BA3UK91O - Coffeeholic: Strategic Analysis of a Coffee Shop

This report provides an introduction to the business environment by analyzing Coffeeholic, a newly established coffee shop. It identifies internal and external information crucial for planning, decision-making, and control processes, including sales trends, customer habits, business documents, and market information. The report further employs PESTLE analysis to assess political, economic, social, technological, environmental, and legal factors impacting the business, and Porter's Five Forces to evaluate competitive intensity. The analysis concludes with recommendations for Coffeeholic to navigate market challenges, maintain quality, and foster innovation for sustained growth and profitability.

Introduction to Business

Table of Contents
INTRODUCTION...........................................................................................................................3
Type of internal and external information required for planning, decision making and control
process.........................................................................................................................................3
Pestle analysis.............................................................................................................................5
Porter's Five Forces.....................................................................................................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Business is an activity of selling and purchasing the goods and services in order to
maximise the profit and improve the performance in market. It generally describe the brand
values and goals of company (Camargo, Dumas and González-Rojas, 2019). The report is based
on Introduction to business in which types of internal and external information which is required
for planning, controlling and decision making process is determined. Further, it covers pestle
analysis and porter's five forces analysis in order to determine the key factors that could
influence the performance and growth of business. In this project, a new business is established
with an aim to earn revenue and create strong market presence. The new business which is
selected is coffee shop which offers wide range of coffee products to its consumers. Coffeeholic
is a chosen brand name that delivers high quality of coffee items and food. It is a sole trading
business which is run by single owner due to which they are liable to pay debt and enjoy the
profitability of business. Due to the single owner there is full control and greater flexibility while
working.
Type of internal and external information required for planning, decision making and control
process
In order to run the business in effective and smooth manner, there are various internal and
external information is required for decision making, planning and control process. It is
important for company to identify and collect internal and external data while establishing
business.
Internal information required by company
Sales trend is one of the internal information which is required by organisation while
planning, decision making and controlling process. While establishing or running business, it is
essential for organisation to identify the sales trends in market so that they can gain valuable
insights into how business operates in market (Ibarra, Ganzarain and Igartua, 2018). Coffeeholic
must focus on investing in future growth, find the growth in micro markets, capture value from
big data and advanced analytics, outsource the sales function, understand social selling,
collaborate more closely with marketing and also adopt automation an artificial intelligence.
Customer habits is internal information which is required by company while setting plan
and making decision effectively. For running the business in smooth manner, it is essential to

identify the customer habits and their taste and preference so that coffeeholic can attract more
and more customers towards the brand. Through offering food and beverages according to the
taste and preference of consumers, company can increase its profit margin (Ghemawat, 2017).
By assessing the habits of customer, organisation can know about their usual lunch spots, eating
habits, price sensitiveness and their choice of items. Due to COVID 19, people are demanding
online food delivery services with safe and hygienic food and beverages. There are various
trends which are shaping fast food industry such as vegan options, smart appliances, artificial
intelligence, butter alternative, organic foods, healthy sweeteners and many others.
Business document is other information which is needed for making decision, planning
and control the process of running business. It mainly include the meeting, records of employees,
annual reports, minutes of meeting, plan, financial data, customer data and various other
information which is required to run the activities and functioning of business (Hanafizadeh and
et. al., 2018). The document is required to tell the story of business and also ensure consistency,
efficiency and peace. There are various other documents which is required for forming business
such as memorandum of association, consent of proposed directors, articles of association,
statutory declaration and various other (Moşteanu, Faccia and Cavaliere, 2020). Coffeeholic
must required these document in order to run the business smoothly without facing any legal
issues and conflicts. They must have good documentation as it helps in providing complete
information, reduce documentation errors and also determine how to deal with issues.
Human resource information is also an important internal information which is
required by organisation while planning, decision making and control the process of running
business. While establishing the business, it is essential to determine the number of human
resources required to run the activities and functioning of organisation. By identifying the
number, company must hire the talent according to the required qualification and skills of
employees. Through human resource information, company can plan for the activities and make
decision related to the number of employees required for running business activities. It mainly
include employee data such as name, address, records on dependents, visa information and
various other.
External information required by company
Market information is one of the external information which is needed by organisation
in order to make decision, plan for activities and control the business process. It is important for

Coffeeholic to focus on identifying the factors which may influence the profitability and growth
of company in market. Through collecting information related to the market, company can frame
the strategies accordingly and compete in market for long run (Evens and Van Damme, 2016). It
helps owner to organise the data collected from market and use it in effective manner that
increases the productivity of business. Coffeeholic must focus on collecting data related to target
market such as pricing trends, customer expectation and competitor analysis. Through these
information, company can understand the needs of consumers and make effective decision for
improving the performance and efficiency of business.
Competitors analysis is also an external analysis which is required by Coffeeholic for
decision making, planning and control the process of business. While running the business in
smooth and effective manner, it is important to assess the competitor’s moves and action in order
to frame effective strategy to deal with competitors. In London, there are various competitors
that offer coffee items and food to consumers. The competitor analysis must include competitor’s
features, pricing, strength, weakness, customer reviews and their marketing strategy so that
company can make strategy and compete with their competitors (Niemimaa and et. al., 2019).
Pestle analysis
Pestle analysis is one of the strategic management tool that helps in identifying the
external environment factor that influence the profitability and performance of business.
Political factors:
Political factors influence the growth and profitability of business as there is an
involvement of government. It mainly includes tax policy, environmental law, political stability,
labour law, trade restriction and tariffs. Organisation must focus on identifying the political
stability of country in which company is going to establish their business as it helps in achieving
long lasting development (Trapp, Voigt and Brem, 2018). It is important for Coffeeholic to
implement the rules and regulation which is framed by government in order to maintain hygiene
and food quality. Government keep focus on the safety and hygiene of food items so that
company can offer healthier food items in their menu.
Economic factor:
The growth rate of food and beverage industry can influence the performance of business
it is important to determine the growth rate of industry in London in order to run business
effectively. Growing disposal income also creates an impact on the productivity of business as

people spend more on luxurious items and restaurant. Increasing labor cost is another factor that
affects the business activities as owner of coffeeholic earn less profit.
Social factors:
People are becoming more health conscious due to spread of disease, it is important to
offer high quality of food that helps in maintaining their personal health. Consumers are also
focusing on dietary restriction in order to remain healthy and safe in the tough time of pandemic.
In order to remain safe and healthy, Coffeeholic must provide delivery services to people so that
they can eat healthy at their home.
Technological factors:
The new and latest technology can influence the performance of business it is important
to adopt new technology that improves user experience and save their time. Due to COVID 19,
cofeeholic must focus on adopting digital technology in order to reach to maximum customers.
They must also implement automation technology in order to compete with competitors in
London such as invest in robots, payment system and delivery system (Gitman, McDaniel and
Shah, 2018).
Environmental factor:
Sustainability is one of the factors that create an impact on growth of business.
Organisation must focus on providing organic food to consumers without harming the nature of
environment. Coffeeholic must focus on adopting food related regulation in order to manage the
food wastage. They must also adhere to green approach by organising recycling and waste
management programme so that they can create awareness among people for reducing food
wastage (Hall and et. al., 2016).
Legal Factor:
There are various legal laws which must be followed by Coffeeholic while establishing
business in London such as employment law, intellectual law, health and safety law, etc. It is the
responsibility of brand to maintain quality standard of products and ensure the safety of people.
They must also govern with Food Safety and Standards Act, 2006 which generally include the
packaging and labelling of products.
Porter's Five Forces
Bargaining power of buyers:

Bargaining power of buyers is high in food and beverage industry as there are many
competitors who serve same varieties of food and coffee at different prices which attracts
consumers (Thomas, 2016). In order to overcome the issues it is necessary to offer unique items
that meet the expectation of customers.
Bargaining power of suppliers:
The supplier power in food and beverages industry is high as they can influence the price
of raw materials with changing demand. It is important for Coffeeholic to maintain healthy
relations with suppliers.
Threat of new entrant:
Threat of new entrant in food and beverage industry is low as it requires huge investment
to establish business and compete with existing players.
Threat of substitute product:
Threat of substitute product in food and beverage industry is high as there are various
players who deliver same items with different taste and price. In order to overcome the issues
related to thereat of substitute product, Coffeholic must provide items at low price that attracts
customers (Linder and Williander, 2017).
Rivalry among existing firm:
The rivalry among existing players is high as there are several competitors in London that
are engaged in attracting customers by offering coffee and food such as Attendant Coffee
Roasters, Lexpress Cafe, Alex Coffee and many other.
CONCLUSION
It is being recommended from the above information that business plays an important role in
society and culture as it helps in creating innovation and also bring technological advancement in
market. It improves the quality of life by providing high quality of goods and services to
consumers that enhance the standard of living of people. Organisation should conduct pestle and
porter’s five forces in order to identify the factors that could influence the productivity and
growth of business.

REFERENCES
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