Launching a New Café for Diabetic Patients

This document provides an overview of a new business venture to open a café offering desserts for diabetic patients. It covers the background of the venture idea, market research, competitor analysis, target market, resources, proposal to launch the venture, techniques used for competitive analysis, skills and capabilities required, promotional and pricing activities, and more.

Launching a new business
venture

Contents
Overview................................................................................................................................4
LO 1...........................................................................................................................................4
Background of venture idea...................................................................................................4
Market research......................................................................................................................4
Competitor analysis................................................................................................................5
Target market.........................................................................................................................5
Resources...............................................................................................................................6
Proposal to launch new venture.............................................................................................6
Techniques used for competitive analysis..............................................................................6
Strength and weakness of new venture..................................................................................6
Critical analysis of competitive environment........................................................................7
LO 2...........................................................................................................................................7
Identify the skills and capabilities for business......................................................................7
Discussing the supporting cost and timescale require for launch a new business.................8
LO 3...........................................................................................................................................8
Explanation of different promotional and pricing activities and channels that will support
the launch and justify their choice.........................................................................................8
Identify an appropriate promotional activity plan for both launch and pre-launch.............10
LO 4.........................................................................................................................................11
Produce an itemised monthly cash budget for the pre-launch phase of the venture and the
first 12–18 months preceding launch...................................................................................11
Details of an appropriate legal structure for the business stating why it has been chosen.. 12
REFERENCES.........................................................................................................................13

Overview
The present business venture is to open a new café in which different types of
desserts are offered to diabetic patients. The name of cafe is La-favela who especially offer
product to their customers who suffering from diabetes.
LO 1
Background of venture idea
La-Favela will planning to start a new business venture in the UK in which it offer
range of products for diabetic patients such that granola with no sugar added and fresh fruit,
graham crackers with nut butter, angel food cake, sugar free hot chocolate sprinkled with
cinnamon etc. The main idea of starting a new business is such that there are millions of
people who suffer from diabetes and no restaurant and cafes are offering the product for
diabetic patients. Hence the main purpose of this new business is to let people enjoy the new
flavors in their life that is why it offer the same especially to diabetic patients.
Market research
With the help of Porter five force model, company perform industry analysis which is
as mention below:
Bargaining power of suppliers (low): The industry have low supplier because there are
variety of vendors to purchase a business supplies from. As there are range of products
offered by different companies and this in turn lower down the bargaining supplier rate
(Afolabi, Ezenwoke and Ayo, 2017).
Bargaining power of buyer (high): It reflect that industry have a high power of buyers and if
there is low number of customer then they will bargain to lower down the price. Thus due to
low suppliers, buyers are ready to pay high amount.
Threat of substitute (high): Industry have an ability to purchase other product or replace the
same. Such that in café, there are range of option available to the customers which in turn
helps to generate the profit. So there is a high threat of substitute within market.
Threat of new Entrants (low): There is a high threat of new entrant but it creates low impact
upon the industry. Such that establishing a new business within a market requires high

investment and there is no chances of getting success. That is why, it does not creates a direct
impact upon business.
Competitive rivalry within industry (high): It has a high competitive rivalry because there is
a strong competition in market and that is why, industry keep innovating new things in order
to attract range of customers.
Competitor analysis
Particulars La-Favela Society Café Boo-Boo Cafe
Product It mainly offer diabetic
food products to their
customers which contain
no sugar
It offers best coffee
and uses ingredients
directly from the farm
(Arora, Srivastava
and Bansal, 2020).
It offer different
variety of food
product for lunch
and dinner including
beverages.
Price It uses penetration pricing
strategy
It uses skimming
prices strategy
Quoted café uses
competitive pricing
style.
Promotion Uses only modern form of
marketing
Uses social media to
attract customer
Use both traditional
and modern form of
marketing style.
Target market
Segmentation: In order to sustain the brand image, café segment the target market
using demographic profile in which diabetic patients are selected to enjoy the offered
products and services.
Targeting: La-Favela Café uses segmented targeting style in which differentiated
marketing is used (Hafezi and et.al., 2020). Such that initially it has few target but once the
brand image is sustain it attract range of people towards it.
Positioning: cited café uses positioning based upon product characteristic such that in
UK there are small number of cafes who offer this unique concept and that is why, it position
itself at up on the basis of product characteristic.

Resources
Tangible resources: It is the physical resources which can be touched such that cash,
inventory, equipment, building, investment.
Intangible resources: This resources are not touched by hand but are necessary to
start a new venture (Kaplan, Naori and Raz, 2020). Such that La-Favela has professionals
who possesses skills and capabilities to execute the plan in better manner.
Proposal to launch new venture
To execute the plan in better manner, it is suggested to use hire a place at rent which
assist to let people know about new offers. For that café needs to identify the resources
including tangible and intangible resources, equipment, inventory, professionals etc. Also,
company decide to take a loan from bank and use own saving to meet the financial resources
and develop contingency plan as well.
Techniques used for competitive analysis
SWOT Analysis
Strength Weakness
 Offer high quality of product to
customers.
 Focus on customer needs and tries to
meet the same.
 Best customer service along with
highly experts at workplace
 Did not conduct proper market
research to examine the need of
customers
Opportunity Threat
 By offering high quality product,
café add new food products.
 Take a business at international level
by focusing upon customer service
and quality of product
 Faces tough competition in market
from small cafes (Karpenko and
Filyppova, 2016).
Strength and weakness of new venture
Positive side of new venture Negative side of new venture
Offering food product to diabetic patients is The negative side of new venture is the

new concept and this attract range of people.
It is so because there are range of
individuals who suffer from diabetes and
La-Favela provides new opportunity to
enjoy the products.
chances of getting success in future. As
there are range of small café in UK and they
are unique as per their product, price etc. So
in future the success chances are minor and
this is consider downfall side of a business.
Critical analysis of competitive environment
The modern era is full with competition and that is why each and every business
wants to execute innovative product to attract customers. In the same way, by considering the
direct and indirect competitor, it is evaluated that risk is higher in the market. But La-Favela
has its unique product along with best quality which in turn assist to grab attention of many
customers. So, with the help of effective contingency plan, company tries to minimize the
risk and execute the plan as well (Kim and et.al., 2018). Also, there are so many direct
competitor of quoted café and to sustain brand image, it is essential for the business to
generate USP that keep attracting range of customers towards it. On the other hand, from the
indirect competitor it is analyzed that they attract customers from their brand name and
customers have a trust that keep encourage them to visit such places. So, it is essential for the
company to keep analyzing the market trend which in turn met the wants of customers.
LO 2
Identify the skills and capabilities for business
It is not easy to introduce new business without any specific knowledge, so there are
range of skills which is required to successfully launch new business and some of them are as
mention below:
 Communication skills plays an important role in successfully launch the business in
better manner such that there are range of suppliers and potential investor with whom
a business owner has to deal. That is why, with the help of effective communication
skills, different relationships are manage which assist to successfully launch the
business.
 Effective leadership skills is also required that motivate employees in order to
improve the productivity. Also provide them unique customer service which in turn
leads to improve the overall result

 Financial Management skills are also play crucial role in the success of a business.
Like it will assist in forecasting the cash flows and sales, also determine the profit and
loss statement. Hence this skills are required in order to execute the business in well
manner (Quintano, Mazzocchi and Rocca, 2020).
 Critical thinking abilities are also play important role because it assist to determine
the risk factors which somehow change the business success. On the other side, it also
assist to examine both positive and negative side of a plan and then make decision
accordingly.
 Moreover, owner should also have enough knowledge of advance technology with
regards to marketing strategy which in turn assist to meet the define aim. Otherwise,
people did not know the new offers which in turn cause negative impact upon
business.
In addition to this, the owner do not have effective organizing skills and that is why, there
is a need to improve the same which in turn assist to meet the define aim. Also, with the help
of management skills, company is easily manage the things in order to sustain goodwill
within market.
Discussing the supporting cost and timescale require for launch a new business
By identifying the essential skills and comparing the same with desired skills it is
analyzed that organizing skills is required or La-Favela owner. Hence to improve the same,
some task are assigned which in turn leads to improve it. Also negotiation skill should be
improved which assist to meet the define aim (Yuan, Wang and Zeng, 2017). Both the skills
will be improved within 15 days of tenure and this in turn assist to successfully launch the
business plan in effective manner. It does not require any additional cost because it may
affect the results and this way, the desired skills fulfill the job requirements.
LO 3
Explanation of different promotional and pricing activities and channels that will support the
launch and justify their choice.
La-Favela is planning to start a new business venture in the UK in which it offers a range of
products for diabetic patients such as granola with no sugar added and fresh fruit, graham
crackers with nut butter, angel food cake, sugar free hot chocolate sprinkled with cinnamon
etc.

Promotional activities
It is considered to be as one of the key central element associated with the marketing mix. It
is an activity which is usually used to effectively communicate the specific products and
services to their targeted customers. This is useful in persuading the customers to buy the
certain set of products in a significant manner.
 Advertising
Advertising is considered to be one of the most crucial and interpersonal method of
effectively communicating with the customers it is useful in reaching mass number of people
and advertising their products at a greater scale. It is advertise usually through television,
print media, radio and other digital methods.
 Digital marketing
Digital marketing is another form of promotional tool which is useful in creating awareness
over of the products and services with the use of electronic devices and other social media
platforms like Facebook, Instagram, YouTube, Twitter, Pinterest. It helps in attracting large
number of customers by endorsing goods and services of the specific company.
 Direct mail
Direct mail is usually sent to select a set of customers who are attracted to buy a certain
button services offered by the company (Afolabi, Ezenwoke and Ayo, 2017). It is considered
to be one of the most effective method when compared to other promotional activities
because it tends to give information directly to the customers. It is useful in creating product
awareness and increases the sales of the company.
 Personal selling
Personal selling is considered to be one of the most prominent activity of promotion. It is
useful in face-to-face and direct oral communication with the customers. Personally
interacting with the customers is useful and effectively increasing the sales.
La-Favela Company will choose advertising and digital promotional strategy to make people
aware about the products and services offered by the company.
Pricing activities
 Premium pricing:
Premium pricing strategy is considered to be one of the most effective pricing strategy
which helps in keeping up with the price of the products and services which has been

offered by the company. It is useful in encouraging favourable perception among the
buyers. This is where the company sets higher prices for the products when compared
to their competitors.
 Penetrating pricing:
Penetration prices is another pricing strategy where the price of the specific goods and
services is initially set low for by the company in order to rapidly reach a wider
fraction of the market and also initiate word of mouth. This strategy tends to mainly
work with the expectation that customers will switch to the new brand this is mainly
because of lower price.
 Economy pricing:
This is referred to as no-frills and low price. The cost associated with the promotional
marketing of the products are kept low. It is referred to as the volume-based pricing strategy
where price of the goods are kept low and gain revenue based on the purchasing made by the
customers.
 Skimming pricing strategy:
Price skimming strategy is used when the organisation tends to charge high prices from
the customers (Kaplan, Naori and Raz, 2020). Then further it lowers the price later on
when they want to attract price sensitive segment people.
La-Favela Company will choose penetration pricing strategy to reach a wider fraction of the
market and also initiate word of mouth.
Identify an appropriate promotional activity plan for both launch and pre-launch.
Promotional activity plan
PARTICUL
ARS
WEE
K 1
WEE
K 2
WEE
K 3
WEE
K 4
WEE
K 5
WEE
K 6
WEE
K 7
WEE
K 8
WEE
K 9
Setting
promotional
message
Building
interest and

buzz with
advertisement
Build a Lead
Generation
Pre-Launch
Landing Page
Start Building
Interest within
Subscriber
List
Identifying
Influencers to
carry out
business
Drafting
Editorial
Calendar
Start
Segmenting
Your
Audience
LO 4
Produce an itemised monthly cash budget for the pre-launch phase of the venture and the first
12–18 months preceding launch.
Particul
ars
1 2 3 4 5 6 7 8 9 10 11 12 Tota
l
Funding 500 550 620 690 560 650 700 750 720 760 800 820 8120

from The
Prince’s
Trust
Funding
from
230 300 350 420 450 480 500 520 550 600 650 680 5050
other sources
Own
funds
200 260 280 300 400 420 460 470 520 580 610 700 5200
Incomes
from
Sales
500 600 800 100
0
150
0
250
0
240
0
260
0
280
0
320
0
360
0
380
0
2530
0
Other 550 350 290 400 460 480 520 590 610 640 680 710 6280
Total
Money
in (£)
198
0
206
0
234
0
281
0
337
0
453
0
458
0
493
0
520
0
578
0
634
0
671
0
4995
0
Loan
repayme
nts
700 650 630 620 600 580 550 500 460 490 470 300 6550
The Prince’s
Trust
Personal
drawings
500 650 720 800 450 580 900 790 850 820 760 590 8410
Total
Money
out (£)
120
0
130
0
135
0
142
0
105
0
116
0
145
0
129
0
131
0
131
0
123
0
890 1496
0
Details of an appropriate legal structure for the business stating why it has been chosen.
Sole proprietorship is considered to be as one of the legal structure for the La Favela
Company because it is easy to start and is one of the simplest form of business. Here the
owner of the company is personally liable for the debts and profits of the company (Kim and
et.al., 2018). The owner of the business has full control over the business functions and
improve the business results and outcomes (Sole Proprietorship, 2020). This business is
inexpensive and has few formalities to effectively carry out the operations of the business.
This legal structure will lead to greater height for La Favel Company.

REFERENCES
Books and Journals
Afolabi, I.T., Ezenwoke, A.A. and Ayo, C.K., 2017. Competitive analysis of social media
data in the banking industry. International Journal of Internet Marketing and
Advertising. 11(3). pp.183-201.
Arora, A., Srivastava, A. and Bansal, S., 2020. Business competitive analysis using promoted
post detection on social media. Journal of Retailing and Consumer Services. 54.
p.101941.
Hafezi, R. and et.al., 2020. Iran in the emerging global natural gas market: A scenario-based
competitive analysis and policy assessment. Resources Policy.68. p.101790.
Kaplan, H., Naori, D. and Raz, D., 2020. Competitive analysis with a sample and the
secretary problem. In Proceedings of the Fourteenth Annual ACM-SIAM Symposium on
Discrete Algorithms (pp. 2082-2095). Society for Industrial and Applied Mathematics.
Karpenko, L.M. and Filyppova, S.V., 2016. Strategic competitive analysis of innovative
enterprises development: predictive validity. Aktual'ni Problemy Ekonomiky= Actual
Problems in Economics.(180). p.392.
Kim, D. and et.al., 2018. A Study on the Competitive Analysis of Digital Healthcare in Korea
through Patent Analysis. Journal of Digital Convergence. 16(9). pp.229-237.
Quintano, C., Mazzocchi, P. and Rocca, A., 2020. A competitive analysis of EU ports by
fixing spatial and economic dimensions. Journal of Shipping and Trade. 5(1). pp.1-19.
Yuan, Y., Wang, F.Y. and Zeng, D., 2017. Competitive analysis of bidding behavior on
sponsored search advertising markets. IEEE Transactions on Computational Social
Systems. 4(3). pp.179-190.
Online
Sole Proprietorship. 2020. [ONLINE]. Available through<
https://www.entrepreneur.com/encyclopedia/sole-proprietorship#:~:text=The%20sole
%20proprietorship%20is%20the,personally%20responsible%20for%20its%20debts.>