LSBM002: Case Study - Launching ‘Cafe Happy to Have’ in the UK Market

Desklib provides past papers and solved assignments. This project details launching a cafe in London.

HANNA- ASSESSMENT BRIEF 3 CONTEMPORARY
THEMES - LSBM002
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Table of Contents
Introduction................................................................................................................................3
Task 1: Setting up a new business..............................................................................................3
Operating business in the UK market.....................................................................................3
Name of business startup........................................................................................................3
Visual identity of business......................................................................................................3
Social, equality, environmental and diversity values.............................................................5
Task 2: Market Research............................................................................................................5
Task 3: Employee Selection.......................................................................................................6
Implementing Equality Law while selecting employees for business....................................7
Implementing Diversity Law for selecting employees for business.......................................7
Rights of the new employees..................................................................................................7
Task 4: Ethical Dilemma............................................................................................................8
Resolving dilemma of brand damaging due to treating the employees badly........................8
Task 5: Business description on the basis of assets, liabilities, gains and expenses..................9
Illustrating business’ assets, liabilities, expenses and gains...................................................9
Approaches taken to avoid cash flow problems (business budget being £20,000)................9
Conclusion................................................................................................................................10
References................................................................................................................................11
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Introduction
Entrepreneurs build up a business of their own by applying basic ideas of market strategies
and even by following them. In this scenario, a businessperson wants to open a cafe with a
budget of £20,000 in London, UK. Therefore, knowing the market operations is essential in
order to start-up this business. Further, every small detail is taken up in executing the cafe
business.
Task 1: Setting up a new business
Operating business in the UK market
In this assignment, this cafe will be opened in London, a well-known place in the United
Kingdom. As per the industry trend, the basic targets customers have been chosen as the
young college students, teenagers and regular office people. The business model followed in
starting up this business is Mass Appeal Model. In this business approach, people being
familiar to coffee experiences tend to visit cafes often. Therefore, this business model
approach will be helpful in this start-up business.
Name of business start-up
The business start-up taken up in this assignment is ‘Cafe Happy to Have’, a cafe with
various flavours of coffee. Alongside, food and beverage services will also be offered.
Visual identity of business
People of London are obsessed with coffee; hence, a start-up cafe business can help the
businessperson in growing business in the London market (Saebi and Foss, 2015:210). In this
context, coffee shops have taken the limelight from all others.
Starbucks and Costa Coffee are some of the famous coffee shops in London. As these
businesses have grown up in their ways, thus for a start-up it can be tough to get that place.
Indeed, attracting new customers by using the Mass Appeal business model will help to
increase demand of the customers.
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Figure 1: Logo of Costa Coffee
(Source: resortsworldbirmingham.co.uk, 2018)
The main and primary idea is not to wait long for getting coffee and hence, speed is required.
The people who are experienced with all sorts of coffee shops prefer paying their order online
and take the order by being hassle-free (McQuarrie, 2015). Secondly, the idea of having the
same taste of beverages can also help in attracting customers. People prefer the taste of food,
drinks along with the franchise. Opposing that, if the sae taste is available in Cafe Happy to
Have, they will prefer visiting this shop frequently.
Figure 2: New Logo of Starbucks
(Source: blogs.bl.uk, 2019)
Comfort ability is necessary to bring in new people for growing business. Cafe Happy to
Have has comfortable seats to relax and have their coffee by following the Mass Appeal
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business model (Massa et al. 2017:80). In other words, this business model can have negative
response if they take too long to provide customers’ order; different taste and no comfort
ability available at the cafe tend to turn away the customers.
Social, equality, environmental and diversity values
Few ethics interconnected with each other with respect in running the cafe. Therefore, strong
core values are important to follow in order to increase productivity and quality of work.
Social values - The social values followed are transparency and passion. Being genuine and
working at a workplace full of happiness leads to the production of productive employees.
Keeping transparency at workplace is equally important.
Environmental values – to provide excellent customer Cafe Happy to Have will follow
service and taking care of the environment by producing less wastage.
Equality values - No gender classification will be done while choosing the appropriate
applicant for business (Lundh et al. 2017). This will lead to follow the equality value of a
start-up. Male and female both will be given equal preference regarding the job.
Diversity values - Obtaining positive as well as negative feedbacks from the customers is
considered as one of the diversity values. If the business is running under profit, the
employees must be benefited accordingly. In addition, customers must feel good about Cafe
Happy to Have while purchasing foods or beverages.
Task 2: Market Research
Market research is done to get an insight of the market, competitors, products, customers and
marketing knowledge about a business setup. Undertaking the key marketing tasks such as
preparing a marketing plan, pricing, product development, SWOT analysis and branding are
considered as the first step in market research (Heinonen and Strandvik, 2018:10). Market
research also provides knowledge about online marketing strategy, which can be followed in
execution of business. Online marketing such as designing website, newsletters and social
networking can help in getting more customers in London. Hence, this research can be
classified into four types. They are as follows:
● Primary research
Collection of data regarding the location of the start-up and business approaches followed by
other coffee shops is classified under primary research. This is done in order to know and
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determine what needs to be done in growing the business. Knowing the customers also fall
under primary research. Presenting forums, surveys and questionnaires help in carrying out
primary research.
● Secondary research
This is done to check whether the primary research done earlier with respect to other coffee
shops are correct and can be used to save time. Information gathered by other researchers fall
under secondary research. Census data, financial records and statistical information helps in
carrying out secondary research.
● Qualitative research
This research aims in understanding the customer’s behaviour and its impact on a new
business venture. Highlighting the potential issues faced by the cafe during their business
setup is said to be one of the qualitative research performed by the entrepreneur.
Nevertheless, qualitative research can help in improving the services, which are provided to
the customers in the business.
● Quantitative research
Asking people or customers and knowing their feedbacks regarding Cafe Happy to Have in a
structured way can be classified under quantitative research. Statistical reports and surveys
can be done to execute this research on the start-up business (Hair Jr et al. 2015). Quantitative
research can be classified into four main types, which are descriptive, experimental,
correlation and quasi-experimental researches. This research can be done once in a year or
even once in month for the benefits of cafe business.
Task 3: Employee Selection
Genuine Occupational Qualifications or GOQ were classified under the Equality Act in order
to prevent choosing one person over the other. For example- a job, which requires only male
or only female workers in the working environment? Discrimination is an unfair treatment of
a person, which needs to be excluded from business structure (Joyce and Paquin, 2016:1476).
Implementing Equality Law while selecting employees for business
While selecting employees for this cafe business, Equality Law will be followed and the
below-mentioned subjects will be taken into consideration. They are:
● No discriminating when employment is being provided.
● Proper promotion procedure will be followed.
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● Dismissal of any employee without any proper and valid reasons will be avoided.
● Harassment and victimization at workplace will be prevented.
● Work role with equal opportunities will be ensured to every employee.
Implementing Diversity Law for selecting employees for business
Diversity is important while recruiting or retaining an employee to allow increase in
employee productivity and employee engagement. It also helps to take a wider and positive
outlook of the business (Fjellman et al. 2018:20). The below-mentioned points will be
followed while recruiting any employee under the Diversity Law. They are:
● Thorough job analysis will be done.
● Assessments will be kept objective.
● Recruitment advertising will be in a detailed structure.
● Trained managers will be provided to the new employees.
● Unbiased feedback will be taken into consideration.
● Performance check will be done every week in order to prepare promotional charts of
employees.
Rights of the new employees
According to the rules and regulations, every worker has few numbers of rights, which can be
laid down to ensure security and treated fair by their employers (Foss and Saebi, 2017:225).
These rights have been allocated by the state law in the UK are therefore, are known as
statutory rights. These rights can be classified as follows:
1. National minimum wages of £6.70 per hour for workers aged 21 or more. £5.30 per
hour for workers has to be the minimum wage between 18 to 21 years old (eoc.org.uk,
2019).
2. Payslip for every pay and deductions must be provided to every employee.
3. Illegal deductions of wages are illegal.
4. Certain amount of paid holiday is the right of every employee.
5. The employers must provide written statement of employment to the employees.
Task 4: Ethical Dilemma
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Resolving dilemma of brand damaging irrespective of treating employees badly
In a recent report, it has been found that Starbucks faced ethical dilemma regarding tax
avoidance, which shed lights on the legal tactics used by other companies worldwide.
Starbucks reported no profit in the past three years and paid no tax. It had sales of around 1.2
billion pounds in the UK. Still they denied the fact of not paying tax despite of having profit.
On an overseas basis, it was found that Starbucks paid an average tax of 13%, which is
considered as one of the lowest in a consumer goods sector.
Hence, a contradiction was raised in respect of Starbucks’ group earning and not paying of
tax to the income tax department of the UK. It had revenues of 73 million euros in 2011,
ispite they declared their profit of only 507,000 Euros (uk.reuters.com, 2019). The
headquarters at that time consisted of 97 employees.
In this case, if Cafe Happy to Have faces problems such as brand damaging or treating their
employees badly, specific steps will be followed in order to resolve the problems. These steps
are:
● Maintaining positive attitude.
● Avoiding any sort of rumours on social media platform.
● Following the jurisdictions strictly.
● Taking severe steps towards the employees who are performing negative activities.
● Accepting all terms and conditions produced by the state law of the UK.
● Disciplinary actions to be taken against the employer.
● Inspecting labour outcome.
● Warnings.
● Informal actions.
The above-mentioned steps can be followed in order to resolve ethical dilemma of damaging
of brand due to treating the employees badly. On the contrary, Starbucks did not face any
problem regarding employee satisfaction, instead had problem regarding tax payment issues.
Being an intellectual property, Starbucks’ UK accounted and commented on their investors
regarding the tax evasion faced by the brand (Dias et al. 2015:160). Later, the payments done
by Starbucks were reduced to the taxable income in the UK. Unfortunately, Starbucks
declined every comment on them and used the offshore jurisdiction to fight it that way and
resolve their issue of ethical dilemma.
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Task 5: Business description on the basis of assets, liabilities, gains and
expenses
Illustrating business’ assets, liabilities, expenses and gains
An item that has value and is owned by a specific company is termed as business asset. On
the other hand, liabilities are defined as the company’s legal financial debts, which arise
during the execution of business.
Assets for cafe business are the items which hold value for the business such as tangible
goods (Cameron et al. 2018:25). For example- the building taken up for the start-up, furniture
bought to add them to the cafe for making seating arrangements for the customers, a range of
cash; in this case it is the capital amount of £20,000, equipments required to carry out the
business and vehicles if required.
On the contrary, balance sheet, loans if purchased, mortgages, revenue, extra expenses other
than requirements and deferred revenues can be listed under the liabilities faced in the cafe
business.
Approaches taken to avoid cash flow problems (business budget being £20,000)
Most of the small businesses tend to encounter cash flow problem because of less business
budget. Fortunately, most of these cash flows can be controlled with right and smart
strategies (Bocken and Short, 2016:50). The five most common cash flow problems are as
follows:
1. Slow-paying invoices- One way to solve this problem is by paying incentives faster
and the other way is by offering payment to control the cash flow.
2. Bad debt- To solve the problem regarding bad debts, reviewing of the commercial
credits of clients can be done. Providing terms to the clients who have good credit
record can help in avoiding bad debt in the company.
3. Overhead expenses- Auditing all expenses and cutting back wherever necessary can
help in avoiding cash flow in business (Bocken et al. 2016:310).
4. Excess inventory- This problem affects the manufacturing goods of the company.
Therefore, to solve these inventories can be fine-tuned and re-sold to other
manufacturers (Barnham, 2015:840).
5. Insufficient gross margins- As it is a business start-up, the entrepreneur will tend to
sell the products for low or negative gross margins. This scenario is faced due to
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highly competitive markets and pricing pressure. It can therefore, be solved by
auditing all the products and services to determine all-inclusive cost. The step may be
difficult but is necessary.
Conclusion
From the above assignment, it can be concluded that the business start up approached by the
businessperson has to know every detail of the UK market. Gaining the appropriate
knowledge of business through different case studies will help to improve it worldwide.
Further, it can be concluded that minimum budget can also help in growing bigger business.
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