MOD006063: Coffee House Business Development Plan Report

This report offers a comprehensive analysis of a new Coffee House venture, detailing its development plan, feasibility, and sustainability within the hospitality industry. The report begins with an executive summary and introduction to the hospitality industry and hospitality management, setting the stage for the Coffee House venture. It then presents a detailed development plan, including mission, goals, objectives, and product development strategies, such as product evaluation and market analysis. A SWOT analysis is conducted to assess the company's strengths, weaknesses, opportunities, and threats. The report further explores the feasibility of the Coffee House's herbal coffee product, considering technical, economical, legal, operational, and scheduling aspects. Additionally, it examines the sustainability of the product, focusing on product quality, customer satisfaction, and continuous improvement. Finally, the report identifies factors that may limit the product's development and concludes with a summary of the key findings and recommendations. This analysis provides valuable insights into the strategic planning and market positioning of the new Coffee House.

Hospitality Management

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................3
CHAPTER 1....................................................................................................................................3
INTRODUCTION...........................................................................................................................3
CHAPTER 2....................................................................................................................................3
Development plan for new business...........................................................................................3
CHAPTER 3....................................................................................................................................6
Feasibility of the new product/ service.......................................................................................6
CHAPTER 4....................................................................................................................................7
CHAPTER 5....................................................................................................................................9
Factors that limit development of the product ...........................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

EXECUTIVE SUMMARY
In this assignment development plan, feasibility of new product, sustainability of the new
product and factors who affect the business are explained in the report. This report is based on
Coffee House which manufacture a new a product herbal coffee. Al the factors, strategies and
techniques which are import for this new product are describe in the report.
CHAPTER 1
INTRODUCTION
Hospitality industry is a service industry where various company provide services to its
customers. This industry includes hotels, motels, restaurant, food services, tourism services and
other services which are beneficial for the customers. Hospitality management is the study of the
hospitality industry (Brown, Arendt and Bosselman, 2014). Hospitality management is process to
manage the service of this industry like a company who provide food services then it manage the
services which are using in this service. This report is based on a new coffee venture, a small
business enterprise which is going to open currently. The name of this venture is Coffee House
and the products of this venture are specially herbal coffee. In this report development plan and
methods are explain which are beneficial for Coffee House. Importance and sustainability of this
product and impact of this in the environment or the society is explained. The factors which
create limits for this product in the hospitality industry are mentioned.
CHAPTER 2
Development plan for new business
Business development is process which is use for kn owing the customers behaviour and
nature towards the new product for driving the growth and profit of the company. Every
company make a plan for the development of the company. Here Coffee House is a newly open
venture, there is the development plan for its business (Buhalis and Crotts, J., 2013).
Mission, goals and objectives
Development plans help in guidance of the organisation in setting mission, vision, goals,
objectives and purpose or making strategies or techniques which helpful in achieving goals of the
company. For making development plan firstly the company set goals, objectives and mission.
Objective of Coffee House is to make the product according the customers needs and demands or

which is reach of them, they can purchase easily. Mission is provide better quality to them on
reasonable price. The goal of the company is to satisfied its customers by their product, increase
consumer line and earn profit. The company set their high goal, it can be related to the
production or financial profit. If the goal of the company is earning high profit in 1 or 2 years
then it set its clear, measurable and specific objective which help it in achieving its goals.
Strategies are generate for leveraging the strengths and opportunities and overcoming its
weaknesses and threats (J.Kara and et. al., 2013). For making development plan the company
firstly do SWOT analysis because Coffee House is a new company so by doing this it can
analyse the market of its products and services.
Product development strategies
The product development strategies for a new products are as follows:
Product evaluation- It is process of analysis g the product and the quality of its that it is
beneficial for the customer or not. Herbal coffee is a new product in the market so the evaluation
of its is important because if it suitable to the customer they adept easily.
Creating a market for a new product- Herbal coffee is new in the market so its attract
young age people because in UK the people consume fast food in high quantity and they are
more conscious towards their health. So they prefer will consume this product because it help
them in solving their health related issues.
Identifying market needs
In this the company trying to find out that the product which it going to manufacture,
there are any demand of that in market or not. Coffee House provide Herbal Coffee because
there are high demand of its in the market because people now these days people prefer fast food
and packed food cause of busy schedule. They are also focus on their health so this herbal coffee
is demanding in the market (Law, Buhalis and Cobanoglu, 2014).
SWOT Analysis
Swot analysis is helpful in measuring company's strength, weakness, opportunities and
threats in the market and in competition market. Coffee house is a new venture but there are
more coffee cafes in the market so analyse its growth and future in the market this swot analysis
development plan is explained here. There are two factors of this analysis, internal and external
factors. Strength and weakness is the internal factor of the company which is related the
reputation of the company, growth of the products and demand of the product. External factors

are opportunities and threats that are related to the suppliers, competitors and prices of the
products. New business use SWOT analysis as a part of their business planning process. There
are not any special plan or fit plan for the business (Line and Runyan, 2012). The SWOT
analysis of Coffee House is as following:
Strengths
Coffee house a new opened small business company which provide different products but
herbal coffee is a special product one of them. The strength of the company are as following:
 The company start its business in UK and the people of the uk is runs on coffee and the
demand of it is high at their. This coffee shop offer a variety of products but its new
product herbal coffee which is demandable in all age groups. In present time the youth
are prefer herbal coffee so it the strength of the company.
 This coffee house is located in office area so it attract in large number of customer and
the quality and quantity of its products are good so it is the strength.
 There are a TV and live music in the coffee house which attract the youngsters and they
come there and drink coffee which also a reason of the strength of company.
 The company have enough financial resources.
Weaknesses
Coffee house is a newly opened company so its face many challenges related to its
services and products.
 It started its new business so consumers can not trust on it and customer confidence is
less.
 It is set up in office area so its are far from its local customer because on holiday offices
are close, it have not customers (Lub and et. Al., 2012).
 It is a newly opened so suppliers are supply the necessary materials on high cost in it the
company wear financial loss.
 It do not have in large number of workers so the services are provided in proper way to
the customers.
Opportunities
It is external factors that related to the social and financial trends that create the
opportunities to the company.

 The company can choose heavy driven area or industrial area where it can get more
customer.
 It has set the opening and closing time by analysing the environment of that area that at
which time the people come early in the morning and how late they go in evening.
 It can add some extra products like beverages and food supplements. It can sell raw
coffee beans and other coffee related products (Pizam, 2012).
 New flavour in new market within coffee can increase the market share and demand of
the coffee.
Threats
Coffee house is a early opened company so changes in products or services and prices
create threats in the business.
 If the company use new marketing strategies and techniques by established coffee house
it can be a threat for it.
 High price of the products and increment in the prices can generate the threat within the
business.
 The economy of areas can impact directly to the possible customers.
CHAPTER 3
Feasibility of the new product/ service
Feasibility is an examination and analysis of a situation to decide a suggested method,
plan and piece of work which is possible and reasonable. It is used in product development
process. During the time of feasibility of product development, Coffee House needs to gather
information and perform analysis to assess the feasibility and for developing the business of a
new product. New product of Coffee House is Herbal Coffee which is good and beneficial for
the customers so large number customers are attract towards it. In UK people are more conscious
for their health so now they prefer herbal coffee and make its health good. For the feasibility of
new product, the company focus on five subjects: technical, economical, legal, operational and
scheduling feasibility (Raj and Griffin, 2015.Ryan, C., 2015).
Technical- In the bushiness it is related to the techniques and equipments which are use
for creating and generating of the product. In Coffee House it is related to the equipments and the
resources which are used in making coffee. These equipments can be related to labour and raw

material. The quality of raw material is good which use to make coffee and the human resources
are enough for the work. If the company use any instruments in coffee making process then the
machineries should be enough or not (Ryu, Lee and Gon Kim, 2012).
Economical- It is related to the finance, Coffee House is a small business company so
there is not use and investment of finance because there are no more use of resources. In starting
of the business no small company use more resources. There are not more human resource and
the raw materials cost is not high that company can invest more money.
Legal- Coffee House use good quality raw material which will not create negative impact
on the customer's health. The quality of the product is good so its attract more customer and the
product quality is legal for the consumer.
Operational- It refers to measure of solving problem with the help of new product. In UK
large number of people consume fast food so Herbal coffee help them to solve the problem of fat
and in other problem. And help them providing little safety to their health from fast food.
Scheduling- It is reacted to the management of the product and the functions which use
in making that products. In Coffee House, during the time of making coffee, it consume more
time its not good for the company because the customers will not wait for a long time. Now these
days customers are not wait for the services so the company use good equipments and human
resources which provide this product to the customer on time.
CHAPTER 4
Sustainability of the new product
The mean of sustainability is that product is capable to satisfied the customer or not. It is
the ability and capability and support of the product that it is capable to support the market and
the consumers to fulfil their needs for a long time. The suitability of the product is depend on the
quality of the product, cost of the product, customers satisfaction, resources base and continuous
improvement. The features of the sustainable products are as following:
Product quality- It is related to the quality of the product if quality of a product is good
customer purchase it more. Quality is the performance and capability of the product because a
product is known by its quality in the market (Sisson and Adams, 2013). If coffee house use
good quality raw material in its product it is like by the customer. The raw material which is use
in herbal coffee that create positive impact on the health of the customer so customer consume it

more. It help in building trust with consumer, if customer trust the product the production will be
high. If the quality is not good consumer will not purchase it and it affect the business.
Affordable cost- It is the cost which is reasonable for customer and they can pay easily.
This is the cost at which people are able to be bought who are not earn lot of money. Coffee
house set the price of herbal coffee according the customer so that they can purchase it easily
without any other extra burden. The price of the product is set as company did not also wear loss
and by earning profit it can provide its product in the market (Testa and Sipe, 2012).
Resources base- All the resources which are needed to company is available within the
company at the time when it needed. In coffee House, these resources can be equipments and
human resources and not more cost are invest on them so that company did not face loss. If the
company will not face loss then it make sustainability in its business.
Customer satisfaction- It is most important factor of sustainability of new product.
It ,measure customer loyalty, identify unhappy customers, help in research customers need and
increase revenue. It help Coffee House to stand out its herbal coffee product from the
competition. If company provide a good quality product it will satisfied customers needs and
demands. Herbal coffee is satisfying the demand and need of the customer then it will also
sustain in the market at long time. In UK people prefer coffee and there are various cafes and
restaurants which provide various types of coffees but if the quality of the raw material which is
used in the coffee is good customer will be satisfied with that. Like this if Coffee house used
good quality raw material in Herbal coffee then it is liked by the customer and satisfied them or
will sustain in the market for a long period of time.
Continuous improvement- It is important to stay in the market and with the customer for
a long time. Every company make changes and do improvement or innovation in it so that it can
always satisfied the customer's needs and their testes or preference. If the company make
continuous improvement in its product customers are loyal for that because the company known
about their testes and make improvement according them (Wang,, Chen and Chen, 2012). Coffee
house can improve its herbal coffee product by making change in its testes and by providing
various flavour to consumers. If company do like that it can improve its customer line because
mostly herbal products are tasteless so if Coffee house provide various flavour. Every age group
people like it and increase customers.

CHAPTER 5
Factors that limit development of the product
There are various product that generate some limitations in the development of the
product. If the product are achieving growth and there are some barriers which create limitations
in their development. The barriers which limits development of the product within the hospitality
industry are as following. These factors are create limits for Coffee House herbal coffee product
(Xie, Zhang and Zhang 2014).
Resources- If the company have not sufficient resources for the production it set orc
create limits for the product. These resources can be related to the raw material, labour and
suppliers. If the company have not sufficient raw material then it can not be produces products in
proper quality. Coffee House is a newly opened business enterprise, it is a small company so if it
have not human resources in sufficient quantity it can not provide the product at time and in
demanding quantity. If the supplier are not provide raw material in needed quantity or at time
this also set limitation for the business of Coffee House.
Technologies- Every day a new technology launch and manufacture and those company
who adept them easily and early they achieve growth. But here it is related to equipments
because Coffee house is a coffee cafe if it use old time equipments which create limitations in
the production and they consume more time and now these customers are not like waiting. They
adept new technologies and equipments so that they provide product on time to customer and
increase the production. By using new technologies they increase the profit and growth of the
company. These equipments can be coffee machines and
Finance constraints- Money is an important resource to run any kind of business either it
is small or large. Coffee house is a small company so it have not more finance or money and it
will not invest more in the business. It want to start some others store and increase the size of the
company but it have not sufficient money for doing this. So the finance is also a factor which
create the limitation for the business and product. Without having proper finance it can not
provide good services and better product or according the customers needs and wants().
Insufficient staff- It is also a barrier which create the limits for the product and the
business of the company. Coffee House started its business with low cost so having a proper staff
in coffee house is no possible (Buhalis and Crotts, 2013). If it have not proper staff then the

services and the product will not deliver at time to the customer which generate the limits in the
production of the products.
Nature of the market- It is a big factor which affect the business of the company and
create various limits for the company and its production. Nature of the market depend on the
customer's needs if the customers needs and demands change the nature of the market change. So
mainly the demand of the customers crate limits for the business within the hospitality industry.
Coffee House produce Herbal coffee so the demand of it is high in UK. Mostly herbal products
are tasteless and this is the factor which create or set limits for this product. If the company make
this product testy then it is liked by all. The company can provide various flavours so that every
age group can consume it (Brown, Arendt and Bosselman, 2014). Tastes of the consumer are set
limitation for the product and their production.
CONCLUSION
In this report it is concluded that inn hospitality management, development plan is
important to develop the new business or the new product so it is explained briefly in the report.
Different types of feasibility like technical feasibility, economical feasibility, financial feasibility
and others are explained clearly which help in new business and production of the product.
Sustainability is related to the product that how much time, the product sustainable in the market
and with the customer so the sustainability and importance are define in the report. And the
factors and function who sets or creates limitations for the business of the company is maintained
in the report.

REFERENCES
Books & journals
Brown, E. A., Arendt, S. W. and Bosselman, R. H., 2014. Hospitality management graduates’
perceptions of career factor importance and career factor experience. International
Journal of Hospitality Management. 37. pp.58-67.
Buhalis, D. and Crotts, J., 2013. Global alliances in tourism and hospitality management.
Routledge.
García-Lillo, F., Úbeda-García, M. and Marco-Lajara, B., 2016. The intellectual structure of
research in hospitality management: A literature review using bibliometric methods of
the journal International Journal of Hospitality Management. International Journal of
Hospitality Management. 52. pp.121-130.
J. Harrington, R., K.and et. al., 2014. Strategic management research in hospitality and tourism:
past, present and future. International Journal of Contemporary Hospitality Management.
26(5). pp.778-808.
Kara, D., and et. al., 2013. The effects of leadership style on employee well-being in hospitality.
International Journal of Hospitality Management. 34. pp.9-18.
Law, R., Buhalis, D. and Cobanoglu, C., 2014. Progress on information and communication
technologies in hospitality and tourism. International Journal of Contemporary
Hospitality Management. 26(5). pp.727-750.
Line, N. D. and Runyan, R. C., 2012. Hospitality marketing research: Recent trends and future
directions.International Journal of Hospitality Management. 31(2). pp.477-488.
Lub, X., and et. Al., 2012. Different or alike? Exploring the psychological contract and
commitment of different generations of hospitality workers. International Journal of
Contemporary Hospitality Management. 24(4). pp.553-573.
Pizam, A., 2012. International Encyclopedia of Hospitality Management 2nd edition. Routledge.
Raj, R. and Griffin, K.A. Eds., 2015. Religious tourism and pilgrimage management: An
international perspective. Cabi.
Ryan, C., 2015. Trends in hospitality management research: a personal reflection. International
Journal of Contemporary Hospitality Management. 27(3). pp.340-361.
Ryu, K., Lee, H. R. and Gon Kim, W., 2012. The influence of the quality of the physical
environment, food and service on restaurant image, customer perceived value, customer
satisfaction, and behavioral intentions. International Journal of Contemporary
Hospitality Management. 24(2). pp.200-223.
Sisson, L. G. and Adams, A. R., 2013. Essential hospitality management competencies: The
importance of soft skills. Journal of Hospitality & Tourism Education. 25(3). pp.131-145.
Testa, M. R. and Sipe, L., 2012. Service-leadership competencies for hospitality and tourism
management. International journal of hospitality management. 31(3). pp.648-658.
Wang, C. H., Chen, K. Y. and Chen, S. C., 2012. Total quality management, market orientation
and hotel performance: The moderating effects of external environmental factors.
International Journal of Hospitality Management. 31(1). pp.119-129.
Xie, K. L., Zhang, Z. and Zhang, Z., 2014. The business value of online consumer reviews and
management response to hotel performance. International Journal of Hospitality
Management. 43. pp.1-12.
Online

Hospitality Industry. 2018. [Online]. Available Through:
<https://www.investopedia.com/articles/active-trading/082615/key-financial-ratios-
analyze-hospitality-industry.asp>.