The Lao Coffee Industry: Implementing Vertical Integration for a Social Cause at Bolaven Farms

Case Solution

Marta K Dowejko, Gilbert Wong
University of Hong Kong ()

Founded in 2007, Bolaven Farms is a charitable coffee business. Bolaven Farms was founded in Laos and Hong Kong with the goal of providing high-quality coffee to the global public while helping alleviate poverty among Lao coffee farmers. The business model involves the full integration of the coffee supply chain, from the sowing of coffee seeds to the sale of the final branded product to wholesale and retail customers. As a result, farmers and companies benefit by removing middlemen from the supply chain and keeping profit margins to themselves. The company’s vision of empowering farmers and bringing them higher income from their work is very compelling in public and was quickly picked up by the media. However, the business model has yet to be tested. On the one hand, after completing the program, farmers need job security and additional acreage. On the other hand, the coffee market is a mature market with many players and a large number of competitive and cheaper offers. People find the vision of the company very inspiring, but it is also very difficult to translate it into actionable actions. The company has already invested $ 4.0 million in the project, but it is still a long way from educating the public and finding customers willing to pay the best prices for coffee. Both ends of the supply chain need further refinement, and Say is unwilling to compromise on quality or price. The case begins with an introduction to the coffee industry and its practices. The following is a description of Laos as the business environment for Bolaven Farms. The case describes the development and implementation of a vertically integrated business model, supported by social networks. It enables advanced analysis of issues related to the selection of an appropriate business model and focuses on the risks associated with future expansion arising from the entrepreneur’s strategic decisions.

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