Strategic Management for Fast Food Cafe Located in Perth City - Example

Title: Name: Course: Institution: Lecturer: Date: Table of Contents Table of Contents 1 2.0 Business Environment 3 2.1 Vision, Mission and goals 3 2.2 Goals 3 2.3 Products and services 3 2.4 Business, organization and finance structures 4 2.5 Strength, Weaknesses, Opportunities and Threat (SWOT) analysis 4 2.6 Premises, plant and equipment 5 2.7 Information systems and telecommunications 5 2.8 Intellectual property, licenses and memberships 6 2.9 Insurances 6 3.0 Goals, milestones, strategies 6 3.1 Goals and milestones 6 3.2 Marketing 7 3.3 Sales 7 3.4 Customer management and retention 8 3.5 Pricing 8 3.6 Suitable business strategy 9 4.0 Business competition 9 4.1 The industry 9 4.2 Target market 9 4.3 Market competition 10 4.4 Influence of Five forces 10 5.0 Financial forecasts 11 5.1 Set-up costs 11 5.2 Profit and loss forecast 11 5.3 Cash flow forecast 12 5.4 Balance sheet forecast 12 5.5 Break-even analysis 13 6.0 References 13 Business Plan 1.0 Executive Summary Our planned new business is a fast food cafe’ located in Perth city. The business will deal in fats foods and drinks served 24hours a day. The business aims at making total sales of $2500 from both the foods and the drinks sold in the café. The sales level is expected to grow over the years with increased production and establishment of the business. The business will deal in natural soft drinks that will boost people’s health as a strategy for attracting consumers. The business will be operating from the café’ outlet but expects to spread across the state and the nation so that it will get an opportunity to penetrate the international market. The business is focused at ensuring healthy and quality foods and drinks for its customers so as to enhance its competitive advantage and to attract the customers. Its target market is mostly students in the nearby colleges who prefer fast foods and drinks rather than cooking their meals. The business will be maximizing on the trend that most young people are consuming more of fast foods. The business is a partnership expecting to realize profit each year and to maximize on sales. 2.0 Business Environment 2.1 Vision, Mission and goals Our mission statement is to be the leading business in provision of quality fast food and drinks. To promote the health and lifestyle of our customers, the business is also committed at ensuring proper living standards for the customers and employees. 2.2 Goals Utilizing available resources in enhancing health and living standard for individuals Introduce two new products by the end of the second year. Maximizing on students trends to achieve profitability Increase revenue by 40 percent every year Participate in enhancing community wellbeing contributing $15,000 per year toward the community kitty To be a leading restaurant in provision of fast foods locally and internationally To have a healthy business committed to customer satisfaction. To be the leading business in fast food market share 2.3 Products and services Our business is offering fast foods and soft drinks as the major products. These products are packaged for specific customers and delivered in different combinations. The business will also provide services such as outside catering, food delivery to specified places and training for people who want to acquire knowledge in hot and cold kitchen services. Our products will be branded Jollyland café and will be packages in a unique way to give the business a competitive advantage by differentiating it from other such products in the market. The foods produced in the business will be natural to enhance health standards of customers. The products will be priced based on the forces of demand and supply in the market. The business is located next to location of collages to target collage students. This will help them save much time especially for lunch and to keep healthy by feeding on healthy fast foods. The advantage with the business is that locally available resources shall be use to ensure that the food is as natural as possible. 2.4 Business, organization and finance structures The business is a partnership formed by two friends contributing capital in the ratio; they are the managers of the business. 2.5 Strength, Weaknesses, Opportunities and Threat (SWOT) analysis The business provides their SWOT analysis to assist their customers in evaluating the future of the business and thus focus on establishing a relationship with it. The analysis also provides a situational evaluation of the business so as to determine its growth potential (Schroeder 2010). The following is the SWOT analysis provided for the business. Strengths Reasonable prices Variety of goods Well packaged and customer oriented services Location is strategic Employment of well qualified personnel Capital is from owners thus less debt Weaknesses Inflation Decline in economy performance High start up cost Increase in new entrants It’s a new business so reputation is not well established Opportunities Creation of employment Participating in community development Improved health standards concerns Social pattern Improved infrastructure Threats Competitors Increased cost of amenities Increased sicknesses related to fast foods. 2.6 Premises, plant and equipment The premise will be located in Perth state so as to adequately target the institutions of higher learning in the state. The business is a partnership between me and my friend Ronald and will operate in a building bought long time and a joint investment with him. The premise will use much of technology appropriate and available in food industry so as to enhance efficiency and ensure quality. The business will be committed to research and development to enhance its production and improve the quality and range of its products and services (Stutely 2012). 2.7 Information systems and telecommunications The management will have in place a central and integrated management and information system in the business. Enterprise systems will be used in managing important information and thus provide a basis for decision making. The use of information systems will promote adequacy in data storage and follow up on business progress. The communication channels in the business will be well integrated to ensure that information flow among the entire stakeholder in and out of the premise is possible especially for purposes of feedback and monitoring efficiency of the business (Laudon & Laudon 2010). 2.8 Intellectual property, licenses and memberships The business will acquire an operating license to ensure all its operations are legal, to ensure that the business contributes to national income and to protect the business from unhealthy competition. The products and the services provided will be branded by having a specific trademark, business logo and colors that are specific to the business will ensure protection of the business from its competitors because it will facilitate differentiation (Awokuse & Yin 2010). 2.9 Insurances The business is committed to ensuring employees welfare and thus has workman’s compensation provided for the employees to ensure they are covered against any harm that may face them in carrying out their roles. The business is also insured against theft, fire. This is to ensure that the business does not cease to operate in case such risks befall it. 3.0 Goals, milestones, strategies 3.1 Goals and milestones The business has both long and short term goals which are expected to be achieved within the specified timeframe. Production is focused on the set goals and constant evaluation is conducted to ensure that all procedures result in achievement of set goals. The business is aimed at ensuring maximum utilization of consumer resources. 3.2 Marketing The business target customers are youths aged between 18-30 years and mostly in the college years. This target group is motivated by the business’s slogan ‘achieve it by keeping healthy’. The customers enjoy fast foods that promote healthy living conditions among the youths. To achieve the target sales the business is committed in sales promotion through advertising and providing after sales services to attract customers. The business uses both primary and secondary sources to avail information about its operation to its customers. Packaging and branding of the product has also facilitated marketing through differentiation of the product from those of its competitors. I future the business targets international market. The business also conducts direct promotions by using public relations to encourage consumers towards their products. Distribution of products and services has penetrated regionally and locally due to the ability of the business to maximize on promotions. The future goal of the business is to establish its distribution outlet across the nation and to be in position to engage in customized productions. The business also has a pan to be able to make direct deliveries to customer premises so as to enhance increase in sales and also to maximize on this as a competitive advantage. They will consider adding a new slogan like get it ‘healthy at your door’ which is a strategy to enhance competition (Ferrell & Hartline 2012). 3.3 Sales 85% of the sales are made and consumed at the premise; this makes it easy for the employees to distribute the products to the customers and also lowers the distribution costs. The premise has a kitchen from which the foods and drink are made and once ready they are brought for storage in the counter before customers are available. The business has a full time marketing strategy to enhance increased sales throughout the year. The business is aiming at selling 12,500units in the first year and expects that the production volume will increase over the years. 3.4 Customer management and retention To enhance customer management and retention the business is committed to research and development so as to facilitate production development and to maintain quality. There is also open communication in the business to facilitate provision of feedback from customers to promote quality and efficiency. The employees have also been trained how to maintain consumer relationship to facilitate consumer retention. The service and product delivery strategies in place in the business are focused towards consumer satisfaction. The market is also producing based on consumer trends to ensure products and their prices are customer friendly. 3.5 Pricing Competition is a great determinant of the prices set for the business’s products and services. Since its products are not luxurious and the management is not out to lure its customers with very low prices, the business prices are relatively low. This will facilitate reasonable sales margin and will play a role in ensuring that the prices in the business are determined by the forces of demand and supply. The prices are based on value so as to ensure that customers reap maximum benefit from any transactions they make. 3.6 Suitable business strategy The business has projected its start up costs adequately. There is also well laid down management hierarchy to ensure that operations run well. The business has estimated enough funds to ensure the business does not fail. There are strategies to enhance growth in the revenue so as to build the performance of the business. 4.0 Business competition 4.1 The industry According to industrial analysis the current trends shows that the consumption trends are favorable fast foods, thus there is expected profitability from the venture. The per capita income among the young targeted in the market is able to support such consumption. There is increasing popularity of fast foods consumption among the youths. Thus, there is much competition in the industry yet the business is viable due to expanded market available. There has been increasing performance in the industry. 4.2 Target market The target market is the locality with increased plans to penetrate the international market/ the target individuals are youths aged 18-35 years who are in their higher education. The business does not discriminate on gender or race but targets men and women from all races found in the city. Increased socialization and partying among these youths has favored business performance since most of them will treat each other to the fast foods in the café. 4.3 Market competition The industry dealing in fast foods and soft drinks are well differentiated and fragment due to competition. The business faces competition from both the local and international businesses operating in the industry. Locally, the business has enhanced its competitive advantage so that it is performing better than many other businesses by enhancing quality and consumer satisfaction. The business is benefiting from increased consumption of fast foods among the young people. There are new entrants to the market which increases competition against the business. The competitors are businesses dealing with foods and soft drinks. Each institution of higher learning has an established café which increases their competition. To outstand in the stiff completion the business has mastered its packaging, branding, promotion and consumer satisfaction as its competitive advantage strategies. Commitment to offering diversified and healthy foods and drinks is also another way to withstand the competition. The business is operating to create more distribution outlets so as to expand its market both locally and internationally. 4.4 Influence of Five forces The business is influenced by the legal framework existing in the nation, the business need to be tax compliant, to operate within polices set up to regulate business. Competition is also a key force that is affecting the business because it is important to enhance competitive advantage to ensure good performance. Political stability existing in the nation also influences the performance of the business by creating an enabling environment for business operation. The level of technology in the Perth is very high and up to date, this is an advantage to the business and creates a good basis to facilitate running of the business. The business employs skilled and experienced employees which facilitates their performance. They also offer on job training to stir up their experience and equip them for changes in the industry. 5.0 Financial forecasts 5.1 Set-up costs The start-up capital is estimated to be $125,350 which includes goodwill which is part of business investment. The budgeted start up costs will be funded through partner’s capital contribution and more capital will be invested after profit. Budgeted start up costs Rent for the first month $950 Legal costs $350 Renovation of the room $1500 Furniture and fittings $1600 Equipment $ 1750 Beginning supplies $850 Goodwill (Insurance and rent advance) $125,000 Utensils $1000 Promotion cost $3500 5.2 Profit and loss forecast The business expects to make profit annually, which will increase over the years so as to increase capital invested in the business. Below the profit and loss forecast for the business; Revenue $2500 Less cost of sales ($800) Gross profit $1300 Add operating income $ 500 Less operating expenses ($ 750) Profit before tax $1050 The profit will be distributed in the agree ratio after a deduction of what will be reinvested. The business expects to increase its revenue and enhance efficiency so as to attain reduction in operating expenses and promote a better profit margin. 5.3 Cash flow forecast The business expects to register $ 95,450 as the cash flow from operating activities and a cash balance of $65,375 at the end of the trading period. The business has also agreed on short term credit with its suppliers to save the business from decline in cash flow level. 5.4 Balance sheet forecast The balance sheet shows the projected financial position of the business at the end of the trading period. This is important in determining the value of the business. Below is the projected balance sheet; Assets Non- current assets Plant and equipment $65,230 Furniture and fitting 43,250 Motor vehicle $73,200 good will 120,500 total non-current assets $302,180 Current assets Cash in bank $65,230 Cash at hand $34,120 Debtors $38,000 Inventory $78,000 total current assets $215,350 total assets $249,470 Capital and current liabilities Capital $120,150 creditors $38,600 Retained earnings $25,430 Bank overdraft 65,290 total capital and liabilities $249,470 5.5 Break-even analysis The business is expected to start making profit after selling the first 1560 units. The business projects to incur variable costs totaling $955 per unit produced and fixed costs of $85350. 6.0 References Awokuse, T, O, & Yin, H, 2010, does stronger intellectual property rights protection induce more bilateral trade, evidence from China’s imports, world development, Vol.38,Iss.(8), Pp1094-1104. Ferrell, O, C, & Hartline, M, 2012, marketing strategy, Text and Cases, Cengage Learning. Laudon, K, & Laudon, J, 2010, management information systems: international Edition, 11/E. Schroeder, A, Minocha, S, & Schneider, C, 2010, the strengths, weaknesses, opportunities and threats of using social software in higher and further education teaching and learning, Journal of Computer Assisted Learning, Vol.26,Iss.(3), Pp159-174. Stutely, R, 2012, the definitive business plan: the fast track to intelligent planning for executives and entrepreneurs, Pearson UK. Read More