STRATEGIC MANAGEMENT 2 2 Strategic Management Authors Note Introduction

STRATEGIC MANAGEMENT STRATEGIC MANAGEMENT 2 2 STRATEGIC MANAGEMENT Strategic Management Author’s Note Introduction 2 Discussion 2 Mission Statement of the Company 2 Internal Analysis of the Business 3 External Environment Analysis 5 Strategic Analysis and Choices 7 Long term Objective of the Business 8 Generic and Grand Strategies 9 Short Term Objectives of the Business 10 Functional Tactics 10 Policies to Empower actions 11 Strategic Control 11 Financial plan 11 Conclusion 12 Reference 14 Introduction The main purpose of the assessment is to develop a business plan which would be

Running head: STRATEGIC MANAGEMENT
Strategic Management
Name of the Student:
Name of the University:
Author’s Note

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Table of Contents
Introduction......................................................................................................................................2
Discussion........................................................................................................................................2
Mission Statement of the Company.............................................................................................2
Internal Analysis of the Business................................................................................................3
External Environment Analysis...................................................................................................5
Strategic Analysis and Choices...................................................................................................7
Long term Objective of the Business...........................................................................................8
Generic and Grand Strategies......................................................................................................9
Short Term Objectives of the Business.....................................................................................10
Functional Tactics......................................................................................................................10
Policies to Empower actions......................................................................................................11
Strategic Control........................................................................................................................11
Financial plan.............................................................................................................................11
Conclusion.....................................................................................................................................12
Reference.......................................................................................................................................14

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Introduction
The main purpose of the assessment is to develop a business plan which would be
focusing on enhancing revenue generated by the business and also increasing the sales of the
business. The business plan is being formulated for a café business which would be providing
different types of beverages, ice creams and bakery products. The name of the new business
which would be established would be Cream Bakery and Café. The business would be applying
innovative setting in terms of marketing and baking the actual product of the business (Ansoff et
al., 2018). The business plan would be including mission and vision statement of the business
along with a Marketing plan and a financial plan. The business plan would also be including how
the management of the company contributes to Corporate social responsibilities of the business
and contributes to the needs of the society.
Discussion
Mission Statement of the Company
The business would be aiming to provide different varieties of beverages to the customers
and also innovative bakery products so that the business is able attract more and more customers
to the business. The mission statement aims to ensure that the business is able to create a
customer base and brand name for the shop in the market so that the business is able to generate
maximum revenue from operations of the business (Blackburn, Hart & Wainwright, 2013).
Another major aim of the business is to engage in innovative practices so that the new products
can be offered to the customers which would also help the business to create an appropriate
brand name for the business.

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Internal Analysis of the Business
The business of café business is considered to be very lucrative business but the only
consideration is the competition in the market. It is therefore very important for any business to
identify its strengths and opportunities so that the business is able to take maximum advantage of
the situation. The new business which is being established needs to conduct an external analysis
of the business environment so that proper strategies are formulated for the growth and
development of the business (Finch, 2013). In order to conduct internal analysis of the business,
the most appropriate tool which can be used by the business is SWOT analysis which reveals the
internal strengths of the business and also points out the weaknesses of the business. The SWOT
analysis of the business discussion is conducted below which identifies strengths, weaknesses,
opportunities and weaknesses.
Strengths
The main strengths which can be identified for the business of Cream and Bakery Café is
the variety of products which is offered by the business. In addition to this, the business would
be focusing on quality of the product which is being offered by the business. In addition to this,
the business also will be setting up a friendly atmosphere where customers can have their
beverage and snack with peace and actually enjoy their food. In addition to this, the business
would be adopting an innovative approach towards products such as bakery food, cakes so that
the customers are attracted to the variety of food products which is being offered by the business.
These factors would contribute to the revenue which is generated by the business.
Weaknesses
The main weakness in the business model and strategies which the management of the
company wants to implement in the business is that the cost of operations would be slightly high.

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In addition to this, one of the main issues which the business faces are regarding the retention of
the key staff members of the business. As the competition is high in the market, therefore, the
employee turnover in the market is quite high which is a major weakness. In addition to this, the
experience in managing the operations of café business is not much and this can be major
weakness for the business as the decision-making process for the business would be affected.
Opportunities
The opportunities which is available to the business is mainly associated with the
customer segments which is available to the business. The management can tap into the interest
of particular consumer segment such as adults, domestic consumers and even office workers for
enhancing the revenue of the business (Burns & Dewhurst, 2016). In addition to this, there is an
opportunity for the business to introduce new innovative products in the market so that the
business can appropriately face competition in the market. The opportunities which is available
would help the business to achieve growth in the business.
Threats
The major threat which a café business would be facing in the market is related to high
competitive pressure which is the business would be facing in the market. In addition to this,
drastic change in the regulations or taste and preference pattern of the consumers would also be
affecting the revenue generation of the business. In addition to this, there is a risk of rise in prices
of coffee which would affect the pricings of the business.

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The above discussion shows the internal analysis of a café business and the factors which
can affect the operations of the business are listed out in the above figure as well. The SWOT
analysis of a business helps the management of a company to frame policies which are most
appropriate for the business. The internal analysis of the business reveals that the management of
the company needs to formulate appropriate strategies for the purpose of ensuring that the
activities of the business are appropriate.
External Environment Analysis
The external environment refers to the external factors which affects the operations of the
business and on the basis of the same major decisions are to be taken by the management of the
company. In case of the business of Cream and Bakery café, the business would be identifying
the market conditions and factors which can affect the operations of the business. Some of the
factors are discussed below in details:

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 Political Factors: The coffee industry faces significant regulations from the government
and such factors can also affect the trade relationships with coffee producing nations.
Such factors can have an impact on the decisions and revenue making capacity of the
business. In such a situation, it is quite difficult for businesses for acquiring appropriate
raw materials and therefore the entire operations of the business would be affected in a
severe manner.
 Economic Factors: The major economic factor which affects the operations of a café
business is the spending power of the business. As the spending power of the business
increases so does the overall demand for the coffee products in the market. The level of
inflation in the market is also a major determining factor for the business as the same
affects the prices of the commodities.
 Sociological Factors: The main consideration which can affect a café business is the
consideration for health or even changes in the taste and preference pattern of the
consumers (Hill, 2017). The consumers in today’s market has started to take their health
serious and therefore, the management of Cream and Bakery café has decided to offer
new innovative products such as digestive and fat free biscuits, cookies. In addition to
this, the business has decided to bake brown breads so that the business can also attract
domestic housewives for the fresh baked products. The management of the new business
anticipates that the business would be able to attract more customers by following such a
trend.
 Technological Factors: The technological factors also play a vital role in the
development and growth of a business. Some of the technological advancement which
would brought about in the new businesses would help in generating more revenue in the

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operations of the business (Haag, 2013). The technological factors of a business
effectively help the management of the company for appropriately managing the
operations and also for gaining a competitive edge in the business (Eden & Ackermann,
2013). The business of Cream and Bakery Café can bring about a change in the
operations by improving the packaging standard of the business. Therefore, it can be said
that the technological factors affect the operations of the business.
 Legal Factors: There are already various laws which are established which can affect the
coffee business. One of the regulations which affect the operations of the business is
related to regulations which have been brought on the import and export of coffee
products. The legal factors also include registration requirements which the business
needs to comply with so that there is compliance with different regulations (Hiduke &
Ryan, 2013).
 Environmental Factors: These are also important factors which can affect the operations
of the business. The business needs to ensure that no activity of the business affects the
environment. There are certain environmental laws which the management of the
company needs to adhere to in order to operate in the society. Some of the important
factors which the company needs to consider while starting the business are
environmental rules and regulations, environmental disasters in countries which produces
coffee beans and global warming and other environmental issues in global level.
Strategic Analysis and Choices
The new business would be aiming to enhance the revenue and also spread the brand
name of the company in the region. The market is quite favorable for a café business but the
same faces significant competition in the market. In order to establish the café business in the

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region, the owners have decided to formulate strategic practices so that the business is able to
establish itself in the market and create a niche environment for the café shop in the market (Hill,
Jones & Schilling, 2014). The strategic management practices of the business would involve
continuous improvements and innovation in the business practice. The business would be
targeting domestic customers, office workers and high school students. The business has
something to offer for all the customers and therefore this would help the business to generate
appropriate revenue.
The business would be innovating the food products which would be offered by the café
as different varieties of beverages which would be attracting different segments of customers. On
addition to this, the business would also be offering fresh bakery products which would be
including cookies, brown bread and different types of cakes. The business would bake the
products and would also be offering less fat and digestive bakery product options so that the
business can attract all types of customers (Thomas et al., 2014). The business model of the
Cream and Bakery Café is focused on innovation and offering variety of options to the
customers. This would help the business to establish itself in the market and thereby also
enhance the profitability of the business.
Long term Objective of the Business
The business of Cream and Bakery Café would be offering best quality of food products
at a reasonable price to the customers. The long-term objective of the business is to build a brand
name for itself in the market which is the primary goal of the business. In addition to the main
goal of the business, the owner also wishes to enhance profitability and wealth of the business.
The owners realize that the business would be able to achieve this once the people are aware of
the quality products which is being offered by the business. The business also needs to focus on

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managing the employees especially the chefs so that the business is able to develop its unique
recipes and flavors so that the business is able to combat the competitive pressure in the market.
This is a plan which is sett by the management of the company for 5 year down the line period
where the business would be able to establish itself in the market and generate appropriate profits
for the business. Therefore, the owner plans to make a brand name for the business and also
achieve growth in the operations of the business. In order to achieve growth in the operations of
the business, the business would be opening multiple chain of shops for ensuring that the
business is able to maximize the revenue of the business.
Generic and Grand Strategies
The generic and grand strategies which the business would be following relates to the
main policies which the business would be following during the initial years of operations of the
business. The management of the Cream and Bakery Café would be aiming to following the
porter’s generic strategy for deciding the approach which would be undertaken by the business.
The market is highly competitive for a café business and therefore, the owner has decided to
adopt a differentiation strategy whereby the business would be making the products slightly
different from what is being offered by the competitors of the business (Tanwar, 2013). The
generic strategies of the business would be enabling the business to enhance the sales of the
business due to the unique products which the business is offering to the customers.

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Figure 1: (Porter’s Generic Strategies)
Source: (Ifm.eng.cam.ac.uk. 2019)
The differentiation strategy covers a broad target and is a very useful strategy for building
brand name for the business. The differentiation strategy also focuses on dimensions which are
highly valued by buyers and considers important attributes which are considered to be important
in the industry in which the business would be operating. The strategy allows the business to
have a unique approach and also keep a premium price for the quality products which is being
offered by the business (Pulaj, Kume & Cipi, 2015). This strategy would help the management to
focus on development of the business as a brand which would help the business to achieve the
long-term objectives of the business.
Short Term Objectives of the Business
The short-term objectives of the business would be aiming to ensure that the business is
able to survive in the competitive environment. The business aims to create a niche environment

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in the market so that the business is able to generate revenue and also survive in the market. The
short-term aim of the business is to make the customers familiar with the variety of products
which is offered by the business. In short term, the business would only be looking to survive
and earn enough revenue so that the business is able to meet the costs of the business (Kaya,
2015). The business would depend on promotional strategies to spread an awareness regarding
the products which is being offered by the business. In addition to this, the business would also
be aiming to keep the employee turnover as minimum as possible.
Functional Tactics
The business need to adopt some measures in initial years of the business so as to ensure
that the café is able to create a niche environment. The owner has decided to invest in innovative
approach so that there is a difference in the products which is being offered by the Cream and
Bakery Café. The business would be focusing on differentiation from the start so that the
management is able to face competitive pressure in the market. In addition to this, the business
would also be relying on enhancing the sales of the business by effectively promoting the
products which is being offered by the business. The business plans to use all the three forms of
media which is radio, television and social media in order to reach out to maximum customers.
This approach would also help the business to enhance the sales and profits of the business.
Policies to Empower actions
The owner of the business would be taking all the major decisions of the business
regarding the operational process of the business. The owners would be appointing a manager
and supervisor so that the plans of the business are well implemented and the objectives of the
business are followed by the business. In addition to this, the policies would be formulated
keeping the long-term objectives of the business in mind.

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Strategic Control
The owner of the business would be appointing supervisors who would be reporting to
the managers and owner regarding whether all processes are being conducted in an appropriate
manner or not. The owner plan to exercise budgeting control so that appropriate control can be
exercised over the activities of the business and the owners can ensure that no resource of the
business is not wasted in any manner. The business would also be providing proper training to
staff member regarding how to communicate with the customers and also for ensuring that they
have quality experience in the café.
Financial plan
Projected Income statement for a period
Particulars 2020 2021
Sales 900,000 1,200,000
Cost of sales 360,000 480,000
Gross profit 540,000 720,000
Expenses
Rent 36,000 36,000
Salaries/Wages 300,000 370,000
Utilities 15,000 24,000
Advertising and sales promotions 20,000 40,000
Others 6,000 14,000
Total expenses 377,000 484,000
Net profit before tax 163,000 236,000
Tax @ 30% (Income Tax) 48900 70800
Net profit 114,100 165,200
The above table shows the projected income statement for the café business and the same
appropriately shows how much revenue can be generated by the business in two years period.
The table shows growth in sales and also in profits which is a positive sign for the organization.
The above table also shows that the business would be relying significantly on advertisement and

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would take all steps for promoting the products which is offered by the business. In a similar
manner the assumption which is taken is that there would be no changes in the market condition
of the business and the business would be able to achieve growth in the second year of
operations. The start-up cash in hand which the business would be having is $ 150,000 for the
business which would help the owners to meet the start-up expenses of the business.
Conclusion
The above discussion effectively shows that the business plan is viable and the financial
forecast also shows that the business would be able to generate profits from operations. The
business plan also includes a internal and external analysis regarding the business. The internal
analysis would be focusing on strengths and opportunities while the external analysis would be
focusing on the external factors which can affect the business. The business plan would also be
focusing on strategic management practices which is followed by the business.

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Reference
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Eden, C., & Ackermann, F. (2013). Making strategy: The journey of strategic management.
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Finch, B. (2013). How to write a business plan (Vol. 35). Kogan Page Publishers.

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