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Strategic Management

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Introduction

A new business is going to start with the name ‘Darling Coffeehouse’ at Sydney NSW Australia. In this study, the evaluation will be done on the business strategies. In this study, a clear view of the vision, mission, and goals of the company will be made. This study will include discussion on the products and the services offered by the company. In this study, a brief will be given to the business and the organization. A discussion will be done on the technologies might get in use and the communication system also. In this strategic management study, the marketing policy and the business strategy will be discussed in a brief. In this study, a discussion will be done on the target market, market competition, and influence of the external forces. This study will also contain a discussion on the financial planning. 

Business environment

Company Ownership

The ‘Darling Coffeehouse’ is a privately held limited company and the maximum shareholder for 80% is by David K. Watson and the District Development Corporation (20%).

Vision, Mission, and goals: Vision for ‘Darling Coffeehouse’ is to become the choice of people for Coffeehouse. Sydney NSW can be considered as one of the biggest business hubs in Australia and it is also the center of Australia. Every day Lacks people visits here with a purpose of the job and many people come for Darling Harbor. As mentioned by Ward (2016), the location is close to the employment centers mainly the IT companies are located near the location of ‘Darling Coffeehouse’. This location is also nearer to the residential area. There are several cross-selling opportunities of the products like burgers, pastry, ice cream, beer, cold drinks, pizza and other fast foods. As mentioned by Burns (2016), the immediate market area for the ‘Darling Coffeehouse’ is Darling Harbor, star city casino, The Sydney Aquarium, The IMAX Theater, Australian Martin Museum, and The Chinese Garden. The historical, architectural beauty of this place attracts the people which might work as the great business market for ‘Darling Coffeehouse’.

Products and services: Keeping the market value on the mind ‘Darling Coffeehouse' will deal in the coffee related products like Aztec single-origin Coffee, Café Mocha, Café Latte, Café Frappe, Café Americano, Classic Cappuccino and Crunchy Frappe. There will be some variety of beverages like Cold Cocoa Latte, Alphonso Mango Milkshake, and Arise with Pomegranate, Classic Lemonade, Cocoa Cookie Milkshake, Classic Strawberry Milkshake, Kesari Delight Milkshake and Cocoa Cookie Milkshake. As mentioned by Southern (2015), considering the market demand some products are included as the cross-selling products as like Big Crunch Chicken Cheese Burger, Big Crunch Chicken Spicy Burger, Black Forest Cake, Chocolate Double scoop flavored ice cream, Chili Cheese Toastizza, Cocoa Fantasy Cake, Cocoa Fantasy Pastry, Egg Wrap and Crispy Veg Wrap. As mentioned by Porter (2008), Magazines on trending fashion, articles, technology, business and health might add extra value to the business of ‘Darling Coffeehouse’.

Finance structures: The business is in the enterprise zone that's why the property tax is been included in the business plan. The owner is responsible for the insurance for the building; the contents, health, death and any kind of injury the startup financial requirement are as followed. 

Strength, Weaknesses: The biggest strength of the new startup is the location. The location is close to Darling Harbour, star city casino, the Sydney Aquarium, The IMAX theater, Australian Martin Museum, and The Chinese Garden. As mentioned by Karagiannopoulos, Georgopoulos & Nikolopoulos (2005), the historical and architectural beauty of this place attracts a lot of visitors to this place. Besides that, there are several companies and that might work like a boost to the sources of income as the employee might like to hang out in a nice place and can have food too. The product quality, service and management can become the key factors to ‘Darling Coffeehouse’.

Goals,   milestones, strategies

Goals: The goal of ‘Darling Coffeehouse' is to become the first choice of people for Coffeehouse. ‘Darling Coffeehouse' has set the goals like a product at a reasonable price, service quality is to be the finest, the place architecture might be eye-catching, The food quality will not be compromised in order to maintain a reasonable price chart. The customers will pay in order to have a good time. The service is the main attribute in order to develop a good reputation. Marketing is the main focus in order to give a high influence to the business.

Marketing policy:

Darling Coffeehouse will maintain the 7 keys for gaining the market in between the vast market in Sydney. The main focus for gaining the market is the product, price, place, promotion, packaging, positioning, and the people. The main importance is given to the people. The type of people might become the customers has been taken in the count. The main daily customers might be the employees of the areas that come every day.

Pricing: The main target is the middle earning people as the majority will form the employee and the residential segment. That’s why Darling Coffeehouse has given importance to the pricing segment and keeps the price reasonable.

Customer management and retention: The aim is to serve the best and retain the customers. A reasonable pricing will attract the customers and will help the company to retain its customers. In Order to retain the customers Darling Coffeehouse has given focus on the packaging and the promotion which might help in branding and the marketing of the organization.

Business strategy: In the strategy, the main key was to choose the place. The place added a vast market for the business. The business strategy has been the best service at the reasonable price. A pocket-friendly service might add value to attract the customers and retain the customers.

Sales: In according to meet the sales target to earn good revenue some certain steps might be followed which are hosting creative and engaging contests, membership programs, social media, ambassador programs and home delivery services. In the new trend of business, the youth is being moved by the culture, social media and the peoples' figures. Promotion of the business through the social media will help to get in the view of the customers. Branding and promotion might help to capture as well as the highlights of the price segment and the ambient atmosphere. The home delivery service will add contribution in sales also.

 Business competition

The industry: Market for the restaurants and the dining services at Sydney Is around AUD $120 billion. The annual revenue is increasing every year by an average of 4%. People are more interest in dining out, hand out, eat out. As the number of female employees has increased in numbers in last some tears that have given a certain hike in the business as it is followed that there is a tendency in the women to go for the dine out and the eat out more than the men.

Target market: The market is divided into two segments. The first segment is the regular customers and the other is the variable segment. In the Regular or the permanent segment it has included the people from the companies that come for the purpose of the jobs. Besides that also the residential complexes are nearer to the location which might attract the residents to spend splendid times and have tasty foods at a reasonable price in there. The most of the incomes might come from the variable market. The variable market is dependent on the tourists. As mentioned by Mohammadzadeh et al. (2018), a large number of people come to visit the highlighted places of Sydney. A good reputation might help the organization to attract the tourists.

Market competition: In Sydney, there are some big names that already have spread their business into the vast market of Sydney. Room 10, Gumption, Campos Coffee,

Bondi Hall, Cabrito Coffee Traders, Paramount Coffee Project, South by dukes, Barefoot Coffee Traders, The Grounds of Alexandria, Celsius Coffee Co. through the Room 10, Gumption failed to make its impression in between the people of Sydney but the others like Bondi hill, carbide coffee traders , South by dukes were not disappointing.

Influence of Five forces: The factor five forces are based on the microeconomics which influences the supply and the demand, relation of quality and cost and the market structure. The five factors are bargaining power of suppliers, bargaining power of customers, a rivalry between the existing players, threats of substitutes and threat of new entrants. As the market is so vast in Sydney the dealers are maintaining their influence in the market. As mentioned by Ghezzi et al. (2015), the demand for the products is too high so the dealers are not giving any space to bargain in buying the products. But to capture the market the cost must be reasonable. As mentioned by Adi (2015), the cost price might affect the price and it will be problematic to maintain the minimum cost for the quality products. There are big names in that industry that has already has spread their market and captured it. As mentioned by Kotler, Rackham & Krishnaswamy (2006), in order to capture the market, a balance has to maintain the price and the quality. Till now there is no substitute in the mind of the people for the coffee so there is no threat of any substitutes. As a new startup, it might face the influence of the existing similar businesses and there might be several problems related to management.

Financial forecast

Profit and loss forecast
In starting up the business it is assumed that to achieve minimum m revenue required estimated sales is about AUD $750000 in the first year. It is aimed that the revenue will increase the amount to AUD $1500000, in five years. Due to several setting up expenses and other expenses, the first year is supposed to experiences a net income of AUD $17000 in the first year. However, in the following years' growth in net income is expected and in the 5th year, it is expected that the neat income will be AUD $493000.

Cash Flow Forecast
Cash flow forecast describes future cash position of the business. The net cash from the operating activities might be AUD $16000 and it might get the increase in time and it is expected to reach 552000 in the fifth year. It is expected that the cash equivalent might get AUD $ (-) 784000 in the first year and in the fifth year, it might reach AUD $702000.

Balance Sheet forecast
It is estimated that the fixed asset might be 1600000 in the first year and it might get 2200000 in the fifth year. It is estimated that the liability for the first year might be 600000 and it might get in the fifth year 1400000

Break-even Analysis
Estimated sale of AUD $750000 is assumed for the unit of 100000.the contribution per unit is assumed AUD $4.67. The estimated break-even point for the first year is assumed 42826.55246.

Conclusion

In this study, the bag round of the business has been evaluated. The mission, vision of the business is been discussed. In this study, the weakness and the strength have been discussed in brief. In this, a discussion is done on the goal and milestones of the Company. Marketing strategies and the sales stogies have been evaluated. The price segment and the customer retention policy have been described in order to gain reputation and have the increment in the business. The brief explanation is given on the market risks, on the industry, the competitors, and the other influencing factors. The financial forecast is been done in this study which includes profit loss forecast, cash flow, balance sheet and breakeven point.

References:

Adi, B. (2015). An Evaluation of the Nigerian Telecommunication Industry Competitiveness: Application of Porter’s Five Forces Model. World5(3). Retrieved on: 2nd jan,2018 from:

 

http://www.wjsspapers.com/static/documents/September/2015/2.%20Bongo.pdf

 

Aktouf, O. (2004). The false expectations of Michael Porter's strategic management framework. Universidad & Empresa6(6), 9-41. Retrieved on: 2nd jan,2018 from:

http://revistas.urosario.edu.co/index.php/empresa/article/viewFile/2748/2260

 

Burns, P. (2016). Entrepreneurship and small business. London: Palgrave Macmillan Limited. Retrieved on: 2nd jan,2018 from:

https://books.google.co.in/books?hl=en&lr=&id=8JlMDwAAQBAJ&oi=fnd&pg=PR2&dq=start+up+business+plan&ots=xq7TknEM_K&sig=nVXW3KdgupLFkY8AwR_L5swq-IQ#v=onepage&q=start%20up%20business%20plan&f=false

 

Ghezzi, A., Cavallaro, A., Rangone, A., & Balocco, R. (2015, April). A Comparative Study on the Impact of Business Model Design & Lean Startup Approach versus Traditional Business Plan on Mobile Startups Performance. In ICEIS (3) (pp. 196-203). Retrieved on: 2nd jan,2018 from:                                   https://core.ac.uk/download/pdf/74313415.pdf

Karagiannopoulos, G. D., Georgopoulos, N., & Nikolopoulos, K. (2005). Fathoming Porter's five forces model in the internet era. info7(6), 66-76. Retrieved on: 2nd jan,2018 from:

https://www.emeraldinsight.com/doi/full/10.1108/14636690510628328

 

Kotler, P., Rackham, N., & Krishnaswamy, S. (2006). Ending the war between sales and marketing. Harvard Business Review84(7/8), 68. Retrieved on: 2nd jan,2018 from:

https://pdfs.semanticscholar.org/2c0a/444e8b50f02246d1add70079e97d049de25e.pdf

 

marketing-insider.eu(2018), MARKETING INSTRUMENTS – MARKETING MIX – 7 PS OF MARKETING, . Retrieved on: 2nd jan,2018 from:                                              

https://marketing-insider.eu/marketing-instruments/

 

Mohammadzadeh, M., Hashemi, S., Salmannejad, F., & Ghari, T. (2017). Identification of Key Success Factors in the Marketing of Cosmetics Based on Knowledge, Attitude and Practice (KAP) Analysis Using Topsis Technique (The Case of Iran) Identification of key success factors in the marketing of cosmetics. PHARM, 23(3).Retrieved on: 2nd jan,2018 from:

http://journals.tbzmed.ac.ir/PHARM/Manuscript/PHARM-23-222.pdf

 

Porter, M. E. (2008). The five competitive forces that shape strategy. Harvard business review86(1), 25-40. Retrieved on: 2nd jan,2018 from:

https://s3.amazonaws.com/academia.edu.documents/32580687/HBR_on_Strategy.pdf?AWSAccessKeyId=AKIAIWOWYYGZ2Y53UL3A&Expires=1523529794&Signature=xV6P7%2B6IJum%2FBM7vGez520jtT8U%3D&response-content-disposition=inline%3B%20filename%3DHBR_on_Strategy.pdf#page=25

 

Southern, L. J. (2015). The status of small business growth and entrepreneurial start-up capital availability during the current extended economic downturn. . Retrieved on: 2nd jan,2018 from:

https://businessperspectives.org/images/pdf/applications/publishing/templates/article/assets/7536/PPM_2016_01_Southern.pdf

 

Ward, J. (2016). Keeping the family business healthy: How to plan for continuing growth, profitability, and family leadership. New York City: Springer. Retrieved on: 2nd jan,2018 from: https://books.google.co.in/books?hl=en&lr=&id=QtwYDAAAQBAJ&oi=fnd&pg=PR9&dq=start+up+business+plan&ots=-Wr4Py8D2b&sig=G6cWB59uOJamMl7HQP64kZ2C8mc#v=onepage&q=start%20up%20business%20plan&f=false

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