porter five forces as follows:

PESTLE Analysis: The political environment indicates that the trade barrier increases significantly in the form of custom cost and delays after brexit. The inflation is also significantly higher and the social trend indicates the growing demand for sustainable brands which is crucial for Northern Brew Positioning. Technological consideration in the form of upgrading POS systems and digital infrastructure is crucial for businesses like Northern Brew, and they need to work legally by complying with fair trade and ethical sourcing. The environmental impact is also direct as it threatens coffee bean supply stability.

Opportunities and threats

The opportunities mainly in the form of rising preference among consumers for sustainable and ethical coffee, where the threats are mainly in the form of high inflation and climate related risk.

Porter Five Forces Analysis

The supplier power is high because of limited suppliers and global risk in the industry. The buyer power is moderate as customers become loyal over time and the threat of new entrants is high because of low entry barriers in the coffee retail. The threat of substitutes is also high as there are coffee machines, supermarket coffee available and rivalry among existing customers is very high between local and national competitors.
The greatest risk is competitive rivalry as there are many large coffee chains that compete with each other.

Organisational structure and culture

The organisational structure of Northern Brew is flat organisational structure with decentralised decision making. The advantage of this structure is it helps in promoting innovation, collaboration and faster decision making within employees and disadvantage is inconsistency in decisions and slower scalability. The culture prevalent within the organisation is collaborative, ethical, sustainability driven and employee focused. As a result of this, it positively contributes towards increased employee motivation, loyalty and better customer satisfaction.

Business growth and ansoff matrix

The current growth strategy of the company is market development whereby it is expanding to new cities and universities. The benefit of this strategy is it helps in increasing the market share and brand recognition. Risk associated with it has an adverse impact on the quality of service. The strategy recommended is product development whereby the company can consider expansion to cold brew and subscription models. It is quite effective as it helps in building brand loyalty and thereby increases the customer database.

Business functions

Logistic and supply chain challenges: These are mainly in the form of delays in import, rising transport cost and volatility in supplies. The solution could be to diversify suppliers and strengthen contracts with suppliers.
Managing staff resistance to digital change: This can be addressed by way of providing training to employees, and transparent communication is required. It is also important to highlight the benefits of digital change and also provide job security to build trust within them.
Improving profit margin: Profit margin can be improved by optimising digital sales, reducing waste via AI systems, and maintaining quality through efficiency.
Stakeholder communication and globalisation: The communication with different stakeholders can be performed using different channels. As for example, customers can be communicated via email and social media regarding the benefits of convenience, rewards sustainability etc. Communication with employees can be performed through internal meetings and training about improving customer engagement, and investors or partners can be communicated by reports and presentations about company performance. 

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