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MGT707 Entrepreneurship Assignment Help
The business plan or entrepreneur plan has been designed over a Coffee Shop. The Coffee House has been becoming a popular place for the coffee lovers of the local areas. The place has been developed over high quality and standards. Greater services are being provided by the store. it has been located near the university campus or attracting college students and the also corporate coffee lovers. The Coffee House has been offering best standard coffee to the customers along with other beverages and foods like pastries, and also free books, internet facilities and study facilities. The store has been operating within a 2,500 square foot coffee bar which has been set within the convenient place for the customers to avail the products. The start-up funds of 1 million have been invested within the business. For other requirements loan from bank has been required by the organisation. The cafe has been serving daily breakfast and other foods to the corporate clients for expanding the businesses. With the mission to expand the business in greater manner and greater revenue generation loan from the bank has been applied. With efficiency design within the store and extra facilities in the service delivery as well as availability of the services the Coffee House has been attracting the customers. By including innovation and including the modern technologies within the service operations the store has been able to attracted increased number of customers to the sores. This is providing the ability to increase the capital or cash in hand.
Mission statement is the key tool of the business plan. The mission statement of the business captures the goals of the business. Mission statements are helpful to clarify the business essence within the organisation. The mission statement should reflect the niche market of the business. With the mission statement the vision statements are also needed to be clarified. Through the mission statement the statement behind the competitive strategy can be developed. The vision statement is used for encouraging the employees in reaching those mission and goals. The mission and vision statement of the business should be conveyed to the employees or the people who are connected to the business such as the shareholders or partners. (Brinckmann, Grichnik, and Kapsa, 2010) The current business venture has been offering higher quality service to the people with moderate price. The business has been viewing themselves as the partner of the customers, environment and the shareholders. The venture has been opting for getting the reputation as the regionally recognised brand.
The current business has the mission statement to provide better services to every customer than every rival. The mission statement of the business venture is to serve the customers better than anyone else. The mission statement is to serve the customers with welcoming behaviours. Through proper service the business tends to attract the customers and increase their current sales and profit margin.
The vision statement of the business is to add values in the customers' relationship. The business has been developing the vision statement to promote the services and products upon the benefits of the customers as well as organisation. Through the fabric of positive relation with the customers and the experiences the business tends to stretch the coffee business. (Osterwalder, Pigneur, and Clark, 2010)
Mission and vision statement also contains the values which are important in developing the strategic goals. Through pursuing industry leadership in operations, quality, standards, and technologies the business tends to get the excellence in organisational performance.
Product/ service Offering
The products and service which are being offered by the business have being designed by maintaining the standards and the quality essence. The business has been offering higher quality coffee and beverages within the local area. The products are designed by using higher quality ingredients to present values to the customers. The store layout is also considered within the services along with the staff behaviours and the other service components like quality and standards. (Finch, 2010) Apart from the beverages and the coffee products the business is also offering bakery products and other drinks. Through adding values in the coffee by analysing the market demands and the customers' demands the business is tending to attract new customers and also retaining the existing ones. Coffee beans are also sold considering higher quality along with higher cost to the customers.
Along with standard products the coffee the business also focuses over the services. Within the components of the services the ambience, staff, extra facilities like music, internet access are also added for attracting all generation customers. Through the trained staffs and proper skills the customers are welcomed and convinced in purchasing the products and services. Proper utilisation of the human resources is necessary for having customers' satisfaction. By analysing the perceptions and the expectation of the customers the services are designed by the store managers. Different discounts and extra facilities are also playing significant measures in attracting potential customers. (Teece, 2010) By analysing the market demands as well as the competitor offering the business has been offering proper coffee or products along with efficient services to the customers. Through differentiation strategy the products and services are developed to place a unique position within the market.
Market analysis is the key part within the business plan. From the financial standpoint the analysis will identify both the opportunities in the market as well as the ability of the business in adapting those opportunities. This is the qualitative and quantitative assessment of the market. In order to analyse the market both size and volume of the market are considered.
a) Industry analysis:
Through porters five model the industry analysis can be constructed. Porter's Five Model is developed to offer the analysis over the investors and the market and also the evaluation of the organisations' strength and position within the particular industry. This analysis is helpful in driving success within a particular industry. There are five forces which are used to determine the potentialities of the industry. The analysis is also helpful in understanding the competitive landscape within the industry. (Osterwalder, and Pigneur, 2010)
Porter's Five forces analysis:
Industry rivalry or competition: the strongest market force within the market place is the competitors or the rivals in coffee industry. There are different and strong market rivals within the market place inn coffee industry. For placing itself within the market and having competitive edge within the market the Coffee Shop is tend to establish strong brand identity and loyalty within the market. The brand identity will be useful to induce the customers for paying reasonable premium for the products. Intense competition within the coffee industry has been reducing the profit potential for the company.
Threat of substitutes: it is another significant force within the market. Substitute products provide the customers the ability to choose between different ranges of products. There are different alternate food and beverages within the market of coffee which encourage the customers in choosing these products. (Burns, 2010) This will limit the ability to raise the price of the products and services. By specialising within the coffee services and providing premium coffee in reasonable prices the Coffee Shop is trying to attract the customers to choose their products and lowering the threats of the substitute products.
Bargaining power of the buyers: the bargaining power of the buyers is closely related to the existence of the substitute products and the degree of competition within the market. Along with these the market structure is also provide certain power to the buyers. Though the Coffee Shop is small regarding the total revenue, customers of the coffee shop have little individual power in bargaining. As there are various other customers no individual customers have the ability to influence the total profit margin of the business. (Safko, 2010)
Threat of new entrants: within the coffee industry in UK the barriers to the entry are not excessive. The coffee shop has been building their presence within the market in greater manner to avoid the threat from the new entrants.
Bargaining power of suppliers: the suppliers of the materials have greater power over the business as the business of the coffee shop has been dependent over the products supplied by the suppliers. The suppliers are able to demand greater price over quality products and can limit the profits of the organisation. (Safko, 2010)
Effective marketing analysis includes the competition analysis over the marketplace. The key competitors and their strategies should be identified for analysing the degree of competition within the market. The competition can be identified by analysing the strength and weakness of the competitors in the market. Certain steps are there to understand the competition within the market:
Identifying competitors: the businesses who are offering the similar products with similar price or better values can be identified as the competitors for the coffee shop. By considering the industry point of view, coffee shop must understand the restaurant industries who are dealing within the similar industry to serve the customers. By considering the market point of view the competitors can be those who are offering similar products like the Coffee Shop to the customers. (Casadesus-Masanell, and Ricart, 2010)
Assessing competitors: within the assessment of the competitors the objectives of the competitors should be assessed. The objectives of the competitors are based on the cash flow, share growth, profit margin, leadership or position within the industry. The competitors marketing strategy should be identifies with appropriate measures. These will be helpful in understand the proper threats which are possessed by these competitors. The Coffee Shop faces different set of competitors as they are operating within the UK premises.
Competition: the competition can be faced by the Coffee Shop from those competitors who quick service restaurants are offering better products like food and beverages and bakery products. Direct competition can be faced from the quick service or ready to drink coffee beverages market. (Casadesus-Masanell, and Ricart, 2010)
Primary target market
The target market comprises of the customers. By understanding the target market and its customers the coffee shop makes proper approaches to deal with the demands of the customers. Understanding the customers of the business will lead to design proper business model to satisfy the customers. The primary target market is the segment of the marketplace. The primary target audience and their perception over the services and products should be analysed before positioning the products and services to them. (McGrath, 2010) The primary target market of Coffee Shop:
Adults: the primary target audience of the coffee shop is the customers of age 20 to 50, considering both men and women. These audiences are the major target customers of the business. The appeal of the coffee shop would be designed over the perception of these audiences. Through contemporary design and consistent approaches are adapted by the coffee shop to attract these customers. Proper advertising through the internet and social media would be efficient to attract these customers. For keeping the service according to the current status symbol would be efficient in satisfying these customers. (Wallace, and Webber, 2010)
young adults: the young generation within 18-24 age would be considered as another target audience of the coffee shop these customers are 30 percent of total sale of the coffee shop. For attracting these customers efficient measures must be added within the services which would also increase the budget allocation. Providing internet facilities like free wifi, direct connection with unlimited usages over a cup of coffee, modern technologies within the processes like order through apps, or electronic coupon codes for purchasing the products, is necessary for gaining major attractions to the coffee shop. (Wallace, and Webber, 2010) Through social media presence or advertising through youtube would be needed for the coffee shop to attract these customers. College students are finding of coffee shop and consider the coffee store as convenient place over study and group meeting. These customers are target for building a loyal client base.
Business customers: the customers of age 30 to 50 who are working in corporate offices are also target by the coffee shop. For attaining the attraction of these customers the Coffee shop should add different facilities like special discounts over corporate orders. The store must provide facilities like holding business meetings within the store. The advertisements through business events like conference can also attract the attention of corporate business. By targeting this set of audience the business will be able to set higher prices of the products and services. (Wallace, and Webber, 2010)
A wide range of products and efficient services are included within this section o the marketing mix. This component of the mix focuses over the offerings of the business to the potential customers. Through adding proper innovation and differentiation strategy within the product development the coffee shop has been providing satisfactory products and services to the customers. The coffee shops' products mix consists of bakery products, coffee of different flavours, beverages, tea, and other merchandise etc. Adding different flavours within the products different than the competitors are essential for driving success in product placement. Through ongoing product innovation the coffee shop can add new products within the product line. (Altman, and Hotchkiss, 2010)
The price is set for maximising the profits from the products or increasing profitability over each unit being offered to the customers. Proper pricing strategy will lead to increase market share within the market. The prices are also used as the reflection of the products and their values. The pricing strategy impacts over the decision of the customers on buying the product. There are different pricing strategies used by the marketers. The Coffee Shop is using the penetration pricing strategy for the gaining the customers attraction and market share within marginal profit in the first stage of the product placement or product life cycle. On gaining the market share the coffee shop will increase the prices of the products. (Guffey, and Loewy, 2010)
c) Distribution/ Place:
The coffee shop offers its products through the cafe. This component of the marketing mix directs the venue where the products are offered to the customers. It is also used as the delivery method of the products. Coffee shop is considered as the place from where the products are being distributed to the customers. The coffee shop has been considering online delivery options or taking orders through apps. (Altman, and Hotchkiss, 2010) These strategies will be helpful in increasing customer convenience as well as enlarging the presence within the market.
Potential customers should be approached through proper promotional strategies. Mainly advertisements are adapted by the coffee shop over their promotional activities. The promotions can be done more efficiently through the promotional mix or marketing mix strategy. Advertisements within the social media and in papers and TV would be efficient while attracting mass market. Through the sales promotions sample products can be offered to the customers. (Guffey, and Loewy, 2010)
Risks analysis should be done by the coffee shop. There are different critical risks which can be faced by the coffee shop while operating their business within the coffee industry. Risk identification before implementing the business plan is necessary for success of the business. There are several kinds of risks within the business plan such as:
Product risk: product risks are associated with the development of the product. Within the coffee shop the product risks can be generated within the product development processes or from the standards of the products. With the changes in the food and hygiene policies and standards the risks upon the products are also increased. (DeTienne, 2010).
Market risk: the development within the market which is different than expected can impose potential risks to the coffee shop. Fluctuation within the cash flow and inflation along with changes in the exchange rates will impact over the customers buying behaviour as well as the increase in the raw materials.
Financial risks: on choosing a financial unstable location will impact over the business of the coffee shop as the chop cannot attract potential customers. Changes in the trading policies of the government will also impact over the market risks. Changes in the global economical market also impact over the business as these changes will place hurdles in taking proper loans from banks. (DeTienne, 2010).
Competitive risks: high competitive risks are associated with the coffee industry in UK premises as there are many rival businesses considering small, medium and large business within the marketplace. The strategy taken by competitors can impact over the success of the business of Coffee Shop. Existence of many similar businesses is also posing a greater threat over the survival of the business.
Human resource availability: availability of proper skills and competencies are also imposing risks over the dealing with the current trends in the business.
Other critical risks: other critical risks can be considered as the kitchen fire, injuries within the store, different accidents and damages in the machines etc will lead to loss in the business. (DeTienne, 2010).
The coffee shop should take help of risk management by employment risk managers within the human resources of the coffee shop to identify proper risks to the business operation and success.
Financial forecast: the business plan projects that the Coffee Shop has been able to generate $540,000 revenue within one year.
Sales: the Coffee Shop has been opting for serving 150 customers and each of them will spend $10 and the projected sales are $45,000 each month. Each month at least 4500 units must be sold.
Income: income can be generated over the projected sales and after all expenses are paid. It is also indicative of profit and loss. Fixed cost or the operating expenses would be $10,000 each month. Cost of goods sold would be $20,000. So the net profit can be projected as $15,000.
Cash flow: the cash flows statements are developed dependent on the cash inflows and outflows. The statements would be needed while measuring the bank loans and estimating the cash in hand. (Sosna, Trevinyo-Rodríguez, and Velamuri, 2010)
Break- even point: it is the balancing making neither loss not profit. Within this point the revenues and the expenses are equal. These leads to neither profit nor loss through opportunity costs can be paid. (Sosna, Trevinyo-Rodríguez, and Velamuri, 2010) For paying expenses every month minimum 160 coffees should be sell and based on the profit and loss two years would be needed for paying start up costs.
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