SWOT Analysis & Risk Management - Essay Example

SWOT Analysis & Risk Management Plan al Affiliation: SWOT Analysis & Risk Management Plan Business and Products With the changing roles in the society, the bakery and café will target the working population. Many people who are working prefer to take their lunch and coffee in nearby restaurants. Furthermore, many women have joined the working population. However, with the increasing pressure from the organizations, they are finding it hard to balance the family and work. Therefore, in order to maintain their working momentum, they are relying on ready foods from the bakeries and café in order to support the family. Therefore, this business will focus on producing freshly organic baked pastries, sandwiches, and other delicacies that will be on high demand by the market. Moreover, it will provide the customers with organic coffee and other types of beverages. After work, many people look for a place where they can hang out with their friends and have a chat in order to relieve pressure from their workplaces. Furthermore, young people are looking for areas where they can have their light lunch and relax with friends in the evening (Feldman, 2013). This bakery will provide this environment by offering products that will improve their experience and make them to feel relaxed. Through offering a variety of the products, the business will target a diversified market. SWOT Analysis Strengths The business will have a strong management. Being a startup gives the business an opportunity to hire a highly qualified manager who will be growth oriented and focused towards the overall success of the firm. This will be significant in enabling the business to penetrate the market, position the products strategically in the market, and attract the loyalty of the customers towards the products and services. A fresh start will be one of the major strength of the business. Many of the customers have had bad experiences with the existing outlet. However, through an effective customer relationship management, the business will be able to incorporate the tastes and preferences of the target market in its decision making process. This will attract more customers towards the products and services offered. The business will offer unique products in the market. This is through introducing new tastes which are not common in the market. This will play a significant role in attracting a high number of customers towards the business. The location of the business will offer it with strength over its competitors. The business will be located either near residential or working places. This will make it easy for the customers to access its premises. This will make it a first priority for many clients. The target market is a major strength for the business. The young people form the largest market segment. As a result, targeting this group together with the working class will strengthen the competitive advantage of the business in the market. In addition, it will reduce the risks and uncertainties associated with focusing on a single product line. Being a startup, the business will be able to start with high quality kitchen equipments that will enable the firm to offer the market with high quality products. As a result, the business will be able to retain its customers, an aspect that will play a significant role in improving its overall performance in the market (Smith, 2013). Weaknesses The bakery and café will have a weak brand compared to other competitors in the market. Major bakeries and cafes in the market have invested heavily in strengthening their brands. This is through the use of audio, visual, print, and social media. In addition, they have been participating in corporate social responsibility. However, in the meantime, this business does not have enough funds to carry out intensive advertising campaigns. As a result, it will have to rely on the world of mouth to reach more customers. Majority of the employees will be inexperienced. Due to the challenge associated with establishing a business in an already competitive market, the business is unlikely to attract experienced workforce. Therefore, it will have to settle on fresh graduates who have no experienced in the industry. As a result, the firm is likely to face stiff competition from bakeries and cafés with experienced subordinates. Extreme competition means limited market share. Many of the well established businesses have created a barrier of entry for other interested investors. They already have a large market segment. Their increased campaign activities are likely to weaken the chances of this new business to expand its market share. Health and safety-As a new business, all the employees must learn the existing health and safety laws. This aspect will force the business to invest heavily on frequent training of the employee. This will force it to channel some of the resources towards training, an aspect that will weaken the firm’s financial position in the market. The type of food that the business will be selling contains sugars and high fats levels. With the increasing awareness on issues related to obesity, many customers are likely to stay away from majority of the foods to be sold by the business. This is likely to provide the competitors with an upper hand in the market. The location is likely to be a weakness to the business. Many similar businesses have been opened in the same areas. This is likely to affect the competitive ability of this new firm as majority of the customers are loyal to the existing bakeries and cafes. The business is likely to operate without adequate space. Hiring business premises is posing a major challenge to small businesses. This is because of the competition emanating from multinational firms. Therefore, customers have better options in the market (Feldman, 2013). Opportunities New markets are emerging. With the changing family roles, new markets are emerging in different parts of the worlds. These are markets that are less competitive. Therefore, the business can invest in this market and create a barrier of entry for other investors. This will enable it to strengthen its financial base. The business has an opportunity to increase the items on its menu in order to improve its customer experience. Many customers want to tastes new products as they have become used to products being offered in the market. As a result, this aspect will increase the number of customers, an aspect that will boost its sales. Innovation-The business will target fresh graduates. This is a generation which is innovative and has new ideas on how to satisfy the tastes and preferences of the target market. This is likely to give the business an upper hand in the market. The business has an opportunity to come up with low sugar products. This is to tap into the market of people who are health conscious. Many multinational firms have been unable to satisfy these interests (Johnson, 2012). Threats One of the major threats is competition. The current bakers and cafes have adequate funds to stage a stiff competition against this business. This is likely to threaten the existence of the firm in the market. There is a threat from non-patented products. It is hard to differentiate food products from those of the competitors. As a result, the business is likely to face stiff competition from substitutes. Strengths Strong management Unique products Fresh start Location Target market Opportunities Expansion to new markets Opportunity to increase its menu items Opportunity to produce products with low sugar and fat content Weaknesses Weak brand Inexperienced workforce Small market share Lack of awareness on health and safety laws Location of the business will expose it to competition Threats Competition Threat from substitutes which are unpatented Risks Analysis Positive Risks These are risks that are worth taking and are likely to change the fortune of the business. For expanding the business in new markets is likely to boost the sales of the bakery and café. These are markets with fewer competitors and whose customers are willing to purchase high quality products. Therefore the business can take this opportunity to open subsidiaries in these markets, an aspect that will enable the firm to accumulate funds for the business. In an example, Asian market is experiencing a shift towards ready foods (Feldman, 2013). In addition, the number of middle income earners is increasing tremendously. Therefore, if the business will make approximately $100,000 dollars in the first year, it can expand this market and triple the earnings to $300000 through utilization of cheap labor and raw materials. The business can expand its menu in order to target a wide variety of the customers. This is likely to reduce the risks and uncertainties associated with focusing on few product lines. Negative Risks Investing in already saturated market is likely to affect the success of the business. This is because the customers are loyal to existing businesses. In addition, focusing more on products that are hard to differentiate makes it hard for the business to avoid the increasing number of substitutes. Risk Priorities Risks Rate Competition from multinationals 5 Competition from substitutes 4 Expanding its menu 3 Risk associated with introducing a new brand 2 Expanding to new markets oversees 1 References Feldman, D. N. (2013). The entrepreneurs growth startup handbook: 7 secrets to venture funding and successful growth. Hoboken, NJ: John Wiley & Sons. Johnson, T. (2012). Spark & hustle: Launch and grow your small business now. New York: Berkley Books. Smith, H. (2013). Learn small business start-up in 7 days: Launch a lean, efficient start-up. Milton, Qld: Wrightbooks. Read More