Los Borrachos: Sparkling Strategies for Expanding the Customer Base

Los Borrachos was a specialty bar in Seoul, South Korea, with the unique vision of creating an intimate gathering place that celebrated sparkling wines and European-style dishes. While the bar generated enough revenue to cover its monthly expenses, it fell short of providing significant income for its co-founders. To fulfill their vision for Los Borrachos, the co-founders need to determine how to attract more of Los Borrachos’ target clientele and increase profitability, all while working with limited time and budget. They were evaluating three strategic options to grow the business: (1) launching a loyalty program to encourage repeat visits, (2) enhancing the bar’s event-hosting services to boost group bookings, and (3) introducing a bundling menu that paired wines with complementary dishes to offer a unique customer experience. Each option represented a different type of innovation, and the decision would affect how Los Borrachos positioned itself within the competitive landscape of the food and beverage industry. The challenge rested in selecting the most effective strategy to drive growth and realize the co-founders’ vision.

This case is ideal for innovation management, entrepreneurship, or strategic management courses at the undergraduate level. It provides an opportunity for students to explore various types of innovation (product, process, incremental, radical) and their strategic importance for small businesses. Through this case, students will apply key analytical frameworks (such as the five-forces model, value-chain analysis, and balanced scorecard) to evaluate growth strategies and make informed decisions in resource-constrained environments. The case emphasizes practical decision-making skills and the development of strategies that align with a company’s vision and competitive positioning. By working through the case and assignment questions, students will have the opportunity to do the following:<ul><li>Analyze the external environment of a company using the five-forces model to identify key factors affecting the company’s competitive position in the market.</li><li>Evaluate a company’s internal strengths and weaknesses through a value-chain analysis to determine how each activity contributes to overall competitiveness and performance.</li><li>Identify and assess a company’s core competencies and capabilities using the balanced scorecard approach to measure performance across financial, customer, internal process, and innovation and learning perspectives.</li><li>Differentiate between various types of innovation (product vs. process, incremental vs. radical, architectural vs. component, competence-enhancing vs. competence-destroying) and assess their strategic relevance for a company’s growth.</li><li>Develop strategic recommendations based on a comprehensive analysis of potential solutions, considering each solution’s value, resource requirements, and alignment with the company’s vision and long-term goals.</li></ul>

• innovation
• entrepreneur