Auckland International Campus: OPAIC Cafe Feasibility Study Report

This report presents a feasibility study for an on-premise cafe at OPAIC, driven by student demand. The study employs observation and secondary research to inform decision-making. Data collection involves observing food offerings and prices at five local businesses (Starbucks, Coffee Club, etc.) and categorizing them. Secondary research includes an analysis of industry reports and data on the New Zealand cafe market, including employment figures, consumer behavior, and market trends. The report analyzes the collected data, comparing prices, identifying common food and drink items, and evaluating challenges and opportunities within the cafe sector, such as healthy eating trends and living wage debates. The conclusion provides recommendations for OPAIC based on the findings, suggesting a variety of food options and pricing strategies to attract students and increase customer satisfaction. The report aims to guide OPAIC in establishing a successful cafe, supporting both students and hospitality training.

Running Head: Improving Organizational Performance
IMPROVING ORGANISATIONAL PERFORMANCE

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Table of Contents
Introduction................................................................................................................................3
Data source.................................................................................................................................3
Data collection............................................................................................................................3
Data analysis..............................................................................................................................4
Secondary quantitative data analysis........................................................................................10
Conclusion................................................................................................................................15
Reference list............................................................................................................................16

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Introduction
This study aims to collect primary and secondary data and analyze those data for
informing the decision-making process of organization. Five organizations have been chosen
and these are Starbucks, Coffee club, Fresh Pots, Mc Cafe, and Global Sandwich.
Observation and secondary quantitative research methods are being considered.
Data source
A data source can be stated as a source of information, which can be used for research
purposes (Quinlan, Babin, Carr & Griffin, 2019). Source of data can be a file or any previous
research. Different data sources have been used in this study, which includes a price list of
coffee businesses, industry datasheets, and previous analysis. The source of data is different
company websites, which contain details about the different food products served. Prices of
those products are also observed and listed. Moreover, for secondary quantitative analysis,
authentic industry reports and previous articles were investigated. Different government
websites and industry magazines are searched for authentic data about the study area.
Data collection
Observation
Observation data collection method is accurate in nature. According to Lipowski,
Pastuszak & Bondos (2018), this data collection method helps to gather reliable data. It
impacts on the outcome of the research. In these cases, food served by five selected
organization has been put into 4 categories. These categories are sandwiches, coffee, bread,
and drinks. Price of these foods has been compared with the average prices and it has helped
in understanding the impact of these data on the decision-making process.
Secondary research method
In the study, a secondary quantitative research method has been adopted for
conducting this research. Different relevant sources were investigated to collect data about

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the industry facts and coffee culture. As stated by Johnston (2017), secondary quantitative
research method of data collection can be done through the help of graphs and charts. These
are existing data, which are already collected by some other researchers or authorities. This
needs to be related to the topic. In this study, different government websites and other online
sources are investigated to frame the analysis. Moreover, different other publications are also
investigated to frame the analysis.
Data analysis
Observation data analysis
Coffee club
Category Food Price (in NZD)
Sandwiches
Signature Chicken & Bacon
Club Sandwich
20.00
Classic Steak Sandwich 19.00
Tempura Fish Brioche
Burger
18.00
Smokey Beef Brisket
Brioche Burger
19.50
Grilled Halloumi Brioche
Burger
20.50
Crispy chicken & Bacon
Brioche Burger
20.00

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Coffees
Ice coffee 6.00
Iced chocolate 6.00
Iced mocha 6.00
Iced Americano (original) 5.50
Iced Americano (caramel) 6.50
Cappuccino 5.50
Coffee and chocolate syrups 1.00
Drinks
Milkshakes (different
flavors)
6.00
Ice tea 5.10
Juice 5.00
Real fruit smoothie 7.00
Keri Fruity Drink 4.50
Bread
Ham & cheese ciabatta 16.50
Ciabatta with loaded veggies 18.50
Avocado, chicken & cheese
ciabatta
18.50

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Tomato, eggs, bacon & toast 17.00
Eggs, tomato & toast 13.50
(Source: Thecoffeeclub.co.nz, 2019)
Starbucks
Category Food Price (in NZD)
Coffees
Caramel macchiato 6.60
Latte Cappuccino 5.80
Americano filtered 5.10
Brewed coffee americano 5.10
Cafe mocha 6.40
Long black 4.00
Drinks
Teavana tea 4.00
Chai tea latte 6.00
Green tea latte 6.00
Iced Shaken lemon passion
tea
5.10
Iced shaken lemon green tea 5.10
Classic Hot chocolate 4.30
(Source: Starbucks.co.nz, 2019)

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Global sandwich
Category Food Price (in NZD)
Sandwiches
Ham cheese tomato 8.50
Chicken cheese avocado 8.50
Ham cheese pineapple 8:50
Bacon Cheese onion 8.50
Coffees
Americano 3.2
Americano espresso with ice 4.5
Flat white espresso 4.50
Cappuccino 4.50
Caffe latte 4.50
Cafe mocha 5
Drinks
Smoothie 7.00
Hot chocolate 3.80
White chocolate 4.20
White mocha 4.80
Lemon tea 5.00

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Milkshake 6.00
Chai latte 3.80
Breads
French toast with banana,
chocolate, and maple
9.90
French toast with grilled
banana and maple
12.90
(Source: Facebook.com, 2019)
Fresh Pots
Category Food Price (In NZD)
Expresso 3.00
Americano 3.50
Coffees Brew Coffee 3.30
Ice Blend coffee 5.30
Ice charcoal latte 5.30
Espresso tea latte 5.30
Drinks Espressonic 5.50

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Lemon ale 4.00
Juice 5.00
Water 3.00
Smoothies 6.50
Tea 4.00
Green tea latte 5.30
Hot chocolate 4.00
(Source: Thefreshpot.com, 2019)
Mc Cafe
Category Food Price (In NZD)
Coffee 6.00
Flat white 4.50
Cappuccino 4.50
Coffees Latte 4.50
Mochaccino 4.50
Long black 3.70
Espresso 3.70
Macchiato 3.70

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Drinks
Hot chocolate 4.50
Chai latte 4.50
Tea 3.20
Salted caramel 6.30
Analysis
The businesses that are selected are Starbucks, Mc Cafe, fresh pots, coffee club, and
global sandwich. From the above-observed data, it can be said that the selected businesses for
observation maintain price of the food products near the standard price. Average price of
coffee in New Zealand ranges from 4 to 4.50 NZ$ (Mytax.co.nz, 2018). Moreover, it was
found that large global brands like mc cafe and Starbucks keep price of products higher than
other businesses. For example, it was observed that price of espresso in Mc cafe is 3.70 NZD,
while in fresh pots it is 3.00 NZD. The prices observed in the above charts for medium or
regular quantity of products. This price will decrease and increase for small and large
quantity of food products. For example, in fresh pots, regular latte costs 3.5 NZD, while for
large latte the cost will increase to 4 NZD.
Different items of coffees can be served from OPAIC cafe. Some common food items
are identified from the above observation data. This includes espresso, latte, cappuccino, and
mocha under the category of coffee. Moreover, Signature Chicken & Bacon Club Sandwich,
cheese onion and ham sandwiches are identified under the category of sandwich. These food
items are liked and favored by millennials. Besides, different common drinks like different
flavored juices, tea, hot chocolate, and smoothies can be served. Price of these common
drinks is from 3 NZD to 7 NZD. For example, in fresh pots price of regular tea is observed 4
NZD while in Mc cafe price of this item is 3.20 NZD (Thefreshpot.com, 2019). Price of this

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common food and drink items and get altered in case of additional flavor addition. It is
observed that in mc cafe 50 cents will be added in the price in case of extra addition of
espresso shot or flavored syrup in the drinks (Mcdonalds.co.nz, 2019). Moreover, the price of
products differs according to brands. For example, in Starbucks price of cafe mocha is 6.40
NZD while in a global sandwich it is 5 NZD.
From the observed data, it can be seen that coffee club and global sandwich provide a
variety of items to their customers. While other businesses like Starbucks, mc cafe, and fresh
pots concentrates especially on some items like drinks and coffee. OPAIC can follow the
offerings of coffee club and global sandwich and provide a variety of items to students. As
stated by Mason, Jones, Benefield & Walton (2016), variety in products increases satisfaction
rate of customers and proper value to them can be provided. Moreover, different breakfast
items like sandwiches and ciabattas can be provided to the students. These foods are
preferred by the students because they can have it during lunch breaks. These are delicious
and heavy, which requires less time to consume. The range of price of sandwiches is from 8
NZD to 20 NZD. The price depends on the type of sandwich and its ingredients. It has been
observed that a normal ham tomato sandwich costs 8.50 NZD in global sandwich, while
Classic Steak Sandwich costs 19.00 NZD in coffee club (Thecoffeeclub.co.nz, 2019). The
price of food items like sandwiches in OPAIC cafe can be fixed according to the ingredients
used to prepare the food. However, it is recommended to keep the price in a medium-range
that is affordable by the students.
The prices of coffee in the selected businesses are near to the standard price. The price
depends on the product and OPAIC must follow the same process of setting the price of their
coffee and drinks products. Different basic drinks like tea, bread-like French toast are
analyzed whose price is 3.00 NZD and 10 NZD respectively. These items can help the cafe to
attract students.

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Secondary quantitative data analysis
Cafes, bars, and restaurants sector profile
This sector has major contribution to the economic growth of NZ. It has offered about
75529 jobs in 2012. Total number of businesses was counted more than 10.600 in 2013. As
mentioned by Samper & Quiñones-Ruiz (2017), this kind of statistics indicates that the
concerned sector is growing rapidly. It has been found that this sector of NZ has contributed
approximately $2648 million to the economy of this country in 2012 (Serviceiq.org.nz,
2014). The above-mentioned table is showing different indicators of this sector in New
Zealand. It is important to encourage more people to enter into this marketplace to ensure
continuous growth of this company. Existing companies in this sector are running their
business successfully. Their process of decision making needs to be followed by students,
who are the future entrepreneurs.
(Source: Serviceiq.org.nz, 2014)
As this sector is growing fast, it is expected that in the upcoming 5 years, there will be more
employment opportunities. Total number of employees in 2012 was approximately 75529.
Households of this company are becoming optimistic by nature and the standard of living is
increasing rapidly. Due to this reason, cafe sector is targeting high-income customers to
ensure fast growth. Based on the current industry situation, it is expected that this sector may

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experience annual growth of 4.6% within 2015 and 2020 (Ibisworld.com.au, 2019).
Reportedly, this sector has about 8740 business at present. Students of business studies must
be encouraged by their institutes to have a look at these industry facts to become successful
entrepreneurs in future.
(Source: Mashup.nz, 2017)
In 2015, it was revealed the Auckland has maximum number of cafe businesses (Mashup.nz,
2017). It means that the marketplace of Auckland is offering more opportunities to cafe
organization. On the other hand, it can be stated that one can think about opening a cafe in
other regions to occupy those marketplaces without facing strong competition. As this
business is more active in Auckland, this part of New Zealand has given more employment
opportunities. The below-mentioned figure is showing the number of managers in different
parts of NZ.

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(Source: Mashup.nz, 2017)
People of NZ prefer to have coffee regularly and this is the main reason behind the blooming
of this industry. Reportedly, NZ people are the top coffee consumers in the world. Kiwis
spend approximately $710 in purchasing coffee per annum. 1 in 4 people consumes coffee
with breakfast (Mytax.co.nz, 2018). Based on these facts, people are investing in this sector
to earn maximum revenue.
Challenges and opportunities of the sector
A trend of moving towards healthy eating in NZ is challenging for cafe industry. It
has become important for this industry to maintain quality. As stated by Huang, Wu, Lu,
Shyu & Wang (2017), healthy eating trend has influenced the expectation of people from
food organizations. The government has introduced a fat tax. This approach has limited the
business of cafe industry. The Food Bill of NZ has been prepared for ensuring health and
safety. A survey conducted by Canstar Blue has revealed that more than 52% of the Kiwi
seeks to have the best quality of coffee. They assess the quality of coffee based on their level
of expectations (Theregister.co.nz, 2017). On the other hand, Liquor licensing laws are
potential challenges for this industry. For example, most of the organizations of this industry

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sell beverages. They need to comply with the laws that mention about the legal age of
drinking, opening hours and other regulatory facts. This industry is facing the challenge of
living wage debate. It is being initiated by the government to increase the minimum wage. It
can push up the input cost of this industry. As a result, organizations have no other option
instead of setting a higher price of products.
Opportunity of gaining trained labor can help this industry to grow further. It has
been found that approximately 84.3% of the trainees of café sector are studying for the level
3 qualification. More than 14.5% of the trainees are studying for level 4 qualifications
(Serviceiq.org.nz, 2014). These statistics are showing that this industry is going to get trained
labor in future. This aspect will help to grab potential opportunities.
(Source: Serviceiq.org.nz, 2014)
The strengthening economy of the country is another essential opportunity. In the
next few years per capita, incomes of the population will increase with labor market earnings.
Thus, affordability of people will also rise, which can facilitate cafe business. high income
will allow Kiwis to spend on eating and drinking.

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(Source: Serviceiq.org.nz, 2014)
Gaining trained labor from major cities is another opportunity. Majority of
training happens in the populated centre of the country like Auckland. 47% of training centre
are located in Auckland and 15% in Canterbury (Serviceiq.org.nz, 2014). Hence, café,
restaurants can get skilled workforce in future. Auckland has high proportion of cafes and
restaurants and many training centers, which helps to meet employment needs. Canterbury
has higher proportion of skilled workforce in proportion of cafes. This can increase the
chance of unemployment in future.
Conclusion
It can be concluded that, in the cafe of OPAIC, different products can be sold that are
preferred by the youths. Apart from coffee, these items can also help to increase the
feasibility of the business. Prices of the coffee products can be kept around the standard price
of 4 NZD. However, the price can alter according to the ingredients added to it. The
secondary data shows that number of cafes and employment in cafe business has increased
due to increased consumption of coffee. Different other food items like sandwiches can also
be served to students that can help the new business to meet consumer needs.

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Reference list
Facebook.com. (2119). Global Sandwich. Retrieved on 25th October 2019, from:
https://www.facebook.com/globalsandwich
Huang, H. W., Wu, S. J., Lu, J. K., Shyu, Y. T., & Wang, C. Y. (2017). Current status and
future trends of high-pressure processing in food industry. Food control, 72, 1-8.
Retrieved from: https://daneshyari.com/article/preview/4558941.pdf
Ibisworld.com.au. (2019). Cafes and Restaurants - New Zealand Market Research Report.
Retrieved on 25th October 2019, from: https://www.ibisworld.com.au/industry-
trends/nz-market-research-reports/accommodation-food-services/cafes-
restaurants.html
Johnston, M. P. (2017). Secondary data analysis: A method of which the time has come.
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http://www.qqml-journal.net/index.php/qqml/article/download/169/170
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marketing research− CAPI and observation diary. Econometrics, 22(1), 58-67.
Retrieved from:
https://www.degruyter.com/downloadpdf/j/eada.2018.22.issue-1/eada.2018.1.04/
eada.2018.1.04.xml
Mashup.nz. (2017). Case Study #2: Opening a café in Hawkes Bay. Retrieved on 25th October
2019, from: https://mashup.nz/blog/item/37-case-study-2-opening-a-cafe-in-hawkes-
bay
Mason, K., Jones, S., Benefield, M., & Walton, J. (2016). Building consumer relationships in
the quick service restaurant industry. Journal of Foodservice Business Research,
19(4), 368-381. Retrieved from:

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https://www.researchgate.net/profile/Stephen_Jones32/publication/303324212_Buildi
ng_consumer_relationships_in_the_quick_service_restaurant_industry/links/
5c7eb851299bf1268d3cc54d/Building-consumer-relationships-in-the-quick-service-
restaurant-industry.pdf
Mcdonalds.co.nz (2019), Menu, Retrieved on 27th October 2019 from
https://mcdonalds.co.nz/mccafe
Mytax.co.nz (2018), Coffee price, Retrieved on 27th October 2019 from:
https://www.mytax.co.nz/moneytip/how-much-is-a-cup-of-coffee/
Quinlan, C., Babin, B., Carr, J., & Griffin, M. (2019). Business research methods. South
Western Cengage.
Samper, L., & Quiñones-Ruiz, X. (2017). Towards a balanced sustainability vision for the
coffee industry. Resources, 6(2), 17. Retrieved from: https://www.mdpi.com/2079-
9276/6/2/17/pdf
Serviceiq.org.nz. (2014). A PROFILE OF THE CAFÉS, BARS & RESTAURANTS SECTOR
IN NEW ZEALAND. Retrieved on 25th October 2019, from:
https://www.serviceiq.org.nz/assets/Uploads/Cafes-Bars-Restaurants.pdf
Starbucks.co.nz (2019), Menu, Retrieved on 27th October 2019 from
http://www.starbucks.co.nz/menu
Thecoffeeclub.co.nz (2019), Coffee club menu, Retrieved on 27th October 2019 from
https://www.thecoffeeclub.co.nz/media/2214/tcc-cafe-menu.pdf
Thefreshpot.com (2019), Menu, Retrieved on 27th October 2019 from
http://www.thefreshpot.com/

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Theregister.co.nz. (2017). Canstar Blue survey results: We're obsessed with coffee. Retrieved
on 25th October 2019, from: https://theregister.co.nz/news/2017/05/canstar-blue-
survey-results-were-obsessed-coffee