SWOT Analysis

Discuss about the business plan of Cafe Aloha.

A business plan is considered as the written description related to the future of the business, and it is considered as the document that state the planning of the management and also the process of planning. Three important elements of the business are operational, finance, and marketing.

This report prepares the business plan for Aloha café and all the necessary details in context of this plan are stated in this file. Structure of this report includes the internal analysis and also the external analysis of the business. In other words, this plan includes vision and mission, operational analysis, marketing analysis, and financial projection. At the end of the repot, brief conclusion is stated which defines the key features of this report.

Mission statement:

Aloha Café ensures best efforts from its sides for the purpose of creating the unique place where it is possible for the customers to communicate with each other in the comfortable and relaxing environment. This cafe also provides the library where customers can do their work and study while having the coffee. All these unique things of this café help the customers in release their stress by giving piece of mind through great environment and high quality products. Profits of the business are invested for the purpose of increasing the employee satisfaction and also to provide appropriate return to the shareholders.

History:

Aloha café is the private limited company which sells coffee and other beverages to the customers, and this cafe also offer snacks and deserts to the customers. This café is established near the university of Xelia campus, and this cafe is established by Mrs. Purna Peter who holds 19 year experience in this field.

Business goals:

Following are the objectives of the Aloha café in the first year of its operations:

• The main aim of this business is to become the best new coffee bar in the Australia in context of the local restaurants guide.
• Increase the profits of the business in comparison of the first month of the operations.
• Maintain at least 65% gross margin.

Marketing research:

The café and coffee shop industry of the Australia reflect immense growth in last 5 years, and this growth is supported by the vibrant coffee culture of the Australia. Growth in revenue is expected from this industry at an annualized 5.1% from last five years through 2017-18, and this is also boosted by the positive attitude and growing income of the consumer encouraged the consumers to visit the cafes and coffee shops. It is also expected that the industry revenue is increased by 2.7% in 2017-2018 that is up to $8.3 billion. Instead of the strong performance of the company from last five years, competitive pressure reduces the profitability of the company. There are growing numbers of cafes with specialties and these special café increase the competition in the industry and also considered as the low barriers to the industry.

Target Customers

It must be noted that cafes and coffee shops industry has very low level of the market share concentration in comparison of the other industries of the country. This industry is mainly lead by the single establishments and owner operated cafes. The most important players of this industry in context of size are major franchisees of US such as McDonald’s McCafe, Starbucks Coffee and Gloria Jean’s Coffees.

Target market:

Aloha cafe will consider those peoples who prefer to study and work in the relaxing environment while having the cup of coffee. Such type of customers can be divided into the age, and the location of the business clearly indicates that company mainly focuses on the student and faculty. Market research in this context Reflect that company mainly focus on the customers who want to work in the relaxing environment. There are number of college students which consider the coffee bars as the location which is suitable or convenient for the studying and meeting, and where they can review and meet the peers without paying any extra cover charges (Ward, 2017). Following are the main target customers of the business:

• Students and faculties of the university
• Employees of the office.
• Sophisticated teenagers.

SWOT analysis stands for strength, weakness, opportunities and threat. This tool is used for the purpose of conducting the situational analysis of the business (Belcher, n.d.).

Strength: it is necessary for Aloha café to stand out from the rest of the cafes for achieving its business goal. Identification of the strength is considered as the identification of the business position in the Niche market. Following are the strengths of the Aloha café:

• Large variety of coffee and beverages offer by the company.
• Company offers reasonable price to its customers.
• Environment of the café is nurturing
• Company offers home-made treats.

Weakness: each and every business has some weakness, and this weakness can be result because of the budget, location, etc.

• Startup cost of the business is high.
• New entertain the market.
• Company does not own any reputation in the market.

Opportunities: new opportunities in the market provide the way through which company can plan its growth in context of products such as company can add new coffee of the month and also some special discounts for the loyal and frequent customers. Following are the opportunities in context of the Aloha café:

• This café offers large number of employment for the local community of the Australia.
• Catering is also offered by the café.
• Diversity in the target market.

Threats: competition is the obvious threat which is imposed on the business, but there are some other threats also which are faced by the Aloha café:

• Numbers of competitors are there such as Starbucks, McDonalds, etc.
• local coffee shops
• New entrants of the market.

 Marketing is considered as putting the right product at the right place, at the right time, and at the right price. However, this is not an easy concept because it includes lot of hard work and research. In case even one area is left unmarked, a promising product or service can fail substantially and it end up by resulting in the product failure. Marketing mix is considered as the general phase which is used to describe the different choices organization have for the purpose of introducing the product or service in the market (Ehmke,  n.d.). Generally, this marketing mix is executed with the help of 4 P’s that are Price, Product, Promotion, and Place. 4 P’s are stand for product, price, promotion, and place. All these 4 P’s are stated below in context of the Aloha cafe:

Marketing Mix

Product:

This section defines the classification of the product, and what does customer required from the product. This section also defines the products and services offered by the business to the consumers. In case of Aloha café, there are number of products which are offered by the café to the customers such as coffee, other beverages, and snacks. Aloha use high quality ingredients for the purpose of preparing its products and also ensure consistency in its products. There are number of options in the coffee and beverages such as espresso, brewed coffee, teas, and other refreshments. Café also served pastries and cakes to its customers. As stated above, a small section of the café is converted into the library where customers can read and study and for this purpose café provides free books and magazines.

Price:

This section defines the value of the product or service offered by the company, and it also compares the price offered by the company with the price of the competitors. Following are the important characteristics of the price offered by the Aloha café:

• Aloha café offers the entire diverse pricing such as small cup of coffee, medium cup of coffee, and large cup of coffee.
• Competitive pricing is offered by the Aloha café.
• Price is the secondary approach in terms of the quality of product and service offered by the Aloha café.

Place:

This section defines the area where buyers can look for the product or service, and in this company also consider the right distribution channels (Foust, n.d.). Following are the basic factors which are considered by the Aloha Café while choosing the place:

• Company chooses such place in the strategic manner where business can be generated.
• Aloha mainly focus on the universities, colleges, and education institutions where they can target the customers and faculties.

Promotion:

This section defines the channels through which company can promote its product and services offered by the café (Cleverism, 2014). Following are the promotional techniques which can be used by the Aloha café:

• Company can use sales promotion techniques such as loyalty card in which 5^th coffee of the consumer is free.
• Another promotional technique is cookie box under which one cookie is given by the café on per coffee.
• Free books are given by the café to its customers for reading.
• Flyers are distributed to number of places.

Legal and licensing:

License is considered as the recognition or certification taken by the person to conduct any particular business activity. Aloha café also take required license and because of this café takes the Restaurant and Cafe License (ABLIS, n.d.).

Management details:

 Aloha café is the private company which owned by Mrs. Purna Peter who holds the 19 years’ experience in this business. She worked in a café for 12 years and before this cafe she conducts road side stall of pastries and other snacks. She is appointed as CEO of the company and apart from her some other peoples are also hired for conducting the business:

• A professional manager is hired at salary of $28000 per annum, and this manager is appointed for regulates all the business operations.
• Three Full time chefs and baristas are hired at $ 15000 per annum.
• Two waiters are hired at $8000 per annum for serving purpose.

Organizational structure:

Organizational structure of this company is not difficult in nature, as director and manager of the business are under obligation to conduct all the necessary operations of the business. For the purpose of managing this company, management use shared service model, and management mainly focus on the relationship with the customers because this is the most important area in this industry. Business structure also includes the board which provides advice and this board includes 3 members and these members deals with the areas related to the behavioral issues, management, organizational dynamics, and a consumer (Suttle, 2018).

License and Legal Requirements

Business structure of Aloha café also includes the center staff which considers and handles the customer queries and concerns of the customer but they are also responsible to manage the financial matters of the business. Center staff of the café is also under obligation to develop the future goals and handle the matters related to the marketing and sales. This group assigned tasks to the lower level management and also ensures on the quality improvement. This café also frames customer relations committee, and this committee is responsible to ensure that customers of the organization are completely satisfied (Morgan, n.d.).

Business Funding:

For incorporating the café in Australia, following cost is required:

Expenses	Amount
Fees related to incorporation	$35000
License and legal requirements	$15000
Place for cafe	$75000
Equipment’s	$12000
Accounting software	$5000
Start-up expenses & stationery	$3000
Salaries	$ 100000
Miscellaneous expenses	$ 8000

Following are the sectors from which funds are adjusted for starting this business:

• Half part of the capital is arranged through the personal savings.
• 25% of the capital is arranged through friends and family members.
• Remaining part of the capital is arranged through loan from bank.

Basic assumption and information:

The financial plan related to this project is developed on the basis of three assumptions, and all three assumptions are stated below:

• Café focus on improving the cash flow
• there is constant growth of the business
• Business mainly focuses on enhancing the quality of the receivables by decreasing the days.

Cash flow: (Amount in dollars)

Factors	1st Year	2nd Year	3rd Year
Cash Received
Cash received from Operations
Sales in cash	50000	65000	77000
Cash received from Receivables	35000	38000	23000
Total	85000	103000	100000
Cash Received on additional basis	0	0	0
Taxes	0	0	0
Current Borrowing (New)	0	0	0
Other Liabilities (interest-free)	0	0	0
Long-term Liabilities	0	0	0
Sales of Assets	0	0	0
Investment Received	0	0	0
Total	85000	103000	100000
Expenditures
Expenditures from Operations
Cash Spending	35000	15000	8000
Bill Payments	55000	70000	88000
Total	80000	85000	96000

Assets	1st year	2nd Year	3rd Year
Cash	30,525	54,940	116,439
Accounts Receivable	119,475	135,908	169,268
Other Current Assets	4,000	4,000	4,000
Long term assets	–	–	–
Total	154,000	194,847	288,708
Accounts Payable	32,450	39,193	51,690
Long-term Liabilities	40,000	28,485	15,865
Capital	81,550	127,169	222,153
Total	154,000	194,847	288,708

Conclusion:

After considering the above facts, it can be said that aloha Café is not the ordinary café, because this café introduce the unique concept of the library. Aloha Café ensures best efforts from its sides for the purpose of creating the unique place where it is possible for the customers to socialize with each other in the comfortable and relaxing environment while enjoying their coffee and deserts.

It is necessary for Aloha café to stand out from the rest of the cafes for achieving its business goal. New opportunities in the market provide the way through which company can plan its growth in context of products such as company can add new coffee of the month and also some special discounts for the loyal and frequent customers.

References:

ABLIS. Restaurant and Cafe Licence. Available at: https://ablis.business.gov.au/service/vic/restaurant-and-cafe-licence/24001. Accessed on 7^th June 2018.

Belcher, L. SWOT Analysis for a Coffee Café. Available at: https://smallbusiness.chron.com/swot-analysis-coffee-cafe-15644.html. Accessed on 7^th June 2018.

Cision, (2018). Cafes and Coffee Shops in Australia Industry Market Research Report now updated by IBIS World. Available at: https://www.prweb.com/releases/2012/5/prweb9545122.htm. Accessed on 7^th June 2018.

Cleverism, (2014). Understanding the Marketing Mix Concept – 4Ps. Available at: https://www.cleverism.com/understanding-marketing-mix-concept-4ps/. Accessed on 7^th June 2018.

Ehmke, C. Marketing’s Four P’s: First Steps for New Entrepreneurs. Available at: https://www.extension.purdue.edu/extmedia/ec/ec-730.pdf. Accessed on 7^th June 2018.

Foust, J. The Four P’s of Marketing. Available at: https://www.scpress.org/13eBulletin/foust_JAN.pdf. Accessed on 7^th June 2018.

IBIS World, (2018). Cafes and Coffee Shops – Australia Market Research Report. Available at: https://www.ibisworld.com.au/industry-trends/market-research-reports/accommodation-food-services/cafes-coffee-shops.html. Accessed on 7^th June 2018.

Morgan, J. The 5 Types Of Organizational Structures: Part 1, The Hierarchy. Retrieved on 2^nd June 2018 from: https://www.forbes.com/sites/jacobmorgan/2015/07/06/the-5-types-of-organizational-structures-part-1-the-hierarchy/#4f24f0935252.

Suttle, R. (2018). Types of Organizational Structure in Management. Retrieved on 2^nd June 2018 from: https://smallbusiness.chron.com/types-organizational-structure-management-2790.html.

Ward, S. (2017). Target Marketing Can Be the Key to Increasing Sales. Available at: https://www.thebalancesmb.com/target-marketing-2948355. Accessed on 7^th June 2018.