Business Plan of Coffee on the Way Assignment 2022

Running head: BUSINESS PLAN OF “COFFEE ON THE WAY”
Business plan of “Coffee on the way”
Name of the University:
Name of the Student:
Authors Note:

BUSINESS PLAN OF “COFFEE ON THE WAY”1
Executive Summary
The business operations of this new coffee shop will be focused on introducing new and
innovative coffee products in the market such as cascara drinks. The corporate strategy of this
new coffee business will be to equitably source exceptional coffees and then roast them to
perfection to ensuring exceptional coffee beverage experience for its target consumers. High
standards of coffee producing methods are attaining political prominence where Australian
coffee industry faces high demand for fair trade coffee. “Coffee on the way” coffee shop is
responding to such change through provision of de-cafe drinks and green coffee. Strong force
as “Coffee on the way” coffee shop has several competitors within the industry such as The
Grind, Argo on the Parade and The Lost Deli that operates successfully in Norwood. Strong
force as “Coffee on the way” coffee shop has several competitors within the industry such as
The Grind, Argo on the Parade and The Lost Deli that operates successfully in Norwood. The
resources that will be acquired by the “Coffee on the way” coffee shop will include physical,
financial, intellectual property and human resources. Capabilities that will be attained by “Coffee
on the way” coffee shop in attaining competitive advantages within the target market will include
corporate and financial management capabilities, technological development, operations
management, marketing, sales and service capabilities, procurement, inbound and outbound
logistics along with human resource capabilities. Based on observation of the Porter’s
competitive advantages model indicated in the figure below, differentiation strategy will be
followed by this new coffee shop in attaining competitive advantages. School and nearby
residents of Norwood can also be potential target consumers and to retain these target
consumers the new coffee shop will offer them with some concession on every purchase.
Considering that differentiation business strategy will be followed in the company through
keeping prices reasonable for all its offerings, “Coffee on the way” coffee shop will set skimming
pricing strategy. Social media promotional channels such as YouTube, Facebook and Twitter
will also be employed for sales promotion The Company will also undergo investment of $
10,000 in installing a service delivery system that can brew fresh coffee every hour.
Transformational leadership style will be followed in the new coffee shop in which the leader will
encourage and motivate employees to support constant changes in ensuring future growth of
the company. The licenses that will acquired for opening new café in Australia will include
attaining a business license that will be attained through registering the business and obtaining
Australian Business Number (ABN). For dealing with financial risks ay special deals will not be
accepted on the initial years of business that drifts from target focus and might be unprofitable.

BUSINESS PLAN OF “COFFEE ON THE WAY”2
Table of Contents
1. Background............................................................................................................................. 3
2. Corporate objectives................................................................................................................ 3
3. Situational analysis.................................................................................................................. 3
3.1. External Business Environment Analysis..........................................................................3
3.2. Porter’s Five Forces, Strategic Groups, and Industry Life Cycle.......................................4
3.3. Organizational Resources, Capabilities and Distinctive Competencies.............................6
4. Strategic options...................................................................................................................... 7
5. Business strategy.................................................................................................................... 7
6. Marketing strategy................................................................................................................. 10
7. Organization infrastructure.....................................................................................................12
8. Operations management.......................................................................................................13
9. Technology, innovation and knowledge management...........................................................13
10. Human resource management.............................................................................................13
11. Organizational culture and leadership..................................................................................14
12. Financial management.........................................................................................................15
13. Capital and funding.............................................................................................................. 15
14. Economic evaluation............................................................................................................ 16
15. Implementation and control..................................................................................................21
16. Legal compliance................................................................................................................. 23
17. Governance......................................................................................................................... 23
18. CSR..................................................................................................................................... 23
19. Communication.................................................................................................................... 23
20. Risk management................................................................................................................ 23
21. Conclusion........................................................................................................................... 24
References and Bibliography.....................................................................................................25

BUSINESS PLAN OF “COFFEE ON THE WAY”3
1. Background
The proposed business plan is focused on developing a business plan for the company
named “Coffee on the way” that will be situated in The Parade, Norwood location. This coffee
shop will be a partnership firm in which the partners will have minimum qualification of MBA and
will be residents of Norwood as they are financially sound to invest enough capital in the new
business. The business operations of this new coffee shop will be focused on introducing new
and innovative coffee products in the market such as cascara drinks. The coffee shop that will
be set up in the selected location will attain competitive edge through offering readymade and
wide range of coffee products to all its target consumers. The business model of “Coffee on the
way” is focused on positioning itself as a coffee bar that will offer its consumers with high quality
gourmet coffee along with exceptional service. The coffee shop will offer its consumers with
unique coffee offerings such as espresso, macchiato, mocha and cappuccino. Among the
cappuccino will be one of the most important coffee beverages that will be sold to consumers.
Other offerings will include hot chocolate, coffee flavored candies and chocolates, homemade
biscuits and cakes along with Cascara drinks. Moreover, the coffee shop will have relaxing
environment with furniture that can offer great comfort to the consumers.
2. Corporate objectives
The corporate mission of “Coffee on the way” company will be to offer its target
consumers with perfect and delicious coffee products along with excellent and reliable services
to its consumers.
The objectives of this new business of the “Coffee on the way” coffee shop are indicated
below:
 To create vibrant café which reflects and improves coffee consumption experience for
consumers
 To attain increase in consumer base and profit margin by 10% at the end of the first year
of business setup
 To obtain 15% of the market share by the end of the next five years
The corporate strategy of this new coffee business will be to equitably source
exceptional coffees and then roast them to perfection to ensuring exceptional coffee beverage
experience for its target consumers.
3. Situational analysis
3.1. External Business Environment Analysis
Political Political environment of Australia has significant impact on the Coffee
industry. High standards of coffee producing methods are attaining political
prominence where Australian coffee industry faces high demand for fair trade
coffee. The political stability of the country is high which helps in prosperity of
the country. Moreover, government has can play a significant role in
promoting coffee business of “Coffee on the way” coffee shop in Australia.
Economic The impact of coffee industry in Australia is stronger and the coffee production
in the nation established vital linkages within the country’s economy. Coffee
industry of Australia went through growth periods but is also facing difficulties
related with low concentration in coffee industry that makes it complex to

BUSINESS PLAN OF “COFFEE ON THE WAY”4
acquire market share without facing significant risks that might support
smooth operations of “Coffee on the way” coffee shop.
Social Consumers of “Coffee on the way” coffee shop are observed to become
highly health conscious and are shifting to alternatives such as health drinks
and other herbal teas. “Coffee on the way” coffee shop is responding to such
change through provision of de-cafe drinks and green coffee.
Technological Hi-tech equipment and premium ingredients are easily assessable and are
used as well as sold in coffee shops that can produce from cappuccinos to ice
blended coffees. For this reason consumers are becoming knowledgeable
regarding specialized coffee ranges along with various tastes of such
beverages. Considering same, “Coffee on the way” coffee shop will implement
such technological advancements.
Legal The coffee industry of Australia ensures that they do not violate any laws and
regulations in the domestic market as well as the nations from where they
purchase coffee beans and sources roasted coffee. Such regulations to be
considered by “Coffee on the way” coffee shop include caffeine production
and consumption related policies by Australian health authorities.
Environmental The coffee shops in Australia are following the trend of building environment
friendly stores and facilities that will be considered by “Coffee on the way”
coffee shop along with focusing on water and energy conservation and
making sure that all their cups are recyclable.
3.2. Porter’s Five Forces, Strategic Groups, and Industry Life Cycle
Porter’s Five Forces Analysis
Competitive Rivalry Strong force as “Coffee on the way”
coffee shop has several competitors
within the industry such as The Grind,
Argo on the Parade and The Lost Deli
that operates successfully in Norwood.
Bargaining Power of Consumers Strong force as there is increased substitute
product availability and low switching costs.
Such substitute products include Tea,
Chicory Coffee and fruit smoothies.
Bargaining Power of Suppliers Weak force as there is large overall supply
and existence of numerous coffee suppliers
that includes Bay Beans Coffee, The Coffee
Beanery and Purebean Coffee Solutions.
Threat of Substitutes Strong force because of high affordability of
substitute products and their increased
availability. Such substitute products include
Tea, Chicory Coffee and fruit smoothies.
Threat of New Entrants The threat of new entrants is relied on extent
to which competitors can enter the market and
coffee industry is easy to penetrate as
relatively little capital investment and there are
no government regulations
(Konacoffeefarmers, 2019).

BUSINESS PLAN OF “COFFEE ON THE WAY”5
Strategic Groups and Stage in Industry Life Cycle
The strategic group map indicated in the figure below for “Coffee on the way” coffee
shop indicates that the new coffee shop has few rivals based on product one and geographic
location (Konacoffeefarmers., 2019).Such major competitors of the coffee shop can be The
Grind, Argo on the Parade and The Lost Deli that operates successfully in Norwood. The
strategic groups of the company consider identification of competitors and the level of
competition within the industry based on sales, product penetration, operations and service. In
analyzing the strategic groups, the direct competition of “Coffee on the way” is from The Grind,
Argo on the Parade and The Lost Deli that operates successfully in Norwood. The Grind is well
established in Norwood that has attained competitive advantages through offering consumes
with seasonally crafted coffee blends and online coffee delivery. Argo on the Parade has
attained competitive advantage of operating successfully within the industry through ethically
sourcing coffee beans and its double shot coffee drinks made from black ground coffee beans.
The new “Coffee on the way” coffee shop will initiate its business through being in the
introduction stage of the industry life cycle, where it will focus on building awareness about its
coffee beverage product offerings and pricing will be kept low to attain high market share.
Competitor Analysis
The coffee industry of Australia has low level of market share concentration where a few
companies holding over 5% share in the market. The most established coffee chains in
Norwood are deemed to include The Grind, Argo on the Parade and The Lost Deli that operates
successfully in Norwood. While such coffee chains operate a number of stores but they have
less market power and are not that capable of influencing industry in terms of product and price
trends. As the industry is fiercely competitive it is important for new coffee shops to attain better
understanding of market for responding quickly to changing consumers tastes and preferences
(Coffee Shops – Australia Industry Research Reports | IBIS World., 2019).
Local coffee shops, quick service along with fast food restaurants are also major
competitors that attains huge consumer base through employing strategic strengths of
introducing special offers and loyalty programs. However, certain weaknesses faced by these
competitors are regarding offering low priced coffee beverages with high quality and introducing
diversified coffee beverages in which “Coffee on the way” coffee shop intends to attain
competitive advantages.
Market Analysis
The coffee market of Australia is observed to offer basic coffee types along with
introducing new beverages to attain diversification in the industry. These products are intended
for offering to target market that have high preference of coffee consumption during morning
and prefer relaxing in a cafe enjoying fresh tastes of coffee.
Characteristics of coffee industry of Austria indicate that there is increased preference of
single-serve coffee brew systems by consumers, regular innovation in coffee beverages and
there is increased demand for instant and ground coffee. Coffee industry of Australia is
forecasted to grow at 1.3% CAGR each year due to increasing demand of certified coffee
products(Cafes and Coffee Shops – Australia Industry Report | IBISWorld. 2019).