Running head: CASE STUDY LESSON 5

Lesson 5 Case Study

Ranjan Shrestha
Kings College
Professor Sushil Raj Kumar Sharma
International American University
BUS 590: Business strategy
February 18, 2015

CASE STUDY LESSON 5

Introduction
This case is the detail analysis of Koots green tea, market of green tea in Japan and USA and
describes the coffee market in USA Vs. tea market in Japan. It describes all factors of success as
well as the external analysis, internal analysis, and the strategies of the Koots Green tea and the
details about the tea and coffee industry in Japan and USA. The case flourishes the
entrepreneurial skills of Kouta Matsuda (founder of Koots green tea). Kouta Matsuda starts his
business by opening the chain of Tullys coffee in Japan at the age of 28. In 2001 he earns license
and franchise right for coffee shop from Tullys. After sometime he recognizes the huge green tea
market in Japan and diversified his business by opening Koots green tea. He promotes different
types of green tea in the various retail chain stores in Japan. He establishes KGT (Koots Green
Tea) retail stores in Japan and provides the taste of varieties of green tea to the Japanese
customer. He got successful to generate high level of capital for the venturing of Koots green tea
and also takes some risk for it. He also provides the health importance of the green tea in Japan.
He also wants to expand his green tea market in USA but there are lots of challenges to develop
awareness and persuade to buy the green tea by the American people.
Koutas entrepreneurial mind
Kouta Matsuda completed his high school from America in 1986 and return Japan for further
study. In his young age he read details of the some American business including Tullys Coffee.
Then he explore his thoughts to do new things in Japan in later on expand it to the USA. One
notable thing is no any Japanese food business has ever expand their business in USA so Kouta
is the first person to entering the food or green tea into the market of USA. He learns lots of
things about the entrepreneurial skills at that time and later on also. So he develops his
entrepreneurial mind from his young age. He starts different types of business of Green tea by

CASE STUDY LESSON 5

opening lots of green tea shop in Japan by creating the brand of Koots green tea. First he took the
license and franchise right from Tullys coffee and at that time he learns many things about the
green tea market in Japan which really helps to diversify his business to the Green tea. He is the
first person to establish the green tea chain shop in different place of Japan and flourish his eager
of being entrepreneur. He really shows his confidence and takes risk in doing new type of
business. He takes more risk in the expansion of the green tea outlet in USA because the culture
of drinking green tea in USA is very low and lots of the people of USA may not know about the
Green tea and its usefulness. At his school level he used to deliver the newspaper and used to
sale computer peripheral which shows that his passion to do business starts from his early age.
After returning to Japan for further study he works as a part timer in Japanese restaurant and gain
knowledge and experience about the restaurant business. Koutas diversification from coffee to
green tea doesnt mean that he got fail in coffee shop business but it is the consequences of
passion and eager of doing new types of business. His high commitment towards his work makes
his different in comparison to others business person. So we can say that Kouta Matsuda is an
entrepreneur minded person.
Strategies of expansion
Kouta Matsuda has planned to open the green tea shops in various places of Japan and also
entering to the American market. His previous experience of opening Tullys coffee as a chain
partner of Tully will works a lot for this work. He also started to sell the franchise of Koots green
tea to the American franchises or making joint ventures with them. He also joins hands with
other tea and coffee store for the expansion of the Koots green tea. He also believed that to be a
market leader, at least 50% market share have to capture so he mostly focuses on expansion of
Koots green tea store in Japanese market. Because of the support of venture capital Suga, it will

CASE STUDY LESSON 5

be easier for Kouta for the foreign or US expansion. His strategy in the expansion of the green
tea retail shop is to open the store where other competitors are not existed there. His priority is to
focusing on Niche market.
It is not easy to highly expand the Koots green tea in the various parts of Japan and entering to
the US market. There are lots of competitor exist in the Japanese market who are selling variety
of Coffee and tea also. The main competitors of the Koots green tea are Starbucks and Tullys
coffee itself. There will be highly challenges for the market growth of Koots green tea in the US
market because firstly they have to develop the green tea culture and market the usefulness of the
green tea to the American people. US people are familiar with coffee but they are very less
familiar with the taste and use of green tea. His plan to expand the green tea market
internationally as a culture of drinking green tea as a culture is good but it possesses lots of
challenges. Another challenge for Koots green tea is rules and tax imposed by the US
government and different states of America. It will causes in increment in the price of Green tea
which makes harder to persuade the US people to drink Koots green tea. So Kouta Matsuda is
taking high risk in the terms of expansion of the Koots green tea in USA. They must need more
human, financial and technological resources for the further expansion. Above 50% of Japanese
people use to drink green tea which would be an opportunity for Koots green tea but in USA
more than 80% people use to drinks black tea which is challenging to make the shift from black
tea or coffee to the green tea.
Analysis of Tea and Coffee industry
Tea and coffee both are known as ready to drink items. People can drink coffee in replace of tea
and vice-versa or these two are known as substitute products. They are such types of products
which can be drink at any time, any place and any in any environment. Customers can easily

CASE STUDY LESSON 5

shift to one another. So the tea company can be a competitor for the coffee company. In this case
also, the competitor of the Koots green tea is coffee selling companies which are more than the
tea selling company. Tea and coffee has their own history but they are taking as a substitute
product from ancient time. But in the case of green tea, it is not popular in the past decades. Now
a days it has got its popularity more than other ordinary tea and the coffee. The customers get
aware about the health benefits of the green tea so more people are preferring green tea. It shows
that the popularity and scope of green tea market is growing day by day. For the high expansion
of tea and coffee business both of these requires high investment so entering into such business is
not so easy and the investors have to take lots of risks.
Conclusion
Kouta is energetic and young entrepreneur. His motive to do something makes him a person who
is lifting in the success of ladder. He peruses the LOHAS strategy to make the public awareness
that they are proving the green tea which is highly benefited for health and to be always fit and
fine. Kouta needs to improve a good management team which should have ability to support his
vision of expansion of Koots green tea market locally and internationally. Good Team work is
necessary for the successful expansion of the market of Koots green tea. He needs full support
from his employees to accomplish his strategies. He should highly focus on research and
development to make the products cheaper and qualitiable which can helps to generate more
profit. Good marketing of the product is necessary to increase the brand image of Koots green
tea and to provide the message about the benefits of the use of product. Market analysis is more
necessary for the expansion of the product in the US market. They have to make effective
strategy to establish the drinking habit of the green tea. They should have to focus on further
innovation for their bright future and to establish in the local and global market. They have to do

CASE STUDY LESSON 5

PESTLE analysis for the minimization of the external risks. So to expand the market in USA
they must have to change the drinking habit of black tea and coffee and make positive
reinforcement towards green tea.

CASE STUDY LESSON 5

References:
Pearce II, J.A., & Robinson, R. B. (2011). Strategic Management: Formulation, Implementation,
and Control (12th ed.). New York: McGraw-Hill Irwin.