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BUSINESS PLAN OF INTHANIN COFFEE SHOP
PIMPATRA SORNPRASITH
An Independent Study Submitted in Partial Fulfillment
of the Requirements for the Master of Business Administration Degree
(International Program)
May 2010
Copyright 2010 by Naresuan University
This independent study entitled “Business plan of Inthanin Coffee Shop”
submitted in partial fulfillment of the requirements for Master Degree in Business
Administration (International Program) is hereby approved.
………….………………………………………..
(Associate Professor Suthinan Pomsuwan, Ph.D.)
Advisor
…………………………………………………...
(Srisuda Chongsithiphol, D.B.A.)
Director, Bangkok Academic center
Naresuan University
May 2010
ACKNOWLEDGEMENT
Without kind and great support from many wonderful people, this independent
study would not have been accomplished. I would like to express my gratitude to them
here.
First of all, I wish to express my deepest thanks to Assoc. Prof. Dr. Suthinan
Pomsuwan and Dr. Krairoek Pinkaeo my advisors, who have devoted a great deal of their
time to read the earlier draft of my business plan, provided their invaluable guidance and
encouragement throughout every stage of its development. I really appreciate Mr. Donald
Antone and Ms. Shylah Antone from English support department who assisted me in
checking English grammar.
Special thanks to Dr. Srisuda Chongsithiphol, the Director, Bangkok Academic
center Naresuan University and Dr. Sarinna Areethamsirikul for helpful suggestions to
complete this business plan. Moreover, I wish to give sincere thanks to my friends for
their advice, suggestions, and hospitality throughout the two years of hard time in this
program. Finally, but most importantly, I am extremely grateful to my beloved family;
dad, mom, sister, brother, my boss and my colleagues for giving me will power. Thanks,
Miss. Chawanda Petchsuwan, my close friend for Inthanin coffee shop’s information.
There may be other people who are not mentioned here but have contributed to
this work. I also want to thank all of you.
Pimpatra Sornprasith
Title BUSINESS PLAN OF INTHANIN COFFEE SHOP Authors Pimpatra Sornprasith Advisor Associate Professor Suthinan Pomsuwan, Ph.D. Academic Paper Independent Study M.B.A. in Business Administration
(International Program), Naresuan University, 2009
Keywords Inthanin, Coffee shop, Coffee business
ABSTRACT
The purpose of this study was to check the feasibility of Inthanin coffee shop
franchise. The increasing demand in coffee and beverage together with relaxation
prompted the beginning of Inthanin coffee shop.
As, life styles of people who live in Bangkok changed fast, they want more
convenience in their lives. Inthanin coffee shop could respond to the question in their
hearts. As coffee lovers they could drink good taste coffee within a short time and
under relaxing atmosphere in Inthanin coffee shop. However, coffee business is highly
competitive; therefore price mechanism and quality are important keys to succeed in
coffee business. Moreover, the decoration style of Inthanin coffee shop is based on
green concept, that is the style in trend at present.
As, Inthanin coffee shop is located at Nawamin road where there are many
competitors such as Starbucks, Coffee Sister and Flower and Coffee, it is determined
to provide the “best cost provider” strategy. The price range begins at 35 THB. That is
a good price that can compete with Starbucks. When compare with Coffee Sister and
Flower and Coffee shop it has the same range of price. However, Inthanin coffee shop
has good management, good brand franchise and well known brand more than others.
Indeed, Inthanin coffee shop is a good pioneer in coffee business at Nawamin road.
The project’s initial investment is 830,680 THB. The owner can have return
on investment within only one year allowing payment of loan within 5 years. Total
loan is 200,000 THB paid at 40,000 per year. The rate of return is 81%.
According to the independent study, coffee business key factors depend on
location, price and quality. This business plan will show how to do coffee business as
well.
LIST OF CONTENTS
Chapter Page
I BUSINESS SUMMARY…………………...…………………….. 1
Business Overview……………….……………...........…...…….… 1
Product/Service Features………...…………...........……...…….… 2
Market Analysis………....................….……………………........... 6
Market Strategy…………........................………………….…….… 7
Key Financial Objectives…………..…………...........…...…….… 11
II DETAILED PLAN…………………….....………………………… 12
Business Structure………………………………...........…...…….… 12 Management and Ownership………...………...........…...…….… 13 Key Objectives………………………………................…...…….… 14 Market Analysis………………………………..............…...…….… 14 The competitors………………………………..............…...…….… 15 Product/Service………………………………................…...…….… 21
Product or Service production…………………………............… 26 SWOT Analysis…………………………....................................… 27
III FINANCIAL PLAN................................................................... 29 Key Objectives and Financial Review……......……….…….… 29 Establishment Cost………………………….................…...…….… 29 Profit and Loss……………………...…………...........…....…….… 30 Cash Flow……………………………….......................…...…….… 31 Balance Sheet………………………………...........…..........…….… 32 Breakdd-ddeven Analysis……………………….......…...…….… 34
LIST OF CONTENTS (CONT.)
Chapter Page
IV SUPPORTING DOCUMENTATION.........................…… 35
V ACTION PLAN.............….…...............................................…… 36 REFERENCES.................................................................................................. 39
BIOGRAPHY………………………………………………….............................. 41
LIST OF TABLES
Table Page
1 Analysis competition in fresh coffee ………......……......…….....… 18
2 SWOT Analysis …………………….……...........….......….….......… 27
3 Establishment Costs ……....……………………….….................…… 29
4 Profit and loss ……………..……....................................….……… 30
5 Cash Flow ……...……........................................….......................… 31
6 Balance Sheet ……….......…...............…...............................……… 32
7 Breakss-sseven analysis………....................................….........…… 34
8 Action Plan. ..................................................................................... 37
LIST OF FIGURES
Figures Page
1 The pattern of Inthanin coffee shop.….....…..............................….. 3
2 Inside Inthanin coffee shop.............................….......................…… 3
3 In front of cashier counter …..........................................................… 4
4 Outside Inthanin Coffee shop …………......................................…… 4
5 Furniture insides coffee shop …......…........................................…… 5
6 Outside Inthanin coffee shop was decorated by trees ….................. 5
7 Porter’s Five Forces Model ……........................................................ 6
8 New choco ice c for winner season …........….................…............... 8
9 Hot beverage cup for take away …........…........................................ 9
10 Hot beverage cup for drinking in the shop …................................… 9
11 Plastic cup for ice..................................................................….......... 10
12 The organization chart of Inthanin coffee shop................................ 12
13 Employee of Inthanin coffee shop..................................................... 13
14 Logo Starbucks................................................................................... 15
15 Logo Coffee World............................................................................. 15
16 Logo Black Canyon............................................................................ 16
17 Logo Au Bon Pain.............................................................................. 16
18 Logo Café Amazon............................................................................ 17
19 Logo Caffe ’D’ Oro............................................................................ 17
20 Location of competitors in 3 square meter........................................ 20
21 Espresso machine with vapour pressure............................................ 21
22 Variety of products............................................................................. 23
23 Food menu set..................................................................................... 23
24 Sausage menu set................................................................................ 24
25 Recommendatory menu...................................................................... 24
LIST OF FIGURES (CONT.)
Figures Page
26 Sales amount of coffee products since 2002 to 2005........................ 35
1
CHAPTER I
BUSINESS SUMMARY
At present, a coffee shop is an interesting business in Thailand, because the
characteristics of people in Thailand changed. Especially, in Bangkok, human life
style has changed following modern style such as officer and worker. As, a coffee
shop seem to be a location for appointment; therefore, the coffee shop business
responded to customer need.
Inthanin coffee shop is interested in a franchise at Bangjak petrol station,
under green concept, therefore we can summarize Inthanin coffee shop as a better
choice than other coffee shop franchises.
From the information for evaluate potential of Inthanin coffee shop, the rate
of return is 81 % and the owner can have return on investment within only one year,
that can return loan within 5 years, that total loan is 200,000 baht by paid in 40,000
per year. Therefore, Inthanin coffee shop has attractiveness of return profit and in
trends. It will be the first choice.
Business Overview
As a coffee shop franchise in Bangjak petrol station is Inthanin brand.
Intanin coffee is focused on people who like fresh coffee by roast, by order; therefore
this is another channel for consumer, beside a department store. The Bangjak petrol
station is the location of Inthanin coffee; it is a co- business among petrol, coffee shop
and supermarket. The management and image of Bangjak petrol emphasizes modern
decoration, environment and clean characteristics, that is why view is important to
support customer need. When compared with other competitors such as Starbuck
coffee, Black canyon, 94O C coffee; Inthanin coffee has sale point different from
competitors. However, there are high competitors, which have the same sales points
such as Banrai coffee, Coffee D’Oro, Amazon and etc.
2
Products of Inthanin coffee shop are hot and cold beverages; there are
coffee, Coco, fruit milk shake. Prices of coffee are beginning at 35 baht to 55 baht for
beverage.
Investment in coffee shop is very interesting in that it uses consumer favors
to drink more coffee. Therefore, Inthanin coffee shop is one interesting choice, that
can get return on investment within 3ss-ss5 years
Product/Service Features
Generally, the main points of Inthanin coffee shop are recognized easily by
the products and place.
Characteristics of coffee shop place have 3 types of patterns.
1. ss Shop (Stand – Alone)
It may be a building or shop, where areas have more than 50 square meters.
The stand – alone shop may be a community, department store, office building, Petrol
station and Plaza.
2. ss Corner/Kisok
This is a medium coffee shop, where areas have 6 square meters. Generally,
image is corner within building, department store and Plaza. This kind has low seats.
3. ss Cart
A minimum coffee shop, where areas have 3 square meters and can move for
finding suitable location. That is why it can approach closely the customer.
In this case, Inthanin coffee shop will be invested to be a shop
(Stand ss - ss Alone).
Products
The types of coffee are several, such as hot beverage, cool beverage and
another. Hot Beverage: hot latte, hot espresso, hot cappuccino, hot coco, hot milk, hot
milk tea and hot green tea. Cool Beverage: ice latte, ice espresso, ice cappuccino, ice
coco, ice milk, ice tea, ice lemon tea and ice green tea. Fruit Ice: strawberry milk
shakes, Kiwi shake.
An important part for the achievement of Inthanin coffee shop is service
mind. All employees are trained about manner and service mind. Moreover, songs are
important part too, that can establish comfortable image. Decoration is created by soft
3
and brown color. Most materials in furniture are wood, which shows natural and
relaxing images. Tree growing is one key to attract customers also.
Figure ss 1 ss The pattern of Inthanin coffee shop
Figure ss 2 ss Inside Inthanin coffee shop
4
Figure ss 3 ss In front of cashier counter
Figure ss 4 ss Outside Inthanin Coffee shop
5
Figure ss 5 ss Furniture insides coffee shop
Figure ss 6 ss Outside Inthanin coffee shop was decorated by trees
6
Market Analysis
According to Kasikorn research center, 2009, coffee market was predicted at
22,000 million in value, which was decreased 12 % when compared with the
previous year. The reason would be economic recession in the first haft of 2009, that
reflected customer need. Customer has more money saving trend. Moreover, target
groups were workers, whose proportion of un Ss - ssemployed people were
higher. Another point, was that healthy trends were strong trends, therefore some
consumers changed from drinking coffee to fruit and vegetarian beverages.
At the end of the year there would be higher customer need for drinking
coffee. Therefore, interest in the coffee shop business existed. Factors reflected higher
customer need, maintaining quality and strategies for creating coffee drink varieties
(Coffee product in 2005, July 24, 2009).
Coffee shop is interesting for making money, especially that people have
passion in coffee.The aim of Inthanin coffee shop business plan is to gain income
more than 150,000 baht per month, that is why income per day would be 5,000 baht.
Analysis with Five Force Model
Figuredd7ddPorter’s Five Forces Model
1.ddSegment rivalry: At present, coffee businesses have high competitors.
There are so many productions and coffee shops, most of which present different
quality, taste and decoration to be factors of choice for customers. Therefore, Inthanin
7
coffee would emphasize on quality, taste and image of coffee shop following sales
point. Giving customers more value when compared with their money is ensured by
incorporating good- to-excellent products, which attributes at a lower cost than rivals.
The best target is lowest (best) costs and prices compared to rivals offering products
(Thomson, J et al, p134).
2. ddBargaining power of suppliers: Even though, Inthanin coffee shop is
one franchise, which does business not a long time, but there is high bargaining
power of suppliers, because it does business with Bangjak petrol station. This is one
important reason, why Inthanin coffee shop would be an important choice for
customers.
3. ddBargaining power of buyers: Bargaining power of buyers is high
because there are so many products such as several beverages, several food sets and
others. Therefore, it can attract customer to buy products from Inhanin coffee shop,
because it can respond customer need in variety.
4. ddThreat of substitute products: For the coffeedd-dddrinking lover, in
their opinion, they cannot find some products to substitute coffee. While, other
customers, fruit beverages would be the other choice.
5. ddThreat of new entrants: Entrants in coffee business or other competitors
is easily done, because investment would be low budget to high budget. Therefore,
coffee businesses have high competitors.
To sum up, coffee business is high in competition. Therefore, it should use
market strategies for establishing brand loyalty. The results of brand loyalty, include
buyers’ repeat in buying and would be an important factor to expand new market.
Therefore, they should emphasize on quality of products, deeply understand customer
insight and approach their customer needs.
Market Strategy
Inthanin coffee shop has several market strategies, that are as follows:
1. ddA bestdd-ddcost provider strategy
Generic competitive strategies are five variations to be identified by the
company for creating competitive strategies. Each company strategy should approach
8
patterns of actions to fit its own matter and industry environment ( Thomson,J et al,
p134).
In this case, they use the bestdd–ddcost provider strategy. Giving customers
more value when compared with their money by incorporating gooddd-ddtodd-
excellent products, which attributes at a lower cost than rivals. The best target is
lowest (best) costs and prices compared to rivals offering products (Thomson,J et al,
p134).
2. ddProduct R and D activities
The aim of product R and D activities is improvement of product designs
and performance features, increased end product and applications (Thomson, et al, p
145).
Inthanin coffee business has policy to develop and create new products for
responding to customer each season. For example, in summer, they have new ice
beverage menu, in the winner, they have new choco ice menu.
Figuredd8ddNew choco ice for winner season
9
3. ddPackaging strategy
Inthanin coffee shop has types of cups for hot and ice beverages.
-ddHot beverage
Inthanin coffee shop has two patterns of hot beverage cup. One is for dinking
inside and another is for take away. Both of these have the logo of Inthanin coffee
shop on skin. This strategy establishes brand awareness.
Hot c cup for take away
Figuredd9ddHot beverage cup for take away
Figuredd10ddHot beverage cup for drinking in the shop
-ddIce beverage
10
Figuredd11ddPlastic cup for ice
Moreover, during New Year festival, there is a decorated package of cookies
to be given as gift.
4. ddMerger and Acquisitions
The combination of the assets and liabilities of two companies is corporate
merger. In a merger of firms that are approximate equals, there is exchange of stock
in which one company is shareholder of the other company at a certain ratio.
(Mergers and acquisitions, n.d) In this case, Inthanin
5. ddDistribution strategy
Inthanin coffee shop undertakes responsibility by Koe Jak company. That is
the subdd-ddcompany of Bangjak Petroleum public company limited. That is an
important strategy because there are so many distribution and maintainance of the
right to do coffee business for Inthanin coffee.
6. ddWireless zone
Customer target groups are various types such as official, student, housewife
and etc. Especially, student and official groups usually use internet, therefore,
wireless service zone at Inthanin coffee shop can attract customers.
7. ddSelling Support
Inthanin coffee shop sets campaign with customers. The details are as
follows:
-ddCollecting star card, which accumulates score. For example, customers
collect 10 scores; they can get one free beverage.
11
Key Financial Objectives
The key financial objectives have been developed using previous months’
data for the existing store, tracking trends in revenues and expenses. A
fivedd-ddmonth track of sales, accounts receivables and payables, and inventory from
a yeardd-ddend benchmark were also utilised.
The key financial objectives are:
-ddto reduce the overdraft from 200,000 to 150,000 THB
12
CHAPTER II
DETAILED PLAN
Business Structure
Inthanin coffee was taken responsibility by Koejak co., ltd, which was merged
by Bangchak public company limited. Koejak company is professional in coffee
and beverage, located at 43/132, 136 M. 5, Bangbon subdd-dddistrict, Bangbon
district, Bangkok 10150.
Figuredd12ddThe organization chart of Inthanin coffee shop
This chart shows Inthanin coffee shop’s organization chart, that presents
procedure of duty, evaluate and control process to control quality in franchise
business. However, This chart will be the initiation step of investment; after that if
Koejak co.,ltd
Owner of Inthanin c
Bangchak Public company limited
Sellers Accouter
Auditor
13
entrepreneur can approach in Inthanin franchise already, that will be adjusted in the
part of Koejak company. However, an auditor has responsibility to check and
evaluate results of work every month per each time.
Management and Ownership
Directordd–ddPimpatra Sornprasith
Pimpatra Sornprasith has a 6dd-ddyear experience in sales. She has a strong
background in service and sales field.
Auditordd–ddChawanda Petchsuwan
Chawanda Petsuwan has experienced auditing in many shops. Her
responsibility is checking and evaluating the Inthanin coffee shop.
Staff
There are four staff members of Inthanin coffee shop. They are fulldd-
ddtime employees, but they work in period time. Inthanin coffee shop opens between
6.30 am to 9.00 pm, therefore, they have to manage time following the details as
follows.
Staff can be divided into two types of responsibility, such as seller and
accountant.
Sunday - Saturday
-dd6.00 am to 5.00 pm: one staff per period
-dd7.00 am to 7.00 pm: one staff per period
-dd10.00 am to 9.00 pm: one staff per period
Figuredd13ddEmployee of Inthanin coffee shop
14
Key Objectives
The objectives for Inthanin coffee shop are to:
-ddsucceed in coffee business, to get profit and maintain quality of service
-ddmaintain a financially healthy business by exceeding breakdd-ddeven
targets by at least 10 %
-ddachieve monthly and yearly sales target
-ddaim to improve sales of coffee, beverage, bread, biscuits and cakes over
the year by 10 %
-ddbegin marketing to new consumers and competitor’s existing supporter
base through mail-outs and promotions to maintain current growth in sales and
service revenue
Market Analysis
At present, people favourite coffee drinking, therefore coffee business
expands continuously. Moreover, in the eye sight of investor thinks about coffee
business, which would be making money business. That’s why, coffee shop has
established rapidly in 4dd-dd5 year later. Because of supporting factors, those are
below.
1. ddStarbucks pioneers coffee business in Thailand, therefore
consumers began to perceive several coffees and establish brand awareness. Besides,
it established culture to drink coffee at shop. That is new trend, so entrepreneur has to
decorate your coffee shop and it may be increasing various service supports such as
internet wireless zone, magazine, song.
2. ddAt present, the consumer admires drinking coffee that means good life
style. Focusing on target groups who have high competence to buy and these target
groups would have high power in buying in future such as students, managers,
officers, etc.
3. ddFranchise business is famous for new investors that will be successful,
even though they lack experience in that business. However, the amount of buyers in
franchise business was decreased because there are several reasons to support success
such as system management, location, coordinator, opportunity to make profit,
working capital and etc. Therefore, investors should study and recognize
15
circumspectly. The important things for investors are studying about gain before
investing.
The Competitors
Analysis competition in fresh coffee
Fresh coffee market has several competitors such as Starbucks, Coffee
world, Black Canyon, Au Bon Pain, Amazon café,
Starbucks
Figuredd14ddLogo Starbucks
Company Starbucks Coffee (Thailand) Co.,ltd
Foundation Founded in 1971 and started in Thailand in 1998
Target group Ages between 22dd-dd50 years and high income.
It has variety of products, several coffee tastes including spin ice coffee,
increased topping, biscuits, cakes, teas and other breads.
Coffee World
Figuredd15ddLogo Coffee World
Company Coffee world corporation Co., ltd.
Target groups Ages of target group are between 18dd-dd45 years, who
are in the young executive groups. It has variety of products, variety of coffee tastes
and bakery goodies
16
Black Canyon
Figuredd16ddLogo Black Canyon
Company Black canyon (Thailand) Co., ltd
Foundation Founded in 1993
Characteristic of product Several types of coffee, foods and bakeries of
more than 200 kinds
Initial cost to do business no less than 6,800,000 baht (FAQ, n.d.)
Branches More than 200 branches in seven countries; there are 190
branches in Thailand (Company back ground, n.d)
Au bon pain
Figuredd17ddLogo Au Bon Pain
Company Au Bon Pain Company
Foundation Founded in 1978 Boston, USA and started in Thailand
1997 (about, n.d)
Characteristic of products Variety of products, a few type of coffee; they
have more various foods, sandwiches and bakeries
Target groups Workers who love sandwiches
Branches 35 branches in Bangkok and 5 branches upcountry
(Locations, n.d)
17
Café Amazon
Figure 18 Logo Café Amazon
Company PTT Public Company Limited
Target groups Travellers and Workers
Branches 146 branches
Initial cost to do business 2,000,000 baht
Products Variety of products, various types of beverages and some
bakeries (aircraftcoffe, n.d)
Caffe’ D ’ Oro
Figuredd19ddLogo Caffe ’D’ Oro
Company Golden Cream Company
Products Variety of products, a few types of coffee; they have
various foods, sandwiches and bakeries.
Target groups Traveller
Branches 70 branches in Bangkok and boundary (café’D’oro, n.d)
18
Tabledd1ddAnalysis competition in fresh coffee
Brand
Price
Distribution
Strong point
Weakness point
Starbucks
75 to
180
Baht
Department store,
Building, Travel
location in main
cities such as
Chiangmai,
Phuket, Pattaya.
Starbucks is leader in
premium fresh coffee
business and they have
customer loyalty. Besides,
they had more experiences
in selling coffee aboard
They have weakness point:
cost of toasted bean coffee
transportation from USA,
cost of fresh bean coffee
from Kenya and Costarica:
high cost of management,
lack of designing power.
Coffee
World
55 to
90
Baht
Department
stores, Office
building, Cinema
and several
travel locations
such as
Chiangmai and
Pattaya.
Coffee world merges with
B2S shop, therefore there
are more distributors.
There is high cost in
management, therefore,
some brands lose.
Black
Canyon
55 to
180
Baht
Department stores
and petrol station
Black canyon has been
around for 10 year, so
Black canyon is a well
known brand. Moreover,
they have expanded to
Singapore and Malaysia.
Black canyon has no clear
premium coffee image,
because, they do not only
emphasize fresh coffee, but
also on several foods.
Therefore, their image on
premium fresh coffee is not
clear. Moreover, trends of
distributor channels of
Black canyon changed to
petrol stations, where good
locations are already
reserved. It is not easy to
find out good locations to
do business. However, that
is repeat service areas with
Amazon café
19
Table 1 (Cont.)
Brand
Price
Distribution
Strong point
Weakness point
Au bon
pain
start at
50
Baht
Department stores
and office
building
There are various foods
and bakeries, therefore
those attract consumers.
Most locations of Au
bon pain are department
stores, which are
appointment places.
Au Bon pain cannot set
positioning clearly in
premium fresh coffee.
Café
Amazon
start at
45
Baht
Petrol Station
PTT station is leader of
petrol station; therefore
they have advantage in
high amount of
customers, who take
service at PTT Petrol
Station.
Cost to start is rarely high.
Caffe’D’
Oro is
Thai brand
35 to
50
Baht
Shell petrol
station,
Department store,
Hospital, Office
building
They can get advantage
from travellers who buy
fuel in shell petrol
station.
There are high
competitors.
20
Analysis of competitors with area zone information
Figuredd20ddLocation of competitors in 3 square meter
The figure shows location of coffee shops, located nearest Inthanin coffee
shop in 3 square meter areas zone. The direct competitors are three shops such as
Starbucks, Flower and Coffee, Coffee sister. They are direct competitors. Direct
competitor means sellers have same group of buyers and their products fill demand in
the same way of the other (Direct Competitors, n.d.).
Analysis
The direct competitors of Inthanin coffee shops are three shops; first,
Starbucks is located at Carrefour branch Nawamin road. Price will be
90dd–dd160 baht initially per one coffee is 90 baht; hot latte one cup is 90 baht.
Starbucks is premium market and they attract customers who buy stuffs from
Carrefour. Some of the target groups are students and businessmen. Therefore,
the difference in price between Starbucks and Inthanin coffee shop can separate
21
target group. Customer’s Inthanin coffee shop group is medium level who have
income in medium range.
When comparing Inthanin coffee shop with Flower and coffee shop,
there is different position in the market. Flower and coffee shop attracts
customers who buy flowers and consume beverage when they wait for their
flower order. Prices of both are not different.
An important competitor of Inthanin coffee shop is coffee sister who has
high effect on market share of Inthanin coffee shop. They are located at Caltex
petrol station at Nawamin 61 road. However, this shop has a small area: It is
approximately 6 square meters and there is no clean car service business. unlike
Bangjak petrol station which has various shops serving travelers such as
cleaning car service, Thai massage, supermarket and coffee shop, while shell
petrol station has supermarket shop and coffee shop. That is why Bangjak
petrol station attracts more than shell petrol station in customer eye sight.
Indirect competitors
Indirect competitor is seller who sells product in a different way, that is
alternating choice to purchase (Indirect competitor, n.d). In this case, indirect
competitor is fruit beverage shop nearest to Inthanin coffee shop. However, that shop
is small and sells only orange juice. Therefore, it does not affect the coffee shop so
much.
Product/Service
Inthanin coffee shop includes various products such as coffee, tea, ice
fruit spinning and bread. Inthanin coffee shop uses espresso machine with
vapour pressure.
Figuredd21ddEspresso machine with vapour pressure
22
Basic of making coffee is taking roast coffee bean into hot water. The
difference method of espresso machine is using water vapour pass grinding
roast coffee to be coffee water. The high quality of coffee brewing depends on
several factors, as follows:
-ddGood qualityof coffee bean pass through proper roasting and
grinding procedure
-ddClean water is treated by filter
-ddSuitable temperature of water is 94dd-dd98 degree Celsius
-ddBrewing and grinding equipment must work under suitable condition
For example, coffee bean passed grinding too much; it will be strong
taste because it use a long time more than rough grinding coffee.
Beverage Recipe
Generally, most coffee shops have individual recipe; menus of each
shop are different and will be reflected on the name.
International recipe of coffee beverage
Espresso: Using strong roast Arabica in Italian roast type or espresso
roast to brew with 1dd-dd1 ½ onz per time.
Cappucino: Espresso with hot milk (150dd-dd170 degree Celsius) and
covered with hot foamed milk about 6 onz for hot cappuccino. Iced cappuccino
uses cream to replace the foamed milk.
Mocco: Increasing chocolate syrup into espresso 1 onz, hot milk and
covered with cream and chocolate powder.
Latte coffee: 1 Onz of espresso with one cup of hot milk and covered
with foamed milk.
Quality Control and Maintenance for Coffee
Correct process of maintaining quality of raw materials is essential because
it will still be fresh for a long time. The important factors to maintain coffee beans
are several such as temperature, light, air and humidity.
-ddKeep coffee in closed container.
-ddKeep coffee in cool air. Don’t store coffee near hot places or sunlight
because it will lose its aroma quickly.
23
-ddDon’t keep coffee in refrigerator because coffee will absorb food odour.
Besides, taking coffee container in and out from the refrigerator several times, will
lead to humidity.
-ddGrinding coffee bean to stock should not exceed more than 1 month; the
shop should grind suitable quantity of coffee beans for consumers.
Products and Service
Inthanin coffee shop has so many products such as beverages, breads
and biscuits, sausages, menu set, waffle cake and others.
Figuredd22ddVariety of products
Figuredd23ddFood menu set
24
Figuredd24ddSausage menu set
Figuredd25ddRecommendatory menu
25
Products of Inthanin coffee shop are various types.
Menu food sets consist of various menus, which are as follows:
Roti, sausage and fried egg: 45 baht
Two pieces of bread with jam or butter : 20 baht per set
Waffle and Jam: 35 baht
Roti and Ham : 40 baht
Roti with chilli and chicken : 35 baht
Big hot dog: 32 baht
Ham cheese : 35 baht
German Sausage set
Set 1
-ddcheese sausage 1 piece 50 baht
-ddMinimart sausage 1 piece
-ddGarlic bread 3 piece
Set 2
-ddCheese sausage 1 piece 75 baht
-ddMinimart sausage 1 piece
-ddBacon sausage 1 piece
-ddGarlic bread 3 piece
Set 3
-ddGarlic sausage 1 piece 80 baht
-ddPolis sausage 1 piece
-ddGarlic bread 3 pieces
Set 4
-ddBacon sausage 3 pieces 85 baht
-ddGarlic bread 3 pieces
Set 5
-ddGarlic sausage 3 pieces 105 baht
-ddGarlic breads 3 pieces
Set 6
-ddGarlic sausage 1 piece 45 baht
-ddGarlic bread 3 pieces
26
Set 7
-ddBacon sausage 1 piece 70 baht
-ddBacon stick 4 piece
-ddGarlic bread 3 pieces
Set 8
-ddMinimart sausage 1 piece 95 baht
-ddGarlic sausage 1 piece
-ddBacon stick 1 piece
- Garlic bread 3 pieces
Set 9
-ddBacon sausage 1 piece 100 baht
-ddGarlic sausage 1 piece
-ddBacon stick 4 pieces
-ddGarlic bread 3 pieces
Set 10
-ddMinimart sausage 1 piece 65 baht
-ddBacon sausage 1 piece
-ddGarlic bread 3 pieces
Moreover, there are a lot of biscuits such as butter bread baking, pine apple
sandwich bread, butter cake and cookies.
Service
Inthanin coffee shop is a full-service shop with coffee beverage. The services
include several things:
-ddGood songs to serve customers
-ddMagazine, book, and cartoon book are made available to the customers in
shop
-ddRelaxed atmosphere: air condition, soft and nice seat
-ddWireless lan
Product or Service Production
Products are produced locally. Cost of each product comes from Koejak
company and also includes services.
27
SWOT Analysis
Tabledd2ddSWOT Analysis
SWOT Analysis
Strengths Weaknesses
-ddInthanin Coffee shop is a well known
brand.
-ddCoffee business is still responded by
consumers.
-ddGood place: nearest commodities,
school, bus stop station, market, villages,
located on Nawamin 76 road.
-ddVarious products when compared
with competitors
-ddCoffee shop is located at Bangjak
petrol station, where other services such
as washing car care, massage service,
minimart
-ddWorking under audit by Koejak
policy to control quality of products,
service and image
-ddOther services for customers such as
magazines, news paper, songs, wireless
zone
-ddGood control of management under
Koejak company
-ddManagement under central control
incurs disadvantage: additional, new
products, creating new promotion
-ddPaid Franchise fee per month and
year
-ddSales amount depends on seller, so it
is a sensitive factor to control sales
amount
28
Tabledd2dd (Cont.)
SWOT Analysis
Opportunities Threats
-ddCoffee drinking trends gained
response from customers in increasing
rate.
-ddInthanin coffee shop should find
alliance to do trade continuously, coffee
seller joins with book shop, other
companies for delivery of coffee
-ddHigh competitors such as Amazon
café, Starbucks, Café’D oro
-ddIncreased Interest rate will curb
spending by families/employees
-ddNot keeping up with latest trends and
technology developments
-ddNearest specialised coffee shop is
only 1.2 km away
29
CHAPTER III
FINANCIAL PLAN
Key Objectives and Financial Review
Sales and Marketing:
-ddto achieve sales per month is 180,000 baht
Establishment Cost
Interest loan 8 % per year
Payment liabilities time 5 Year
Tabledd3ddEstablishment Cost
Investment Budget
Source
Description Total Owner Creditor
Non-current asset
Calculator machine 15,000.00 15,000.00 -
Espresso machine 80,000.00 80,000.00 -
Equipment in coffee shop 400,000.00 200,000.00 200,000.00
Total non- current asset 495,000.00
Payment before initiation working
Register and Decoration 210,000.00 210,000.00 -
Land Deposit 25,680.00 25,680.00 -
Working capital 100,000.00 100,000.00 -
Net total of cost 830,680.00 630,680.00 200,000.00
30
Tabledd3dd (Cont.)
Description Year 1 Year 2 Year 3 Year 4 Year 5
Loan 200,000 160,000 120,000 80,000 40,000
Payment of loan 40,000 40,000 40,000 40,000 40,000
Interest rate 15,000 12,000 9,000 6,000 3,000
Total loan 160,000 120,000 80,000 40,000 -
Profit and Loss
Tabledd4ddProfit and Loss
Profit and Loss
Year 1 Year 2 Year 3 Year 4 Year 5
Sales 1,864,800 2,160,000 2,448,000 2,662,200 2,723,400
Variable cost 773,892 896,400 1,015,920 1,104,813 1,130,211
Margin 1,090,908 1,263,600 1,432,080 1,557,387 1,593,189
Fixed cost 559,720 592,600 608,974 626,161 644,200
Profit before initiation 531,188 671,000 823,106 931,226 948,989
Interest 15,000 12,000 9,000 6,000 3,000
Profit before taxes 516,188 659,000 814,106 925,226 945,989
30 % tax 154,856 197,700 244,232 277,568 283,797
Net profit 361,332 461,300 569,874 647,659 662,192
31
Cash Flow
Tabledd5ddCash Flow
Cash flow Year 1 Year 2 Year 3 Year 4 Year 5
Net profit 361,332 461,300 569,874 647,659 662,192
Depreciation 99,000 99,000 99,000 99,000 99,000
Other cash out payment 42,000 42,000 42,000 42,000 42,000
Interest 15,000 12,000 9,000 6,000 3,000
Taxes 154,856 42,844 46,532 33,336 6,229
Liabilities 63,936 10,121 9,874 7,344 2,098
Dividend - 23,065 5,429 3,889 727
Remaining goods in stock -14,918 -2,362 -2,304 -1,714 -490
Cash flow 721,206 687,968 779,405 837,514 814,756
Cash flow
Current asset - 495,000 - - - -
Register and Decoration - 210,000 - - - -
Land Deposit - 25,680 - - - -
Cash flow of investment - 730,680 - - - -
Finding cash flow
Loan 200,000 - - - -
Payment loan - 40,000 - 40,000 - 40,000 - 40,000 - 40,000
Payment interest - 15,000 - 12,000 - 9,000 - 6,000 - 3,000
Payment dividend - - 23,065 - 28,494 - 32,383 - 33,110
Share investment 630,680 - - - -
Total cash flow 775,680 - 75,065 - 77,494 - 78,383 - 76,110
Cash 766,206 612,903 701,911 759,131 738,647
Plus Beginning Cash Flow - 766,206 1,379,109 2,081,020 2,840,151
Ending Cash Flow 766,206 1,379,109 2,081,020 2,840,151 3,578,798
32
Balance Sheet
Tabledd6ddBalance Sheet
Balance Sheet
Asset Year 1 Year 2 Year 3 Year 4 Year 5
Current asset
Cash 766,206 1,379,109 2,081,020 2,840,151 3,578,798
Debtor - - - - -
Goods in stock 14,918 17,280 19,584 21,298 21,787
Total Current asset 781,124 1,396,389 2,100,604 2,861,449 3,600,585
Non - current asset 396,000 297,000 198,000 99,000 -
Register and Decoration 168,000 126,000 84,000 42,000 -
Land deposit 25,680 25,680 25,680 25,680 25,680
Total non current asset 589,680 448,680 307,680 166,680 25,680
Total asset 1,370,804 1,845,069 2,408,284 3,028,129 3,626,265
Debtor and Liabilities
Creditor 63,936 74,057 83,931 91,275 93,374
Taxes 154,856 197,700 244,232 277,568 283,797
Dividend - 23,065 28,494 32,383 33,110
Current Liabilities 218,792 294,822 356,657 401,226 410,280
Borrowing 160,000 120,000 80,000 40,000 -
Total liabilities 378,792 414,822 436,657 441,226 410,280
Equity 630,680 630,680 630,680 630,680 630,680
Retained profits 361,332 799,567 1,340,947 1,956,223 2,585,305
Attributable to equity 992,012 1,430,247 1,971,627 2,586,903 3,215,985
Total liabilities and
equity
1,370,804 1,845,069 2,408,284 3,028,129 3,626,265
33
Tabledd6dd (Cont.)
Cash flow Statement
Year
0 Payment cash at the beginning of the financial
year - 830,680.00
1 Cash inflow 766,205.60
2 Cash inflow 612,903.14
3 Cash inflow 701,911.29
4 Cash inflow 759,131.37
5 Cash inflow 864,326.81
Net present value Calculation at 30 %
Net present value of cash inflow ฿ 1,770,121.09
Less Net Present Value of Cash outflow -830,680.00
Net present value (NPV) ฿ 939,441.09
Rate of return 82 %
34
Breakdd-ddeven analysis
Tabledd7ddBreakdd-ddeven analysis
Breakdd-ddeven point Year 1 Year 2 Year 3 Year 4 Year 5
Contribution margin 1,090,908 1,263,600 1,432,080 1,557,387 1,593,189
Rate of contribution
margin
59 % 59 % 59 % 59 % 59 %
Breakdd-ddeven point per
year
956,786 1,012,991 1,040,981 1,070,360 1,101,197
Breakdd-ddeven point per
month
79,732 84,416 86,748 89,197 91,766
Breakdd-ddeven point per
day
2,658 2,814 2,892 2,973 3,059
Interest loan 8 % per year
Payment liabilities time 5 year
Description Year 1 Year 2 Year 3 Year 4 Year 5
Loan 200,000 160,000 120,000 80,000 40,000
Payment of loan 40,000 40,000 40,000 40,000 40,000
Interest rate 15,000 12,000 9,000 6,000 3,000
Total loan 160,000 120,000 80,000 40,000 -
35
CHAPTER IV
SUPPORTING DOCUMENTATION
Coffee market trends 2dd-dd3 years ago were growing continuously.
According to Kasikorn bank research, predicted sales amount of coffee product in
2005 was 21,000 million baht with 10 % growth rate. They separated coffee market
to be instant coffee, canned coffee and premium coffee (fresh coffee) and sales targets
were 9,300 million baht, 7,000 million baht and 4,700 million baht continuously
(coffee product in 2005: sales growth in 10%, 2005).
Figuredd26ddSales amount of coffee products since 2002 to 2005
In the past, coffee market in Thailand is instant coffee only, but coffee
market in Thailand has high sales amount and there are few competitors. All of these,
will attract new investors. Important competitors of instant coffee are premium coffee
or fresh coffee and coffee in can. However, instant coffee is interesting to new
investors too, because there are still new brands of instant coffee in the market.
Sales amount of coffee products from Kasikorn bank research since 2002 to 2005
0
2000
4000
6000
8000
10000
12000
2002 2003 2004 2005 year
baht
Instant coffee Can coffee Premium coffee
36
CHAPTER V
ACTION PLAN
Prepare a mini 12 month Action Plan. This should include: marketing costs,
activities, actioned by who and when. This plan will then become a checklist of the
key actionable items and the time they have to be done by, including who is to do
them. The tasks should not be too detailed or else they become unworkable. See
example below.
Marketing
-ddInthanin coffee shop wants to establish a new product, that is sandwich
Inthanin. The point of sales for the new product is fresh and made to order. Therefore,
customer receives quality product and other choice for menu set. Sandwich menu
includes Avocado with baked chicken sandwich. They include whole wheat bread and
avocado. As avocado and whole wheat are highly beneficial, it is suitable for Inthanin
coffee shop.
-ddEstablishing new product under franchise brand is controlled by the
organization. In this case, Pimpatra Sornprasith should create an outline or plan and
cook new products to present for manager and marketing team of Koejak company.
After, they approved the taste and feature of avocado with baked chicken sandwich
already, they will create marketing materials and advertisement.
-ddWhen considering several views such as taste, image, cost, price, how to
make order and etc.; the marketing team and Pimpatra Sornprasith will establish
advertisement, brochure and marketing plan to present to the management team of
Koejak company. After that, the launch of the product will be approved and
implemented.
-ddThey will design a brochure when plan has already been approved; it will
be shown and the actualization of the marketing plan follows in the next steps.
37
Tabledd8ddAction Plan
Key Objectives Task By Whom By When
MARKETING
Determine Launch
Plan
Outline Plan Pimpatra
Sornprasith
9 June
Agreement and decision
on implementation
Pimpatra
Sornprasith
Marketing team
9 July
Marketing and
advertisement
Marketing team
Pimpatra
Sornprasith
9 August
Create a Brochure Agree concept Marketing team 18 August
Approval of copy Marketing team 10 September
Print Marketing team 15 October
Brochure ready for
distribution
Marketing team 15 November
Sign by Koejak Manager
company and
marketing team
11 December
REFERENCES
35
REFERENCES
Au bon pain Thailand. (n.d.). About. Retrieved April 28, 2010, from
http://www.aubonpainthailand.com/th/about.
Air craft coffee. (n.d.). About. Retrieved April 29, 2010, from
http://www.aircraftcoffee.com/index.
Kasikorn research. (2009). Coffee product in 2005. Retrieved April 19, 2010, from
http://www.kasikornresearch.com/TH.
Café’ D’oro. (n.d.). Career. Retrieved April 20, 2010, from
http://www.caffe-d-oro.com/career.html.
Black canyon coffee. (n.d.). Company back ground. Retrieved on March 10, 2010,
from http://blackcanyoncoffee.com/branches/list-branches.php.
Center for advantage. (n.d.). Direct Competitors. Retrieved April 18, 2010, from
http://www.centerforadvantage.com/ci/directcompetitors.htm.
Marketing MiMi hu. (n.d.). Indirect competitors. Retrieved April 30, 2010, from
http://en.mimi.hu/marketingweb/indirect_competition.html.
Au bon pain Thailand. (n.d.). Location. Retrived March 22, 2010, from
http://www.aubonpainthailand.com/th/about.
Investopedia. (n.d.). Mergers and acquisitions. Retrieved April 24, 2010, from
http://www.investopedia.com/university/mergers.
Thomson,Jr, StricklandIII and , Gamble,E. (2008). The relationship between a
company’s strategy and its business model (16th ed.).USA: McGraw Hill.
BIOGRAPHY
41
BIOGRAPHY
Name - Surname Pimpatra Sornprasith
Date of Birth January 23, 1979
Address 59/28, Serithai 43, Bungkum, Klongkum, Bangkok,
Thailand
Workplace UHM Co.,Ltd, 185/3, Radamri road, Lumpini,
Pathuwan, Bangkok, Thailand.
Position Supervisor
Work Experiences
2003 Water Doctor Co.,Ltd, Bangkok, Thailand
2001 UAE Co.,Ltd, Bangkok, Thailand
Education Background
2001 B.Eng. (Environmental Engineering), Kasetsart
University, Bangkok, Thailand
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