Feasibility Study: Union Cafe & Catering - Location Analysis Report

This report conducts a feasibility study for the establishment of Union Café & Catering, focusing on identifying the best location to attract a large customer base. The study encompasses a comprehensive market analysis, including a literature review, marketing mix (7 P's), industry analysis (size, growth, trends, environmental impacts), and SWOT, PESTEL, competitor, and Porter's Five Forces analyses. It also considers climate change impacts and consumer behavior. The methodology involves both qualitative and quantitative data collection, with ethical considerations addressed. The report presents research findings, discussions, recommendations, and a conclusion to assess the feasibility of the business plan, particularly concerning location choices and market trends. The study emphasizes the importance of location in attracting customers, especially youth and middle-income workers, and provides insights into pricing strategies and market demographics.

Feasibility Studies of Union Café & Catering

Executive summary
This report is based on finding the feasibility of establishing union café and catering. The report
is based on finding the best location for the cafeteria among the NSW, Pyrmont and Sydney so
that a large number of customers get attracted towards the cafeteria. The purpose of this report is
to find the appropriate location of the business to start. It includes analyzing the internal and
external market condition to examine the feasibility. The finding is done with the help of many
kinds of research, including problems, aims, objectives and research questions. This report
includes a literature review, methodology, data finding, data analysis and discussion. A literature
review is done by analyzing the market and using marketing mix comprises of 7 P’s that are
product, price, promotion, place, packaging, positioning and people. Industry analysis was also
done which includes size and growth, maturity and trends and environmental impacts of the
industry on the business plan. Some other analyses are also done to find out the feasibility of the
union café and catering. This analysis includes SWOT analysis, PESTEL analysis, competitor
analysis, Porter's Five Forces analysis etc. climate changing conditions have been finding out to
research about the climates of different countries suitable for the café and target market was
analysed with the help of market demographics. Pricing policies of the different countries are
analysed with the help of a pricing strategy matrix and different pricing approaches. The
methodology of finding the feasibility of the plan includes research methodology which has been
done with the help of data collection method and qualitative and quantitative data. The research
approach has been applied to the study which comprises of sampling method, data collection
method, quantitative data collection method and qualitative data collection method. Ethical
considerations have also been done to find out the legal values to be kept in mind while
preparing the report. After the complete report findings have been made from the data collected
on behalf of qualitative and quantitative analyses and at last discussions have been made to
evaluate the data and find out the feasibility of the location. Recommendations are also provided
at the end to support the research study, and the conclusion is given at last to summarize the
whole report.

Table of Contents:
INTRODUCTION 5
PROBLEM SPACE 5
Research problem 5
Research aim 5
Research objectives 6
Research questions 6
LITERATURE REVIEW 6
Market analysis 6
Marketing mix 6
Product 6
Price 7
Promotion 7
Place 7
Packaging 7
Positioning 7
People 7
Industry analysis: 8
Size and growth: 8
Maturity and Trends 8
Environmental impacts: 8
SWOT analysis: 8
PESTEL analysis: 10
Climate changing 11
Risk analysis 11
Consumer behaviour analysis 13

Competitor analysis 13
Porter’s Five force analysis 13
Target market 15
Market demographics 15
Pricing 18
The Pricing Strategy Matrix 19
Conceptual map 20
METHODOLOGY: 21
Research methodology 21
Data collection method 21
Quantitative and Qualitative data 21
Research Approach: 21
Sampling method: 22
Data Collection Method: 22
Quantitative data: 22
Qualitative Data 23
Ethical Consideration 24
RESEARCH FINDINGS: 25
Quantitative analyses 25
Qualitative Analysis: 38
DISCUSSION 40
RECOMMENDATION 43
CONCLUSION 46
REFERENCE LIST 47

Introduction
As today the coffee has become the most crucial need of most of the population of the world.
More than half of the population starts their day with a cup of coffee. With the growing demand
for coffee, union cafeteria and catering is planning to open a cafeteria named Union Café and
cafeteria. Since the business will operate at a new location and will concentrate primarily on
business events, meetings, conferences and seminars etcetera., hence, their main focus will be on
the location of the cafeteria. The primary purpose of this report is to analyse the market situation
to start the new venture with the help of some tools and techniques such as qualitative analysis,
discussions and professionals, established approach, SWOT analysis, PESTEL analysis and
statistical surveys etcetera (Jebrin, 2017).
The report will perform a literature review in the context of the topic and will explain the
problem in detail. It will critically analyze each variable related to the plan and will present a
conceptual map of the idea. The adopted research method will be based on using the sampling
techniques and methods to find out the information and collecting the relevant data for the
research. Based on the collected data, different findings will be present with the help of tables
and graphs and then evaluated to check out the feasibility of the plan. A detailed discussion will
be made in the report after appropriate findings and to find out the answers to the research
questions. A short conclusion will be made at the end of the report to get a detailed analysis of
the complete report (Mialon et al. 2016).
Problem Space
Research problem
This report is based on the study of the feasibility of the business plan of Union Café and
cafeteria, who wants to start their new business of cafeteria and catering at a new location. This
report will focus on analyzing the market situation and find the feasibility of the plan at a
particular location.

Research aim
The main aim of this report is to find out the best location for the cafeteria to attract a large
number of customers.
Research objectives
 Finding the appropriate location of the business to start.
 Analyze external and internal market conditions will be analyzed to examine the
feasibility of the business plan.
 Analyse the demand and identify new trends
 To find out if there is a market niche for Union café and catering
Research questions
 What will be the contribution of the location in the productivity of the cafeteria?
 Will the business plan be feasible according to the trending market conditions?
Literature review
The main focus while starting a new business is maintained on its business plan and its feasibility
in the present market. This feasibility can be checked out with the help of market analysis.
Market analysis
It can be done with the help of market segmentation, market needs, industry analysis and
competition and buying patterns. On the basis of market research, it can be found out whether the
business plan is feasible for a particular population or demographic segmentation can prove to be
an essential tool in finding out the population to be focused on. It can be done on the basis of
gender, age, income level and marital status. Knowledge of demographic location helps in
finding out the location of the cafeteria to be planned out. It must also focus on geographic
segmentation that includes analysing the market on the basis of neighbourhood, area code, region
or city. It can also be done on the basis of the upper class, lower class or middle class, skilled
working class and working class. The business planning after a successful market analysis helps
in determining the issues that can be faced during the setup of the business venture (Jebrin,
2018).

Marketing mix
Product
The union café and catering are planning to provide the best quality products and services to
attract large customers. There are more chances of providing best quality products in Sydney as
compared to NSW and Pyrmont due to availability of adequate and required raw material.
Price
It is planning to provide its entire product as cheap and affordable cost and follow pricing
strategy keeping in mind the affordability of the meetings, conferences and events. This will be
suitable in Sydney as it follows a penetration pricing strategy while NSW follows economic
price strategy and Pyrmont follow skimming price strategy (Overton, 2007).
Promotion
Advertising and monthly publications are a source of promotion for union cafeteria. It will also
promote its business plan with the help of the website and other social media as its main
concentration is youth and students. It will focus on Sydney university for more youth attraction,
which will not be possible in NSW and Pyrmont.
Place
It is going to be developed near the university to attract large customers and in an area close to
public transport and the centre of the city. It is also going to be developed near the university as
it is going to focus on students. Hence Sydney will be the best option as compared to NSW and
Pyrmont (Hofstrand et al. 2009).
Packaging
It is planning to use recycled products and biodegradable material wherever possible for
packaging of the products and serving it to customers. Since government rules are less strict in
Sydney as compared to NSW and Pyrmont, hence Sydney will be a viable choice.
Positioning
It is focusing on maintaining its position among other brands to face the competition. The main
focus of union café and catering is to tackle up with the competition from longtime local
competitors and other brands such as Starbucks. Sydney lacks in branded products while NSW

and Pyrmont have high availability of branded shops such as Starbucks, CCD etcetera (Jebrin et
al. 2012).
People
The main focus of this cafeteria is attracting large customers, especially youth and middle-
income workers. Establishing the business near Sydney university will provide more opportunity
and high growth to union café and catering.
Industry analysis:
Union cafeteria and catering is a new business venture planning to start its cafeteria in
Sydney has the main focus on youth and middle-class workers. It aims to focus on
differentiated products to attract a large number of customers. It is planning to open the
venture near the university to focus on students and other youths. This analysis depends on
growth, size, competitors, trends, environmental impacts, technological impacts, climate
changing and risks analysis etcetera (Huang et al. 2017).
Size and growth:
It is analyzed that coffee shops are increasing at a rate of 12% annually. Consumption of
coffee in Sydney is found to be 70% and growing at an annual rate of 7%, while it is found
only 50% in NSW and 55% in Pyrmont (Pagotto et al. 2016).
Maturity and Trends
Since the cafeteria is at its maturity stage, it will face fierce competition with other brands.
On the basis of the analysis, it is determined that due to more healthy eating habits, there are
chances of an increase in the consumption of coffee with 25% of annual growth in future.
This is found to be 12 % in NSW and 15% in Pyrmont (Williams, 2017).
Environmental impacts:
Union cafeteria is also focusing on some environmental impact so that further issues do not
appear. Many issues are presently facing by every company. Similar is in this case. It will also
focus on reducing all environmental impacts that will lead to a reduction in its growth. The union
cafeteria uses no polluting item and wastes harmful for the environment. This will get
opportunities more in Sydney as NSW and Pyrmont relies on heavy environmental restrictions
while those are less in Sydney (Higgins-Desbiolles et al. 2017).

SWOT analysis:
SWOT analysis stands for finding out the strengths, weaknesses, opportunities and threats related
to starting up of new venture. In the case of union cafeteria and catering the swot analysis will
help to understand the positive and negative aspects that it can face in future with relation to the
location of the cafeteria (Higgins-Desbiolles et al. 2017).
NSW
Strengths:
 Large customer attraction
 Efficient network
Weaknesses:
 Competitive market
 Lack of experience
Opportunities:
 Ability to attract more customers
 Ability to recruit skilled staff
Threats:
 Local competition and other brands
 Income level of the targeted market
PYRMONT
Strengths:
 Availability of raw material
 Centre of the city
Weaknesses:
 No built-in brand equity
 Adequate staff to fulfil demands
Opportunities:
 Building brand equity
 Expanding the market
Threats:
 Changing the demand of customers
 Other cafes in the area (Williams,
2017)
SYDNEY
Strengths:
 Close to the university
Weaknesses:
 Demographic analysis

 Close to public transport  Differentiated products
Opportunities:
 Unique décor
 Opening earlier and closing late
Threats:
 Relatively costly food
 Competitive area
PESTEL analysis:
PESTEL analysis focuses on finding out the outcomes of the business plan on different
sections of the market. It includes identifying the impact of several factors on the business
venture such as political, economic, social, technological, environmental and legal factors
(Wales, 2015).
FACTORS NSW PYRMONT SYDNEY
Political: Easy availability
of coffee beans at
a particular
location(Wales,
2015)
Government
regulations
Bureaucratic hurdles
Economic Maintaining quality at
lower cost
Income level of the
targeted market
Social Youth and middle-
class targeted
cafeteria
Affordable for
meetings, events,
conferences
Technological Providing
entertainment and free
access to WiFi
Marketing strategy
based around
technology

Environmental Less pollution and
limited waste
Using biodegradable
and recycling
products
Legal Ethical considerations Les complaints from
consumer
Quick customer
service
:
Climate changing
They are also aware of climate change as it can also have a significant impact on their products
and service. Unavailability of the raw material can result in a reduction of their growth, and
hence, it requires minimum stock for this kind of situation. As there are less climatic variations
in Sydney as compared to NSW and Pyrmont, hence there will be more chances of improved
business in Sydney.
Risk analysis
It is also prepared for risk factors that can come in their way in future. Risk analysis helps them
to find out the possible risk in their field. Risks are related to changing the taste of consumers,
competition level, etcetera (Jebrin et al. 2012).
Establish the
Context
Risk Description Effectiveness of
Controls
Analysis
Evaluation
Objective Context Risk
Source
Description Current
Control
Control
Rating
Risk
Rating
Increase
service
productivi
ty to core
clients by
10 % in 1
change
in
manage
ment
change in
governme
nt funding
Caus
e
Fail
ure
to
Eve
nt
Lea
ds
to
Impact
Results
in poor
service
level to
quality
improve
ment
plans
High 5 Removing risk
sources

year main
tain
client
servi
ce
mana
geme
nt
syste
m
dela
ys
in
serv
ice
deli
very
core
clients
Customer
satisfactio
n and
consumer
delight
Lack of
quality
products
and high
cost
Change in
taxes and
subsidies
Provi
ding
prod
ucts
and
servi
ces at
a
high
cost
Lea
ds
to
cust
ome
r
redu
ctio
n
Result
in the
rise in
the
price of
the
product
Offers
and
allowanc
es
Medium 3 Removing risk
source
Clean and
calm
environm
ent
Use of
non-
biodegra
dable
resource
Lack of
environm
ental
policies
Wast
age
of
resou
rces
Unh
ealt
hy
envi
ron
men
t
Result
in
many
environ
mental
issues
Governa
nce
committe
e
Low 2 Sharing risk
with another
party
Great, Lack of Lack of Lack Lea Result Recruitm High 4 Changing the