THEENTRE701 - Entrepreneurship and Innovation Assessment 3 Critique a business plan
THEENTRE701 - Entrepreneurship and Innovation Assessment 3 Critique a business plan
Diego Alberto Maestre Moron 001209148
Sondor Sukhbold 001206473
Maria Camila Lopez 001206135
Bachelor of Tourism, Hospitality and Events Management (BTHEM)
Date:
Word count:
Contents
TOC o "1-3" h z u 1.Introduction PAGEREF _Toc132271352 h 42.Findings and analysis [or replace with relevant heading] PAGEREF _Toc132271353 h 52.1.[Section heading] PAGEREF _Toc132271354 h 52.2.[Section heading] PAGEREF _Toc132271355 h 52.3.[Section heading] PAGEREF _Toc132271356 h 63.Conclusion PAGEREF _Toc132271357 h 7Reference list PAGEREF _Toc132271358 h 8Appendices PAGEREF _Toc132271359 h 9Appendix A [Insert name of appendix] PAGEREF _Toc132271360 h 9Appendix B [Insert name of appendix] PAGEREF _Toc132271361 h 10
Informal Report on the Cafe Bistro Coffeehouse Business PlanIntroduction
The Watertower is a bistro coffeehouse located in Atlanta, Georgia. Its business plan outlines a holistic strategy for developing and growing a dining and entertainment venue, including a comprehensive description of the business assets, its competitors, an analysis of the market and a structured strategy for successfully operating the business. This report, analyses, reviews and propose improvements to the plan. The critical study will focus on entrepreneurial opportunities, risk management, resource organization, added to social, ethical, and cultural responsibility.
Entrepreneurial Opportunities and Competitive Environment
The Watertower cafe has the goal of being recognized for producing high-quality food, coffee and entertainment in an affordable range of prices. Its strategy focusses on identifying key segments of the market to target as potential customers, including urban professionals, executives from downtown businesses, tourists, and convention participants. This segmentation responds to the vibrant economy and diverse population of Atlanta (Kotler & Armstrong, 2023). The location of the facility in an Empowerment Zone and Enterprise Zone provides tax advantages, which allow to enhance its competitive advantages (Jones, Hillier, & Comfort, 2013).
In terms of product differentiation, the caf emphasises in comfort food with international hints, Which positions Watertower in the range of casual dining market. With this strategic choice, the venue points to a broad demographic while also filling the needs of a growing demand of diverse culinary experiences (Druker, 2015). The mixed services offered that include a coffeehouse with live performances increase the valued proposition by offering customers a multifaceted and dynamic experience.
The business plan emphasizes the relevance of the high-quality service, a crucial factor in the hospitality industry (Kuratko, 2016). The strategy includes to ensure that each member of the staff is courteous, efficient and attentive in order to offer memorable experiences for visitors.
The business plan identifies diverse entrepreneurial activities, among them utilizing the owners large scale of local networks and flexibility in the facility design to be adapted to various events. These activities add value through attracting different kinds of customers and creating several revenue flows. The plan could be improved through analysing deeply global dining trends. Also, the incorporation of innovative practices such as sustainable policies and health-conscious menu options could meet innovative and constantly evolving consumer preferences (Crane & Matten, 2019).
Additionally, there is no mayor details on how the caf will constantly innovate in order to remain competitive, especially being in a segment of the market that offers diversity of similar concepts. Finally, the plan could be improved by incorporating more detail analysis in the development of the activities, staff training and quality control could be explained in a detailed plan of operations (Hisrich et al., 2016).
Financial Plan
While The Watertower Caf's financial plan has solid strategies such as cash flow financing to reduce dependence on external financial aid allowing for greater control within the company, profitability goals of 14%, and inventory controls to minimize waste and increase profitability, there are some areas that could be improved through recommendations.
Cash flow dependency: Excessive use of cash flow can limit the company's growth, so it is advisable to consider lines of credit, to have greater payment opportunities without interrupting operations.
Key indicators: Maintain inventory turnover, gross margins should not be below 38% and marketing costs below 3%.
The company can and should break even with monthly sales of $106,101 to increase the viability of the business.
Break-even sales = fixed costs / (Variable Cost Per Unit Sales Price per Unit)
57,873/1-(5.70/12.54) = 57,873/1-0.4545=57,873/0.5455 = 106,101
Key Entrepreneurial Activities
The cafes entrepreneurial objectives, includes approaching to different demographic groups of customers and stablishing strategic agreements with local institutions in order to add relevant value. These activities have, being leverage by the owners professional network and the versatile design of the facility (Hill & Jones, 2012).
The entrepreneurial activities are strategically connected with identified market needs and trends. The plan mentions a growing demand for evening dining and venues fucus in entertainment in the city of Atlanta. The areas closer to the downtown have particularly showed an increase in visitors. The cafe management team have identified a rising trend on customers looking for diverse and culturally rich experiences, based on that, it was decided to include live music and a dessert bar as part of the coffeehouse. This strategy connects with the theories of experiential entrepreneurship, which propose the generation of memorable experiences as a source of competitive advantage (Pine & Gilmore, 1998).
However, the strategic positioning of the plan could be enhanced through and integration of technological innovations. Implementing mobile an app for customer engagement and loyalty programs would help to improve the number of returning visitors. Additionally, adopting sustainable practices could be an essential strategy to attract environmentally committed consumers and connect with substantial global trends (Crane & Matten, 2016).
Some key entrepreneurial activities identified based on its business plan are:
Market research and location selection: The company have chosen a strategic location in Atlanta near urban centres, and foot traffic to attract regular customers, they have understood customer preferences in terms of food offering and atmosphere based on market research. The restaurant is in the Sweet Auburn District of Atlanta adjacent to the studio plex on Auburn residential loft development. The Water tower will establish itself as a "destination" of choice to the many residents of the greater Atlanta metropolitan area, as well as numerous out-of-town visitors.
Menu development and product innovation: Focusing on product and service development, the caf Bistro coffeehouse, have identified unmet needs in the market and have creative innovative solutions, products, and services to address them. By offering diverse menus influenced by African and French culinary traditions and aiming to create more personalised menus for the existing and new customers the company aims to add value to their operation by improving customer experience and making sure their operations, dining and entertainment experience met the customer needs. They also have designed specific menus for the different ambient and spaces within the restaurant for example, brewed coffee and espresso-based beverages, juices and smoothies for the coffee shop, dessert bar for breakfast, carry out and dine in menu for lunch, Spanish tapas service and full-service bar for evenings, and weekends.
Branding and ambience creation: The company also base its operations in offering accessible, sophisticated, and casual dining experiences ensuring efficient management of food and sustainable operations. This adds value to the company because maintaining high quality of their products and services and offering customer service excellence will guarantee good business reputation, will build customer loyalty, and will attract more customers. They focus on creating a unique customer experience through ambiance, music, seating arrangements and lighting.
Marketing and supplier relationships: According to their business plan they will build relationships with local coffee suppliers, bakers, food vendors. They also include marketing activities and strategic alliances in their key entrepreneurial activities. Their marketing plan and partnerships will add value by improving customer and sales index and enhancing more visibility to the company.
Financial planning and cost management: They have developed a clear business plan with projections for revenue, costs and breakeven analysis, focusing on proper inventory, employee management and quality control of their operations, products and services.
Other additional business activities that support their operations includes, business planning, they have developed a strategy and plan to execute the idea, including defining their mission, target market, 4P development, risk management, financial projections, competitive comparison, sourcing analysis, market, and industry analysis.
Risk Management and Resource Organization
In the business plan is depicted a well-developed comprehension of the market opportunities and sales strategies. Risk management strategies are strong, including the selection of a location with high peasants traffic and visibility with ensures the possibility of having a significant base of possible customers. Additionally, the plan outlines a diversified product offering, which includes food, coffee, and entertainment. s
The Watertower plan includes to capitalize on seasonal events like Halloween and New Years Eve and maintains a clear set of sales predictions (Kotler & Armstrong, 2018). The caf is expected to be owned and operated by a limited liability corporation, that decision provides legal and financial protections for the owners. However, the plan lacks a holistic risk management strategy. It should be included a chapter for potential risks such as economic recessions, supply chain disruptions, and variations in consumer behaviours. After that, a detailed risk management plan, that includes contingency strategies, should be added in order to strengthen the businesss resilience to changes (Hill & Jones, 2012).
The plans resource organization is well-structured, it identifies clear roles and responsibilities. Nevertheless, there is an excessive reliance on part-time staff and external contractors for marketing and accounting, that strategy have the risk of leading to inefficiencies. In order to build an operational consistency and cohesion in the brand activities is recommended to invest in a more dedicated team (Jones, Hillier, & Comfort, 2013).
In relation with the human resources, the plan mentions the goal of create 21 new jobs and the generate revenue in order to support the Historic District Development Corporation. However, there is no detailed information related with how the resources will be allocated to ensure the cafe's sustainability in the long-term. Furthermore, there is just a briefly information about supply chain management, inventory control, or cost management strategies (Hisrich et al., 2016).
Social, Ethical, and Cultural Responsibility
The business plan demonstrates well knowledge of social and cultural factors using a strategy to take advantage of them, which includes strategic alliances and community involvement and impactful projects like supporting the Historic District Development and revitalizing the Old Fourth Ward in the neighbourhood. These initiatives contribute positively to reinforce the growing of the brand while supporting the local economy and reflecting the cultural diversity of the city of Atlanta (Crane & Matten, 2016). As well, the intention of generating revenue in favour of affordable housing and job creation is a significant example of corporate social responsibility (Elkington, 1998).
In order to increase their impact in social and ethical responsibility, The Watertower could incorporate specific sustainability initiatives like reduction of water usage and committing customers with recycle and compost. Fair labour practices, and culturally sensitive marketing strategies are as well powerful tools to impact in the community. Addressing these aspects would strengthen the businesss ethical position and get the support of a broader audience (Crane & Matten, 2016).
Focusing on African and French culinary heritage shows an interest and respect for the traditions and the cultural diversity present in a city like Atlanta. However, the business plan could argument how the cultural elements represented respond to an authentic cultural leadership and not as the result of a marketing strategy. That could be afforded through collaboration with chefs, local cultural organizations that print authenticity and depth to the cafes products and services. (Drucker, 2015)
Current Canvas Model
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Key Partners: Key partners are essential as they provide vital support and help the business model to function vitally (Dieffenbacher 2023). A good relationship with partners can attract more customers interested in the experiences offered by the company. It is advisable to diversify relationships to ensure different options and extend the continuity of operations.
Key Activities: Key activities are those that allow the development of different processes, functions and tasks within the company to offer a good value proposition (Digital Enterprise n.d.). Offering food, drinks, entertainment and events expands the opportunities to attract different markets. To offer quality services, you must have an adequate team, otherwise this could indicate a problem within the organizational framework.
Key Resources: These are the assets and credits to create, deliver and transmit value. These resources can be human, financial, physical, among others (Digital Enterprise n.d.). According to The Watertower Cafe's business plan, the company's key resources are workforce, technology and marketing. This also aims to attract new customers who enjoy and take advantage of the features it offers.
Value Proposition: Provide sophisticated, sensual, and casual dining and coffeehouse experiences for Atlantans residents and visitors. Affordable venture with comfortable facilities containing ample patio space, alfresco dining with the option of enjoying coffee, deserts and live entertainments, and a relaxed game of bocci in the garden.
Coffee stands out primarily for offering a close and unique interaction not only with customers, but with the community. This relationship is the backbone of any business that seeks success, attracting new customers can be more difficult so the focus should be on current customers (Qualtrics n.d.)
Channels: As mentioned above, marketing is one of the key points to attract customers. The focus of the channels is broad, so it is important to increase the presence on current social networks such as Instagram, and thus have a greater reach.
Customer Segments:
Cost Structure:
Revenue Strea:
ReferencesCrane, A, & Matten, D 2019. Business Ethics: Managing Corporate Citizenship and Sustainability in the Age of Globalization. Oxford University Press. UK
Drucker, P, 2015 Innovation and Entrepreneurship: Practice and Principles. Routledge. London.
Elkington, J 1998, Cannibals with Forks: The Triple Bottom Line of 21st Century Business. New Society Publishers, Oxford.
Hill, C, Jones, G 2019. Strategic Management Theory: An Integrated Approach. Cengage Learning. USA
Hisrich, R, Peters, M, & Shepherd, D 2016, Entrepreneurship. McGraw-Hill Education, New York.
Kuratko, D, 2016 Entrepreneurship: Theory, Process, and Practice. Cengage Learning.
Jones, P., Hillier, D., & Comfort, D, 2013. Sustainability in the Global Hotel Industry. International Journal of Contemporary Hospitality Management, 25(7), 940-958.
Kotler, P, & Armstrong, G, 2023. Principles of Marketing. Pearson. UK
Pine, B, Gilmore, J 1998, Welcome to the experience economy. Harvard Business Review, 76, 97-105, Boston.
