CoffeeBoy Strategy, Part I

Strategy Plane

With this post we’re landing on the strategy plane. Here we’ll first get to know how the idea for CoffeeBoy actually came up. In the role of broodforce Ltd. CIO Pete we’ll then see how the idea gets further developed in his company after he has presented it to his colleagues. However, in the first strategy part we won’t deal with the desires of our potential users. This will be our duty in the second strategy part in the next post.

CoffeeBoy Series Schedule

The idea

On a spring weekend broodforce Ltd. CIO Pete got visited by some of his friends. On Saturday morning they had breakfast. While Pete cooked coffee in the kitchen his guests were already sitting at the table in the dining room having their breakfast.

Pete’s guests had pretty individual wills regarding the coffee recipe: strong coffee without sugar, mild coffee with two spoonfuls of sugar, Cappuccino with extra milk froth, etc.. Pete just could not memorize them at once. Thus he moved between dining room and kitchen (were the coffee machine was located) in order to (1) accept the next coffee order, (2) cook the ordered coffee and then (3) bring the cup of coffee to the orderer.

The whole process felt pretty inefficient and annoying. He thought that this process could be designed more convenient. He thought about a remotely controllable coffee machine capable of “batch cooking” multiple cups of coffee. The idea for CoffeeBoy was born!

In the evening of the same day Pete developed his idea by means of a mind map. Below we can see an extract of this mind map which bears the essentials of the remotely controllable coffee machine:

CoffeeBoy Idea Mind Map
CoffeeBoy Idea Mind Map (extract)

Pete decided to present the idea to his broodforce colleagues and eventually derive a new product out of it.

Jumping on the strategy plane

Let’s now change to Pete’s perspective. What should we do now? Well, it makes sense to first convince our broodforce colleagues of the idea. Then we should define a solid strategy for our product. In fact, what we want is a strategy which is in line with broodforce’s company strategy, which describes our vision of the product, and which ultimately satisfies the needs of the product’s potential users.

The product goals

In the week after the visit of our friends we actually convince our colleagues of the idea. We decide to extend broodforce’s portfolio with a new product based on this idea. During several meetings and workshops we define first goals for this “remotely controllable coffee machine”-product. The upcoming sections introduce the outcome of those meetings and workshops.

Name

We agree with the broodforce guys that the name CoffeeBoy is perfectly in line with the names of our existing products LawnBoy, LightingBoy and PoolBoy. Furthermore the name is not reserved by an other company.

Brand

We strive towards product brand recognition. So as with the product’s name, we plan to design a brand which is consistent with the existing ones. There are first ideas to integrate a grinning bean into the brand and to go with the colors brown and green. However, the actual brand design gets postponed to the surface plane.

Image

CoffeeBoy should not be an ordinary kitchenware. We want grant CoffeeBoy a personal, vivid appearance, which should especially be pushed by the product name and brand. CoffeeBoy should be a member of the family. When our users talk about CoffeeBoy, we want them to use attributes like cool, pleasant and reliable.

Features

After going over the original idea’s mind map, conducting a further brainstorming session and drawing a sketch of the Coffee Machine hardware component (see below), we decide on the essential features of CoffeeBoy. These features in fact constitute an “immutable framework” for our product. They also build up a basis for further requirements which we’ll define when involving the target users. The following sections enlist these specified must-have features, divided into software and hardware features. While the features get covered on a very high-level on this plane, we’ll go further into details on the scope plane.

Must-have software features
The following features apply for both, the Local Client component as well as the Remote Client component.

  • Ordering Cup(s) of Coffee: choosing one or more coffee recipes and submitting an order
  • Coffee Recipe Management: create, update and delete (CUD) functions for coffee recipes
  • Displaying Ingredient’s Fill Level
  • Displaying Cleanliness Status: informing the user if it’s time to clean CoffeeBoy

Must-have hardware features
Below we can see a sketch of the Coffee Machine component together with the numbered features.

CoffeeBoy Features
CoffeeBoy Hardware Features
  1. Ingredient Tanks (top side): 4 tanks with capacity sensors for water, beans, milk and sugar
  2. Touch Display: enables the control of CoffeeBoy via the Local Client
  3. Nozzle: moves from cup to cup; spills out coffee (with admixed milk and / or sugar) or milk froth
  4. Tray: includes up to four cups; recognizes cups via sensors
  5. Power Cable (rear side): supplies CoffeeBoy with power
  6. Power Button: the one and only button powering CoffeeBoy on and off
  7. WiFi Antenna (inside): connects CoffeeBoy with the network
  8. Cleanliness Management (inside): provides information about cleanliness status; enables cleanliness maintenance (start and stop of self-cleaning)

Business

broodforce’s products are high-priced and our customers are willing to pay these prices. CoffeeBoy won’t be an exception in this matter. We plan to produce CoffeeBoy in a limited edition and thereby gain a profit margin between 70 – 80%. In order to achieve that, we draw the following estimations:

  • The whole staff will be occupied approx. one year with the development of CoffeeBoy.
  • We’ll thereby generate personal costs of approx. 6.000.000 €.
  • Other fix costs will proportionately (by including other products) be approx. 1.000.000 €.
  • One CoffeeBoy item will generate production costs of approx. 500 €.
  • The average number of produced and sold broodforce product items is 10.000.
  • In order to gain a profit margin of 70% we’ll have to sell 10.000 items for 4.000 € per item.
  • In order to gain a profit margin of 80% we’ll have to sell 10.000 items for 6.000 € per item.

By facing these estimations we’re convinced to reach the business goals and decide to strive for a profit margin of 80%, and only reduce it in case the fix costs rise.

Marketing

For CoffeeBoy we’ll continue our company’s “no-marketing” strategy.

So, let’s recap a bit

Which strategic decisions do we have so far? We have a name and a brand idea for our product. Both will have a recognition value with regard to our existing products. Thus CoffeeBoy will benefit from their brand awareness and all the positive predicates our existing products notoriously have like coolness and reliability.

Then we have a concept for the image, that is, the way the users should experience CoffeeBoy. Furthermore we have a set of features which will be build into our product. In order to optimally tailor the features to CoffeeBoy’s users and achieve the aspired image, it’s now critical to extensively deal with the target users.

Finally we have rough estimations for the required resources (time and personal) to produce CoffeeBoy, and how much CoffeeBoy items we want to sell for which price.

Up next

As already mentioned in the introduction, the next post will cover the product strategy with respect to CoffeeBoy’s potential users. We’ll learn who they are, what characterizes them and what they want. Afterwards we’ll try to derive further strategic decisions from those insights. Stay tuned!