In this report, business analysis of Company and the opportunity available in market have been taken into consideration. This research report reflects how an organization could earn high amount of profit by running its business effectively in market.
Present description of organization
The name of organization is Lucky café which will be incorporated to offer coffee and other beverage products in market. In United Kingdom market, lucky café business has been started to provide foods and beverage products in market. The main marketing factor of business is to increase its overall productivity and increase the efficiency of business. This lucky café business could help investors to create value on their investment. Once lucky café establish its brand image in United Kingdom market then it will increase the overall productivity and efficiency of business in determined approach.
Location of starting of new business
It is evaluated that this Lucky café business would be opened near to multinational mall of the UK. This area will be accompanied with the employees, college going boys and couples who like to drink coffee and other drinks (Palia, 2014). The location of Lucky café business would be in the mid of the Shepherd’s Bush, London near Westfield London shopping centers. It is highly potential area which will be useful to grab more clients in market.
Founding Team
This business is started by five members in which three were promoters and rest two were directors who instruct and manage the business functioning. This founding team will be indulged in key activities to run the business effectively.
Business model of Lucky café
This business model will be useful for the lucky café to start up new business and effectively run the business (Brigham & Ehrhardt, 2013).
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Key strategic partner · Promoter’s alliance. |
Key Activities · Generating systematic app · Implementing proper action plan · Taking franchise and other plans. |
Value Proposition · Creating dashboard · Establish new marketing channel. · Grasping more clients. · Understanding clients’ needs and demand. |
Customer Relationships · Direct sales through offline business channel. · Using cyber system to sell goods through online channel. |
Customer Segments · UK clients. · Focusing on walking clients near to malls · College going girls and boys |
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Key Resources · IT solutions: · IT staffs and members · Investment in development work |
Channels · Generate website of education support · Use of social network sites and values · E-mail marketing and Referencing |
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Cost Structure · Website cost · Maintain charges · Use of IT development · App development cost · Hiring IT staff members · Management of dashboard · Installing cyber computing system plan |
Minimum Viable Product · Use of highly advanced cyber computing system · IT dashboard · Use of Google image section · Implementing strategic alliance |
Revenue Streams · Developing posters · Installing cybersystem · IT team · Use of new system · Developing app and new system |
The main business which is introduced to start up new business is related to food and beverage products. It is observed that selling food and beverage products near malls and multinational companies. These offered products will increase the overall turnover of company and will increase the profit throughout the time (Brigham & Ehrhardt, 2013). Hub area crowed with the many people will strengthen the overall turnover of the market and strengthen the opportunities available in the market and will increase the overall outcomes of the business.
This gap analysis is used to identify the gaps between optimized allocation, integration of inputs and current allocation of resources. This gap analysis helps company to identify the areas which need to be improved. It is accompanied with the following steps given as below (Brigham & Ehrhardt, 2013).
Usage gap
It is determined by identifying the gap between the total potential for the market and actual current usage by all the consumers. Lucky café is a new start up in which there is high potential of market and existing usage is very low. However, there is around more than 2 million people who could be potential clients and company has no achieved clients in market. Therefore, the whole market potential is included in usage gap of the company.
Product gap
This product gap is called the segment gap which could be used by Lucky café to diversify its business. For instance, including dinner, lunch and other product selling could also be included in the business of lucky café (Romme, and Reymen, 2017).
Implementing better process system
This process will help Lucky café to start up new business in effective manner. Company could adopt cyber computing system in its business to attract clients and increasing the overall output from its business (Mohd, Idris and Momani, 2013).
Lucky café has planned to offer the foods and beverage products in market. Providing best quality and offering best services are the key competency of the products. These factors have shown that company could keep its price and quality of the products high with a view to increase its overall efficiency of the business. This will help company to increase its overall brand image on international level.
Lucky café has determined to develop core competency by following cost leadership and product differentiation strategy throughout the time. This level of business functioning will allow company to increase its overall output throughout the time.
Market demand
This food and beverage market is having high growth in market. However, with the ramified changes and economic condition of business, new entrants or businessman is gaining momentum in market with the help of innovative and creative technologies in market. It is considered that if proper level of business functioning is implemented then it will increase the overall productivity and efficiency of business. The innovative technologies in market are related to use of cyber computing enterprises resources planning in market. It will help company to grasp more clients through online portal and increasing the brand image in effective manner (Mohd, Idris and Momani, 2013).
Market segmentation
However, existing business organizations who are indulged in providing foods and beverage to clients are lacking with the new innovative and creative technologies. It has resulted to low level of client’s satisfaction in market. Therefore, new ventures who are indulged in running business by using cyber computing enterprises resources planning in market could easily increase the overall turnover and market share. This cyber computing enterprises resources planning will help new ventures to develop cost leadership and product differentiation strategy in market. This will reduce the overall cost of the products and services and increase effectiveness of the communication channel of organization (Loza, 2017). In addition to this, if proper level of business is implemented then new ventures could easily create effective brand image in present United Kingdom market. The main innovative strategy of lucky café would be to take orders through its cyber computing enterprises resources planning or developed dashboard. This will increase the satisfaction level and experience level of clients on the edge of their satisfaction (Mohd, Idris and Momani, 2013).
Application to industry/sector
There are several market segments such as restaurants business, hotels and coffee centers. Lucky café could focus on grasping the restaurants business in starting. After that it could planned to increase its overall products selling. This food and beverage industry has been offering good amount of business growth and high potential which will showcase the positive result to the future business growth.
Market potential/Target market
People in United Kingdom are more inclined towards the organizations and business enterprises that uses highly advanced technologies in their business functioning. However, the main advantage of implementing the business in United Kingdom which lucky café could have is related to how well it could offer its products and services to its clients. If clients find the services and products offered by Lucky Café are more attractive and accompanied by newly innovative technologies then it will increase the overall market share of business (Rashid and Ghose, 2015).
Macro-environment analysis
PESTLE analysis
It is evaluated that PESTLE analysis helps company to evaluate all the internal and other factors of business. This will help to optimize the resources of organization and implement effective market strategy (Schmidt, Spann and Zeithammer, 2014).
Political- These are the political factors which influence company’s corporate governance, government leadership, legal policies and laws of the company. In United Kingdom, starting of food and beverage business is very easy and political view point of the United Kingdom government is also very stable. Therefore, Lucky café could easily prepare its corporate policies on the basis of existing law and political parties of United Kingdom (Siguaw and Simpson, 2015).
Social- It is accompanied with the value, belief, perception and wants, needs of the clients in market. If proper levels of strategies are implemented then it will not only increase the turnover of the business but also brand image of company. Lucky café has to keep its beverage products sugar free in order to make its products customized as per the needs and wants of the clients (Solomon, 2014).
Legal- It is related with the applicable rules and regulation of company. Lucky café needs to evaluate all the tariff and traits of the business. It will also have to comply with the CSR rules, regulations, international laws, workmen compensation act. Lucky café also have to evaluate all the domestic and international rules and regulation which will also increase the effective corporate governance of company (Wei, Samiee and Lee, 2014).
Economical- It is evaluated that GDP of the United Kingdom is growing with the average rate of 9% on the basis of last 5 years data. It is considered that with the increase in the GDP rate, standards of living of the United Kingdom people is also increasing. In addition to this, employment rate and National income of the United Kingdom is also increasing with the tremendous rate.
Technologies- These factors directly affect the business functioning and productivity of the business. It will help company to provide product differentiation strategy in market. Lucky café could follow cloud computing enterprises resources planning. This cloud computing enterprises resources planning will allow company to customize its offering as per the clients demand in market. It will also allow company to follow product differentiation strategy (Palia, 2014).
Micro-environment
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Company These above factors have shown that company needs to evaluate all the policies and measures to provide best quality of foods and beverage in market. This will allow company to increase its overall market share and brand image of company. However, company needs to cover at least 10% market share in this foods and beverage sector with a view to cover up its invested capital within 3 years (Ramoglou, and Tsang, 2017). |
Customers There are several clients in UK who are inclined towards availing best quality services. Company could focus on customizing its products and services to grasp more clients. |
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Competitors Star bucks, Dunking’ donuts are the main competitors for lucky café. These companies are coming up with innovative business ideas and plans to run its business. |
Collaborators In order to finance the business funding and marketing of its products, Lucky café could enter into strategic alliance with ITC for IT marketing and banks for financing the project. |
SWOT analysis of company
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Strength Lucky café by using ERP cyber computing system could grasp more clients and increase its turnover (Diggle, 2013). Existing laws and regulations in UK is very liberal. Lucky café could easily prepare its corporate policies on the basis of existing law and political parties of United Kingdom. |
Weakness Company could face litigation and proceeding from the existing rivals in market. There is high start-up cost which may result to increased cost of production. |
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Opportunity Lucky café could diversify its business in other markets in future to increase the output of business. Availability of experts employees may also create core competency in product differentiation strategy |
Threats There is high growth in restaurant business which attracts various businessmen to invest in this business. Tough competition may result to facing high loss in business. |
There are several expenses which are required to start up new business (Brigham & Ehrhardt, (2013).
Start- up capital requirement
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Details |
Cost £ |
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Restaurant expenses |
40K |
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Employees hiring = Employees salary= 1K* 13 employees=13K Expenses for HR team 7K Salary to managers and Key persons= 5k*2 =10K |
30K |
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Management expenses |
20K |
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Marketing advertisement expenses |
10k |
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Legal expenses |
5K |
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Tender filling cost with vendors |
1K |
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Licensing cost for the product |
1K |
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Space hired |
10K |
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Project escalation cost |
5K |
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Total cost |
122K |
Financial analysis
Pricing strategy- Lucky café has planned to sell its products at its production cost. In addition to this all the products are sold at cost plus 25% profit margin. The cost of Mojito drinks are classified at the rate of £8.50 for the small one, £10.00 for medium size, and the largest size is£12.50 (Petty, et al. 2015).
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Computation of the profit For the lucky café in 2017 |
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Details |
Amount |
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Sales |
2000000 |
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Raw material |
500000 |
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Warehouse expenses |
300000 |
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Labour expense |
100000 |
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Other variable expenses |
200000 |
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Total variable expense |
1100000 |
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Contribution |
900000 |
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Fixed cost |
500000 |
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Profit |
400000 |
Break even analysis –This reflects the point at which there will no profit no loss in business
(Source by author)
Conclusion
It has shown that there are various internal and external factors of business which an entrepreneur should consider while implementing effective business functioning in market. If company could use these factors in its strategic planning then it could easily establish effective business functioning in UK business segment.
References
Brigham, E. F., & Ehrhardt, M. C. (2013). Financial management: Theory & practice. Cengage Learning.
Diggle, P. J. (2013). Statistical analysis of spatial and spatio-temporal point patterns. CRC Press.
Mohd, W., Idris, S. and Momani, R.A., 2013. Impact of environmental dynamism on marketing strategy comprehensiveness and organizational performance. International Journal of Business and Management, 8(9), p.40.
Palia, A. P. (2014). Target profit pricing with the web-based breakeven analysis package. Developments in Business Simulation and Experiential Learning, 35.
Petty, J. W., Titman, S., Keown, A. J., Martin, P., Martin, J. D., & Burrow, M. (2015). Financial management: Principles and applications. Pearson Higher Education
Rashid, S. and Ghose, K., 2015. Organizational culture and the creation of brand identity: retail food branding in new markets. Marketing Intelligence & Planning, 33(1), pp.2-19.
Schmidt, K.M., Spann, M. and Zeithammer, R., 2014. Pay what you want as a marketing strategy in monopolistic and competitive markets. Management Science, 61(6), pp.1217-1236.
Siguaw, J.A. and Simpson, P.M., 2015. A marketing plan for marketing instruction: A satirical look at student comments. In Creating and Delivering Value in Marketing (pp. 129-133). Springer International Publishing.
Solomon, M.R., 2014. Consumer behavior: Buying, having, and being (Vol. 10). Engelwood Cliffs, NJ: Prentice Hall.
Wei, Y.S., Samiee, S. and Lee, R.P., 2014. The influence of organic organizational cultures, market responsiveness, and product strategy on firm performance in an emerging market. Journal of the Academy of Marketing Science, 42(1), pp.49-70.
Ramoglou, S. and Tsang, E.W., 2017. In defense of common sense in entrepreneurship theory: beyond philosophical extremities and linguistic abuses. Academy of Management Review, 42(4), pp.736-744.
Romme, A.G.L. and Reymen, I.M.M.J., 2017, May. Entrepreneurship research and practice: toward a taxonomy at the interface of science and design. In Combining rigor and relevance: Entrepreneurship theory as design and social mechanisms.
Loza, E., 2017. Female entrepreneurship theory: A multidisciplinary review of resources. JWEE, (1-2), pp.26-6
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