The History of Tea in China - Dissertation Example

of Business Objectives Tea- The history of Tea in China is a long and complex one. It is all about quality. We are passionate about ethically sourcing the finest tealeaves steaming, brewing, roasting and finally fermenting them, hence improving the lives of those who grow them with such care and hard work. Customers- We strive to provide our customers an experience that is relaxing and fun. Customer service is the most important part of the café along with high quality food items. Location- Why UK? United Kingdom is one of the developed countries that are fond of Tea, and Tea is considered quintessential of English drinks. Therefore, it would be very advantageous to open up RBT in UK, as drinking tea is an afternoon tradition in UK. Sales growth –This may be because we believe that the survival of the business depends on being large. We believe that economies of scale are achieved through large, outsized businesses. RBT- and everyone it plans to touches- has the potential to endure and thrive. RBT, as above-mentioned objectives, is aiming to serve a quality product, diversify in business, to satisfy customers and shareholders, to enter into a new market and last but not the least, to cash up on the new taste through pleasant and finicky existence. Mission The main purpose of RBT is to build-up a new trend in UK by bringing in the traditional Chinese Culture and by offering high quality hygiene Tea of almost six different types along with light snacks. Most importantly, making high profit is the ultimate goal of entering a new market. Keys to Success The five principles based upon which we tend to succeed in the new market are as follows: We plan to provide a great work environment and treat each other with esteem and poise. Embrace multiplicity as an indispensable module in the way we do business. Apply the highest standards of excellence to the purchasing. Roasting and steaming delivery of our tea. Contributing positively to our new communities and environment so that they become our regular customers. Company Summary RBT tends to offer several unique tea blends of Chinese traditions, a power snack i.e. sandwiches, salads, bakery items and deserts. Hygiene and proper food handling is also important at RBT. The raw materials used in the preparation process will be supervised to ensure strict adherence to the highest standards of hygiene. Our menu includes Teapuccino, Pearl Sago, Green Tea, Jasmine Boba Tea, RBT special, Coffee, Spin Frozen Beverage (cold) and Shakin’ Savvy. For UK, we plan to introduce light snacks like sandwiches and as it is a tradition in UK to have tea in afternoon with a bit of snacks. Along with this menu, we plan to offer additional services that include weekend system i.e. our specialty menu for weekends would be extra ordinary happy hour or live entertainments on Sundays to freshen up the moods of the consumers. Similarly, student discount will be offered too. Take away option is also there for the ease of customers. Moreover, we are planning to open up a Club Card system for the entertainment of the consumers and swing chairs instead of the usual furniture used as well to appeal the kids as well as to give customers a fresh homely atmosphere. Location is of very crucial importance to the success of a business. Therefore, we plan to locate it in areas near offices and preferably near the famous teahouses in UK. Marketing Services Take away- The option is available on all times during the working hours. Student Discount- The option is offered on weekdays only. Weekend System- Extra ordinary happy hour or live entertainment listed under the specialty menu offered only on Saturdays and Sundays. Club Card System- An entertainment area to make people enjoy their tea in a light mood and a pleasant environment Competitive Comparison There are wide varieties of hotels in London offering the typical classic afternoon tea experiences. The main competitors in our view can be The Botanist, Brumus, Cocomaya, The Caramel Room, The Chinoiserie, High Road Brasserie, Nicoles, Orange Pekoe, The Orangery, Palm Court, Peacock Bar, Soho’s Secret Tea Room, The Tea Box, The Winter Garden, Aubrey Restaurant and Beas of Bloomsbury etc. (Restaurants in London, 2011). Most of these competitors focus on serving the tea with sweet desert type snacks i.e. Éclairs, Sweet Cakes, Sandwiches, Pancakes and mainly a variety of cakes. Moreover, they all are British Italian or Modern European categorized cafés. So, we will launch into UK with the tagline of ‘what is your Chinese plan of Tea’? In addition to that, considering the fact that all competitors are Italian, Spanish or British, therefore a Chinese teahouse for sure would appeal the customers. What we believe is that Chinese food is usually considered hygienic and delicious; therefore people would want to try out the new Chinese-Taiwanish Tea Style. Since we plan to offer services like take away, card club system, weekend specialty menu and student discount, so this would sure appeal to all types of customers. Yet again, the concept of having tea on a swing chair would also attract the customers as it gives more of a homely touch within a restaurant. Marketing Analysis We plan to attract all type of customers ranging from kids to youngsters to middle aged to old aged people. We think that we will best serve our customers that are students and working class during day hours as we plan to open our outlets in a proximity that would make it easier for all types of customers to access. As our café will be serving the families so that, along with the night shifts will also help us increase the profit as well as the publicity of the restaurant. The café also offers different type of juices to appeal kids. In addition, to attract the oldie we came up with the idea of opening up the card club system. It will provide them with a comfortable entertainment where they can enjoy their tea along with the cards with a peaceful relaxed mind. The tea’s price range would be from 22 Euros to 27 Euros. That is the most common price charged by the main competitors so we plan to charge almost the same price to remain in the competition. Furthermore, different prices would be charged for different types of teas according to the price of the ingredients that would be charged by the suppliers. Moving on, the prices for snacks would be around 18-19 Euros, again depending on the nature of the food. Obviously, there will be prices like the special deals that we might decide to offer. In the first six months, we are assuming the sales of around 20,000£. External Environment: Opportunities and Threats Opportunities: In the new market there will be more chances to cash up on the new taste as Chinese-Taiwan tea will be offered and it is a very new concept. Economy of UK is on modest stage and is actually booming as it is considered to be a developed state. The inflation rates are also modest, so the incoming profit opportunities are high. It will actually improve the balance sheet of China. London is a developed city; the profits are going to high if launch is successful. Established Market as Tea is considered a very typical drink in the region. Threats: High Costs, as RBT is going to launch in an altogether new market. Employment risks are involved. Employment would be expensive too. Exchange Rate issues need to be catered to. If the launch turns out to be unsuccessful, the whole business will be a downright flop; therefore, we plan to offer one outlet at first. We need to be aware of the culture and norms of UK to attract more customers and fulfill their needs more appropriately. Michael Porter’s Five Forces: Porter describes five forces to have an impact on a firm’s competitiveness- Threat of Substitutes, Threat of new Entrants, and Bargaining power of Suppliers, Bargaining Power of Customers, and the intensity of the competition within the industry. The company will be facing a threat of substitutes and the competition within the industry from many other cafes, restaurants and teahouses offering the same product of high quality that are satisfying the same need efficiently. Taste of Tea/Coffee will obviously differ from what is the actual taste of the UK’s coffee and tea. Bargaining Power of Suppliers and Customers will also be a very significant issue as the café is not located in the home city and the labor costs would be high comparatively. Suppliers may also try to gain competitive advantage because the company is new and belongs to a completely different culture. Societal Issues: Economic Issues: Economic Factors would be of the utmost importance for the company. As the success of the company, depends heavily on the prevailing conditions in the UK. An economic Recession was witnessed in the early 2000s, in countries like Switzerland, Germany and France where it experienced decreasing Revenues and Sales. Moreover, a real expectation of huge recession during the upcoming years is predicted worldwide because of the universal financial crisis. So the probability of taking loans from the banks in UK is low. Technological: RBT will have to be very up-to-date in terms of technology. Introducing ever attracting ways of attracting customers will need to be on the go all the time. But with the introduction of RBT, the company is creating the opportunity to improve employment rates, shorten lines and making the visit for customer an easy one and more convenient. Above all, if in future we decide on to introduce WI-FI systems it will be a significant improvement in technology. Social/Cultural Issues: RBT will try its best to abide by the rules and regulation of the country. A plus point here would be ‘The Rabbit’ used as the logo for the company. It is green and green is the color to show friendliness to the environment. Moreover, another plus point would be that Chinese are considered as nation that is harmless and creative in every aspect, so the chances of success are high, keeping in mind the environmental issues of the country. Management Management Summary RBT plans to pay considerable attention towards the hiring and firing of the employees. Initially, we are planning to hire a staff that can cater the needs of one outlet on a small scale efficiently. We are planning to hire around 3-5waiters at first, 3-4 cookers and a manager. The manager will be a Britain because he would know the norms and cultural issues more intensely. And the staff i.e. the waiters they are less in number because the launch is going to be on a small scale and if it turns out to be a successful business venture we will broaden the restaurant and the services offered. Three to four Cookers would be more than again as the company is operating on a small scale. The pay grades for the first six months would be as followed: Waiters and Cookers- Hourly wage rate would be suitable. Manager- Monthly wage rate system i.e. 300- 500 Euros Additional costs could be if a financial and R&D expert would be consulted when needed. The hierarchy of the café is very simple and self-explanatory i.e. a manager who would be supervising the total number of staff that is at most 10. Hence, the structure of the company is a flat one. We are assuming the labor cost to be high because the country is foreign but once adjusted successfully the overheads are expected to reduce. Training Costs would be zero as the job is very plain and straightforward. Finances: Start-up Summary The start-up cost for the business for the first six months is expected16, 950. Now dividing the Costs and Sales, if we look into the Cost of Sales section, the opening stock sums up to 6000 Euros. Moreover, the purchasing cost of the company is expected to be around 5000 Euros and we assume to be left with a closing stock of 2000. Coming to the Expense side of the firm, the expenses are divided into five types of overheads. First comes the motor expenses that add up to 500 Euros. The Wages and Salaries for the employees are going t cost around 2500 Euros. Next, is the infrastructure cost of the company that will amount up to 600, 150, and 200 for Electricity, Telephone and Rent respectively. The sales figure cost of goods is to be 13000 Euros and we will be left with a gross profit of 11000 for the first six months. Subtracting the 11000 i.e. gross profit and the expenses i.e. 3950 the net profit earned in the first six months is 7050 Euros. Analysis of the Balance Sheet of RBT for the first Six Months The Balance Sheet of any business is divided into two sections i.e. Assets and Liabilities. The cost of Assets for RBT for the starting six months is going to be a sum of 14895 Euros. The Fixed Cost expected is 750 Euros and the cost of equipment and depreciations sums up to 6930 Euros. The liability section for the company sums up to 18390. In which the accounts payable by the company are 10,500 Euros. Short-term liabilities are 3650 Euros and Long term is an amount of 4240 Euros. Comparing the two sections, the company has a huge loan to pay back. Furthermore, the current ratio is current assets divided by current liabilities; 7215/14150, which equals to 0.51 meaning that the company has around 0.51 Euros of liabilities to pay for its one asset. In simple words, company is in a huge loss if its finance gets out of control as the liability section is outweighing the asset section. The ratio for receivables and payables is also in negative as for one receivable there is 0.0001 payable. The depreciation cost is 1660 and the need for new furniture would be after 19 months. The available cash now is 5200 Euros. The Company start-up finance is not very motivating. The cost of opening up a new restaurant is high firstly because it is going to be located in the new country altogether. Secondly, the loan opportunities for the company are not appreciative. The recent exchange rate for both countries is one Euro equals to 9.46379 Chinese Yuan. Meaning that, the euro has lately appreciated in respect to Chinese Yuan. Figures in Chinese Yuan Euros CNY Sales: 20000 189,275 Gross Profit: 11000 104,101 Expenses: 3950 37382 Euros CNY Net Profit 7050 66,719.7 The profit earned in Chinese Yuan would be around 67000 CNY that is a polite profit. But the company will have to put in extra efforts to reduce the costs and pay back all of its loans in the right time. The company will be able to payback its loans for the first six months in the time- period of 0.74 months of the first six months. The cash flow will be negative in the initial state and will gradually increase over the time. Conclusion: RBT is a Chinese company that will be serving tea along with other edibles in UK. The company’s headquarter is located in China. The company is successfully operating in different parts of Hong Kong, China and is famous for its tea and juices. The company is now planning to open up its outlet in United Kingdom, at first in London. Currently, at an international level, it has its outlets in China, Taiwan, Malaysia, Canada and New Zealand. It has cultivated an international tea legend through hundreds of chain stores lay claim to the four corners of the world. However, to be successful in the UK, the company needs to be very efficient dealing with the finance. We want this company to be a very successful launch in UK. Therefore, we plan to hire all the right staff and the right raw materials are to be used to earn a positive profit. (RBT, official website) Bibliography Rbt. Home Page. Web. April 12. 2011, from http://www.rbt.com.cn/tcen/about.asp ‘Restaurants for Afternoon Tea in London’. Home Page. Web. April 12. 2011, from http://www.viewlondon.co.uk/restaurants/restaurants-for-afternoon-tea-in-london-recommended-london-106.html Read More