Entrepreneurship and Venture Planning: Cuban Coffee Feasibility Report

This report assesses the feasibility of a Cuban coffee venture, focusing on key aspects such as product life cycle projection using the Abell matrix and analyzing customer groups, needs, and technological competencies. It delves into the value proposition of offering unique coffee blends, including a coffee soda, and evaluates competitive advantages using Porter's Five Forces model. The report examines customer decision-making processes through the AIDA model (awareness, interest, desire, action) and explores strategies for customer acquisition. The analysis includes an overview of the Australian coffee market, competitor analysis, and the importance of product differentiation to maintain and grow market share. The conclusion emphasizes the importance of understanding customer needs and adapting to market dynamics for long-term success.

Entrepreneurship And Venture Planning

Contents
INTRODUCTION...........................................................................................................................3
PROJECTION OF THE PRODUCT LIFE CYCLE.......................................................................3
VALUE PROPOSITION.................................................................................................................5
COMPETITIVE ADVANTAGE.....................................................................................................6
CUSTOMER DECISION MAKING AND ACQUISITION..........................................................7
CONCLUSION................................................................................................................................8
REFERENCE...................................................................................................................................9

INTRODUCTION
Venture planning is the step by step activity which is planned by an entrepreneur to
run their business idea. For this report, Cuban coffee is taken for consideration which is
specialised in selling coffee while considering the taste of it according to customers
(Kuratko, 2016). They also have Coffee Soda which is not sold by any other coffee
shop in Australia. Three dimensional model will be explained by considering the Cuban
coffee. Besides this, value proposition will be done and different strategies which could
be opt by entrepreneur will be discussed. To scan the environment, porter five forces
model will be scrutinised and on the basis of it, tradition funnel tunnel will be made.
PROJECTION OF THE PRODUCT LIFE CYCLE
The Abell matrix is used by companies to determine the scope of the business and
how it would perform in the different circumstances. Three different dimensions is
explained below with the help of functional examples of Cuban Coffee,
 Customer Groups: Business market is made up of different types of customers who
use that product (Mazzarol and Reboud, 2017). For instance, Cuban coffee has to
identify the age group, demographic, gender etc which uses on coffee on a daily
basis and then make their market strategies accordingly.
 Customer Needs: It refers to what type of needs and demands of customers has in
the market. Australian coffee market is 1.1 billion dollar (Australian coffee market,
2019) which shows the amount of potential customers in the market. To become
successful, Cuban Coffee has to identify the taste and variant of people near their
store and then modify their products and services accordingly.
 Technology competencies: In this dimensions, technology includes diverse points
like market research techniques, machines used to make coffee, supply chain and
logistics, billing, time taken by customers to pick their orders etc (Abell’s
Framework, 2019).

PRODUCT LIFE CYCLE
This practice is used by companies to decide their marketing strategies in the market.
PLC has four different stages which is explained below,
 Introduction: Cuban coffee seeks to build the awareness in the market by setting low
prices of the product so that large market share would be made. Product quality will be
top notch so that customers would become loyal to it. High amount of money would be
invested in the promotion with the aim of getting high brand awareness (Kickul and
Lyons, 2016).
 Growth: Entrepreneur role is to make brand preferences in the market by maintaining the
quality of it. Prices need to be increase a bit according to demand of the products. More
money is invested in the promotion which will leads to more customer awareness.
 Maturity: At this stage, customers and competitions are now aware about the product
and brand due to which prices have to be maintained. Product differentiation is essential
to bring new potential customers. More focus of Cuban coffee is product differentiations
instead of heavy promotions (Burns and Dewhurst, 2016).
 Decline: This is the last stage in which customers are changing their brand to other
companies to try new product. To cope up with this, Cuban coffee have to launch new
product in the market with differentiating features so that it would allure the customers to
taste and then the cycle goes on.

VALUE PROPOSITION
Value proposition is concerned with determining the importance or worth of the
company’s products and services in order to ensure that the Cuban Coffee is delivering
the promised service to its customers (Rauch and Hulsink, 2015). It is a unique selling
statement or description of the organisations products through it can create awareness
in the mind of customers regarding the product which is being sold and where the
company stands in the market. It is a evaluation of the organisation which illustrates the
primary reason for which the customer must purchase the organisation product. So, the
unique selling proposition for Cuban coffee is “to deliver the best taste to the customers
with multiple combinations of drinks”. This statement is described and elaborated by
the organisation wherein it communicate to its customers that the drink which is being
sold by the business enterprise provides the flavour of soda, coffee and milk in just one
single drink. This drink will be highly effective and efficient as the taste will have
uniqueness that contains the sweet and sour taste with perfection combination of cold
beverage. Furthermore, this drink will be suitable and appropriate for all age group
people right from the children of middle age to the elderly old people wherein the
acidity prop will be easily solved with sods added in the drink. This is one of the
primary reasons which will induce customers to purchase the product as it is good for
all age group people.

COMPETITIVE ADVANTAGE
Porters five forces model is effective and helpful for companies as it shows the
level of competition in the market and what company could do to avoid it. Different
factors of this model is given below,
Threat of new entrants: It refers to number of new companies which are planning to enter into
coffee industry (Honig and Samuelsson, 2014). Due to low operating income and high
competitors, it becomes hard for any new competitors to invest high amount of money
with high risk. It can be said that Cuban coffee has moderate threat of new entrants.
Threat of substitute: There are high number of substitute of coffee in the market like juice, tea,
alcoholic and non-alcoholic beverages etc. Besides this, homemade products are also
easily available in Australian market. But to cope up with that, premium quality of
products and brand loyalty of customers reduce the threat to a certain level. So threat of
substitute for Cuban coffee is high.
Bargaining power of supplier: Cuban coffee has selective supplier in the market as they only
use beans which hail from Cuba. As low number of suppliers is inversely propionate to
high bargaining power. So it can be said that there is moderate bargaining power of
supplier.

Bargaining power of buyers: This factor is high in nature as switching cost in coffee industry is
close to negligible (Hiatt and Sine, 2014). So customers won’t find any difficulty in
switching their brands to one company to another. Cuban coffee must make their
pricing strategies according to customers only.
Competitive rivalry: It refers to number of competitions in to the market who is selling same
products and services to the same customers. Starbucks, The coffee club, Hudson’s
coffee, Michel’s patisserie etc are few of the competitors of Cuban coffee. This implies
that there is high competitive rivalry in Australian coffee market.
Main competitor of Cuban coffee is Starbucks, Gloria jeans, costa coffee, Macdonald etc.
Indirect competitors are local bars, jittery Joes, local coffee shops etc.
CUSTOMER DECISION MAKING AND ACQUISITION
The traditional funnel has been used in the field of marketing in order to make
people aware about the product and convert them into the permanent customers.
Similarly, the Cuban coffee needs to adopt the model of decision making process and
consider the different phases through which customer goes in making final decisions
regarding the purchase of the products. The AIDA model has been used in this context
which stands for awareness, interest, desire and action. The first and foremost phase is
awareness wherein, the product must be such that it easily catches the attention of the
customers and makes them aware about the new product. For instance, the new product
of Cuban Coffee must have effective design, style, colour, packaging and proper
marketing tools must be used in order to create awareness among people (Spinelli,
Ensign and Adams, 2014). The next phase is generating interest for which the Cuban
Coffee will concentrate on mentioning the relevant information about the new product
on the official website of the organisation with ingredients being used and different
benefits of the drink. After this, the desire has been generated in the customer regarding
the product with the help of advertisement tools and methods. The last phase in
decision making process is taking action in which, the customer is finally diverted
towards the new product of the company and makes the decision to purchase the same.

CONCLUSION
As from the above mentioned information, it can be said that company have to take
care of all the needs and demands of the customers as then only it would be possible for
them to sustain in the market for longer period of time. Besides this, it is essential for
company to assess their external as well as internal market as it assist them to identify
the strategies of competitors and how it could be tackle so that increase in market share
would be seen.

REFERENCE
Books and Journals
Burns, P. and Dewhurst, J. eds., 2016. Small business and entrepreneurship. Macmillan
International Higher Education.
Hiatt, S.R. and Sine, W.D., 2014. Clear and present danger: Planning and new venture survival
amid political and civil violence. Strategic Management Journal. 35(5). pp.773-785.
Honig, B. and Samuelsson, M., 2014. Data replication and extension: A study of business
planning and venture-level performance. Journal of Business Venturing Insights, 1, pp.18-25.
Kickul, J. and Lyons, T.S., 2016. Understanding social entrepreneurship: The relentless pursuit
of mission in an ever changing world. Routledge.
Kuratko, D.F., 2016. Entrepreneurship: Theory, process, and practice. Cengage Learning.
Mazzarol, T.W. and Reboud, S., 2017. Entrepreneurship and innovation. Tilde Publishing and
Distribution.
Rauch, A. and Hulsink, W., 2015. Putting entrepreneurship education where the intention to act
lies: An investigation into the impact of entrepreneurship education on entrepreneurial
behavior. Academy of management learning & education. 14(2). pp.187-204.
Spinelli, S., Ensign, P. and Adams, R., 2014. New venture creation. McGraw-Hill Education.
Online
Abell’s Framework. 2019. [Online]. Available Through: < https://www.cleverism.com/abells-
framework-for-strategic-planning/>
Australian coffee market. 2019. [Online]. Available Through:
<https://www.statista.com/topics/4615/coffee-market-in-australia/>