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CafeNova

Case Interview Practice > 
Synthesis

CaféNova’s leadership team is evaluating whether to continue operating in the U.S. or to exit the market and refocus on Europe. Based on everything we’ve discussed - the financials, labor dynamics, and operational differences - what would you recommend? Should CaféNova stay and try to turn the U.S. business around, or exit the market altogether?

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Sample answer from an expert consultant

I would recommend that CaféNova stay in the U.S. market but narrow its focus and restructure operations rather than continue with its current footprint. The company’s challenges appear to stem from execution and cost structure rather than a lack of demand. The data show that U.S. stores face high labor costs and low utilization, but these are operational problems that can be improved through better scheduling, leaner staffing models, and technology to increase productivity. The brand already has awareness, and suburban locations are likely close to breakeven, suggesting there is a viable format if managed correctly.

Exiting now would mean walking away from five years of investment and brand-building in one of the world’s largest coffee markets. Instead, CaféNova should focus on optimizing the U.S. store base, closing or downsizing underperforming flagship locations, and running a pilot to test a lower-cost suburban model with simplified operations. If these changes do not show measurable improvement within a defined timeframe, an exit could still be considered later, but for now, the market remains worth fixing rather than abandoning.

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