Contemporary Business and Marketing Strategy Analysis - Assignment Example

To Build or Buy Craft a brief strategy for a business concept that would directly compete with the small business you selected. Explain the rationale for the strategy in detail. In this age of competitiveness and economic distress, every entrepreneur desires to enhance its rate of sustainability and market share. Only then, the brand image and position of the organization, in spite of size might get enhanced thereby amplifying its profitability and reputation. However, it might be possible only if a new entrant, competing with an established coffee shop, implements the strategy of cost leadership. By implementing this strategy, the new entrant needs to offer a wide range of products such as coffees, teas, deserts of high quality at competitive price (Myoops.org. 2003). This is because; maximum extent of the customers desire to consume high-quality products at a value-added price in order to retain their health and fitness. Thus, strategy might prove effective for the organization in attracting a wide range of customers in order to enhance its prosperity and identity in the market among the other coffee shop. Along with this, in order to enhance the brand awareness of the new organization, the entrepreneur might also try to offer more attention offer over its comprehensive marketing strategies. This means in order to enhance the market popularity, the organization might offer free Wi-Fi services for its customers. So that, they might enjoy various cups of coffee in the breaks of their work in order to enhance its brand value and revenues (Grant, 2005). Therefore, by following the above mentioned strategy, the newly developed coffee shop might easily develop its position and recognition in this aggressive market among others. As a result of which, the demand of its products and net income might get enhanced that may prove extremely effective for the organization in future. Apart from this, cost leadership strategy might also help the newly developed organization to develop its competitive advantage thereby increasing its loyalty in the market. Moreover, due to the presentation of varied flavoured products, the rate of preference and reliability of the customers over the brand might get enhanced thereby amplifying its craze in the market. Thus, it might be clearly depicted that by following such a strategy, not only the position but also the target market of the organization might be evaluated so as to improve its status and reputation in the market. So, implementation of such type of cost leadership strategy is extremely beneficial for any newly developed organization in a market, comprising of numerous rival players. 2. Determine if it would make more sense to open the new business you describe or to purchase the existing business you selected. Explain your reasoning. In this age, maximum extent of the business entities tries to enhance their business earning thereby reducing the total cost. However, it might be possible only if the entrepreneur tries to purchase the existing shop thereby purchasing it. This is because; opening or developing a new shop requires huge amount of expenses such as layout cost, advertisement cost, resource cost, equipment cost and many others. As a result of such type of costs, maximum extent prefers the option of purchasing the existing shop. By doing so, the existing coffee shop might be renovated with varied types of modern furniture’s and equipments such as automated coffee machine, LED televisions, Wi-Fi connections for the consumers to enjoy their snacks with laptops and computers. All these facilities might prove effective for the existing coffee shop to attract a wide range of customers thereby amplifying its net income to a significant extent among others. Apart from this, the entrepreneur might try to position its organization by offering varied types of coffee such as espresso, cappuccino, Americano, cafau lait, caffe lalle, mochachino, caramel mochachino, frappe, iced coffee, affogato, black eye, cafe miel, decaf, doppio, flat white, breve and many others. By doing so, the preference of the targeted customers might be easily met thereby enhancing its brand image and profitability to a significant extent among others. Other than this, along with coffee, high-quality teas and desserts are also offered to the customers of age-groups (15 -30) at a quite fairer price so as to fascinate them towards this brand among others. As a result of which, the income of the existing coffee shop might get enhanced thereby amplifying its demand in the market. Therefore, by following this above mentioned tactic, the renovation cost of the shop might get fulfilled within a very small time-frame. Not only this, it might amplify the demand of the products of the organization thereby enhancing its strengths among others. Along with this, the weaknesses and threats might get reduced thereby enhancing its dominance and supremacy in the market among other new entrants or existing rivals. 3. Discuss the most appropriate form of ownership for your new business (assuming your current financial situation). The most appropriate form of ownership that might be used in order to enhance the recognition and market value of the coffee shop is sole proprietorship. This is a type of proprietorship in which a single individual is responsible for all sorts of debts and decisions. Moreover, the name by which, the organization is operated acts as a fictitious name used for trading and does not create any separate entity. Other than this, for a sole proprietorship, unemployment tax is not mandatory, which also acts significant impacts over the total revenue of the organization (Guillén & García-Canal, 2012). Apart from this, a sole proprietorship might be started at any time as it does not require any sort of legal papers. So, it is the best form of ownership for a newly purchased coffee entrepreneur in this age. This is because; such type of ownership does not require any sort of finances and so the rate of debts remains quite low as compared to others. As a result of which, the amount of profits of the organization might get enhanced very easily as the amounts of debts is quite low. Moreover, the extra returns might be used for enhancing the internal environment of the organization along with inclusion of various inventive machines and equipments so as to make the work, easier and simpler (ESOMAR, 2008). Therefore, due to these above mentioned reasons, maximum extent of the individual desire to select this type of ownership s compared to others. 4. Outline a business plan for your business The organization of coffee shop might be introduced with the name: ‘Coffee Hot Cafe’ and the tagline for the organization might be love and drink. The mission of the organization might be to offer a comfortable and friendly environment with high quality beverages at a competitive price. However, in order to fulfil this mission, the organization might try to implement cost leadership strategy. This might prove effective for the organization to enhance its range of customers and profit margin as well. Market analysis: Target market- the target customers of this organization might be mainly of age-groups 15 to 55 years. However, mainly the students and faculty members would be attracted towards the shop as presented below: Market Trends: maximum extent of the customers desire to offer high-ended beverages at a fair price so as to retain them for longer period of time. Only then, the organization of Coffee Hot Cafe might enhance its market share and revenue to a certain extent. Along with this, it may become able to fulfil its mission to create a wide range of customer base. This might help in amplification of the total profit margin of the organization thereby boosting its popularity and demand in the market among other rival contenders. Products: Espresso, cappuccino, Americano, cafau lait, caffe lalle, mochachino, caramel mochachino, frappe, iced coffee, affogato, black eye, cafe miel, decaf, doppio, flat white, breve as well as tea and desserts of numerous flavours (Beall, 2010). Start up cost or operation cost (approx) Equipment cost: 6 $ Furniture cost: 7$ Renovation cost: 2$ Cost of utilities such as water, electricity, internet: 6$ Salary: 20$ Supply cost of napkins, coffee, tea, cups: 2$ (Bradley, 2007). Promotion cost:6$ Total operation cost: 49 $ Price and revenues of the drinks (approx) Coffee- 5$ -7$ as per to flavour Tea- 5$ -9$ as per to flavour Dessert- 5$ - 8$ as per to flavour Daily revenue (approx): 100 cups of coffee: 100* 7$:700$ 50 cups of tea: 50* 9$: 450$ 150 pieces of desserts: 15*8$: 120$ Total revenue: 1270$ Total profit: Total revenue- Total Operation cost 1270 $- 49 $: 1221 $ Thus, from above mentioned plan, it might be clearly depicted that, purchasing or starting a coffee shop might be extremely beneficial for an individual. This is because; it might enhance the economic condition and living standard of the individual thereby amplifying the brand image and prosperity of the organization in a very small time. Hence, purchasing an existing coffee shop is regarded as one of the best ideas of starting up a new business as compared to others as analysed from above mentioned strategies and techniques. Moreover, it might also offer a good return at the end of the month as presented above. References Beall, A, E. 2010. Strategic Market Research: A Guide to Conducting Research to solve problems. Boston: Harvard Business School Press. Bradley, N. 2007. Marketing Research: Tools & Techniques. New York: McGraw-Hill. ESOMAR. 2008. Market Research Handbook. London: Sage. Guillén, M. F., & García-Canal, E. 2012. Execution as Strategy. Harvard Business Review 90(10). Grant, R, M. 2005. Contemporary Strategy Analysis. London: Sage. Myoops.org. 2003. Business strategy. Retrieved from: http://www.myoops.org/cocw/mit/NR/rdonlyres/Sloan-School-of-Management/15-904Strategic-Management-IIFall2003/5C46DECE-DF6E-4E51-8810-0073E6504E3F/0/session2_businessstrategy.pdf Read More