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Custom Entrepreneurship, Innovation and New Ventures Essay

Mission statement.

Bright-X Coffee Cart provides best coffee Espresso and pastries to university community. It will be opened to help customers reduce their daily stress with high quality friendly customer service. The company aims to become one of the best coffee carts in Sydney. 

Company history.

This coffee business is a new brand business with farsighted plans of becoming a franchise.

Business goals

Bright-X Coffee Cart’s business goals are the following:

- To penetrate the coffee market in Sydney by attracting scholars, university staff, and local community members and by keeping them loyal to the brand. The latter will be achieved by proposing comfortable and the nearest coffee cart with all kinds of Espresso, delicious desserts, and the possibility to enjoy a cup of fresh coffee while reading free newspapers and magazines;

- To yield AUD $2000 weekly and receive sales revenue of about AUD $100000 and to make a AUD $30000 profit by the end of the first year of operations;

-   To become a franchise after a year of successful operations.

It is expected to minimize the expenses in a short time frame and earn AUD $30000 profit by the end of first year. In the long-run (in two-year period) the profit will be increased as a result of successful marketing policy and increased popularity among target customers. The number of staff employed will account for 1 employee for the first year, and then this figure will be increased depending on the results obtained after one year of operations. Product range will include all kinds of Espresso and several types of desserts. Owner of the business will take active part in all company’s activities since he has high entrepreneurial skills. He graduated with CQUniversity bachelor degree in business.

Marketing

Market research.

According to the data provided at the official website of the CQUniversity Sydney (2013), there are around 2100 students who come from 60 countries. This number of potential customers will be added to the university’s staff and office workers, who are employed at the companies situated close to the CQU Sydney campus. According to the Australian Coffee Traders Association Inc (2013) “more than one billion cups of coffee are consumed in cafés, restaurants and other outlets each year, this is an increase of 65% over the last 10 years” (n. p.). It should be stated that roast and ground sector of the coffee market is growing fast recording total retail sales volume of $96 million. This market sector demonstrated 28 percent growth over the last 5 years, and Australian consumers continue to prefer these types of coffee appreciating their higher quality.

Market analysis.

According to Australian Coffee Traders Association Inc (2013) “the Australian coffee market is very competitive but consumers are brand-loyal, and becoming more sophisticated”. Pure coffee market, in particular premium, ground and roast coffee segments, is the segment where consumers are increasingly sophisticated. Customers prefer pure coffee products and decrease their consumption of the instant coffee correspondingly. “Coffee consumption per capita has doubled over the last 30 years in Australia, from 1.2 to 2.4kg per capita in 1998/99; while tea consumption has declined from 1.2kg to 0.9kg per capita, a decrease of 60% over the same period”.

Regarding the main competitors of the Bright-X Coffee Cart, it should be stated that there are many different coffee shops that provide similar coffee products. However, the biggest weakness of these coffee shops is that they are located within 2-3 minutes walking distance. It is not convenient for students when they have a short break. According to statistics on the survival rate of new businesses since 2007, in 2011 the percent of new entities’ survival amounted to 56,9 percent.

SWOT analysis of the coffee cart business is presented below. Strengths of Bright-X Coffee Cart that will provide profit for the first year of operations and for the further development are:

-   Selling high quality Espresso and desserts;

-   Well trained employees with high level of dedication, who increase the number of repeated purchases due to the high level of customers’ satisfaction;

- Appealing to students, university staff, and business people, who do not want to spend their break time walking more than 10 meters to get their coffee and a dessert.

Weaknesses:

-   Unknown label and brand;

-   Small scale of operations;

Opportunities for the business are:

-   To enlarge business scale and increase the market share  by developing a franchise;.

-    To attract more customers with aggressive marketing policy and promotional actions;

-    Possibility to have governmental support, in particular tax incentives as for the small businesses;

Threats for this new business may appear in the following situations:

-   Economic and financial crisis with worsening of the economic situation in the industry;

-   Deficiency in the number of customers due to new brand introduction;

-    Entrance of the new competitors with the lower prices.

Marketing plan.

Products/services and target market.

It should be emphasized that Bright-X Coffee Cart Pty Ltd will be positioned as the nearest and the most convenient coffee cart for the university community and local office workers that would propose fragrant and fresh Espresso with desserts and possibility to relax while reading newspapers and magazines. Target customers are students, staff, and local community members living around the campus area. The emphasis is put on favorable location of the Bright-X Coffee Cart Pty Ltd.

Key factors of the success of Bright-X Coffee Cart and its competitive advantages are the following:

-    Favorable location;

-   It will provide various kinds of Espresso even for the most sophisticated coffee fans;

-  High quality of all products proposed and high sanitary standards;

-   Advertising and promotion, in particular conducting numerous special promo campaigns.

Placement.

Bright-X Coffee Cart will be situated on the territory of the CQUniversity in Sydney and it will be the nearest coffee cart compared to other competitors.

Promotion and advertising.

The following preconditions will determine success of the business of Bright-X Coffee Cart:

-   Favorable location;

-   Exceptionally high quality of coffee and desserts;

-   High level of service, making customers loyal to the brand;

-  Highly professional staff;

-   Attention to details in strategic planning and routine daily operations;

-  Aggressive promotion and advertising policy.

It is planned to implement some activities to encourage customers to buy coffee. These activities can include coffee art competition. The winner can get reward - a $500 gift card. The increase in sales will also be stimulated by the promotional offer: “Buy 10 cups of coffee and enjoy the 11th one for free”.

Naturally, a web site of the business will be created with the aim to receive feedback from company’s customers and enlarge the scale of sales. It will also be one of the steps to promote the new Bright-X Coffee Cart, the source of information about company’s products, their origin, and discounts and special offers proposed. Advertisements through the leaflet distribution will be done. Moreover, the system of membership cards will provide additional bonuses to the most loyal customers. Positive word of mouth will also be a part of marketing promotion of the new venture, in particular the emphasis will be put on the fact that students are the most active users of social networks. Therefore, the information about the new coffee cart offering high quality products and services will spread with the tremendous speed.

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Pricing strategy.

Penetration strategy or the low-price strategy will be applied to introduce a new business and increase the interest of target customers’ to the new brand. According to Sullivan & Adcock (2002), such a strategy provides additional demand for industry’s new player and allows to win bigger portion of the market share.

Considering that company’s location is in the ground level of the campus, most of the target customers are students. Therefore, the price will be set lower than that of nearest competitors.

Evaluation of marketing.

It should be emphasized that effectiveness of marketing policy, in particular special offers, promotion, and advertisements efforts, will be evaluated on the quarterly basis analyzing the number of customers, sales volumes, and trends. Moreover, with the aim to monitor preferences of target customers, their tastes, and possible suggestions or complaints short questionnaires will be conducted. These questionnaires will include questions about the main parameters of the service provided with the opportunity to evaluate the level of products' quality and the overall quality of the service provided. After obtaining results, the management of the company will make appropriate decisions or corrections in operational activities with the aim to increase the quality of services. This will also be done to receive more positive feedback in the future as well as prove the reputation of being the best in the industry.  

Operations

Legal and licensing requirements.

The name of the business is “Bright-X Coffee Cart”. This name was chosen to underline that customers will enjoy extraordinary service and high-quality of products, their experience will be bright and they will certainly come back to order additional cup of coffee.

According to the Australian Taxation Office (2013), Bright-X Coffee Cart Pty Ltd can be legally defined as a small company for a planned income year because it will conduct a business in that year. Moreover, its aggregated turnover will not exceed the level of AUD$ 2 million.

According to the Business License Information Service (2013) and Australian Securities and Investments Commission (2013), it is required to have food business license, national business name registration, registration of a trade mark, Australian business number registration, and goods and services tax (GST) registration.

Management details.

The Bright-X Coffee Cart will be organized as a proprietary limited company with contribution to the share capital of 45 thousand AUD. The owner will take a long-term loan at St. George Bank Limited at 7% interest rate. This loan is planned to be paid off by 2017.

Organization, structure, and staffing.

It is planned to hire one employee during the first year of operations with the aim to minimize start-up expenses. This employee will take courses for operating the coffee-making machine. This position will be regarded as a full-time position. It is important that the owner will follow all requirements of labor legislation established by the Australian Department of Commerce (2013) including paid vacation, sick leave, and others. It is also planned that the operations will be expanded, and, therefore, the number of employees will increase with the increase of sales volumes.

Professional advisers.

It should be stated that despite the fact that the owner of the business has deep knowledge in the business sphere as a CQUniversity bachelor of business, he will use professional services in the spheres of expenses optimization, profit level reaching, and will use outsourcing of accounting services. Grosvenor Management Consulting will be chosen as a consultancy company in the sphere of taxes, expenses optimization, and its services will be particularly needed during the process of franchise implementation. Grosvenor Management Consulting has several subsidiaries in Melbourne, Sydney, and Canberra. The main office is located at Level 12, 220 George Street, Sydney. Taylor Woodings Company, Sydney is chosen as the outsourcing company for accounting services.  

Insurance and security issues.

It is necessary to insure the property and other unexpected events. Insurance company NRMA insurance will provide insurance in particular covering public liability, machinery/equipment breakdown, fire, personal injury and illness.

Business premises.

The Bright-X Coffee Cart will be located in ground level CQU Sydney campus. Coffee cart was chosen as the most technically upgraded, and the coffee making machine is the latest achievement of technological progress in the coffee industry.

Equipment required.

Equipment will be ordered from the Coffee Cart Biz. The owner chose 10' Espresso Cart form the Signature Line of coffee carts. This coffee cart was chosen due to exceptional technical characteristics such as water filtration, back bar splash, storage area, fixtures in particular industry leading beverage air UCR refrigerator and other fabrication, and plumbing.

Production process.

During the first year of operations Bright-X Coffee Cart will buy imported coffee from the local supplier. The same purchase process will be used with the supply of readymade desserts that will be stored at the refrigerator built in Signature collection’s coffee cart.

Critical risk/contingency plans.

The owner of Bright-X Coffee Cart business should consider the following critical risks:

-  Failure in the sales volumes and customers number prognosis;

-  Loss of a key supplier;

-  Illness or loss of the employee;

-  Illness of the owner.

Custom Entrepreneurship, Innovation and New Ventures Essay

Code: Sample20

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