The Management of a New Business - Franchising Gloria Jeans Coffees Cafe - Case Study Example

SWOT Analysis of Franchising Gloria Jean’s Coffees Cafe University name Student name Student id Course Date Table of Contents Introduction 3 SWOT analysis 3 Strengths 3 Weaknesses 5 Opportunities 6 Threats 8 Conclusion 9 References 10 Introduction SWOT analysis entails the analysis of business strengths, the weaknesses of the firm, the business opportunities, and the threats facing business operations. It assists companies in utilizing the opportunities and strengths of the business in the industry. Besides, the SWOT analysis ensures that the firm can be in a position to deal with the weaknesses and the threats to ensure the survival of the businesses in the industry (Zhang, 2013). It is considered crucial in the analysis of the business environment both external and internal. The climate business screening is critical in the process of starting a venture as it determines the strategy formulation and implementation. The management of a new business needs to consider the business environments in which the company operates in the implementation of the strategies formulated. This is because failure to review the business conditions affecting the industry in policy formulation can result in the wrong formulation of strategies (Abrams, 2003). The analysis will entail the market conditions that affects the operations of the jeans coffee café. The external market analysis of the environment involves the analysis of threats and opportunities while the internal analysis of the environment entails weaknesses and the strengths facing the business. SWOT analysis Strengths The strengths that can be associated with jeans coffee café can assist the management of the café in ensuring that it can achieve competitive advantages in the market. First, the skills and the experience of the staff can play a significant role in making the café competitive in the make through offering quality services and products. The employees of the café are highly qualified hence able to meet the needs of the customers in the market. The hygiene standards are set to ensure that there are no any issues related to the contamination of food materials. Besides, the production process in the kitchen is properly monitored to ensure that the food prepared is safe for human consumption (Pinson, 2008). The service delivery of the café will be in a position to surpass the expectations of the customers making them satisfied. The satisfied customers will be a critical part of the marketing strategy of the café where they will be marketing the products of the café to their friends through the word of mouth. This will assist in increasing the sales volume of the café. Second, the pricing strategy of the café is competitive as the prices are affordable in the market. The café will ensure that the prices are affordable by making sure that the operations are automated to ensure proper management of the costs of production. The automation of the operations will result in cost reduction of production hence making it easy for the café to offer a low price to the customers while making profits (Abrams, 2003). Besides, the suppliers will ensure that the supplies are fresh to ensure that the products are of high quality making the services of the café unique in the market. The service delivery will result in the increased number of customer due to the ability of the service provided to meet the needs of the clients in the industry. Third, the café accommodates other services such as life performance of artists due to the availability of has necessary for hosting life shows. The artists can contribute a lot in the process of ensuring that the customers are satisfied. The management ensures that the customers are given the opportunity to give their responses pertaining their service experience (Pinson, 2008. Fourth, the location of the business makes it have various advantages of the over businesses. The location of the firm has ensured that there are a significant number of customers that can access the facility hence increasing the sales volume. The café is located at St. Melbourne, where many customers can access the facility for, is unique services in the market. The café has dominated the industry due to a large number of the customers making the café the maker of the prices in the market. The café has been able to attract many clients into the business due to the affordability and quality of its services. The firm has differentiated its services where it has also been providing newspapers where the customers can be in a position to buy the newspapers as they take their breakfast to go to their workplaces. The differentiation of the services of the business has played a significant role in making the business very competitive (Markendahl & Makitalo, 2007). The customers have been finding it convenient to access the newspapers as they take their breakfast. Weaknesses Some weaknesses can also be associated with the café considering the internal business environment. First, the number of the service providers is likely to fail to meet the service demands of the customers. This is because the number of the employees working in the café might not be in a position to handle the increasing number of the customers due to the improved quality of the services and products of the café. The demand for more employees has increased to cater for the growing number of the customers. The increasing number of the customers is making the employees be overworked hence making the available employees works overtime to ensure the required services to the customers (Mishra, 2013). Employees working for a longer duration than required are making the employees fail to balance their job and life hence the need to increase the number of employees to ensure work-family balance. Besides, the customers have been complaining due to the slow service as a result of the few employees making them waste time waiting to be served during the peak hours. However, the café has looked for a solution that can assist in saving time where the ordering system has been made online. The online system has been working towards increasing efficiency and save time hence proving to the convenient to the customer. The customers have been able to receive their orders at their places of conveniences like their workplaces making the service delivery of the business highly differentiated (Huynh, 2014). The company has adopted electronic payment systems that can assist in eliminating congestion where the customers have been able to make orders and pay online hence increasing efficiency. Secondly, the business has been facing increased debts from the suppliers making the management of the café face some challenges in settling the debt. The starting of the firm used a debt that has been paid in installments hence affecting the various operations of the business. The increased debts have been affecting the operations of the café adversely due to the time needed to repay the debt (Markendahl & Makitalo, 2007). Opportunities There have been opportunities that have been facing the business availed by the external environment. First. The government has been creating a healthy environment that can assist in the success of the firm. The support of the government has been helping to the growth and success of the local business. For instance, the government has been ensuring that the financial institutions for loans to the firm with reasonable interest rates. The availability of the funds has been assisting business in expanding the businesses (Mishra, 2013). Besides, the availability of the funds has ensured that the firm has the required resources that can assist in making the businesses successful in the market. Besides, the management of the café has been conducting research to look for the best ways that can guarantee that the needs of the customers can be met efficiently. This has made the business tailor its service delivery to meet the market demand, as the management has been able to have enough market knowledge. Second, the café has been able to keep pace with the changes taking place. The tourism industry has been changing where the management of the café has been very keen to ensure utilization of the opportunities availed by the changes taking place. For instance, the café has been keeping pace with the technological changes taking place in the industry making it embrace the advancements in technology taking place in the market. Technology has been important in the management of the costs of production through automation of most of the operations of the café. The competitors have not adopted the technological changes making them fail to manage their costs correctly. As a result, the business has been able to offer competitive pricing strategy in the market. The café has remained relevant in the market through the adoption of technology where has been providing services that can better meet the needs of the customers through the help of the technology. Besides, the use of technology has assisted in making the café innovative in the service delivery making the café competitive in the market (Zhang, 2013). Through innovation, the café has ensured that the service delivery is differentiated from that of the competitors in the market. The number of rivals is increasing making the café enjoy expanded markets share in the market. The train travelers are forming an important part of the customers of the cafe hence assisting in the growth of the business. Fourth, the employees of the café are likely to be motivated to work hard toward achieving the organizational objectives due to the increased salaries. Raising the wages of the employees will be geared towards the efforts of the management to ensure that the interests of the employees are met (Zhang, 2013). The government has been closing the cafes that have been offering substandard products to the consumers hence the closure can be an opportunity to enhance the market share of the café. The employees will be trained to ensure that they have the necessary skills that can be crucial in helping in discharging quality services. Threats There are threats that the café is facing from the external business environment. First, there has been increasing of new firms entering the market resulting in increased competition. The new companies are offering the same products and service hence affecting the market share (Markendahl & Makitalo, 2007). Many competitors are entering the market offering fierce competition in the market. Second, there has been increased taxation, as the government has been raising the tax rates. The increased tax has affected the performance of the business because an increase in tax reduces the profits. The costs of operations are likely to increase leading to the new pricing of the products to ensure that the business does not suffer a loss (Mishra, 2013). The changes in the prices of the products are likely to affect the demand negatively. Third, the other firms in the market have adopted a competitive pricing strategy as they have realized the ways of reducing costs of production in the market. The reduction of prices of the other firms threatens the café, as it has been the one offering the most pocket-friendly products (Huynh, 2014). Fourth, there is a proposal to change the station of the train making the café loose customer as it has been relying on the station as a primary source of its clients. The change of the station will negatively affect the sales of the café. Besides, the business has been relying on the train for transporting most of is supplies. Conclusion The analysis of the environment can be crucial for the cafe to prepare for the changes that are likely to take place. With SWOT analysis, the management can be in a better position to ensure that the necessary strategies exist to meet the future changes in the market. The analysis of the business can make the business ready to utilize the opportunities that are likely to be held in the market. Therefore, the analysis of the business environment can be important in assisting businesses in adjusting their strategies to be in line with the future changes (Zhang, 2013). The management of the café will need to continually conduct market research to ensure that the business strategies can be adjusted to meet the trend in the industry. References Abrams, R. M. (2003). The successful business plan: Secrets & Strategies. Palto Alto, Calif: Planning Shop. Huynh, D. V. (2014). The business plan for a social entrepreneur project-A cultural café (Doctoral dissertation, International University HCMC, Vietnam). Markendahl, J., & Makitalo, O. (2007, September). Business model analysis for local access is provisioning. In Personal, Indoor and Mobile Radio Communications, 2007. PIMRC 2007. IEEE 18th International Symposium on (pp. 1-5). IEEE. Mishra, A. (2013). The business model for Indian retail sector: The café coffee day case: In conversation with VG Siddhartha, Chairman, Coffee Day.IIMB Management Review, 25(3), 160-170. Pinson, L. (2008). Anatomy of a business plan: the step-by-step guide to building your business and securing your company's future. Zhang, Z. (2013). Business English students learning to write for international business: What do international business practitioners have to say about their texts? English for Specific Purposes, 32(3), 144-156. Read More