Discuss about the Benefits of Integrated Business Planning.
Entrepreneurship is crucial for starting a new business venture in the market. Today, entrepreneurs are focusing on starting the business at the global level for getting more and more profit. Entrepreneurs develop and generate new ideas for the business venture at global level. There is well known that the idea of business is the starting of the business procedures. A new business idea is helpful the entrepreneurs to discover various chances and capability to start up the new venture beneficially (Dudin, 2015). So, this report focuses on the new business idea for the new venture in the market. The report is focused on the new business venture of a café along with the effective business model. New business start-up is based on the business model canvas which is very effective for the success of business venture. Basically, this report is all about running a new and creative coffee shop and meets the needs and requirements of the customers in the Australian market. Objective of this report is to understand the role of business model canvas based on the analysis of market information and essential aspects (Toor & Dhir, 2011).
This report describes a new business venture i.e. a café. Name of this café would be Culture Coffee Bar. There are many coffee shops in Australia but the current coffee shops only meet the basic demand of the customers i.e. demand for the coffee and various drinks. In other words, consumers generally go to the coffee shops as they do not have time to prepare coffee. In many shops, there are no specialists for retaining the consumers. Their sets of choices are simple including fundamental food items such as packed drinks and refreshments and iced coffee. Some coffee shops try to improve the effective image by providing some additional services such as live music and games but they are not enough to improve the image and to retain the customers.
So, by analyzing the enormous demand of the customers in the market, Culture Coffee would spend huge amount of capital in creating positive image of the café. For this manner, company would focus on creating relaxing atmosphere for the customers along with the core products of food, beverages and other services. Because of the value of time in the current time, the café would offer the service of free delivery of the products so that the consumers can enjoy the products in office timings also. By this service, café would be able to maximize its ability to diversify itself among the customers in the coffee market.
Like other coffee shops in Australia, main revenue for Culture Coffee shop would come from the drinks and coffee for meeting the needs of the customers. Along with this, café will offer many different beverages to the customers. So, price of the products would be set as the high level pricing but affordable for the customers in the industry. Apart from the drinks and coffee, the customers will also get variety of products i.e. snacks, food, cakes and live music nights in café.
Based on the business model canvas theory, this model will be applied in the new business venture along with its nine building block structure. This model would effectively able to achieve the goals and objectives of the company. The applied business model in the Culture Coffee bar will be the presentation of the services of the company. The business model will provide the understandings of who company serves, what activities it is carrying out, from where it will get its suppliers and how to minimize the cost to generate more profit in the business (Osterwalder & Pigneur, 2010). So, for the café Culture Coffee Bar, the business model canvas is described below.
First and important part of the business model canvas is identifying key partners for the café. Culture coffee bar will always focus on the food safety to achieve sustainable development in the market. For this manner, company would make reliable partners. Company would make partners to the leading coffee brand in Australia to get fresh and healthy products. To design the furniture, a furniture company would be second partner (Filet, 2013).
There would three major activities of the café for achieving growth and success in the market. Those key activities are marketing, selling and supporting. In the marketing activities, there would be drinks and food preparations, delivery of food and cleaning and decorating café. Selling activity would include training, sales call and advertisements on various platforms i.e. magazines, newspapers, and Facebook. Support activity would include hiring people for the administrative work and outsourcing brands and singers for café.
For achieving significant growth and success, there are two most essential resources i.e. value proposition and activities which including well skilled employees and inside design of the café. The employees and staff of the café will be trained in the in the proficient manner so that they can serve the customers in the better way. They will wear professional uniforms and have the knowledge of foreign languages. Further, company will also invest in the furniture and interior design of the café to build up an Australia style coffee shop for the entertainment and enjoyment. This would create a positive image of café among the mind of consumers (Gavrrilova, 2014).
From the perspective of the potential customers, café will provide such atmosphere that will be enjoyed by the customers. Customers could enjoy variety of beverages i.e. drinks, fast foods and cakes served by the trained employees and staff in the café. Café will provide such atmosphere which would make the customers relax after hectic schedule of work or study. Further, Café will provide various quiet spaces where businessmen can make their meetings and appointments. Along with this, café would also conduct some live music nights to generate more activities for the potential customers. By all these activities, customers will have new experience with the relaxing place (Sinfield, Calder, McConnell & Colson, 2011).
It is well known that effective relationship with the customers is very important for the success of the business. In terms of the importance of the relationship with the customers, Culture coffee café will plan to provide coupons and VIP cards to the customers so that they would get for their allegiance towards the products (Mason, 2015). The VIP cards with the special offers will be distributed to the loyal customers who would come at least once in the week. Further, less regular clients will also receive 10 to 25% off coupons and discounts. It is believed that this strategy would be helpful in maintaining customer loyalty and improve the visit facility (Teece, 2010).
In terms of distribution of products, there would be two ways to use the products of café i.e. in store and delivery of products. Café will suggest the customers to visit on the store and order their products. This would generate opportunity for the café and employees to provide better quality experience to the customers. Further, if the customers are busy and demand for their desired products, then free delivery service or delivery with the extra charges would be provided to transport the products to the customers’ hand. The time of the services can be shortened as much as possible to provide guaranteed quality products (Burns, 2014).
The potential customers for the café will be identified based on the age and profession. In terms of the age of potential customers, the café would serve the customers from 15 years old upwards. Further, in terms of profession, the consumers are differentiated from the students, employees, businessmen and performers. The reason is that the students spent lots of time hanging around in the coffee shops after their schools and colleges. Further, employees and businessmen have high and middle income and they are highly demanding for the coffee shops where they can settle down, make their activities and enjoy the drinks. Located in Australia, the café would be oriented towards providing services to the artists who make high income and need quality products (Fifield, 2012).
It should be noted that the target customers have different styles and habits. It is observed that in the age of 15 to 22, there are students of high schools, colleges and universities. Although these people are not earning money but they get money from their parents so these consumers have high demand of coffee after their school and colleges. The customers will be approached by the internet and social media platforms. Other target customers are the employees and business people who are working full time to create their money. These customers are willing to pay for their desired product. These customers will be attracted by the TV commercial, internet and magazines. Further, there are artists who will be attracted by the company. Advertisements in newspapers and magazines will be helpful and effective to approach those customers (Armstrong & Cunningham, 2012).
The cost of the rent would be responsible for the crucial part of the operating cost of the company. Along with this, there are other operating costs including raw material, staff, outsourcing and marketing of the products. These costs would be estimated in the financial part of the café.
Key revenue stream of this new venture would be generated by the purchases of the customers i.e. beverages and varieties of coffee such as Espresso, Flat White, Macchiato, Americano, and Cappuccino which are the core products of café. Along with this, café will also collect the amount of revenue by the event of live music on every weekend. Further, there will be additional services i.e. appointing or meeting area which would be free of charge. It is expected that the customers segments i.e. teenagers having age of 15 to 22 and working people having the age of 22 to 40 would bring about 35% to 45% out of total revenue. Meanwhile, 10% revenue from the customers having age above 40 would also be generated (Baraban & Durocher, 2010).
Conclusion
This report focuses on the importance and role of the business model canvas in the new business venture. From the above discussion, it is observed that new venture of café needs to prepare its business model canvas for getting high level of growth in the market. There are nine blocks in the business model canvas and all the blocks have significant role in the success of the new venture. Main objective of this report is to create a new business venture and formulate business concepts with the business model canvas theory. Second objective was to provide the overview of how the business model canvas would be helpful to achieve the desired goals and objectives in the new business venture. This report provides brief overview about the coffee market and the requirements and preferences of the customers. Based on the analysis, target market is decided for the café. Business model canvas is the important part of the study to analyze the detail of the company along with the understanding about the new venture. In conclusion, this report provides the theoretical information on formulating the business model for new business venture of coffee shop based on the huge demand of the coffee in the Australian market.
References
Armstrong, G., & Cunningham, M. H. (2012). Principles of marketing. Australia: Pearson publication
Baraban, R. S. & Durocher, J. F. (2010). Successful Restaurant Design. USA: John Wiley & Sons
Burns, P. (2014). New venture creation: a framework for entrepreneurial start-ups. USA: Palgrave Macmillan
Dudin, M. N. (2015). The Innovative Business Model Canvas in the System of Effective Budgeting: Asian Social Science. 11 (7). 290-296
Fifield, P. (2012). Marketing strategy. (2nd). Berlin: Reed educational & publishing Pvt Ltd
Filet, E. (2013). Conceptualising Business Models: Definitions, Frameworks and Classifications: Journal of Business Models. 1 (1). 85-105.
Gavrrilova, T. (2014). Modern Notation of Business Models: Visual Trend: Foresight-Russia. 8 (2). 56–7
Mason, H. (2015). Trend-Driven Innovation: Beat Accelerating Customer Expectations. John Wiley & Sons
Osterwalder, A. & Pigneur, Y. (2010). Business Model Generation. New Jersey: John Wiley & Sons
Sinfield, J. V., Calder, E., McConnell, B. & Colson, S. (2011). Corporate Strategy: How to identity new business models. MITSloan Management Review.
Teece, D. J. (2010). Business Models, Business Strategy and Innovation. Long Range Planning. 43. 172-194
Toor, T. P. & Dhir, T. (2011). Benefits of integrated business planning, forecasting, and process management: Business Strategy Series. 275-288
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