Abstract

Since China Resource Enterprise Ltd. (CRE) acquired a majority stake in Pacific Coffee in 2010, the coffee chain had experienced tremendous expansion particularly in mainland China. Yet, Hong Kong remained the core  of the business, and Pacific Coffee could not afford to lose its leadership position in its home base. The competitive environment became more intense and Hong Kong coffee consumers became more sophisticated.

Jonathan Somerville, the CEO, realized that while he needed to stay involved, and on top of the business in Hong Kong, he no longer had the capacity to be involved on a day-to-day basis. However, he needed to motivate his Hong Kong team and give them direction when implementing strategies. He decided the Balanced Business Scorecard would be an effective tool to link and align the company’s strategy to its operations.

Two other related cases in this series include:

1. Pacific Coffee: Making the Numbers Count

2. Pacific Coffee: Long Run Investment Decisions

Learning Objectives

This case can help students understand that no single metric can monitor the health of a business. They will learn to appreciate the Balanced Scorecard as an effective tool to monitor and balance the needs for financial and non-financial factors, as well as provide leading and lagging indicators. It can also help translate and monitor how the implementation of a business strategy is progressing.