Capitan Coffee International - Case Study Example

Capitan Coffee International By Student’s Name Code+ course name Instructor’s Name University Name City, State Executive summary Coffee shop industry is a booming business in the world today. It is a booming industry and the business needs a lot of care from the already established premises. In US specifically, this industry has over 20,000 stores in the country and is a major contributor to the country's economy. It has combined revenue of around $11 billion annually. The major competitors in the industry do not only operate in the US but also globally. Therefore, this paper carefully looks at a company that has its presence globally and how it is able to remain competitive globally. The major companies in the world’s industry include; Capitan, Caribou, Dunkin’ Donuts and Coffee bean. In the world, the companies in the industry are very strong and the market is highly concentrated from the top (Abrams 2003). This is because the top 50 companies in the world get 70% of all the sales. Coffee is a large commodity in the world and is especially produced in Colombia, Brazil and Vietnam. As seen in the world the major producing countries are poor countries and small and rely on the coffee to support their economies. United States is the largest consumer of both green and processed coffee in the world. However, it cannot support its own demand of coffee and hence the requirement to import (Young 2007). Coffee shops are well known for selling beverages and other complimentary foods. It is also rising that the shops are venturing into providing accommodation as a way to improve their portfolio. The beverages include tea brewed coffee, cappuccinos, café lattes, bottled water, soft drinks and cold blended beverages. The food products also have a wide range depending on the shop and the culture of the customers. It is also salient to indicate that some coffee shops sell equipments used in making coffee like the mugs, grinders, and other equipments. Most of the consumers of coffee range from 20 to 50 years old who are educated and affluent. Students and baby boomers also have a role to play in supporting the industry. In this paper we are to review how Capitan coffee international operates globally and is able to overcome its challenges (Ontario 2001). Business Description Capitan Coffee International plans to start coffee shops around the country. The company will start with ten shops spread across different cities in the US. The main headquarters of our company will be situated in Washington where the management will sit. Capitan is a Spanish name for Captain meaning a leader and hence we project to be leaders in this business. Capitan Enterprises is a business that will be mainly located in the US but has the potential to expand abroad as time and growth allows. The company will have a very vibrant management team that will ensure that the company succeeds and expands as per the plans set. The company sets to employ the services of David Richards as the chief executive officer since he is a well connected officer. Veronica Peterson as the finance officer of the company, He is well versed with the finance theories as he has a doctorate degree in finance from a re-known university. Chris Jameson is projected to be the chief legal officer of the company to advise the company on legal issues affecting the company. Angela Ann will be the company’s advertising and marketing officer. She will assist in making a brand for the company (Klein, Coffee & Partnoy 2010). Coffee will be our main product however; the company will also improve its portfolio. Capitan Coffee International has two major product offerings. First is to provide 4-star guest accommodation. In addition, we will ensure guests have access to a spacious well arranged lounge that has open fire during winter warmth and atmosphere; there is also a large library of books about the local environment and a rose garden depending on the location. It is fundamental to highlight that a selection of coffee from the local suppliers and an extensive selection of pudding including a good choice of eggs, fruits, tomatoes, mushrooms etc. These will all be sourced from local suppliers and will vary depending on seasons (Monaghan & Huffaker 1995). It is also paramount to show that the garden will have sufficient off-street parking for 80 vehicles. This is separate to the reserved parking for guests of the house. The main coffee shop will be in Washington and will target the employed and the big businessmen to provide them with space to strike deals. Capitan coffee international has a plan to expand to have over 21000 coffee shops in 65 countries and this fact will make it global. The company has a passion in providing great coffee and connecting well with the consumers. Through this, the company plans to have its products diversified and have different types of business which reduce risk of loss. This is in their quest to shake off competition and increase their competitive advantage over the other business and other competitors (Short 1975). Target Markets A significant trend in Australia and abroad is that people are taking a more proactive interest in nutrition. People have also developed new interests for variety of foods. This is exemplified by the increase in the number of restaurants in the US. People are therefore developing more interests in restaurants that are well managed in terms of sanitation, variety, and quality of foods (Chapman & Hodges 2011). The age factor is a very fundamental aspect that guides the targeting of the US market. The restaurant is going to target all the age brackets in terms of the nature and types of foods that it serves. For instance, it will majorly target the adult customers. This is because this age group composes majorly of people who are financially stable. Capitan Coffee International business in their proper service to the employees and in their quest to improve the welfare of the employees will sign up to an initiative known as Ethical Trading Initiative. It will help in improving the welfare of the employees and keep them motivated throughout. Through this, the business has shown a great respect to the worker’s rights. This initiative is a way to improve the freedom of the workers in their associations and also a good living wage. Implementation of this initiative is very difficult however, since living wages varies with the difference in the countries, and the buying using a strategy of being a major importer like Capitan Coffee International. This is that because large importers affects the national minimum wages indirectly by obliging the governments so that they can set them low in order to stop the business from closing down or even going to other countries (Sturges 1989). Competitive analysis The company will also embark on vibrant customer satisfaction. It must be noted that customer satisfaction is a very fundamental factor that must be considered in as far as improvement of customer loyalty and improvement of the company’s growth is concerned. Customer loyalty ensures that there is high customer retention. It must be noted satisfaction of the needs of the customers that a company has ensures that the customer’s realizes full utility for their money. Utility is therefore a very significant parameter to be considered while dealing with customers. Capitan Coffee International has embarked on ensuring that there is very close follow-up and appropriate after sale services. Better delivery system has been noted as strength for this company. The company will ensure that there is strong and a reliable service of the products to the customers. It must be observed that Capitan Coffee International will have much organized logistical criteria of goods and their entertainment services between different countries of the world so as to accelerate faster delivery of goods and services to its customers. As far as technological industry challenges are concerned, two main topics dominate in this issue. These are costly research and development and high dependency on skilled practitioners. Starting with high investments for research and development is apparent that these companies, Capitan Coffee International included, are pressurized to continuously invent. Some researchers admit that, Heavy hitters are Capitan Coffee International Competitors like Caribou who spend 15% of its annual income on research initiatives. This paralyzing investment funds is a big hit to all companies, big or small. Capitan coffee international is a new company in the drinking coffee industry. It is therefore paramount to give the point that the company has identified a specific targeted group so as to facilitate its work of production and supply. For instance, the company has delved in coffee products alone. Since Capitan coffee international will majorly be operating in the US market it will have to face off with other competitors in the market. The competitors will involve: Caribou and Starbucks Coffee International who operate in the same country and targets the same class of people. Growth forecasts This company expects to begin its operations in 25 states of US. It is predicted that the company is likely to expand to 51 states within 2 years. This will be realized through higher production emanating from huge capital investments. The company expects its revenue to increase with 45% within the first 4 years. This is however predicted to increase to 70 in the subsequent years. This is due to expected increase in the volume of sales with 60% each year. The initial investment of the company is calculated to be $67,000 in the first year and $70,000 in the second year. This is expected to increase with 14% in the subsequent years. The number of customers we expect to start with is 45,000 in the first year, 50,000 in the second year. This is also expected to increase with 45% in the subsequent years. The company will send expats to France and New Zealand to check on the doing of business in the countries. Doing any business across the local borders is challenging and has cross cultural problems. Investing abroad is a challenge and prior to investing in a country it is necessary to send experts to understand the market prior. The factors to be considered in the trip are business practice, etiquette and negotiation techniques. The experts need to know the public life in both countries. The public life in New Zealand and in France is different; it is less orderly but at times very professional especially when it comes to registration of business (Richardson & Gilmartin 2008). The company also has a stable human resource. For instance, the company has a total of 4000 employees. However, this number is expected to increase with 125% in the subsequent years due to expansion of the company to other regions. Cash flow forecast The cash flow of Capitan coffee international can be forecast as follows. JAN FEB MAR APR Beginning cash flow 165,000 160,000 170,000 165,000 Sources 140,000 150,000 145,000 150,000 Uses 145,000 140,000 145,000 140,000 Ending balance 160,000 170,000 165,000 180,000 SOURCES OF CASH Selling of coffee 139,000 145,000 140,000 148,000 Other products 11000 15000 15000 12000 USES OF CASH Raw materials 100,000 100,000 100,000 100,000 Transport 10,000 10,000 10,000 10,000 Rent 10,000 10000 10,000 10,000 Salaries 10,000 10000 10,000 10,000 Other 15,000 10000 15,0000 10,000 MARKETING PLAN This Company has a very vibrant marketing plan. This plan will be very useful in ensuring that the marketing activity is very efficient. This section will also involve analyses of different aspects of marketing and financial base of the company. SWOT analysis Strengths I. Very strong relationships with suppliers who supply quality raw materials at the right time II. Very efficient operations that leads to higher profit margins III. The management understands the target market of the organization. IV. It has very little debt, hence higher growth potentials. V. Higher quality of its products Weaknesses I. Limited cash flow by the organization II. Lack of consumer vibrant awareness program III. It is still new in the market Opportunities I. Existence of very loyal consumers who are likely to consume the new products introduced in the market. II. Existence of gaps that can be easily filled by new products III. The ability to expand to other markets outside US due to presence of very strong financial structure Threats I. Higher rate of competition in the beverage industry II. Divergence of products being produced by different companies The company management through the advertising and marketing officer will also promote a brochure to the public. This pamphlet will have all the necessary information that pertains to the books published by the company. The management team is planning to promote a very attractive brochure. This pamphlet will be distributed to the major states in US. This will help in promoting the activities and the image of the company in as far as its publishing business is concerned. In a nutshell, promotion is aimed at improving the revenue of the company by 30%. This will be due to increased volume of sale. Product Coffee is the primary product however; the company has improved its portfolio. Capitan Coffee International has two primary product offerings. First is to provide 4-star guest accommodation. Promotion Promotion of the products offered by the restaurants will be done using different aspects of media. Development is seen as a fundamental factor whose primary role will be to improve the revenue of the restaurant through increased volume of sales. Promotion will also increase the competitive ability of the restaurant in the market. It is, therefore, fundamental to highlight that the following media will be used to promote the products of the restaurants. Website: The internet site will also inform the consumers more about the foods and drinks offered. Appropriate search engines will also be developed to make the consumers’ work of searching for the products provided by the restaurant very easy. To maximize the discoverability of the website Capitan Coffee International restaurants will arrange for links to the key internet search engine sites (Cowan 2005). Advertising: Advertisements will be placed in the local press highlighting special deals for local customers wishing to visit the facility. Advertisement, that is deemed to be used here, will be very vibrant so as to capture a significant percentage of the market (Sim & Maria 2004). The local newspapers in Australia will be efficient in the advertisement of the restaurant’s products. For instance, the restaurant will actually promote its products like the foods and services. This will also involve showing some of the photographs of different types of foods offered at Capitan Coffee International restaurants (Thurston, Morris & Steiman 2013). Production and Distribution of Coupons Through this method, Capitan coffee international will develop brochures that contain relevant information about the company’s products. This will include their location, the price of each product as well as the different coffee products and accompaniments. This method is an essential way of promotion since it is always cheap. Therefore, the new introduction will be well catered for in this way of marketing. The method is also efficient because it does not take up much time. It only involves printing and supplying of the coupons to the targeted consumers or customers. It is however true to note that the method would only be appropriate for literate persons since it involves majorly reading and formulation of the data contained as far as the products are concerned (Richardson & Gilmartin 2008). The administrative department has shown the huge correlation in the sales performance. This means that management has more effects on the sales performance. Product management can, therefore, have the impact on the sales performance. Its impact is very huge hence will affect the performance of the bikes in the market. It is also worth realizing that the sales efficiency has shown a substantial correlation with the performance of the management. This means that for Capitan Coffee International to perform well in the market the directors including the managing director, sales manager and other managers will have to pull up their socks. This will improve production and sales (Angelico, Gutierrez & Fichman 2006). The following strategies will be very fundamental in the implementation of the above strategic plan of this company that is focusing on improving the effectiveness and efficiency of the organization. We will ensure the creation of a vision for the strategic plan. It is also important to formulate time line that the plan will cover. This will assist us in the allocation of resources so as to realize efficiency. It is vivid to note that most projects always have unique timeline that is achievable according to the resources available to an organization. We will, therefore, make sure that we set the right schedule that will ensure maximization that the objectives of the organization are achieved. It is also paramount to realize that we will make sure that we set a schedule that will not frustrate the resources of the organization. We will then ensure that the schedule is followed strictly (Satin 2011). The second step would entail identifying the resources that would be required in my plan. The resources should be selected wisely to ensure that efficiency is achieved. We will, therefore, identify the resources that would result into productivity of this organization. In the course of identifying the resources, we will recommend a firm tendering committee. The ultimate role of the tendering committee will be to ensure that a reliable and efficient supplier of the parts is identified. After this the provider will be liable to supply the designated parts of the bikes according to the stipulated budget (Gilbert, Martin & Formichelli 2005). References Gilbert, S., Martin, W. E., & Formichelli, L. (2005). The complete idiot's guide to starting and running a coffee bar. Angelico, I., Gutierrez, G., & Fichman, I. (2006). Black coffee. Montreal, Cinéfête. Richardson, J., & Gilmartin, H. (2008). Wake Up and Smell the Profit 52 guaranteed ways to make more money in your coffee business. 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Wake up and smell the profit 52 guaranteed ways-- to make more money in your coffee business. Oxford, How to Books. Sturges, P. (1989). A cup of coffee: a comedy about business. New York, S. French. Monaghan, J., & Huffaker, J. S. (1995). Espresso!: starting and running your own specialty coffee business. New York, Wiley. Chapman, G., & Hodges, G. (2011). Coffee. Mankato, Minn, Smart Apple Media. Short, J. N. (1975). American business and foreign policy: cases in coffee and cocoa trade regulation. [New York], Columbia University. Read More