Assignment 4: Written Business Plan and Presentation

BUS 521

Walden University

November 17, 2019

Competitive analysis, differentiation strategy, and risk assessment

The Modern Café is committed at making sure that it becomes a highly competitive business in Idaho and other regions across the state. Different measures are being put in place to boost and maintain high levels of competitiveness. For instance, hiring qualified chefs and other employees that have the skills and experience needed to offer quality services and prepare uniquely tasting coffee and tea among other beverages. The business shareholders also intend to embrace unique and dynamic leadership that will oversee innovation and creativity take center stage at the Modern Café (Yang, 2016). Available resources also intends to be utilized effectively after developing a budget that would help meet set organizational goals, mission, and vision.

On differentiation, the Modern Café is aware of the fact that it is only by being different that clients can be attracted and retained for the longest time possible. The management team has opted to understand consumer needs and come up with a unique brand that clients can easily identify and desire to relate with. Unique branding and setting of the café will also be done on the premises to make it look serene and welcoming. This is to mean that environment will be used to create that unique feeling of relaxation and satisfaction. However, the company is aware of the fact that risks are in most cases unavoidable. For this reason, the management has planned on appointing a risk assessment team that will be incharge of conducting risk-related researches and advising the advising the management on the best course of action to keep risks at bay or handle the risks that the business might encounter from time to time.

SWOT Analysis

Strengths

The Mass Appeal business model is a major strength because it will promote fast and convenient services which mean it will help in building and maintaining a unique brand where clients do not have to queue or wait to be served. Secondly, it is a model that will help in creating the desired serene environment that would help clients to relax hence meeting the main purpose of business existence. The primary target is also another major strength of the business because office workers and students normally have tiring and demanding day and they need time to relax and socialize. The products served at Modern Café will help this primary target to relax and socialize and the good thing is that they can afford the products without challenges something that will make them regular customers of the business. The industry has a major strength in that it supports new and upcoming investors and offers them a serene environment that makes it easy for them to venture into the industry and thrive. The competitors are also a source of strength because from them, the business management team is learning on the best practices to embrace and those to avoid since some competitors have been in the business for long.

Weaknesses

The business model selected is too costly and sadly, the company does not have plan in place on how to finance the model and ensure that business operations are not compromised. The primary competition needs unique marketing tactics to inform them about the business and also adequate reasons why they have to take coffee, tea, and other beverages from the café. However, the business is yet to come up with such unique marketing techniques. The business is also yet to conduct extensive research that will help the business in approaching the industry in the right manner that would not end up ruining business operations and this grants competitors a chance to take over.

Opportunities

The business model can be applied in different ways to attain diverse business goals and objectives. This grants the business an opportunity to meet diverse goals using the model and also diverse in products and services as the industry is also growing. This is also to mean that the industry in which the business has been established possesses massive growth opportunity as the need for unique, healthy and tasty beverages continues to increase in Idaho and the entire country. The target market also possesses a major expansion and growth opportunity for the business. The reason is that the target market is consistently increasing as the number of workers is increasing due to economic growth in Idaho and also more students being admitted at the university.

Threats

In Idaho, there are lot of cafes and similar business like hotels and restaurants and this means competition of high (Kanchana, Divya, & Beegom, 2013). Moreover, the industry is constantly developing new trends which means investors must be ready to embrace change constantly which is costly and this exposes the business to risks of unexpected expenses.

Strategic position statement

A strategic position statement is important as it helps a business describe its competitive advantages as well as its value proposition that the products being served will offer the target audience. The Modern Café intends to make use of strategic position statement to communicate to its target market why the consumers should try business products being served because of the benefits associated with these products and services. It is evident that the company has a series of competitive advantages and the value proposition is serving newest coffee brands in the market to offer new and fresh experiences to clients. Hence, the company shall make use of the following strategic position statement “the Modern Café! For new, unique and tasty coffee, tea, and other beverages”

The marketing message used to market different coffee and tea products will be carefully designed to make sure that the message is simple and clear but communicating volumes. The following marketing message will be used “Want a refreshing and unique blend of coffee, tea, or any other beverages, Modern Café is the only option in the market that gives you a new and exciting experience. Try us today”. The above marketing message will be distributed through printing of brochures and hiring people to distribute them along busy streets and malls. Social media will also be used for communicate the message as well as a billboard strategically placed.

Possible business risks and mitigation strategies

According to Vesković, (2014); there is different business risks that businesses should expect to face at any time. The good thing is that there are possible mitigation strategies that can help addressing these risks. The Modern Café management team is aware of these risks and has identified at least three of them that the business could possibly face. These risks are; economic, operational, and compliance risks. These risks are possible because economic status of a country and region keeps on changing from time to time and these means during economic depression seasons, the business is likely to suffer limited sales due to consumer purchasing power being reduced. On the other hand, operational risks are possible because there are instances when errors and unexpected incidences can affect daily operations from time to time (Vesković, 2014). lastly, state laws and policies keeps on changing and it is possible for a law to change and before the business makes the move comply, it is faced with compliance risks.

However, Toma, & Alexa, (2012); the Modern Café plans to use the following five steps process to mitigate any of the risks that may be encountered immediately after starting and in the future.

Step1- identification of the risk for the purpose of uncovering, recognizing, and assessing the risks in order to understand it in terms of the type of risk and source of the risk

Step 2- analyzing the consequences of the identified risks and the impact that each consequence is likely to have on the business.

Step 3- ranking the potential impact as per the possible impact identified in step 2 of the plan in order to handle the impacts with highest potential thereby reducing the amount of impact from the risks

Step 4- developing solutions to the identified risks and implement the solutions so as to reduce the power of the risk on the business.

Step 5- monitoring and reviewing the risks after the implementation of the solutions to determine whether the solution worked effectively or more amendments are required. It is important to note that monitoring and reviewing is a continuous practice until there is an assurance that the risk has been completely mitigated to avoid some unhandled consequences interfering with business operations.

References

Kanchana, R. S., Divya, J. V., & Beegom, A. A. (2013). Challenges faced by new entrepreneurs. International journal of current research and academic review, 1(3), 71-78.

Toma, S. V., & Alexa, I. V. (2012). Different Categories of Business Risk.

Vesković, N. (2014). Aspects of entrepreneurial risk. FINIZ 2014-The Role of Financial Reporting in Corporate Governance, 115-117.

Yang, M. (2016). Leadership in Startups: A Penniless Powerless Approach.