Project Leadership and Governance for a Small Cafe in Melbourne

This study addresses the problem faced by a small cafe in Melbourne regarding the reduction in the number of customers. The objective is to develop an effective plan for marketing of the business, in order to increase the flow of customers and improve the profits. The potential ideas that can be implemented to improve the inflow of customers to the business are discussed. The sector of industry being addressed in this context is of food and hospitality. The target customers that can be focused on by the cafe are also discussed.

Running head: PROJECT LEADERSHIP AND GOVERNANCE
Project Leadership and Governance
Name of the Student
Name of the University
Author Note

1PROJECT LEADERSHIP AND GOVERNANCE
Part 1: Opportunity Analysis:
The Business problem:
The aim of this study is to address a problem faced by a small café regarding the
reduction in the number of customers. The café opened two years ago in Melbourne Australia
following which it had a decent footfall. In the last 12 months, the café underwent an
expansion, and the price of food and beverages were increased following which the inflow of
customers started dwindling (Adams et al. 2016). This severely affected the profits of the
business and has jeopardized the long term sustainability of the café. Additionally,
competition from other café’s have also taken away many of the regular customers who used
to visit the shop (Pedini et al., 2017).
The objective is to develop an effective plan for marketing of the business, in order to
increase the flow of customers and improve the profits. The idea is to attract more customers
to the business through effective marketing strategies and overcome competition from other
businesses in the region (Chang and Chen 2015). Thus the business problem being addressed
in this study is a reduction in the number of customers and a reduced flow of cash for the
business, as well as the threat from other competitors in the sector and region in Australia
(Saito 2018).
Ideas to address the problem:
The potential ideas that can be implemented to improve the inflow of customers to the
business can include the following:
 Implementing happy hours scheme from 12pm to 4pm to attract students during this
off peak hours. During this time all food and beverages would have flat discounts.

2PROJECT LEADERSHIP AND GOVERNANCE
 Reserving tables for social and personal events by guests. This can allow guests to
reserve a section of the shop to host personal or celebratory events.
 Providing flat discounts on deserts and bakery products after 8pm to clear the day’s
stock. This can allow the daily stock for bakery products and deserts to be cleared
every day, and ensure fresh products are procured every morning. Additionally, it wil,
help to attract more customers.
 Implementing limited time offers on food and beverages in the form of introductory
offers on newly added food and beverage items, which can help the customers to try
the new food and beverage at a lower cost.
 Providing guest receipts for free on appetizers or deserts, which they can use on their
next visit to the store. These receipts can given to the guests while they are paying the
bill, informing that on the next visit they can show the receipt for a free appetizer or
desert.
 Implementing loyalty programs using email marketing strategy where discount
coupons will be emailed to regular customers which they can redeem for a discount.
 Adding a jukebox to the café where the guests can choose what music can be played
 Free WiFi internet availability for all guests
 Open Mic weekends from 7pm to 10pm where live bands can play and can attract
music lovers to the store.
 Using social media advertising on platforms such as FaceBook to promote the
business, the discount offers as well as the weekend events being hosted in the shop.
 Using word of mouth advertising strategies where satisfied customers can spread the
good word about the business to their friends and acquaintances.
 Engaging with major events such as the upcoming Super Show Down pay per view
event by WWE in Melbourne on October 6th.

3PROJECT LEADERSHIP AND GOVERNANCE
(Birt 2016; Fuentes 2017; Wolf and Floyd 2017)
Industry/Sector of Economy being addressed:
The sector of industry being addressed in this context is of food and hospitality. The
café is in a busy metropolitan area of Melbourne, Australia. The shop offers both quality
beverages such as coffee, milkshakes and various other coffee based drinks for the guests.
Food options include savories, snacks, deserts and bakery products as accompaniments for
the beverages. The shop also provides the guests the opportunity to relax and unwind in the
shop, listen to music, read books or magazines and talk to people. Thus the business offers
both foods as well as hospitality services for the guests (Huang et al. 2017; Ridoutt et al.
2016).
Why is the market attractive?
The café is located strategically to ensure good flow of customers from the urban
metropolitan areas, schools, colleges and local offices. The café is also close to several tourist
destinations which can attract several tourists who would like to spend some time, relaxing
and planning their travel itineraries through the city. The market for cafes in the region is
very high, and there is a significant market demand for this sector due to which there are
several other competitors in the business. Studies show that the market for coffee shops and
café have grown in the last 5 years because of the strong coffee culture in Australia. The
market has an annual growth rate of 5.1% and the total revenue is expected to reach to about
AUD 8.3 billion by the end of 2018 (Samoggia and Riedel 2018).
Key trends in the market includes an increase in demand for cold drip coffee and
Nitro Coffee whose market have increased over the last five years by 58%. The market for
instant coffee is also expected to grow to AUD 1.6 billion by the end of 2018. Additionally,

4PROJECT LEADERSHIP AND GOVERNANCE
statistical records also shows that average per capita revenue for the coffee market is
approximately AUD 79.79 (as of 2018) and is expected to rise to AUD 83.71 by 2021 (Topik
2015; Samoggia and Riedel 2018; Jayasinghe 2018).
Such statistical information clearly shows that the market for coffee shops and coffee
products in Australia is very big and has a lot of potential for growth, due to the strong and
vibrant coffee culture in Australia.
Target Customers:
The target customers that can be focused on by the café include:
Students: Students from schools and colleges can be targeted by the business since they the
age group is a significant consumer of coffee products across Australia. Studies show that
students drink an average of 9.6 cups of coffee every week, showing that they represent a
significant proportion of the coffee drinking population.
Office goers: They are major drinkers of coffee, drinking about 15-20 cups of coffee every
week. These individuals prefer to start their day with a nice cup of coffee and snacks, and
also like to spend their lunch times or break times in a café (preferably close to their office)
where they can relax for sometime before getting back to work.
Businessmen: They are another major coffee drinking population in Australia, drinking
equivalent amount of coffee as the office goers. Additionally, they also prefer a good
ambience of the café, that can help them focus on their day to day business before they start
for the day. The café can also provide them an optional venue for informal meetings with
clients.
Coffee Lovers: Since Australia has a strong coffee culture, there are many coffee lovers, who
prefer different types of specialty coffee drinkers. Such people prefer beverages such as

5PROJECT LEADERSHIP AND GOVERNANCE
espresso, latte, mocha, cappuccino, nitro coffee and cold drip coffee. Additionally, they also
love coffee related or coffee flavored deserts.
Coffee Shop Lovers: These individuals visit the café and coffee shops as they love the
ambience of the shops and prefer to spend extended time in the shops, enjoying the ambience
while drinking coffee.
Music Lovers: Australia also has a very rich culture of art and music, and there are a lot of
people who love music. They prefer to spend time in café’s that plays good music, which
helps them to relax and enjot themselves while they drink their cup of coffee.
Tourists: They are also another potential source of customers as the tourists often would like
to take a break from the travelling and spend some time in the cafés looking up places they
can go on the internet while they enjoy their coffee and favorite snacks and savories.
(Aadinath et al. 2017)
The Revenue Stream:
Given below is the prices of the beverages and snacks that are available in the store:
Beverages:
Products Price (AUD)
Regular Large
Regular Coffee 1 2
Instant Coffee 1.5 3
Cappuccino 2 4
Latte 2 4
Mocha 2.5 5
Americana 2.5 5
Espresso 2.5 5
Iced Coffee 3 6
Iced Mocha 3 6
Iced Frappe 4 8
Iced Tea 2.5 5

6PROJECT LEADERSHIP AND GOVERNANCE
Cold Drip Coffee 3 6
Nitro Coffee 3.5 7
French Press Coffee 3 6
Vacuum Pot Coffee 3 6
Hot Cocoa 5 10
Mexican Hot Chololate 5 10
White Chololate Mocha 5 10
Black Coffee 1 2
Snacks:
Products Price (AUD)
Bread rolls 5
Chocolote cake 5
Coffee flavoured cake 5
Cheesecake 15
Pancake 5
Waffles 5
Apple Pie 10
Shepards Pie 10
Kidney Pie 10
Lemon tart 10
vegetable Wraps 10
Cheese Sandwitch 8
Beef Sandwitch 10
Hamburger 10
Plan to get the market share of current competitors or thwarting future competition:
The business can overcome the steep competition in the market through increase in
the marketing activities to attract more customers and increasing the advertising the business
in large events to increase the penetration rate of the brand in the market. In order to do so,
the ideas that have been discussed earlier (such as social media advertising, involving in big
events such as the upcoming WWE pay per view in Melbourne and word of mouth
promotions) can be used to increase the advertisement coverage for the business. Attracting
new customers and retaining existing customers can be made possible through strategies such

7PROJECT LEADERSHIP AND GOVERNANCE
as food discounts, happy hours, limited time offers, guest receipts and loyalty programs).
Additionally, customers can also be attracted through certain added benefits or attractions
such as free WiFi Internet connectivity, Open Mic events, Jukebox in the café, and options
for reserving parts of the café for events (Phillips and Moutinho 2014).

8PROJECT LEADERSHIP AND GOVERNANCE
Part 2: Opportunity Exploitation:
Validating if the idea would work:
Discussed below is the SWOT analysis that can help to understand the Strengths,
Weaknesses, Opportunities and Threats faced by the business and identify strategies through
with the opportunities can be best exploited through the implementation of the ideas
discussed earlier (Bohari et al. 2017).
Strengths:
 Strategic positioning of the café in a busy metropolitan area of Melbourne
 Strong funding from the business owners which allows to cover for most of the
expenses of the shop
 Good ambience of the café
 Rich assortment of coffee and coffee related products
 Procurement of high quality coffee beans from Brazil, Colombia, Vietnam, Ethiopia
and India
 Procurement of high quality Darjelling Tea from India
 Highly skilled coffee brewers and coffee makers
 Assortment of high quality and delicious snacks as accompaniments
(Chang and Chen 2015)
Weaknesses:
 Not enough customer attraction strategies
 No discounts on the products
 No WiFi
 No Happy Hours

9PROJECT LEADERSHIP AND GOVERNANCE
 Weak marketing strategies
 Social Media platforms not used adequately for advertising campaigns
 No Loyalty programs for regular customers
(Bohari et al. 2017)
Opportunities:
 Strong market demand for coffee products
 Strong growth rate in the market for café and coffee shops
 Increase in the number of coffee drinkers in the next four years
 Strong coffee culture in Australia
 Potentially large base for customers in the Melbourne region
 Preference of coffee drinkers for exotic coffee products
 Strong demand for instant coffee, nitro coffee
 Good potential for market penetration through strong marketing strategies
 Customers favor businesses that offer discounts and loyalty offers
 Large number of customers are active social media users
 Possibility of attracting more customers through involvement in big events
 Growing attraction for places that has open mic evenings
 Potential to attract more customers and retain existing ones through discounts,
promotional offers, loyalty coupons and programs
 Stong influence of word of mouth advertising
(Bohari et al. 2017)
Threats

10PROJECT LEADERSHIP AND GOVERNANCE
 High competition from other businesses such as: Starbucks, Dunkin Donut, Nestle,
Kraft Heinz, Coffee Beanery, Luigi Lavazza and Coffee Repiblic.
 Fluctuations in the price of Coffee beans procured from other countries
 Change in the preference of the choice of beverage due to increase in coffee price as
per the scarcity and demand theory.
 Potential of a shift in market demand for coffee
 Adverse health effects due to overconsumption of coffee such as headache or
insomnia can also drive away customers
 Health awareness campaigns that warns customers of the adverse effects of drinking
coffee.
 Maintenance of the upkeep costs of the business.
 Changes in the costs of the snacks and savouries
(Bohari et al. 2017)
Changing weakness to strengths and threats to opportunities:
In order for the ideas that has been discussed before to work, they need to be able to
convert the weaknesses of the business into its strengths and the threats to opportunities.
Validating the idea:
The validation of the ideas can be done through the analysis of the flow of customers in the
next 6 months. Additionally, strategies to analyze the profitability of the business can also
help to understand if the selected ideas are able to address the business problems faced by the
café. These strategies include:
 Break Even Analysis (such as break even analysis for on fixed expense, variable
expense and sales)

11PROJECT LEADERSHIP AND GOVERNANCE
 Profitability Ratio (such as gross profit margin ratio, operating profit margin ratio and
net profit margin ratio)
 Return on investment analysis (such as return on assets and return on investments)
 Using DuPont Model so summarize all the financial ratios
(Chang and Chen 2015)
Also, the inflow of customers, their preferences of drinks can be analysed using the
customer flow analysis framework that can help to understand the patterns of customer
traffic, characteristics of the customer, preferences of the customer, how much time
customers spend in the store and the buying behavior of the customer (Bohari et al. 2017).
To understand whether the customer are pleased with the service, pricing and products as
well as the ambience of the café, and whether they would like to visit the store again,
feedbacks can be taken from the customers through feedback forms that can be given to them
along with the bill, and deposited in the feedback and suggestions box placed in the front
counter. Overall, an increase in the number of customers, retention of existing customers and
an increase in the time spent by the customers in the store can be taken as positive indices for
the efficacy of the ideas along with the index of profit increase in the business (Feili et al.
2017).
Role of project manager to exploit the opportunity:
The project manager can play important role in the exploitation of the potential
opportunities of the business to ensure a better implementation and execution of the ideas and
thus ensure success of the plan to increase the number of customers in the café. The roles or
activities the project manager can play include:

12PROJECT LEADERSHIP AND GOVERNANCE
Analyzing the market demand for different coffee products: The project manager can analyze
the demand for different products and understand which products have the highest demand in
the market and are preferred by the customers. This can help to decide upon the beverage
menu offered by the store (Papke-Shields et al. 2017).
Fixing the price of the beverages based on the market analysis: The project manager can also
fix the price of the different beverages based on the cost of the raw materials, logistics and
costs of preparation of the products and also informed by the market analysis on the price of
similar products by the competitors to develop a competitive price for the products
(Vukomanović 2016).
Fixing the price of the food and snacks: Prices for food and snacks can also be developed by
the project manager, in consultation with the chefs.
Deciding upon the discount options for food and beverages: This is an important aspect that
can be determined by the the project manager. Here the manager can decide upon the amount
of discounts that can be offered to the customers of various foods and beverages and also the
discount given during the happy hours to attract the maximum number of customers but also
keeping in mind the costs of production (Andersson and Chapman 2017).
Deciding upon the loyalty programs: The project manager can decide upon the loyalty
programs and loyalty bonuses that can be offered for regular customers and the types of
benefits (free deserts or beverages) that can be offered to them on their return visit (Papke-
Shields et al. 2017).
Managing the marketing and advertising activities: This is another important aspect that
needs to be managed by the project manager. Marketing strategies such as promotional
campaigns and event organization can be managed by the project manager.

13PROJECT LEADERSHIP AND GOVERNANCE
Contacting with the hosts of big events such as the WWE Pay per view in Melbourne: The
manager can contact the hosts of big events for event tie ups whether the business can be
promoted in the event.
Managing Open Mic Events: The manager can organize the open mic events, arranging for
the equipments and performances.
Procurement of materials: The manager can also determine the procurement strategies for
importing coffee beans and tea from abroad.
Managing the accounts: The manager also have to overlook the accounts management,
monitor the inflow and outflow of cash from the business accounts.
Performing Profit analysis and customer flow analysis: The pr0ject manager can analyze the
growth and profitability of the business through these strategies and understand whether the
proposed plan is able to achieve its objectives and address the business problems faced by the
café (Andersson and Chapman 2017).
Project Management Approach appropriate to meet the challenges of delivering the
opportunity:
The project management approach that can be used to meet the challenges and deliver
the opportunities for the business can be Agile Project Management Approach. This approach
can help to implement the plan in small phases. This allows flexibility to the project
implementation and different ideas can be implemented in small and incremental phases thus
providing a dynamic approach in the implementation of the plan. The project manager can
decide upon the milestones of the project, with each milestone representing specific phases in
the project implementation and also incorporate the real time outcomes to make changes in
the implementation based on how it influences the customer flow and profit of the business

14PROJECT LEADERSHIP AND GOVERNANCE
(Layton and Ostermiller 2017; Franková et al. 2016). Thus using this strategy, all the ideas
does not have to be implemented simultaneously, but grouped together in categories such as:
marketing and advertisement, procurement, customer retention and customer attraction.

15PROJECT LEADERSHIP AND GOVERNANCE
References:
Aadinath, T., Amaladhas, P.H. and Anandharamakrishnan, C., 2017. Dried Dairy Products
and their Trends in the Global Market. Handbook of Drying for Dairy Products, p.15.
Adams, B., Hayes, R. and Lampe, R., 2016. Unmoved by Chains: Entry and Exit of
Australian Coffee Shops.
Andersson, T. and Chapman, R., 2017. Project strategy for product innovation: the strategic
project management framework. International Journal of Project Organisation and
Management, 9(4), pp.328-349.
Birt, I., 2016. Writing your plan for small business success. Allen & Unwin.
Bohari, A.M., Hin, C.W. and Fuad, N., 2017. The competitiveness of halal food industry in
Malaysia: A SWOT-ICT analysis. Geografia-Malaysian Journal of Society and Space, 9(1).
Chang, W.L. and Chen, S.T., 2015. The impact of World Café on entrepreneurial strategic
planning capability. Journal of Business Research, 68(6), pp.1283-1290.
Feili, H., Qomi, M., Sheibani, S. and Azmoun, G., 2017, November. SWOT Analysis for
Sustainable Tourism Development Strategies using Fuzzy Logic. In 3rd International
Conference of Science & Engineering In the Technology Era.
Franková, P., Drahošová, M. and Balco, P., 2016. Agile project management approach and its
use in big data management. Procedia Computer Science, 83, pp.576-583.
Fuentes, B., 2017. Marketing plan: Chambers Café.
Huang, H.W., Wu, S.J., Lu, J.K., Shyu, Y.T. and Wang, C.Y., 2017. Current status and future
trends of high-pressure processing in food industry. Food control, 72, pp.1-8.

16PROJECT LEADERSHIP AND GOVERNANCE
Jayasinghe, G., 2018. Healthy eating: Growing trend or wishful thinking?. Food Australia,
70(3), p.32.
Layton, M.C. and Ostermiller, S.J., 2017. Agile project management for dummies. John
Wiley & Sons.
Papke-Shields, K.E. and Boyer-Wright, K.M., 2017. Strategic planning characteristics
applied to project management. International Journal of Project Management, 35(2), pp.169-
179.
Pedini, S., Cecchini, L. and Santucci, F.M., 2017. Fair trade coffee potential market in Italy: a
roaster sector analysis. Italian Review of Agricultural Economics, 72(2), pp.195-214.
Phillips, P. and Moutinho, L., 2014. Critical review of strategic planning research in
hospitality and tourism. Annals of Tourism Research, 48, pp.96-120.
Ridoutt, B., Sanguansri, P., Bonney, L., Crimp, S., Lewis, G. and Lim-Camacho, L., 2016.
Climate change adaptation strategy in the food industry—insights from product carbon and
water footprints. Climate, 4(2), p.26.
Saito, Y., 2018. Business plan template for café solopreneurs.
Samoggia, A. and Riedel, B., 2018. Coffee consumption and purchasing behavior review:
Insights for further research. Appetite.
Topik, S., 2015. Trade History: From the Tree to the Futures Market, the Historical Process
of Coffee Commodification, 1500–Today. In Beyond Free Trade (pp. 17-35). Palgrave
Macmillan, London.
Vukomanović, M., 2016, January. Strategic Project Management. In Future Trends in
Project, Programme and Portfolio Management 2016.

17PROJECT LEADERSHIP AND GOVERNANCE
Wolf, C. and Floyd, S.W., 2017. Strategic planning research: Toward a theory-driven agenda.
Journal of Management, 43(6), pp.1754-1788.