Strategic Partnership: Katz Cafe & Southbank Centre Development Plan

This report outlines a business development plan for a partnership between Katz Cafe and Southbank Centre, focusing on enhancing the cafe's market presence and service offerings. The plan includes a market analysis using PESTLE and SWOT frameworks to evaluate the external and internal factors influencing the partnership's success. It explores the feasibility of introducing new products such as handmade objects, music CDs, and books to attract customers and increase revenue. Furthermore, the report discusses the sustainability of the new business within the hospitality sector and identifies factors that may limit its development, such as partnership conflicts and economic fluctuations. The financial aspects, including initial lease payments, equipment costs, and marketing expenses, are also considered to ensure the venture's financial viability. This analysis aims to provide a comprehensive understanding of the strategic considerations and potential challenges involved in establishing a successful partnership between Katz Cafe and Southbank Centre.

Hospitality Management

Table of Contents
INTRODUCTION...........................................................................................................................1
CHAPTER 2....................................................................................................................................1
The Development Plan................................................................................................................1
CHAPTER 3 ...................................................................................................................................5
Feasibility of the New Product/Service.......................................................................................5
CHAPTER 4....................................................................................................................................6
The demonstration of the sustainability of the new business within the hospitality sector and
the importance of it.....................................................................................................................6
CHAPTER 5....................................................................................................................................8
Factors that limit development of the product/service within the hospitality industry...............8
CHAPTER 6..................................................................................................................................10
Conclusion.................................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Hospitality management is termed as the study regarding the hospitality industry (Fotis,
Buhalis, & Rossides, 2012). It is also referred to as the task that helps in creating wealth of
shareholders by servicing the guests and helps in to meet the required satisfaction. This type of
industry segments mainly includes hotel, restaurants, private clubs, managed food service, event
planning, tourism related business and also travel provides. Thus, in this report partnership
between South bank centre and Katz Cafe has been taken into consideration. South-bank centre
is one of the artistic venues that is situated in London. While Katz cafe is a cafe that desires to
become the most recognized leader in its target market so that they can provide selection of
outstanding coffees.
In the following report, the business development plan in terms of partnership has been
discussed along with feasibility of new products and services. Further, sustainability nature of
new products and services has been described. In addition to this, the factors that limits the
development of product and service with this industry has been analysed and highlighted in deep
manner.

CHAPTER 2
The Development Plan
Overview
The Katz cafe business is being designed in such way that helps them in bridging the
gaps that is existed in the market and that is divided into several strategic business units. The
units of strategic business includes handcrafted objects, CD, DVDs with music and also literature
and art books. Further, they are trying to have a partnership business with south-bank centre
where events are been taken place. In this partnership the cited brand Katz cafe wants to offer sip
of deluxe coffee along with favourite music, new accessories that is trendy. They also want
people to enjoy health and organic vegan and also with vegetarian foods. Further, this cafe also
wants to update the book or collection of music so that they may attract huge volume of
customers towards the brand.
Vision / Mission
The mission statement of Katz cafe is to become the recognised leader of London in the
market that has been targeted by them (Filieri, Alguezaui, & McLeay, 2015). This statement also
includes to inspire the people who are great in order to do great things. Their vision is to provide
outstanding selection of bagged gourmet coffees from all over the world along with organic
Dutch and French pastries. They aim of making the whole team happy by catering in the
upcoming meals. It also includes inspiring stakeholders in order to do the best things in terms of
Cafe.
Objectives of Katz Cafe
The main objective of Katz cafe is to provide a selection of objects that is hand made,
books, and also music accessories that is based on events happening on a particular day. They
aim of going extra miles for the customers.
Market Analysis
A situation analysis is termed as the process that helps in gathering internal and also the
external information that helps in creating the development plan of a business ( Duan, Yu, Cao,
& Levy, 2016). External environment includes business environment information that also
includes economy, industry and competitors. Internal analysis includes information about
employees that includes turnover, wages etc.
Pestle analysis of Katz Cafe

 Political- the decisions of government regarding tax and trade policies determines the
political factors. This affects the economy of business and company to a large extent.
Therefore, Katz cafe has to regulate and balance the strategies in terms of marketing as
per the requirements of government as political factors has influence on the way of the
cited company if tends a partnership firm.
 Economic- this factors includes rate of inflation, growth of business, employment level
and trading of goods and services. This has the great impact on the cited company. This
factors may differ from one country to another. If the cited company has to expand its
business in terms of partnership with south bank centre than they must have sufficient
funds.
 Social- Social factors includes the taste and preferences and also the demand of the
society. Thus, if the cited company Katz cafe has to expand its business than they have to
analyse the present and upcoming trend in the particular area and accordingly start the
business. This will help in attracting large number of customers towards the particular
brand.
 Technological factors- this includes advancement in technology. Therefore, they must
update their technology in such way that they may attract the huge volume of customers
towards the brand (Christofle, Papetti and Fournier, 2017). They must update their
website so that the customers can easily compare the products and later choose the best
on as required by them.
 Legal factors- consumer rights and safety of the product are included in the legal factors.
Thus, it becomes necessary for the cited company that they must know their legal rights
and also the limitations so that they can act according to the laws and regulations that is
underlying. Environmental factors- this factors focus on the environment that may affect the business.
This factors include global warming and another issues of environment in a global level.
Therefore, the cited company must concentrate on such factors that may affect their
partnership firm, so that they can expand their business accordingly. They must produce
products in such way that may attract maximum customers towards the invented brand.
SWOT analysis

Swot analysis is the tool or a framework that is used in order to evaluate competitive
position of the company by identifying strengths, weakness, opportunities and threats (Aluri,
Slevitch and Larzelere, 2016). This is the model that also helps Katz cafe in order to measure the
potential opportunities and threats of the organisation. Thus, it has been discussed as per below
context-
Strengths-
In order to open a partnership firm between Katz cafe and south bank centre they have to
first analyse the strength of their company. They have to gather the detailed information because
they have to pull together unique selling points that will carve out the space in a way that helps
them in earning huge profits. They have to first discuss the quality of the product they want to
sell, the atmosphere and also the décor of the planned business or cafe. They also have to analyse
the location and other positive aspects that may attract large number of customers towards the
brand. If they have the crowd of college going students than they must have facility of live music
and late night parties. They must also offer with unique books in the gallery that may attract huge
volume of customers.
Weakness-
Weakness of the company includes the investment in staffs and maintenance of their
business premises. If the cited brand decide to have a partnership firm with South bank centre
than it will be difficult to them in order to acquire. As the cited brand don't have much
knowledge in these areas, they will have to face many challenges to have a successful
partnership.
Opportunities
They also have to evaluate the opportunities in terms of market that they have to come
across. They can target the audiences accordingly to the products and services they are offering
so that it may help them in attracting large number of customers towards the brand. They must
identify the untapped target audiences as they are the key to the success in a space where there is
availability of maximum number of choices.
Threats
The cited company must have to think about that things that may act as threatening for
their business (Hsiangting Shatina Chen, Joseph Fiscus, 2018). The main threat for such business
is the things that is uncontrollable. Partnership business mainly leads to conflicts between the

partners that are involved. Further, change in price of the product and also economy fluctuations
may cause the drastic change in the particular business.
Budget
Expenses Cost %
Initial lease payments 3.00%
Lease deposit 1.00%
Website development 2.00%
Equipments and furnitures 24.00%
Improvements expenses 20.00%
Working capital 28.00%
Marketing 4.00%
Inventory of coffee supplies 8.00%
Retail business insurance 2.00%
Miscellaneous expense 8.00%
Total 100.00%
CHAPTER 3
Feasibility of the New Product/Service
Hand made objects, music CD's and books are very attractive in terms of getting
customer’s attention. These products or are very useful in attracting a huge number of customers
in mainly in hospitality industry. The Katz Cafe needs to increase its sales sales and profit in
order to a improve its brand image along with the partner Southbank Centre. In order to achieve
its goals and objectives the Cafe can use different hand made crafts such as pots, grocery, show
piece items etc (Hsiangting and Joseph, 2018). All these objects can help to increase the revenue
of the business, along with this music CD's and books can also be attractive products to gain
attention of the customers. All this products have high feasibility as it can be easily bought and
being sold to the customers.

 Hand made crafts – The hand made crafts are very much popular among people UK, in
order to purchase attractive and unique handicraft items they travel to different countries.
Katz Cafe can purchase these handicraft products from countries such as as China, India
where it is produced or manufactured at a large scale. The price of handicraft products in
those countries is low and the cafe can sell the same product at relatively high price. The
visitors mainly tourists can easily buy these handicraft items at higher prices. Therefore,
it can help in increasing the revenue of the business due to high profit margin. Music CD's – Along with hand crafted items the Katz cafe can also sell music CD's in
order to increase revenue. Visitors of cafe can listen to music during the events organised
in the cafe, the organisation can offer the music CD's of their music collections at low
prices so that they can listen to the songs. It can be cheap or low cost method to increase
the income source for the cafe. Music CD's can be purchased or even produced easily
with small amount of money. It can be a extra element which can contribute to the
revenue of the business and lead to increased profitability of the cafe. The music CD's
can also be purchased from local vendors or shops at cheap prices and can be sold at
higher prices to tourists who like and are attracted towards local music.
 Books and articles – Another attractive product are books and articles that can be a
element to seek customers attention and increase profit of the Katz Cafe. Books and
articles related to local events, information, place or culture can also play an important
role in increasing revenue of the business. The cafe can purchase interesting and
attractive book as well as articles to increase the sales or revenue of the business. Tourists
are highly eager to learn and develop knowledge related to the places that visit. While
enjoying their time in Katz Cafe they can also go through the books or articles. It can be
an effective product for the organisation as they do not need to invest much funds or
capital and profit margin is high which can be very helpful in increasing the revenue of
the company.
The above new products are very easy to be offered as there is no production, marketing
or other operational cost and activities included. The feasibility of these new products is very
high and due to low cost it can be very effective in increasing the revenue or profit margin of the
Katz Cafe.

CHAPTER 4
The demonstration of the sustainability of the new business within the hospitality sector and the
importance of it.
Southbank Centre is a complex of artistic venues in London, England, on the South Bank
of the River Thames. It further comprises 3 key performance venues that are; Royal Festival
Hall, consisting Queen Elizabeth hall and Purcell room with the Hayward Gallery. Moreover, it
is considered as Europe's largest centre for arts and more than 6 million visitors are attracted
annually and over 2 thousand paid performances of music, dance and literature are staged (Shi
Xu, and Larry Martinez, 2018 ).
The Katz Cafe, situated in London which aims at becoming the London's recognisable
leader in its target market for offering an outstanding selection of bagged gourmet coffees from
around the world. It is currently operating with Southbank Centre to offer services in hospitality
industry in order to become a well known and famous business in London. It is in partnership
with Southbank because the cafe is a Start-up company and needs support to expand further,
hence, they both together can provide visitors with lots of services.
Services provided by both are the best in their own way, as Katz provide such products
that will be really helpful for Southbank to use at its events. Katz provides direct sales of unique
hand made objectives, Music, popular literature and art books. In addition, it also offers direct
trade of food products, locally sourced, organic food, vegan, vegetarian which further involve
salads, pastries, sandwiches, etc. Katz business is important for Southbank as a hospitality
industry because the cafe is designed in such as way that fills the current gap in the market and is
segmented into various strategic business units.
The first important point for hospitality sector to consider Katz is that its strategic
business unit sells Hand crafted objects, as these are highly preferable trends I hospitality
industry to attract attention of visitors as arts created by Katz can make significant visual
statements, changes the mood and connect with the local community. Southbank can use its
objects in its Hayward Gallery, which is a world's renowned contemporary art gallery and a
landmark of brutalist architecture (Arash Riasi, Zvi Schwartz, and Chih-Chien Chen, 2018). The
second strategic business unit sold by Katz is CD/DVD's with music, and this is important for
Southbank Centre, it conducts events, with new improved facilities for music and performance
events, at its Purcell Room. The third strategic business is selling Literature and art books which

can also be kept at Hayward Gallery Art library. Another important advantage for Southbank and
hospitality sector to have partnership with Katz is the business fills a present gap in the market
because none of the rivalries offer the similar services as The Katz Cafe offers.
Ability to sustain the business and address environmental, social and economic issues. Economic issues :- the key economic factors that may affect both South bank and Katz
cafe business is economic factors and competition for tune in the UK's budget hospitality
market at the present, particularly in London. These types of factors include economic
growth, interest rates, exchange rates, inflation, wage rates and cost of living. Katz and
Southbank can address these issues by being more competitive and efficient. It's art and
handmade objects can serve as a vital extension of branding strategies by helping hotels
to convey their values in a perceptive but effective way. Social factors :- these factors include cultural features, health and safety consciousness,
growth of population and several demographics. Hospitality sector is adversely affected
by customers with different backgrounds, culture, taste and preferences. But Katz and
Southbank can overcome these issues as services offered by Katz Cafe in the context of
social factors are beneficial for both the businesses. Products and services by Katz are
organic, vegan and vegetarian food for people who are health conscious (Alsos
and Ljunggren, 2017).
 Environmental factors :- there is a low barrier for Katz Cafe in London, as the Coffee
shop industry has become a target for investors due to the increasing consumption of
coffee. Katz business can overcome this issue by providing biodegradable packaging
which is important to reduce waste. Further, due to consumer demand for naturally
produced goods, company can produce organic coffee for guests in hospitality sector.
CHAPTER 5
Factors that limit development of the product/service within the hospitality industry
Product development refers to the creation of products with new or varied characteristics
that offer new or extra benefits to the visitors. It can be either modification of the current product
or its presentation or entirely developing a new product in order to fulfil the latest taste of
customers. Nowadays it has been observed that, hospitality sector offers consumers according to
their, demand of customers, their location or areas, external and internal source facilities, service,

price and image of the company. Hospitality products and services are defined as the essence of
a hotel design, whether flooring, lightening, furniture, etc. Below are the factors that may affect
the development of the product or service within the hospitality sector are:
 Shortage of labour and capital :- the product development within hospitality industry can
be affected adversely, if increased supplies of trained labour are not available. Similarly,
if fresh capital cannot be raised expansion stops. But, it has been also determined that if
the prospects of the business is very good and if the company is the established reputed
one then it can cross all the barriers. Likewise, both Southbank and Katz together can
overcome these hurdles as Southbank Centre is a reputed artistic venues in London and
services/products offered by Katz are new and innovation as none of the customers offer
the similar services. Shortage of finance is often the most commonly cited problem of
new product development. As Katz Cafe is a newly established business in partnership
with Southbank centre, with good product ideas simply do not have resources to fulfil to
pursue product development and commercialization. Though Katz idea of offering hand
crafted product can assist it's business to overcome this barrier (Ineta Luka, 2018).
 Nature of the market :- it has been discovered in hospitality sector that if demand is
limited or fluctuating, it will be unwise to increase the size of the business. Therefore, the
nature of demand of consumers is reasoned as the limiting factor for product
development within hospitality industry. Katz offers 35 to 40 different varieties of
flavours, varied sizes, with personalise coffee cups, and unique picture prints on
customers.
 Competition :- another factor that influence the development of a product and service in
hospitality industry is competition on which companies have no control over. However,
no one can beat Katz Cafe as services provided by it are different from its rivals. It also
serves Jem's child centre where they have fun activities. Moreover, they also offer 30% of
the profit made from trading hand crafted objects, music and books is donated to different
charities in London.
 Environmental concern:- there are many such customers who are concerned regarding
their environment and the harm to it caused by industry production. While creating a
product it may be wise to make sure that the materials can be recycles or the goods itself
can be manufactured from huge proportion of recycled material. Katz cafe can easily

overcome this barrier to product development by offering biodegradable packaging (Kai
Li Chung, Norma D’Annunzio-Green, 2018).
 Background :- the success of any product relies on how well a product is designed and
links to emerging technological possibilities with emerging market opportunities. Further,
it requires that customers from different specialised departments within the hospitality
industry such as; sales, Research & development, manufacturing, etc. Also, the
collaboration among these sections is very important.
 Changes in taste of consumers :- this is termed as the most crucial factor affecting the
development of a new product or service in hospitality sector. Alterations in taste and
preferences of guests, as some prefer organic food, some like to have fast food etc. Katz
Cafe keeps in mind it's customers demand and desire and accordingly sells its products.
Company offers organic food, with biodegradable packaging including variety of coffee
beverages.
 Changes in technology :- nowadays with technology changing very rapidly, a new
commodity may become obsolete very soon. Life cycle of development of a new product
in hospitality industry have been adversely shortened and if a company fails to develop
and sell fast enough, it will be unable to achieve its financial objectives (Andrew Bratton,
2018).
CHAPTER 6
Conclusion
From the assignment on hospitality management it has been concluded that hospitality
management embrace many different industries and businesses. It further includes hotels,
restaurants, casinos, resorts, airlines, etc. Its main purpose is to create wealth by serving and
satisfying guest. The report also stated the development plan for a new business of Katz Cafe in
London, and importance of its new product and service within hospitality industry. Moreover, it
also demonstrated various factors that limit the development of a new product.