Business Plan for Italian Cafe: Market Analysis and Strategy

This business plan provides a comprehensive analysis of the Italian Cafe concept, focusing on its establishment in Mayfair, London. It begins with a business overview, outlining the cafe's purpose and unique selling points, emphasizing authentic Italian cuisine at competitive prices. The plan delves into the restaurant industry in London, providing market analysis, including growth forecasts and the product life cycle stages. It identifies market opportunities, such as the growing demand for Italian food, and potential risks, like financial instability and competition. The target market is defined based on customer behavior, preferences, and demographics. A marketing strategy is outlined, including promotional activities and customer loyalty programs. The operations section covers food offerings and services. Financial projections include startup and running costs, revenue projections, and cash flow forecasts. The plan aims to provide a clear understanding of the business's potential for success and sustainability in a competitive market.

Business Integration
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TABLE OF CONTENTS
THE BUSINESS OVERVIEWs...........................................................................................................3
Purpose of the business....................................................................................................................3
Product or service description..........................................................................................................3
USP (Unique selling point)..............................................................................................................4
MARKET OR INDUSTRY ANALYSIS..............................................................................................4
Restaurant industry overview, London............................................................................................4
MARKET OPPORTUNITIES AND RISKS........................................................................................6
TARGET MARKET.............................................................................................................................7
COMPETITOR ANALYSIS................................................................................................................8
MARKETING STRATEGY AND PLAN............................................................................................9
OPERATIONS....................................................................................................................................12
FUNDING REQUIREMENTS & RATIONALE...............................................................................13
Sources of finance..........................................................................................................................13
FINANCIALS....................................................................................................................................13
Cost: set‐up and running cost.........................................................................................................13
Sales revenue projection................................................................................................................14
Profit & loss account......................................................................................................................16
Cash flow forecast.........................................................................................................................16
REFERENCES...................................................................................................................................18
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THE BUSINESS OVERVIEWS
Purpose of the business
In a general aspect, primary purpose for beginning of a business is generating profit. There
are many people who get not satisfaction by working for other people or not getting a proper wages
for their efforts. Due to this, they takes the decision to start own business to complete their needs
and attain satisfaction level. The aim of the following business plan is perception of people is
changing with the time towards the food verities. They want the best place to eat wide range of food
product s with good quality at low prices.
Product or service description
Italian Cafe will give a new face of restaurant industry of the UK in the upcoming
years. It will bring a unique concept of eating food in a restaurant with the twist of Italian
style. This will start at the end of 2017 in the area of Mayfair, City of Westminster, London.
This geographical location is one of the best areas for eating foods and shopping ( Blank,2013)
. So, this is the best location of open an Italian Cafe. In the London, demand of Italian food is
increasing with alarming rate and many of the restaurants using Italian food concept to give a
new twist and taste to traditional food items. But these cafes have not able to maintain the
main taste of Italian food which it should be as liked (Wentzensen and Wacholder, 2013). The
ingredients will bring different retail stores of the London and few ones will be outsourced
from outside the London. The food items will be taken by the customers at their home,
ordering by call and also east at the same place. Therefore, open a new Italian Cafe can be
considered as a perfect idea in Mayfair location. The following business will offer wide range
of food items and related services to its customers which are as follows:
Dishes and foods
Antipasto (appetizers)
Breadsticks
Bresaol
Zuppa e salsa (soups and sauces)
Garmugia
Pasta e fagioli
Common pizzas
Ai frutti di Mare
Pizza ai funghi e salsiccia
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Pasta varieties
Eliche
Gnocchi
Rice dishes
Insalata di riso
Risotto
USP (Unique selling point)
In Mayfair, City of Westminster, there have huge number of resurgent present. It has
considered as a best place to eat different kind of variety of food items. It is also attract shopping
place for local people and visitors. In this context, it has decided to open Italian Cafe in the
following geographical location. Cafe will provide good and real Italian food items to the customers
at low prices. There will some entertainment arrangement at the eating place for the consumers to
make internal environment cool, positive and attractive ( Monks,Pitt,Stein and James, 2014). There
will special arrangements for organizing the parties on wedding, birthday, anniversary etc on the
request of the service users. Along with this, new cafe will offer some loyalty cards, gifts coupons
etc to its customers. Further, there will be playing facility offer by the organization to its customers
where they can leave their children while eating. Therefore, the above stated different things of
Italian Cafe will work as a USP for new Cafe.
MARKET OR INDUSTRY ANALYSIS
Restaurant industry overview, London
From the assessment of article of ..., it has determined that restaurant market of UK will
attain £52bn by 2017. The reason behind this is unexpected interest of customers in food industry is
growing with the time. In the upcoming years, the growth rate of the following sector will be double
i.e. from 1.3% to 2.5%. The branded restaurant will attain the growth of 6.5% with £17.6bn. Along
with this, in the 2014, sales of pubs and restaurants have gained 4.4% growth and it has been
forecasted that in the upcoming years, they will gain a high augmentation in restaurant industry of
the UK as compare to other service sectors( Hiduke and Ryan, 2013). On the other hand, forecasted
data on fast food category, it has determined that this area has gained a significant enhancement in
both sales and revenue aspect. The major dominated organizations in this industry are McDonald,
Pizza Hut, Nando’s, PizzaExpress and KFC. As per the report, it has been identified that UK
restaurant industry is passing from a potential and important change period. With the time, on daily
basis, the new fast food items are discovering and trial by the customers. These things enable the
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consumers to eat wide range of food items at a single place in an informal setting. Restaurants have
increased awareness in the service users by using social media, review sites and blogs and have
tried to make them food trendy. Age group from 18 to 24 are the most active customers in the
restaurant sector of the UK and this is one of reason of changes in food trends. From the research, it
has been recorded that between 2013 to 2014, spending power of consumers on breakfast become
increase by 3% , 6.6% on lunch and 6.9% at dinner( McKenzie,2015). Restaurants of the UK have
delivered a good value to the service users against their spending.
From the above discussion, it has found that the UK restaurant industry is gaining effective
growth in the present time. This will give advantages to Italian Cafe to gain the advantages in the
market place along with achieving business objectives. But, it becomes very important for the
organization to find the stage in which business can lie and penetrate the market for long time
duration. This problem can be resolved with the help of product life cycle stage. The following
concept will help Italian Cafe to attain the growth and make the business more sustainable in
operate in competitive marketplace(Bérard, Bidoit, Finkel and Laroussinie, 2014). Product life
cycle stages are introduction, growth, maturity and decline. Explanation of these phases within the
context of the proposed business is as follows:
Introduction stage: At this stage, it becomes important for a new business to create
awareness in the customers about the services. During this process, company has to face a strong
competition in the market which may affect the sales and profit of the firm. As Italian Cafe is at
introduction stage where company will make low sales at high costs with no profits. In the case of
to survive in the market, the cited business owner will need to start the business by offering famous
and most common dishes to the customers which are offering by its competitors at different costs.
This will help in gaining enough market shares at initial level of business by keeping low sales
volume at high operating costs(Blascovich, 2013 ). In this context, new business can consider
penetration pricing strategies for increase market share.
Growth stage: This is the phase which responsible for high sales at low costs with strong
profit margin. Under this, the major emphasis of company is to maintain the quality of the food
items as per the set quality standards that can easily attract the customers and convert their number
into the consumers (Borges, Hashimoto and Limongi, 2013 ). For this, owner of Italian Cafe will
need some effective and unique promotion strategies in order to attract more and more end users to
consume Italian food.
Maturity stage: At this level, a company enjoys high sales with good profits by attaining
enough growth in the market place. The objective of Italian Cafe at this stage will be to maintain
market share by slightly decrease the prices of the food items.
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Declining stage: It is the last stage of Product life cycle where the sales of products of
company are going at declining stage with generating low profit level(Kirklin and Naftel, 2013 ). In
the following phase, Italian Cafe has to introduce more new food products for the customers that
can attract them. This will help the business to survive in the market place for long time duration
and attain competitive advantages over the time.
MARKET OPPORTUNITIES AND RISKS
In the case of opening a Cafe in Mayfair with the name of Italian Cafe, there will be some
market opportunities will available to the company. These will help in develop the business in more
effective manner to attain competitive advantages. One of the opportunities for following business
will be faster growing target segment is students of college and schools, employees of the
organizations etc (De Oliveira and Shayani, 2013). These are increasing the use of restaurant for
various purpose such hangout with the friends, parties, eating food etc. So, by offering them healthy
and good quality Italian food, Italian Cafe will able to take advantage of growing business in Cafe
industry of the UK.
In order to operate new business in the new market, there are various uncertain situations
related to financial, unavailability of employees, customer shortage etc. Company have to
effectively analyse these all risk and uncertain situation so as firm can overcome its impact on the
business operation. Business entrepreneur have responsibility to make sure that each stage of
business should properly undertake and evaluate all activities in an appropriate manner( Zikmund,
Babin, Carr and Griffin, 2013). Hence risk assessment plan has been recommended to the sole
proprietor of Italian cafe so as it can develop suitable and reliable risk management strategies to
mitigate the risk or uncertain situations.
S/N Risk Event Likelihood Impact Ways of mitigating risks
1 Financial risks High High Corporation should regular
check the fluctuation in the
market changes and
fluctuation in the economic
condition of country.
Effective monitoring may
assist to organisation in
overcome uncertain risk of
finance and also it can
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control the shortage of
finance.
2 Shortage of skilled and
qualified employees
Low High Corporation should
encourage and motivate staff
members by providing
attractive incentive and other
financial rewards. If
employees moral will
increase then company will
beneficial in overcome
employees turnover.
3. Management related
risks
Low High Company should properly
allocate authority to each
department of management.
4 Customer Shortage Medium High Italian cafe should adopt
attractive promotional and
marketing activities so as it
can effectively promote its
product and services in the
new market.
TARGET MARKET
Target market is a place where the potential customers are ready to buy any product or
services they offer in the market. Italian Cafe target market on the basis of customer buying
behaviour, taste and preferences, income and age groups, geographic area etc. Italian Cafe mainly
focuses on customer satisfaction. They target Mayfair market on the basis of similar characteristics
in this market on the basis of demographic as well as geographic etc.(Reich and Benbasat,2013 )..
Mayfair is a food marketplace where all French and Italian people visit mainly. So, this Cafe targets
all the people who like Italian food. Along with this, by creating market plan of any Cafe they
should consider various points are as follows:
 What type of person really like and enjoy food on the basis of sex, gender, religion and
background. If marketers clear all things they successfully attain marketing objectives.
 Make sure that the important information are properly communicated in a demographic area
by using proper use of medium. Cafe should prefer effective promotional tools for
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advertisement such as Radio ads highly attract as compared to Email marketing so there is a
lack wastage of resources and energy.
Italian Cafe target specific market to attain its objectives by increasing in sales and profit.
They choose those target market in which they get maximum profit . Moreover, consumer who visit
Mayfair market loves Cafe food taste, price and quality as well as quantity. But nowadays recently
its sales down for this reason, it is essential for the Cafe to segment its Mayfair market( Massa and
Tucci, 2013). Thus , they are in many forms they segment are demographic area ( age, sex and
income ) and Psychological area ( lifestyle, habits and perception). They deliver unique and special
dishes to its customer in that particular area that helps them to increase brand image in the minds of
its customer. Furthermore, after segmentation, they put all efforts in the target market, Italian Cafe
will choose either demographic or geographic area. Thus, they consider potential customer groups
of cited Cafe are as follows-
Local people – From the latest survey it found that, Mayfair market is around 5.6 million for
this reason Cafe will be opened( Siewiorek and Swarz, 2014). These people will help in increase in
sales and demand of Italian food in Mayfair market it attract the local customer towards Cafe's food.
Tourist from UK and international- In London a number of visitors visit in the UK it is find
in the statistics record it shows that travellers in year 2015 have been recorded as 40.1 million
increase from 30.0 million( Buppert, 2014.). Considering this facts and figure, Italian Cafe Cafe can
focus on both domestic as well as international tourist for improvement in the level of operations.
They also attract its customers by deliver its menu on social app like Zomato and food Panda ec.
COMPETITOR ANALYSIS
Every business know that they survive in the dynamic environment and they also have to
consider competitors policies, procedures and process by competitors analyses so they survive in
the world of competition. For this reason, they need to implement Porter's five forces model on
Italian Cafe are discussed below-
Industry rivalry- Mayfair market in a London is food street market where there is a lot of
food Cafe are opened who serve its customers special dishes, beverages and ice creams etc. to
attract a large number of customers towards its food Cafe. Thus, competition is highly affect the
Italian Cafe due to various factors are customer buying behaviour, taste and preferences , culture as
well as pricing, services and goodwill (Vitale, 2014 ).. So, it find out that there is a highly
competitive in a Mayfair market.
Threats of substitutes (High) - Threats of Italian Cafe food substitutes are high in Mayfair
make because this marketplace involve a number of food Cafe where this Cafe survive . They
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vegetarian , Non – vegetarian , beverages as well as chocolates and ice cream dishes are same as its
competitor offer so these high chance of customer to switch another food due to low cost( Duval‐
Couetil, 2013). Consumer compare food quality price , quantity as well taste to another competitor.
Threats of New entrants (Low)- In the Cafe industry the entry of new firm is easy and they
are highly threat to existing firms. In this industry there is low cost and expenditure arise to enter
into this market.
Bargaining power of suppliers (Low)- Bargaining power of suppliers is very low in the
Italian Cafe. Reputation in the eyes of its supplier is high they satisfy them by timely payment so
for this reason it does not take much time on bargaining with its suppliers (Ferraro and Brody,
2015). These suppliers already provide raw material at very low price of food material, so there is
no need to bargain with them. The major suppliers for new cafe will be those stores which contains
ingredients of Italian food items.
Bargaining power of buyers( High)- Bargaining power of customer is high because
customer are more concern about price, quality , quantity, marvellous taste as well as special dishes
they offer and best premium services etc. These elements generally make customer loyal towards
Cafe. Nowadays, Cafe does not offer much special dishes and preferable price so the chance of
bargaining power of its customer usually high.
MARKETING STRATEGY AND PLAN
Swot analysis
In the competition world, every company needs to analyse its internal as well as external
factors that affect the business environment. So we need to analyse by using SWOT analysis so they
enhance its strength and take opportunities from external environment and overcome from its
weakness and threats so they survive in the long run( Boyer and Blazy, 2014). This will help the
Italian Cafe to analyse it strength, weakness, opportunities and threats are discussed below-
Strength
 Strength of Italian Cafe is that it serve a good quality food and service at the table by décor
the dishes that looks attractive and its make fun of eating at the Cafe that shows a
remarkable experience in the minds of guest.
 Along with this, they deliver flexible pricing structure it change according to the buying
behaviour of customers.
 Customer visit due to its unique services in the Mayfair market.
Weakness
 The major weakness of Italian Cafe is that they do provide fast service of its staff members
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customer wait on table due to people are less trained they have not much adequate
knowledge.
 Another weakness of this Cafe is that point -of – sale is not updated regularly and they keep
paper to track records of ordering so there financials position goes down due to improper
management of accounts.
Opportunities
 They can increase in its profits by taking opportunities from the market by extending
different types of foods and beverages.
 Customer are much more concern about its health so they also take advantages by provide or
adding more feature in the menu that deliver more organic dishes and healthier ingredients
in the food ( Rogers and Davidson, 2015).
 Drive more customers in the afternoon help them to grow more customers by selling Cafe
foods such as salad dressing or baked foods so people buy them and take away food at
home.
Threats
 Italian Cafe situated in Mayfair market where these is a lot of Cafe so if they do not properly
analyse its competitors strategies then it make loss of customers .
 Another threats of customer in pricing due uncertainty it can be change with the time period
that rice in price of raw material of food.
 New entry of Cafe harm the existing Cafe such as Italian Cafe is a major threat.
Canvas Business model
In the strategic management a canvas business model is used it help them starting a new
venture company. It have some advantages due to it comprises of finance, infrastructure,
proposition and customer's perception( McKenzie and Woodruff, 2013). This model have a
different activities with certain abstract . With this model template , Italian Cafe Cafe in Mayfair
market can easily explain its business model that help them to implement a plan. There are various
components are as follows:-
Key activities- To execute business value proposition this is very essential activity so there
is a effective develop supply chain that help them to lay down cost lower to the new venture. It help
the Italian Cafe so they mainly focus on production as well as installation of of machines within the
factory that help them to attaining organisation objectives as well. Apart from this, they will also
help them in marketing and also consumer networking so it mainly focus on business departments.
Key resources- For create value to the customers resources play a major role . It act as an
asset for the new venture that helps in sustain and support the new venture( Myers, 2013). Italian
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Cafe main resources are financial , raw material of food , human and intellectual helps them to
maintain its business operations.
Key partners-It play a major role in better utilization of business operations that help them
to minimize the risk of business model. Italian Cafe maintaining a relationship between suppliers
and its customers. Suppliers are major partner of every company they provide raw material that
directly affect sales of any business(Ward, 2016. ). Here suppliers are linked with the customer if
suppliers provide better quality of raw material to its firm they direct impact its final customers they
deliver high and better quality food.
Value proposition- It is a combination of product and services that Cafe offer to its customer
is known as value proposition to achieve its objectives and goals. The value proposition provide
value to Italian Cafe in competitive advantage over its rivary competitor in the Cafe industry. It
mainly divide into two parts are Quantitative and Qualitative( Hamid and Rozan 2013, November) .
Qualitative give moment as well as experience to its customers and on the other side Quantitative
force them to make price better and its efficiency.
Customer relation-Italic Cafe wants to make its model effective they first identifying its
customer base so they serve the needed consumers. At the starting level they have to focus on target
market so they will maintain its income flow and slowly they capture the new target market so its
revenue and productivity run effectively. Furthermore, cited business improve and maintain its
customer relationship by regular reply on their feedback . The resultant its performance level
improved that directly help them to attain its goals and objectives.
Customer segments- The customer segmentation help the Italic Cafe Cafe help in earning
profit and help them to grow within the customer segment where they serve its food. Furthermore, it
help them to maintaining particular segmented area that will enhance loyalty and trust in the minds
of customers towards its product and services. The customer segment can be categories into mass
market, niche market , differentiated and diversification etc.
cost structure -In the cost structure, the owner of the Italic Cafe Cafe helps them to define
its pricing structure of its dishes and special dishes so they satisfy it customers. They help them to
survive in the competitive market by not charge high price to its customers( Ginn, 2013). This is
done due to customer always want a best quality food at favourable price that help them to
reduction in cost and overall expenses and also the suppliers margin.
Revenue system- This system help them to show a way how organisation generate its
revenue from each customer segment area. This usually gives opportunities to earn profit from this
segmented area and attaining objectives (Moshkelani and Paris, J., 2013 ). The revenue is generated
more by attracting a number of customers by take online orders. It is Additional facility and comfort
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facility to increase large revenue.
OPERATIONS
Italian cafe objective is to begin full operation by the year of 2017 ending and therefore has
targeted a period of 6 month to begin full operation. In order to measure cited venture operation,
Gantt chart can use. Below is a Gantt chart which shows what Italian cafe objective to do within the
6 month period and each time frame for each task.
Task name Month 1 Month 2 Month 3 Month 4 Month 5 Month 6
Registration
of company
Purchasing
of office
equipments
Setting up
and
arranging
process
Recruitment
and selection
process
Full business
opertion
begin
As per the above table of Gantt chart, it has been ascertained that Italian cafe will operate its
business in the new market and its carried out business activities and function from the year ending
month of 2017.As per the diagram it has been ascertained that company will take various activities
and function within 6 months. In the first month Cited venture register the company according to
the London governmental regulation of business organisation( Appleton,2016). In this month
company will take serious consideration on the legal rules and regulation of government of country
related to business activities and function. In the next month, Italian cafe will purchase the office
machinery and equipments. In this month company will buy all required physical resources such as
machines, tools, plant related equipment etc. In the 3rd month company will set all management
systems and process. In this month company will develop policies and procedure of business
activities and function. All management system, structure and process are taken in this month for
Italian cafe. In the 4th month company will recruit the new employees and staff(McKay and Peters,
2013). It will publish its documentation of recruitment and invite the candidate for new job in the
new business organisation. Manager will take the interview for recruit new staff member for Italian
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