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Business Management Assignment: Case Analysis of The Coffee Club

Question

Task: Assessment Details: Report Analyse a new business – Provide ideas on Effective Management Practices In this business management assignment, students are required to write a report on a new business management practice. They need to analyse the selected Business to come up with answers for the following questions:

  • Name and introduction of the Business
  • Size of the business and Product Features
  • What are the capital sources for the new business and how they are obtained?
  • What are the challenges and difficulties that might be expected for the example business? You need to discuss any possible problem such as legal, technological, political, economic, environmental, social and cultural challenges.
  • How are the potential risks involved in the process of the example business venture?
  • Provide Management practices you will be implementing to minimise or eliminate the problems/issues you have or might have in the future.
  • Recommendation
  • Conclusion

Answer

Executive summary
As discussed herein business management assignment, a business involves an array of operational aspects which directs the company to the desired results. Eachoperation plays a significant role in the process of business accomplishment. The main aim of a business begins with deciding on a proper goal. Objectives are then framed accordingly to attain the goal conveniently. The strategies are also established considering the main objectives of the business. The present report will attempt to present certain aspects of a new business. ABC is a coffeeshop business which will be conducting its business soon in the market. The report will establish a comprehensive understanding of business practices. It will also analyse the probable threats and opportunities the company might face during its operational procedures and how strategies of new management practices can address those issues and help mitigate those properly. The report will present the business features and the background of the company. The capital sources of the company will also be highlighted. Company dimension will also be evaluated to get a better understanding of the probable management practices of the company. According to the company background, certain sources of issues will also be rationalised to get better knowledge about the operational process of the business. A set of recommendation will also be provided to allow the company to execute its operations properly.

1. Introduction
Company name: The Coffee Club

Company Background: the coffee club is an Australian coffee shop star-up which will be offering a range of products to its customers. The rising demand for the coffee shop has always provided definite opportunities for individuals to start a coffee shop business. Coffee has always been one of the most famous drinks across various nations. Most people prefer coffee more than tea. The current business is also aiming to get a proper market share with the new venture. It has never been an easy process to build and run a coffee shop. The coffee shop market is driven by changing tastes and personal income of the consumers. Individual businesses' success depends on the ability to obtain optimal positions, boost sales volume, and offer high-quality products. In purchasing, financing, and marketing, large corporations have advantages. By selling specialised products, targeting a domestic market and delivering a personalized customer service, business owners may remain competitive in the market (Turner and Endres, 2017). Cafes are primarily dependent on customer flow and are most frequently situated in places where visitors or drivers have easy access. Standard places include commercial centres in central or suburbs, movie theatres, office complexes, and college campuses.

The layout and dimension of the shop differ by area, as some places provide more capacity than others. The cost of the coffee products varies from one store to the other depending on the ambience, customer service, product quality etc. the retail prices of coffee and other items vary as well due to the fluctuation of dairy and coffee beans prices. The employees are often recruited on the basis of their skills and customer management efficacy. These employees are hired mostly temporarily. The pay scale depends on performance and employee is often paid on the basis of their efficiency level. There may be one supervisor and 10 to 15 staff in a standard franchise coffee shop; individuals often have around six to seven employees. In order to achieve high customer service and product quality, new workers also go through trainingprograms and acquire in-store practise sessionsto increase their professional efficiency.

Achieve high customer service and product quality, new workers also go through training programs and acquire in-store practise sessions to increase their professional efficiency. In order to create signature varieties and flavours, master breweries manage the entire process. Staffs are trained and well equipped to operate industrial-grade coffee makers use for making speciality drinks (Turner and Endres, 2017). The Coffee Club is located in an urban area and offers a variety of items on its menu list. The company being a start-up has hired around 10 employees and have one operating manager to supervise the team of employees to ensure the customers are managed conveniently and efficiently.

The main target customers of the company are the millennials and young couples. These people come to these kinds of coffee shops often. These people visit these shops to spend quality time and best customer service for a good experience. They prefer trying out new and trendy menus. Especially millennials are more aware of the global coffee trends and are attracted to such coffee houses. They want to experience a variety of coffee recipes and flavours. Not only coffee but other beverages are also preferred by these young people (Hanetal., 2018). The Coffee Club has considered the taste and preferences of the young people and created their menu accordingly to satisfy the demand of each and every consumer. It has a variety of coffees such as latte, macchiato,cappuccino, mocha etc. other than these, it also offers sandwiches,pastries, desserts and salads. Capital Sources: The Coffee Club is an individually owned shop. Bank loans and personal investments are made to establish this new venture.

2. Discussion
2.1 The challenges and difficulties
Political

The company applies all the relevant laws that The Coffee Club implicitly implements in its activities, including hygiene, state laws, health and safety laws, and bundling and naming legislation (Hanetal., 2018). Australia's government relies on potential provisions for the growth of skills and financial advancement, which have good future opportunities for the organisation.

Economic
The Australian economy is highly stable and has an optimistic monitory stand with its retail and mining segments. The unemployment rate is also declining and is less than 5%. The population has more expenses capacity which drives the coffee shop industry massively. The affluence of the people allows the coffee shop ventures to bloom (Waxman,2006). The Coffee Club also has the opportunity to utilise economic strength by enhancing its market relevancy. The biggest challenge for the company can be the constantly rising cost of coffee beans and other dairy products. The increasing market competition has allowed the supplier's wider opportunity to escalate their demand which has significantly affected the cost ratio for the ventures.

Social
Australian society is heavily drawn to new trends. They are socially well aware and are open-minded. This quality allows them to experiment with their regular experiences. This factor helps coffee shops to expand their demands by addressing consumer preferences. Especially the millennials are enthusiastic as the coffee shop culture is heavily trending on the internet and has become a matter of interest for teenagers and young adults.

Technological
The advancements of the internet have provided The Coffee Club immense opportunity to create a strong market in the market (Lee,Moon and Song, 2018). The coffee Club has introduced new approaches which involve the internet and allow it to offer a convenient service to the customers. The venture has promoted its existence by using social media platforms and websites which allows people to know the deliverables of the company easily. It also has an online reservation system which allows convenience. Though the company is using technology in favour yet the other competition with much more capital strength can utilise the technology more efficiently to drive more consumers. It can create a strong competitive gap between the markets.

Legal
The Coffee Club ensures that all appropriate prerequisites are pursued, whether in product quality or employee protection and well-being and job instructions. By maintaining these company assures its growth opportunities.

Ecological
The company focuses on the corporate method that ensures processes and activities that have minimal environmental consequences (Waxman, 2006). In its store network, the Coffee Club takes a look at the open door for business civil commitment and tries to include the goods in recyclable bundling.

2.2 Potential risks
The coffee shop industry is constantly facing major challenges which have disrupted the usual operations of the business (Lee,Moon and Song, 2018). Though the opportunity of growth is immense yet the chances of uncertainty remain constant.

Market competition
The coffee ventures are facing major threats of new competitive entrants in a similar market. Especially companies with big brand reputation and global brand value are gripping the market share potentially which is creating substantial challenges for The Coffee Club. Brands like Starbucks have a significant market presence in Australia which can lower the customer strength of these medium-size coffee ventures (Hanetal., 2018). The most important factor is customer preference. It is important for the company to maintain its potential market existence by addressing customer preferences. It is evident that customers are attracted to the reputed brands and have a special preference for brands like Starbucks which has created a severe problem for small and medium coffee shops like The Coffee Club to create its customer base which will create a huge risk for the company to stay competitive in the market.

Cost of raw materials
The rising cost of raw materials has increased the risk for coffee shops to maintain their product quality as it has become difficult for them to manage the expenses and create a standard balance in its expenditure (Waxman, 2006). Considering the current global cost increase it can easily be predicted that the in the upcoming time the cost of coffee beans and other raw materials such as sugar, dairy products will also hike which will be a challenge for the Coffee Club to deal with. The enhanced expenses will gradually reflect on the product quality which will be challenging for the company to manage.

Inefficiency among employees
Employee inefficiency is one of the most threatening issues faced by most of the medium-sized coffee shops (Lee,Moon and Song, 2018). The Australian market has many coffee shops ventures whether its small of large, big brands or local competitors it is difficult to stay upgraded with best customer services. Employee efficiency is one of the key elements for the company to make sure that it stays relevant among consumers. With constant up-gradation of menus and sudden inclusion of new items in the menu, the list can be difficult to adopt for the chefs. They might lack certain skills which can affect the company performance extensively.

2.3 Management practices
Technological adaptation

It is always a great approach to stay relevant in the target market (Rahardjo, Hasbullah and Taqi, 2019). Adaptation of new technology can increase the level of rapidity and performance which will mitigate the risks of market incompetency. Technological advantages such as digital marketing, online presence, app reservations etc. can increase convenient to attract more consumers.

Employee training sessions
In order to maintain service quality, the employees and managers will require constant training. It will enable them to stay efficient and increase their professional credibility which will enhance the overall performance of the company (Turner and Endres, 2017). Especially the managers are liable for all the management aspects which require specific guidance and skills. Training sessions can provide essential learnings to the employees.

Resource management
Resource management is the core challenge for the venture. Resources are often mist=used and not measured properly which cause excessive usage and results in increased expenses for the company (Rahardjo, Hasbullah and Taqi, 2019). Thus, inventory management must be prioritised for balanced resource usage and to cut excess cost.

3. Recommendation
I. Most importantly The Coffee Club should analyse the market and form its future strategy accordingly to gain more competitive advantage and secure market position conveniently.

II. The company should employ an efficient leader for the organisation to assure the right management of the entire staff team.

III. It should consider new marketing strategies to attract new consumers. Festive discounts, special offers on birthday menus etc. should be introduced to increase market recognition and to stay ahead of the market competitors.

IV. Inclusion of several employee training courses should also be adopted to make sure that the employees are well aware of the current industry patterns and know-how to enhance their professional calibre to match up the company standards.

4. Conclusion
The coffee shop industry has been rising consistently and has evolved with time and induction of new strategic up-gradation. Coffee is consumed by most of the population and ranks significantly high in the preference list of consumers. Mostly the new generation of people is more interested in coffee which has increased the demand for coffee shop businesses in the global market. Most importantly the global connectivity of the internet has developed so the reach of people to new trends has also increased. Thus, the commercialisation of coffee shop ventures has visibly grown. Considering the global demand of the coffee shop the competition in the same industry has increased rapidly. This is a significant aspect that impacts the strategic drive of then coffee shop ventures. Constant competitive growth increases the requirement for new strategic adaptation. It becomes important to specificallyidentify the probable challenges which might create interruption while carrying out the processes. The identification of this challenge will provide a better understanding of the essential management practices which can enhance the efficiency and increase better performance within the organization which will reflect on the success of the business. The report has precisely attempted to evaluate these issues and present a realistic strategic drive for the company.

References
Turner, S. and Endres, A., 2017.Strategies for enhancing small business owners' success rates. International Journal of Applied Management and Technology, 16(1), p.3.

Rahardjo, B., Hasbullah, R. and Taqi, F.M., 2019. Coffee Shop Business Model Analysis.Integrated Journal of Business and Economics, 3(2), pp.140-152.

Han, H., Nguyen, H.N., Song, H., Chua, B.L., Lee, S. and Kim, W., 2018. Drivers of brand loyalty in the chain coffee shop industry. Business management assignmentInternational Journal of Hospitality Management, 72, pp.86-97.

Lee, W.S., Moon, J. and Song, M., 2018. Attributes of the coffee shop business related to customer satisfaction. Journal of Foodservice Business Research, 21(6), pp.628-641.

Waxman, L., 2006. The coffee shop: Social and physical factors influencing place attachment. Journal of Interior Design, 31(3), pp.35-53.

Appendix

Political

·         The Coffee Club has maintained the state legislative standards aptly

·         Australian govt. opts for futuristic policy implementation.

 

Economic

·         The price rise has contributed to the monitory strain on the company

·         It has also affected the access to wide supplier range for coffee shop ventures

Social

·         The trend of coffee shops has increased among millennials and young adults

·         The coffee culture of Australia has evolved a lot and increased the preference for coffee massively. They prefer a coffee latte

Technological

·         Advantage of internet and preference of digitalised services have increased

·         Online reservations and other services have also enhanced the coffee venture scalability aptly

Legal

·         All the legal aspects are well managed in the company

·         It complies with every law regarding safety, employee interest etc.

Ecological

·         The Coffee Club makes sure to maintain all the ecological actors and allows actions which do not have much ecological impact

·         It also practices recycling process to ensure environmental sustainability

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