Strategic Plan for Coffee Shop

Complete your strategic plan below using information from the scenario, Chapter 3, and the sample plan in Table 3-6 on page 75-76 as a guide. Type your answers only in the blank rows with the > below each heading.

Brief Description of Retail Business:

Coffee Shop is a house or place which serves coffee and related coffee beverages. My coffee shop will be located within the campus area and it will be a retail business. Examples of the coffee beverages that will be served include; iced coffee, cappuccino, and iced tea. The campus Coffee shop may also serve light snacks such as pastries and muffins.

1. Situation Analysis

Current organizational mission:

My mission is to serve better coffee than any other coffee shop and create job opportunities for students.

Current ownership and management alternatives:

The form of business ownership will be a sole proprietorship. The main reason for starting the business is because it has a greater percentage profit making compared to other types of business.  

In addition, the owner of the business will not share profits

Current good/service category:

The products offered in the coffee shops are coffee, iced beverages, pastries, and muffins. The service provided is catering and delivery of the products.

2. SWOT Analysis – use what you wrote for lesson 2 (you may modify, based on instructor feedback)

Strengths:

Coffee shop it is more convenient for the student. They are using china cups and recyclable to go cups which environmental friendly. The coffee shop provides free Wi-Fi service. Poetry readings, musicians, palm readings, and meet-the-local politicians’ forums will be presented in the evenings which are extra service for customers. She has lots of friend on campus since she earned her degree from the same school. She plans to sell high-quality Italian coffee and ice cream during summer time.

Weaknesses:

Lack of enough funding and very reluctant to borrow from her friends and family. She needs to have a better business plan. She is not financially strong enough to offer fair trade coffee. Price strategy is an important factor for sales increase since students living in a limited budget and always looking for cheaper alternatives. There was not clear advertising plan in place, advertising plays a big role in any new business.

Opportunities:

There is a strong demand for specialty coffee in today’s market. Coffee shops have the opportunity to provide people in their community a place to socialize with one another. With WIFI technology businesses are able to promote their products and customers stay longer and possibly spend more money. Adjustments in the structure of shops along with fluctuating social, routine patterns, deliver chances for expansion and attract new customers.

Threats:

A surge in technology use by consumers such as Facebook may have a great impact on how people purchase their coffee. State or federal changes may create an impact on the coffee business if the service or product becomes highly regulated. As an example, California asking for cancer warning signs on coffee cups. Coffee shops face competition from other outlets such as convenience stores and gas stations where some are now offering specialty coffee at lower prices. Change in target market demographic usually indicates possible chances and threats. For example, a decrease in family incomes will result in less spending especially in restaurant and coffee shop.

3. Objectives

Annual sales:

Annual projected sales of $600 000. The coffee shop is projected to grow and get established in the local market. In the next five years, the net profit will increase to 55%.

Net profit before taxes:

The net profit before tax is projected to be $55000 monthly.

Positioning:

Repositioning to appeal to lecturers without losing the targeted customers (students). Ensure the prices are friendly to the students.

Satisfaction of publics:

Create a good relationship with my customers and create a healthy working environment for the employees

4. Identification of Customers

Mass marketing:

The targeted consumers choose to drink high-grade coffees.  The company decides to use mass marketing because it gives an insight on the targeted customers. There is need to know where to place media.

Concentrated marketing:

The strategy focuses on marketing a product very well using specific segments. There is need to use the strategy since the company is small. The coffee shop will use niche advertising strategy.

Differentiated marketing:

The strategy has more than one target market. For the coffee shop, the targeted group is only one. There is no need of using differentiated marketing strategy.

5.A. Overall Strategy – Controllable Variables

Goods/service strategy:

For the service to be best, a firm needs to have a service strategy. Ensure that it is customer friendly. Install a Wi-Fi and book live entertainments. Additionally, ensure the service render are effective. Have the best customer service.

Location strategy:

I chose campus as the location because on a campus there is a library. There are young adults studying. Tired, hungry student will need caffeine to freshen up their mind.

Pricing strategy:

The price affects the profitability of a company. On Tuesdays, the coffee shop will offer free muffin for a cup of cappuccino bought. Lower the prices of iced beverages on hot seasons. Combine a beverage and a snack at a cheaper price than when purchased separately. Give out discounts on the loyal customers.

Promotion strategy:

Make and post flyers. Give out to a passerby to assist in advertising the coffee shop.  Give out free coffee for the first time customers. Get weekly customer feedbacks about the products and services of the coffee shop.

5.B. Overall Strategy – Uncontrollable Variables

Consumer environment:

Ensure that I satisfy the consumer wants. Look at their feedback and in case there is an issue, the coffee shop management will follow up and solve the problem.

Competitive environment:

Within the campus area, there are other coffee shops. I will ensure that my shop meets the standards of the targeted clients.

Legal environment:

The coffee shop management will be careful with complying with the law and ensure to pay taxes. Sometimes the federal law changes and creates challenges but it should not affect how an individual complies with the law.

Economic environment:

Some economic include recession, inflation rates. The coffee shop management will come upon a strategy to use since it reduces sales.

Technological environment:

The coffee shop management will come up with a software that will help in generating the weekly profits and losses of the shop.

6. Specific Activities

Daily and short-term operation:

Prices are lower compared to the competitors. Work long hours in the evening to maximize on the profit.

Response to the environment:

Have the correct strategies to respond to the environmental challenges.

7. Control

Evaluation:

The accounting software will help the coffee shop in calculating the sales and thus will help in forecasting monthly profits of the business.

Adjustment:

The system will help reduce errors and give out actual numbers. The management thus will have an easy time when making accounting decisions.