ICCC 2024 Case

Overview

Lindsale Complements is a multinational corporation with a 5-year history in the food & beverages industry. Through years of product development, Lindsale has developed a unique product line of exotic Kopi Luwak based coffee products, known for their unique flavor mixed with the most expensive coffee beans in the world. Their products are currently in 2 large retail chains and 50 locations across the United States and Canada, having recently received Series B funding due to their gradual success. However, the company is beginning to face a variety of challenges threatening its future.

Consumer Market

According to market research, consumers consider the Lindsale brand as overpriced and costly, due to their pricing of 40% higher than average. Furthermore, 20% of consumers were found to have negative perceptions of Lindsale due to links to child labour coffee farms, with some having recently engaged in a nation-wide boycott of Lindsale products.

In the market, the last two years have also seen the rise of a variety of new brands, with both smaller and larger companies like Folger recently launching similar exotic coffee products. 

Scaling & Corporate Strategy

Additionally, Lindsale is facing a turning point with the appointment of a new CEO, Jason Atwood. In response to company growth objectives, Atwood decides to expand into developing carbonated soft drinks and enter the confectionery industry. Lindsale’s current revenue is split across their exotic instant coffee mix (78%) and their bottled iced coffee (20%), with the remaining coming from their limited-time products and other revenue streams. Atwood believes growth opportunities in other industries will generate the necessary revenue to fund future growth.

Financial Management

Meanwhile, Lindsale is in the midst of a financial crisis. The rising cost of goods, interest expenses, and other overhead costs have pushed Lindsale towards a net loss in 2023. With a large amount of current liabilities and debt, the company is looking to scale down its business and reduce the amount of locations they sell in.

Adding on to the issue are declining affordability trends among middle class and higher-earning workers, which make up over 82% of Lindsale's customer base. Lower-income households have nearly completely stopped purchasing Lindsale's products, instead deferring to standard coffee brands. 

Your Role

As consultants for Lindsale Complements, you’re responsible for developing a set of short-term and long-term strategies for navigating its current challenges and achieving profitability. Additionally, Lindsale has requested you provide a general growth plan for scaling the business for the next 10 years. Once you have developed a solution, you are to present your conclusions to top level management and demonstrate the effectiveness, analysis, and rationale for your plan.

SUPPLEMENTARY INFORMATION

  • Due to recent conflicts in the Red Sea and additional shortages, oil and natural gas prices have increased significantly around the world

  • Current assets owned by Lindsale are mainly receivables

  • Jason Atwood is experienced as a top-management executive in manufacturing companies, owning a significant portion of stares for each

  • The average consumer’s demand for Luis Vuitton products have increased by 15% in the past year

  • Rumble, a video-sharing platform, is planning on entering a price war with its competitor, YouTube, for attracting corporate clients

The case and supplementary information are hypothetical to the competition. You are free to consider factors and trends occurring in the real world; however, please assume the information within the case to be true regardless of any contradictions with the status quo.

Things to Consider:

  • Consider Future R&D and Product Development. Should Lindsale introduce new products or improve existing ones? If the company’s new CEO remains firm on his decision to enter new product lines, how should Lindsale strategically proceed?

  • Consider Marketing. Should Lindsale waste its financial resources on additional marketing expenses? What are Lindsale’s strategies moving forward?

  • Consider Pricing Strategies, Business Ethics, & Barriers to Entry