Project: Launching a New Venture - Monmouth Coffee Company Analysis

This project analyzes the launch of "Monmouth Coffee Company," a new venture cafe located in London's Old Spitalfield Market. The project investigates the target market, competitive analysis, and the tangible and intangible resources needed for launch, including financial and human resources. It includes a detailed proposal with an executive summary, company statement, and market analysis using SWOT and PESTEL frameworks. Furthermore, the project assesses required skills and capabilities, outlines promotional activities and channels for both pre-launch and launch phases, and develops a monthly cash budget for the initial period. Finally, it suggests an appropriate legal form for the venture, concluding with a comprehensive overview of the venture's strategic plan and operational considerations.

Launching a New Venture

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1. Investigate and explain a new venture for specific target markets and competitive
analysis........................................................................................................................................1
P2. Tangible and intangible resources that would be required for the launch of a new venture.
.....................................................................................................................................................2
TASK 2............................................................................................................................................3
P3. Produce a credible proposal..................................................................................................3
P4. Assess the skills and capabilities..........................................................................................5
TASK 3............................................................................................................................................6
P5. Promotional activities and channels that will support the launch of the new venture..........6
P6. Develop an appropriate promotional activities plan for both launch and pre-launch...........7
TASK 4............................................................................................................................................7
P7. Produce a monthly cash budget for the pre-launch phase and the first 12–18 months
preceding launch ........................................................................................................................7
P8. Suggest an appropriate legal form for the venture................................................................8
CONCLUSION................................................................................................................................9
REFRENCES.................................................................................................................................10

INTRODUCTION
There are many types of ventures but a small business plays a vital role for the growth of
the economy. An entrepreneur sees the opportunities to introduce a firm in the market although,
it is daunting task for others. There are myriad issues in launching a firm like financing,
marketing, resources, etc. But an optimistic approach can bring a huge profit and make the small
organization successful. "Monmouth Coffee Company" is a small firm which is situated London
and opening a new venture cafe at Old Spatial Market. The small venture is established with a
thought to offer a variety of coffee, snacks and chocolates. Therefore, it needs to investigate a
report about several things such as target markets, competitive analysis, tangible and intangible
resources, credible proposal, skills and capabilities. In addition this report also covers
promotional activities, channels, promotional activities plan, budget and legal forms of venture
(Barringer, 2015).
TASK 1
P1. Investigate and explain a new venture for specific target markets and competitive analysis.
"Monmouth Coffee Company" is a small cafeteria which is located in the Old
Spatialfield of London. The idea behind origin of the name of the venture is that, presently its a
small cafe and slowly it is will to gain higher profit like a flower bud. The core concept of the
cafe is to offer a wide range of coffee, chocolates and snacks from several countries such as
Antoccino, Cafe Con, Miel, Cortado, etc. As there are various people who have different savour,
so they would like the cafe due to such variety of coffee. There are several kinds of people who
have different roots and culture that's why their food habits also diverse. In order to make all of
them glad it is essential to provide them a satisfaction through offering them such relishes which
are close to their culture (Scarborough, 2016).
The cafe is also providing them a wide range of coffee which is a prodigy attribute of it.
There are various shops which are selling coffee but they are not to alluring that's why the
"Monmouth Coffee Company" is offering a variety of coffee and snacks.
This is the one of the busiest market in the country as there are various small firms are
established. Citizens can find anything in this market whether it is a micro or a giant object. As
people can access their stuff at this spot that's why this location is selected to launch "Monmouth
Coffee Company". This is a hub of numerous kinds of business such as apparel boutiques,
1

adornments, furniture, home appliances, electronics and so on. So, whenever people will shop
from this place they would like to have a sip of coffee and taste the snacks. They will notice the
cafe and buy their favourite coffee and snacks. As the people always would like to have
something that can please them while shopping then, it can assist them to feel the pleasure
(Navis and Glynn, 2011). Old Spatial Field is a perfect place for the cafe because the business
can target a huge number of customers. Moreover, the target customers can be identify on the
basis of segmentation that are mentioned as follows
Behaviour segmentation : As the people likes to spend money on luxury products that's
why they can easily step into the cafe to have a coffee and snacks.
Demographic segmentation : Every individual likes the cafe as children would like to
have snacks whereas the adults will to purchase the coffee after their shopping and college. As
everyone likes to spend some time with their friends with coffee and gossip. No matter, at what
age they are, they can be a college mates or adults. This cafe is also targetting to the students,
children, adults and retired people.
Geographic segmentation : "Monmouth Coffee Company" is targetting the customers
within Old Spatialfield market and the nearest region to run a business smoothly.
As the Old Spatial Field has the potential customers that's why "Monmouth Coffee
Company" is established at this location. While running a business at such thronged place, a firm
can gain a huge profit by targetting every kind of customers from any age group and status.
Every one can get there choice of aliment, such as the snacks for kids and adults would like to
have Turkish coffee.
Porter's five force model
There are five elements of elements of Porter's five for model that are mentioned below -
Bargaining power of supplier : In this the supplier has power to increase the cost of the
supply because the "Monmouth Coffee Company" have the only supplier. But if they have more
than one supplier than the supplier has less advantage to increase the cost.
Bargaining power of customer : The customer has the power to decrease the cost of
snacks and coffee because they can find the same products at different place. But to sustain in the
market the cafe needs to provide the unique coffee which cannot be find at some other place.
Competitive rivalry - Although, there are various restaurants in the market such as Sud
Italia, Wright Brothers Spitalfields, Jollof Box and so on. All of these have their own speciality
2

which is targetting the same customers, but none of them is selling the wide range of coffee.
They all are having a different kind of food such as pizza, sea food, etc. which is good for
"Monmouth Coffee Company". So the cafe can stay in the market with variety of snacks and
coffee.
Threats of substitution : There are numerous cafes in the market which are offering the
same products and people can switch to them if the cafe increases the prices. To sustain the
market the cafe needs to keep the prices reasonable.
Threat of new entry – There is a needs to innovate the ideas to escape from the new
entrants that may have the strength to replace the business.
(Source :Porter’s Five Forces of Competitive Position Analysis, 2018)
P2. Tangible and intangible resources that would be required for the launch of a new venture.
"Monmouth Coffee Company" is going to be launched in the market, the first and
foremost thing is to manage the resources, whether it is a tangible or intangible. These resources
are described below -
Tangible resources : It refers to the physical assets which are used to conduct the
activities and operations in a smooth way. The most crucial asset for the "Monmouth Coffee
Company" is land, building, vehicles, equipments, machinery, furniture and inventory. These are
3
Illustration 1: Porter’s Five Forces of Competitive Position Analysis

the core resources for the cafe as the land and building are the place where it is going to be set up
and vehicles will be used to supply the inventory stuff. Similarly, equipments and machinery
will be used to conduct the cookery operations, billing and so on (Hmieleski, Cole and Baron,
2012). Further, the furniture will also be used to adorn the interior of the cafe, so that the people
can attract towards the ambience.
Instead of these assets, there are some resources which has significance for "Monmouth
Coffee Company" and that are mentioned below -
Financial resources – "Monmouth Coffee Company" needs funds to run a business
successfully. At the beginning of the firm initial capital investment to purchase the land and
building for the venture (Klotz, Hmieleski an d Bradley, 2014). After that, the funds can be
gathered from the friends and family to conduct the starting operations such as to spend in
furniture, etc. But, there is still a need of money that can be manage by potential sources like
banks. Then, it will be easy for the cafe to manage the activities and functions in an appropriate
manner. Finance is required to make a smooth work flow in day to day activities like inventory
stuff, chef wages, machinery maintenance, etc.
Human resources – It is the most essential resource for the firm because employees are
the only assets who put their efforts to sustain the organization for a long time. "Monmouth
Coffee Company" is requires cooks as their backbone as they assist the venture to gain profit.
The cafe can stand in the market through hiring the skilled workforce. The cooks should have the
knowledge to prepares different kinds of coffee and snacks and home made chocolates.
Therefore, they needs to recruit such hard workers who can raise their goodwill in the
marketplace by serving the best quality of nutritions. As it is a small funds then it only needs a
four cooks and seven dinning servers to manage the cafe activities (Blank, 2013).
Intangible resources : On the other hand, this can be define as non – physical assets
which remains with the business for a long term. Intangible resources are the intellectual assets
which includes patent, trademarks and goodwill. "Monmouth Coffee Company" needs to
purchase a trademark for the Logo for the security of the firm. As much as the business will
grow and satisfies the customers needs it will raise its goodwill that cannot be hurt by other
organization. In order to sustain in the market the cafe needs to provide the content which has
some value for target customers.
Resources required by "Monmouth Coffee Company":
4

Specific resources which are required by "Monmouth Coffee Company" are High quality
espresso machine, land, skilled employees, cooks, Coffee makers, refrigerators, oven, toaster,
security system, shelving, freezer and cold products storage, management system and many
more. Through these resources owner of respective cafe able to open their business successful in
respective country market.
TASK 2
P3. Produce a credible proposal
While launching a new venture it is important to prepare a plan that assist to achieve the
predetermine goals and objectives. In order to run a business in an effective way "Monmouth
Coffee Company" needs a strategic plan which gives a direction to the leaders to set the goals.
These aims will support in the progress of the cafe. An effective plan is needed to manage the
flow of the operations as each activity is depended on other. After the execution of the plan, it
will give a beneficial result to the business. A plan refers to a proposal which incorporates
mission, vision, objective, marketing analysis, etc. in order to conduct the activities in an
effective way. A credible proposal can be develop as following -
Executive summary "Monmouth Coffee Company" is focusing on the coffee, home made
chocolate and snack items. It provides variety of tasty treats from the
diverse countries to capture the attention of the potency buyers.
Company statement As "Monmouth Coffee Company" is a new small venture and it is
planned to open its store in the Old Spatialfield to capture the
attention of the potential customers. The entrepreneurs are planning
to owes 3000 square feat land on lease to start the business
(Fernhaber and Li, 2013). Then, it can gain the benefit to purchase
the same land in nearest future.
Market analysis There are two kinds of aspects such as SWOT (internal) and
PESTEL (external) that influences organizations operations. Through
these aspects the "Monmouth Coffee Company" can attain the
benefits in the marketplace (Terjesen, Elam and Brush, 2011).
Financial presentation In order to launch "Monmouth Coffee Company" there is a
requirement of funds and finance to manage the operations and
5

functions. As there are various activities which needs money to
launch the venture such as marketing, assets, human resources and
equipments.
Standards for
benchmarking
"Monmouth Coffee Company" has goals and objectives that have to
be attained within a specific time to establish a goodwill of the
venture.
P4. Assess the skills and capabilities.
Skills and capabilities : As being an entrepreneur there are some key skills and
capabilities which are required to launch a new venture. The core skills and capabilities can be
define as follow -
Risk Tolerance – An entrepreneur should bare the risks to run a business. When they
starts a business there is an uncertainty about the firm. "Monmouth Coffee Company" is a new
venture so they can't predict that it can perform well and raise the profit (Nagy, Pollack and
Rutherford, 2012). In this situation, the entrepreneur have to take a risk to invest the funds which
has no surety to gain the profitability.
Negotiation – In order to gain satisfaction an entrepreneur should bargain with their
associates such as suppliers of inventory stock. "Monmouth Coffee Company" needs to raw
material for the serving beverages ( such as cinnamon, milk, coffee beans, etc. ) and snacks such
as (vegetables and other baking items). So they need to a supplier to get the things on time but
they cannot pay the charges instantly. They should need to negotiate the cost which satisfies to
both parties in order to gain profit.
Problem solving - "Monmouth Coffee Company" is a new venture that's why they may
face several problems. To resolve the issues they should have the capabilities to find out the
ways to solve the issues (Teixeira and Davey, 2010). These problems can be related to funds,
management, staff, etc. that needed specific solutions to amend the issues.
Decision making – A business owner should have an ability of decision making. They
needs to analyse the gathered information and then take a decision. Moreover, there are some
situation can exist in "Monmouth Coffee Company" where they need take a decision according
to the circumstances. So , they should have ability to take the decision in the various situations.
6

Methods to develop skills and capabilities : There are various ways from where an
entrepreneur can develop the skills and capabilities that are mentioned below -
Education and training – Entrepreneur can take coaching through any institution which
offers a course of business management. "Monmouth Coffee Company" owner can manage the
cafe through gaining the education and training which provides several skills and capabilities.
They can acquire the skills to solve the issues and decision making as well as risk tolerance
(Kariv, 2013).
Observation – It is the wide area from where a person can learn several things but they
should have exploring nature. There are various skills that can be achieved by observing others
such as negotiation. No one can teach to bargain but it can be acquire through noticing others. As
"Monmouth Coffee Company" leaders can bargain with the suppliers through learning from
other people.
Getting feedback – It is essential to take the feedback because it leads to improve own
self. "Monmouth Coffee Company" owners can ask for the feedbacks from the employees and
other people who can help them to acquire new skills such as effective problem solving and
improvement in management of the venture.
TASK 3
P5. Promotional activities and channels that will support the launch of the new venture.
There are some specific promotional channels and activities which is used to make the
users aware about the new venture. different promotional activities and channels. "Monmouth
Coffee Company" can adopt any marketing channels such as print media and social media (Lim,
Busenitz and Chidambaram, 2013).
As it is a small business that's why initial the firm will use the print media and social
media such as brochures, newspapers, magazines, signage, Facebook, Twitter, Instagram, Scoop
it etc. The venture is established in the Old Spatialfield so the owners will promote the cafe in
the near by locations. While covering all of these mediums of promotional channels they will use
their special recipe and affordable price. This is the best way to penetrate the market through
product differentiation and premium prices. It will attract the people towards "Monmouth
Coffee Company". The cafe has variety of coffee and snacks which is provided by others and
that's why because of the quality of the product the customers can pay the premium amount. This
price is not too much for the targetted people (Chrisman, McMullan and Kirk, 2012).
7

P6. Develop an appropriate promotional activities plan for both launch and pre-launch.
There are various kinds of promotional activities and therefore, they need different plan
to attain the attention of the targetted customers. "Monmouth Coffee Company" needs to
promote the cafe with promotional plans which includes pre – launch and launch.
Pre-launch –Before establishment of the "Monmouth Coffee Company" the
entrepreneurs needs to use aggressive marketing activities. Through using the print media and
social media. The entrepreneur can use print media to make the potential customers aware about
the upcoming cafe by using the newspapers, brochures, magazines. On the other hand, social
media is the most appropriate way to promote the firm through developing a page content which
has a message and logo of the cafe. It is used to announce the opening date of the cafe with an
effective message. So that the people notice the advertisement of the cafe and get attracted
towards it. It can be used to launch the cafe before getting started as “coming soon” to capture
the attention of the people (Zhang and Li, 2010).
Launching activities - After the opening of the cafe, the owners needs to invite the
customers through the same promotional channels. In order to grab the customers, they needs to
attract the price through offering the coffee and snacks on discount and coupons. So that they
people can step in to the "Monmouth Coffee Company" to taste the products. It is planning to
grab the customers in the competitive market and establish a brand image among the customers.
TASK 4
P7. Produce a monthly cash budget for the pre-launch phase and the first 12–18 months
preceding launch
Pre-launch cash flow :
Pre launch cash budget
Cash Flow budget
Particulars Jan Feb Mar Apr May June J
Cash inflows
Investment 8000
Credit sales 2000 3000 3000 4500 1500 3500
Total inflows 10000 3000 3000 4500 1500 3500
8

Cash outflows
Fixed : Equipment’s 2000 2500 1500 2000 1200 1500
Variable : Direct material 300 300 200 300 150 500
Total outflows 2300 2800 1700 2300 1350 2000
Net cash flow 7700 200 1300 2200 150 1500
Opening balance 0 7700 7900 9200 11400 11500
closing balance 7700 7900 9200 11400 11550 13000
Post launch cash budget
Particulars Jan Feb Mar Apr May June J
Cash inflows
Investment 8000
Credit sales 1200 2000 7500 3000 5000 6500
Total inflows 9200 2000 7500 3000 5000 6500
Cash outflows
Fixed : Equipment’s 2500 1200 1500 2500 1100 1500
Variable : Direct material 350 300 250 150 100 500
Total outflows 2850 1500 1750 2650 1200 2000
Net cash flow 6350 500 5750 350 3800 4500
Opening balance 0 6350 5850 11600 11950 15750
closing balance 6350 5850 11600 11950 15750 20250
Investment of company is 8000 which is for purchasing of resources or equipments i.e.
High quality espresso machine, land, skilled employees, cooks, Coffee makers, refrigerators,
oven, toaster, security system, shelving, freezer and cold products storage, management system
and many more.
9

P8. Suggest an appropriate legal form for the venture.
While considering a business which is developing to earn profit through satisfying the
customers. Then, partnership is the most appropriate legal form to be adopted because the entire
management, profit and risk will be share by the partners. Only one is not responsible for the
risk, profit and management activities. "Monmouth Coffee Company" is a cafe there is need to
mange the activities and funds in a proper way. The one partner can manage the finance and
other can organize the activities of the cafe such as suppliers, inventory and day to day activities.
Thus, when both partners equally shares their particular management area, then they can manage
their activities in an appropriate manner (Barringer, 2015). The profit and loss will also share
between the partners so that one is not liable to tolerate the risks.
CONCLUSION
From the above report it can be summarized that there are various opportunities for an
entrepreneur to start a business. They just need to identify the possibility to gain the profitability
in the marketplace. They can achieve the goals and objectives of an organisation with the support
of funds and other resources. Further, they should have some skills and capabilities to conduct a
business in an effective way. In addition, while launching a venture they need to use the
promotional activities through various channels. The budget also plays a crucial role to manage
the activities and functions of an enterprise.
10