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Executive Summary

Company Description:

Drive Thru Coffee Shop will be located in Riyadh city in Saudi Arabia. The shop will provide Arabic coffee, which is rare to find in shops that provide Arabic coffee in the country. Perhaps, the reason for this is because preparing Arabic coffee takes 25-30 minutes , (2008). However, if the shop provides large quantities of Arabic coffee, then customers would be able to collect them without having to leave their cars. This type of coffee will also be prepared in a way that a customer would just drink. They only need to add flavor such as, Arabic coffee with 1) Cardamom Arabic: Hal, Hail (Ginger Family), 2) Zofran. The price starts from 9 to 20 RS depends on the flavor and size and the type of dessert.

Mission Statement

It will always be the shop’s mission to produce the best Arabic coffee. We will be at the forefront in listening to feedback that will come from our customers, franchise owners, and staff. We will always ensure that we have invested our resources, energy, and time in coming up with innovative and new offerings Abrahams, (2009). We will also continue to focus on the success of both our franchises and employees by blending excellence, providing quality products, and setting professional standards. We will be a reputable and progressive company that will play a crucial role in our communities while giving support to our employees and franchisees. We will also provide a friendly yet unique and welcoming experience for employees and patrons alike.

Industry Trends and analysis

Saudi Arabia is the biggest consumer of coffee in the whole world, since it is a country where coffee is used to signify the Arabic hospitality and generosity, as well as the drink that is irreplaceable.

A study that Dr. Firdaus Bukhari conducted in King Abdul Aziz University in Jeddah reveals that Saudi Arabia is the biggest consumer of coffee worldwide. The annual estimated quantities of coffee, which are imported for production of Arabic coffee, stands at 10,000 tons.

The study further revealed that the per capita coffee consumption stands at 3kg annually. The same study also shows that the Saudi citizens spend over SR1 billion annually in preparing coffee and its components. The number of coffee shops within the country has continued to increase at a rate of over 10% annually. Therefore, these statistics are enough proof that Drive Thru Coffee Shop has the greatest market potential.

The young Population

The local population within Saudi Arabia has continued to adopt a western way of life. In their article, Euromonitor International, (2014) notes that the rise in internet technology has also made many people to subscribe to a number of social networking sites, such as Facebook, Twitter, and Instagram. In fact, this has exposed many youths in the country to international dietary habits, fashions, trends and lifestyles. Since many youths have the strongest desire of emulating the western culture, this trend has been reflected in their everyday life, be it in their eating habits, fashion, or beauty. Perhaps the European style cafes, as well as the American-style dining restaurants has been on the rise, and the country’s fast growing young population, which includes women, have been seen socializing in groups. The young population has also been known to consume a lot of coffee, in spite of the fact that tea is the national favorite. Therefore, once Drive Thru Coffee Shop is established, it will always find ready market among this young population.

Competitive Landscape

Drive Thru Coffee Shop will be aiming to be the leading coffee provider in the year with more than 20% value share. The company will also be keen on having a strong following among the traditional coffee consumers, which includes Arabic coffee. Since the Bedouins and traditional Arabs normally consume this type of coffee in large quantities because they consider it as premium priced, the shop will have a strong value share Euromonitor International, (2015). The shop will ensure that this coffee is available not only through our coffee shops, but also through the main grocery stores, a situation that will help us in maintaining the leading position. However, we also hope to face stiff competition from the growing influence of instant coffee, as well as the aggressiveness from companies, which includes Nestle from South Africa.

Prospects

The increase in the young population within the country will give a strong boost to coffee. Therefore, Drive Thru Coffee Shop, spurred by the rise of western influence on the young population, will always aim to increase its activities to meet the increasing demand for Arabic coffee. This means that the shop will not only increase its marketing activities, but also focus more on innovative product developments, which results in production of quality coffee. In addition, the rapid pace in infrastructure development within the retail industry will also help in boosting sales.

Vulnerability to Economic Factors

Technological factors

The coffee industry in Saudi Arabia constantly comes up with quality coffee, which makes it difficult for Drive Thru Coffee Shop to assume the largest market share. The production of good quality coffee by the key industry players, such as Costa Coffee, and Starbucks, has made these shops to command the largest market share. For example, Costa coffee is a leader specialist coffee shop in terms of value sales, with a percentage share of 22%. On the other hand, Starbucks takes the second spot, with a percentage share of 20%. These two companies have employed the latest technology in production of quality coffee, and this has made them accelerate their presence faster as compared to other brands.

Risk Analysis

The consumption of coffee in Saudi Arabia is very high since the product is considered as the daily lifestyle. As a result, the risks associated with trading in coffee is very low, which means that Drive Thru Coffee Shop will have a higher prospects of success once it is ready to start business. The market potential is also expected to grow, which is advantageous for the coffee shop.

Regulatory issues

In order to import coffee to Saudi Arabia, an individual is required to produce a manufacturer’s ingredients certificate. This certificate provides a brief description of all the products that are imported and since Drive Thru Coffee Shop will be importing its coffee it would be required to produce this certificate.

Barriers to Entry

Saudi Arabia is often seen as the most promising and emerging market worldwide. However, this potential market has relatively high barriers to entry, which would make it hard for Drive Thru Coffee Shop to gain access to the market. The oligopolistic firms that operate within the coffee industry, coupled with government regulations always make it hard for new investors to gain entry into the market.

Bibliography

Abrahams, J. (2009). The mission statement book: 301 corporate mission statements from America's top companies. Berkeley, Calif: Ten Speed Press.