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to the hotel with a universal drink- coffee. Any customer can walk into any major hotel in the world, and enter the coffeehouse, and know what to expect. These cafs are not really major players in the coffee caf industry. Retail Caf Chains: The last, and the most organized sector in the coffee caf industry, is the retail caf chain. Off late, these chains have become extremely popular and are growing at an ever-increasing pace. These retail chains have work with an organized structure of man, material and money. The work on developing a recognized brand consistent to all their outlets, which customers can easily relate to, wherever they go. They provide customers with a standardized level of service and quality at each of their outlets. Feasibility report: Market threat: our business have the stiff competition from the big retail brand like Caf Coffee Day, Barista Lavazza, Java Green, Costa Coffee, and Gloria Jeans Coffee, but the market is still young. There are more than 140 registered caf in India which may affect out profit margine.our biggest threat in the business is the FDI in retail if there will be 100% FDI in retail shops then there can be the mushrooming of the foreign brands. Business weakness: Due to serving a gaming zone to our customer there can be the high investment cost with it and it may take more time to cover the capital investment, this may also effect the overall per unit cost of production. Customers dont have the brand loyalty with our product will also affect the profit at its introductory stage so this will cost heavy advertisement cost and promotion cost.
Risk analysis: Competition is high in the initial stage with the existing brands in the market and there is the threat of the foreign brand and FDI in the market Financial risk since at the maturity stage there will be more investment in the advertisement, high capital investment which includes coffee machine, land, furniture etc. Economic risk is also included at the introductory stage of the product as there can be less demand of the product in the market as there is big brands are there in the market which are doing well and at the initial stage may be the customer will not have willingness to pay higher price. Ecological risk there can be legal issue while registering the caf in the market.
S.W.O.T Analysis: Strength of the business is the distinct service of the game zone and providing tea of wide variety.
Weakness of the business is that it doesnt have any existing brand name or support of any loyal brand in the market and have comparatively high cost of investment. Opportunity: despite of the stiff competition in the market and existing of the big brand Indian beverage market is still young market which opens opportunity to the new player to enter into the market. Threat: The biggest threat in the market is the 100%FDI in the single retail out let which will intensify the competition in the market as there is already big brand in the market.
Micro economic factor: There can be the problem of the availability of the good work force. There can be the problem of the have having furniture and fixture at cheap cost. Managing chain of retail outlets will be biggest problem for the internal management of the company. We have near about 140 competitors in the market but still this market is young and growing so there is opportunity of growth in the market.
PEST Analysis: There is lots of political issue which caf may face at the initial stage due the change in the working or the policies of the government. The present UPS govt are in the favor of the 100% FDI in the retail outlet India which may create problem. The present Economical condition in the market are in the favor of the business as there is recession in the market so there will be less requirement of the initial capital for the business. At the initial stage society may not accept the new brand In the market but the concept of sophisticated games are brought in the market keeping the need of society in the mind and also fulfilling the need of the variety of tea . Since there in very less need of the technology for this business accept for the use of the Wi-Fi zone, which is not such big issue.
Cost estimation: Fixed cost: Land bought=3500000 Construction=1500000 Furniture=500000 2 coffee machine=16000 Ice cream machine=12000 Tea machine=4000 Flavor soda machine=13000 Salary o 4 main staff for shop @80000 each=32000 pm o 1 sweeper @6000=6000 pm
Fixed rent for electricity=300 pm Total fixed cost=5583300 Variable cost: Electricity bill=2500pm Advertisement expense=6000pm Maintenance=12000pa i.e. 1000pm Total variable cost=9500pm
Total cost=5592800 Estimated sale p.m. =60k to 70k pm (To cover the fixed and variable cost)
Competitors Strength: Barista Barista has a Skim Pricing Policy. They began with a higher price, and skimmed the cream for the market. With the sudden spurt of growth in number of outlets, came the benefits of economies of scale. Because of this, they have been able to gradually lower their prices, and appeal to different segments of their target market. Currently, their prices are the lowest they have ever been, and they can competitively match their prices against Caf Coffee Days prices. The prices are constantly changing though, and the last 1-year has seen 3 changes (mostly reductions) in prices. This gradual price reduction meant that Barista could maintain its profit- maximization policy until it could earn large cost savings because of the benefits of high volume. Barista positions itself as a brand for anyone who loves coffee. Their products, services and outlets are more like the traditional European cafs, where people would meet for the love of coffee, and for an intellectual appealing time. They position their outlets as a place where the world meets, and they look to appeal to anyone in the 14- 60 age group that loves good coffee and looks for a nice quiet time. Products: Baristas product mix constitutes a wide range of products that appeal primarily to traditional coffee lovers. Their products themselves are traditional products with
traditional names. Food items like croissant, pastas, and sandwiches are complimentary to their coffee, and project a very classic image of Barista. Their merchandising also consists of primarily coffee related products like coffee beans, coffee machines, etc. 20 Prices: Considering that Barista is trying to target a market whose age range is between 18 and 60 years, a pricing policy appealing to this segment is difficult. Extremely low prices act as a deterrent to some customers who might regard it as an indicator or quality, while very high prices cannot be afforded by most of the youth. But since Baristas current consumer profile is quite young, their prices are mostly inexpensive, and at par with their competitors.
Solution to the problem: Since the future threat is the FDI in the retail market so to overcome to this problem we have come with the solution of regular innovation in the service and product which will give the competitor edge in the future and we will follow the penetration pricing policies which are acceptable by the society at the initial stage. For the heavy investment in the game zone we came with the idea of leasing the game zone in the initial stage and its demand increases with the time we will buy those games. We will use the social media for the extensive advertisement of the business which wiil be good and cheaper mode for positioning the customers. We will also try to have joint venture with the college canteen and petrol pumps for opening of the outlets. For reducing the financial burden will give the self service to the customer which will reduce the salary budget to the employee. Will Focus the posh area and area where we will get huge young crow and that will be our target customers in the market.