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MA625
AU
Melbourne Institute of Technology
The mission of the business is to provide the best quality of café products to the customers and to also ensure that the management is able to generate proper revenue from operations.
The vision of the business is to establish a café which can be best café in the region for the customers and the management of the company further wants to expand its café business to forms recognize café brand in Australia.
The values of Café Latte would be to offer the best quality of café products and bakery items which the region has seen and that too at affordable prices so that every class of customers can be served. The business would look to maintain high level of hygiene and ambience so that customers are attracted to the café to just spend some quality time with their love ones and enjoy a cup of coffee of their preference.
The business would be ensuring that no activity is undertaken which can impact the flow of operations and can affect the flow of operations of the business.
In Australia, coffee is a very popular product which accounts for daily consumption from the residents of the country. It is for such a reason that there is ample opportunities in the market to establish a successful business operations in Australia. In terms of revenue Australia recorded revenue of USD 2.36 billion in 2020 which covers a substantial growth in the consumption rate of the beverage. Future the Industry is expected to growth further which clearly denotes the potential which the industry has in terms of generation of revenue. Even though the business environment was severely affected by COVID 19 pandemic, it is still anticipated that the small cafes and franchises would remain popular in the next five year (Quantumhouse.com.au. 2021).
The business operation for Café Latte would be based on a service model and the business would look to produce fresh bakery and fast food products so that the business can offer a certain level of quality in its products. The business store would be offering dining services and also delivery services so that overall range in the market can be enhanced and proper revenue can be generated from operations
The business would be looking to satisfy the consumption needs to café products in the market and further would be providing best qualities of food products so that more products can be offered to different class of customers. The business would be looking to supply café products to office near Adelaide as the café latter, expresso would be in high demand.
The strategic advantage for the business would be in quality which the business would be offering and that at a lower price so that the same can be afforded by all. In addition to this, the business model is focused on diversification aiming at ensuring that the business has some products to offer for every class of consumers. The business would also be looking to follow a flexible pricing structure which means that the products which are being offered would determine the price of the product.
The business structure for Café Latte would be a private company as it would then be able to access external capital such as bootstrap financing and venture capital options. The business would be established as a private company so that it can be legally be established so that there can be legal advantage for the same.
The business would be registered as a private company with the register of companies so that it becomes legally binding and the business would be able to enjoy legal advantages which are applicable to a private company.
The location for the store would be in Adelaide where the management of the company would be able to access the local household customers and office workers so that the overall demand of the business can be enhanced significantly. The location of the business would also help the management to attract new customers and thereby create a strategic advantage in the market.
In terms of geographical reach, the business would also be offering delivery services and therefore the business would be able to reach out to more and more customer around the areas of Adelaide. In order to ensure that proper delivery services are provided to the customers, the management of the company would be ensuring that proper fleet of cars and delivery bikes are maintained. This would be a form of alternative revenue for the business and the management would be able to expand its operations on the basis of the same.
The owners of the business would be handling the operations of Café latte in a joint manner and would have equal contributions and equal share in terms of remneration. All the major decisions of the business would be the responsibility of the owners.
The management in order to formulate a proper plan regarding the business would be utilizing both qualitative and quantitative research data. The business would be analyzing trends and also the future potentials of the company so that proper opportunities can be identified and accordingly steps can be taken to make maximum use of such opportunities.
The business of Café Latte needs to target its customer segment so that it can specifically focus on such customers to generate maximum proportion of revenue and maintain a steady rate of profits. The business would be looking to target office workers and household customers to generate maximum proportion of income. The main reason for the same is the fact the café would be situated near a major office area of the region and would have a supermarket near its location (Rothaermel 2015). The office workers can gt their morning expressos or latte from the café and bakery items would be specifically baked for the household wives and maids. The business would be maintaining a fast food section as well so that additional revenue can be generated and more profits can be achieved from its operations (Burns 2016).
The business of Café Latte in order to differentiate its product line would also be offering bakery items and fast food products. The bakery items would be baked freshly including donuts, buns, cakes and breads. This is expected to attract more customers to the business and enhance the overall revenue of the company significantly. The market is quite favorable as bread still enjoys a high penetration rate in Australia, albeit slowing down in terms of growth rates. The bakery business has a potential of achieving growth in future as pre the trends which is portrayed below:
Figure 2: (Australian Bakery Trends)
Source: (Marketresearch.com. 2020)
Figure 2: (Different types of Australian Bakery Products trends)
Source: (Marketresearch.com. 2020)
The above graph appropriately shows that the business idea has lot of potential and if the same can survive in the market, then is a scope for achieving growth in the operational process.
The factors which have an impact on the demand of the products and services are appropriately listed below:
The factors which have an impact on the bargaining power of the supplies and other support are listed below:
The industry size for the business is large as there are a lot of café business either established or are being started so that opportunities can be identified and taken advantage of. In terms of revenue Australia recorded revenue of USD 2.36 billion in 2020 which covers a substantial growth in the consumption rate of the beverage. Future the Industry is expected to growth further which clearly denotes the potential which the industry has in terms of generation of revenue. Even though the business environment was severely affected by COVID 19 pandemic, it is still anticipated that the small cafes and franchises would remain popular in the next five year
The current and anticipated trends for the business is quite positive which shows that there are ample opportunities in the market to enhance the operations and further increase the savings of the business.
The major customer group for the business would be household and office sector so that appropriate revenue can be generated from operations.
| Strengths | Weaknesses |
| The business would have a strong location and therefore can access customers easily. The product line for the business is quite diverse which would protect the revenue of the business. Experienced Management to manage the operations (Bohari, Hin and Fuad 2017). | High turnover of employees and staff members is expected Initially high operating costs is anticipated Difficult to plan due to unavailability of proper data to plan whether the business would be successful or not. |
| Opportunities | Threats |
| The business has the opportunity to take advance of the location and create a brand name for itself Technological advancements and innovative beverage combinations and cakes can be created to attract customers There is a potential market for online delivery services of the products which can enhance sales significantly. | High competition in the market can affect the revenue of the business. Price sensitive markets and therefore keeping the prices low would be a challenge Low profit margin for the business unless customers range is high. |
The direct competition for the business would be from café business which are offering same or similar products. In the manner that indirect competition would be from established foods chains like McDonalds, KFC, Starbucks who are a bit premium but offer the same type of products as the business.
The business would be depending on the quality and price so that proper customers can be attracted to the operations. In addition to this, the business would be following diversification strategy so that better quality and variety of products are offered to the final customers.
| Competitors Name | Product and Services | Point of Difference |
| Room 10 Espresso | Different types of Café products and foods | Does not offer bakery items especially freshly baked breads. |
| Starbucks | Specialises in different varieties of café drinks and the same have innovative flavours and combinations (Hospitality Suppliers Sydney: Best Supplies For Cafes & Restaurants 2018). | Café Expressos would have a more friendlier price which would attract customers |
| Mary Street Bakery
| Specialises in Bakery items and offers wide variety of café products as well | The business would have better prices in comparison to this competitor. |
The business would be formulating its marketing plan which would have its own separate budget and the same would be allocating funds to the operations so that better results can be obtained in terms of profit generation
The business would be looking to keep its prices low and use the word of mouth means to promote the operations and further offer discounts so that it can retain customers. The business is also looking to maintain an advertisement and promotion budget so that more revenue can be generated with the investment made in advertisement activities. The business would utilises television and social media advertisement mainly to reach out to as many customers as possible so that more profits can be generated from its operations.
Baker, M.J., (2014). Marketing strategy and management. Palgrave Macmillan.
Bohari, A.M., Hin, C.W. & Fuad, N., (2017). The competitiveness of halal food industry in Malaysia: A SWOT-ICT analysis. Geografia-Malaysian Journal of Society and Space, 9(1).
Brigham, E.F. & Ehrhardt, M.C., (2013). Financial management: Theory & practice. Cengage Learning.
Burns, P., (2016). Entrepreneurship and small business. Palgrave Macmillan Limited.
Curtis, V., (2016). Small Business For Dummies-Australia & New Zealand. John Wiley & Sons.
Gupta, A., (2013). Environment & PEST analysis: an approach to the external business environment. International Journal of Modern Social Sciences, 2(1), pp.34-43.
Gürel, E. & Tat, M.,( 2017). SWOT analysis: A theoretical review. Journal of International Social Research, 10(51).
Ho, J.K.K., (2014). Formulation of a systemic PEST analysis for strategic analysis. European academic research, 2(5), pp.6478-6492.
Hospitality Suppliers Sydney: Best Supplies For Cafes & Restaurants (2018). Available at: https://www.sydneycafes.com.au/hospitality-suppliers/ (Accessed: 16 September 2021).Phadermrod, B., Crowder, R.M. and Wills, G.B., 2019. Importance-performance analysis based SWOT analysis. International Journal of Information Management, 44, pp.194-203.
Quantumhouse.com.au. (2021) Available at: https://www.quantumhouse.com.au/wp-content/uploads/2020/09/Industry-Performance-and-Outlook_Cafe-and-Coffee-Shops-Services-2021.pdf (Accessed: 16 September 2021).Rothaermel, F.T., (2015). Strategic management. McGraw-Hill Education.]
Trends in the Baking Scene - Fine Food Australia (2015). Available at: https://finefoodaustralia.com.au/bakery/shopping-purchasing-trends-in-the-baking-scene/ (Accessed: 5 October 2020).
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