Australia-based, Brand New, For-profit Business Venture Essay. Individual Business Model And Plan

INDIVIDUAL BUSINESS MODEL AND PLAN
Student’s Name
Course
Professor’s Name
University
City (State)
Date
Executive Summary
Report has highlighted business model and plan for business venture of Global Tea and Coffee (GTC) shop. The GTC shop will be located at Sydney, Australia. Company offer coffee and tea products by using organic material and important customer segments in business model are Millennial generation, professional executives and freelancers. Mobile application with data analytics feature is going to be introduced by company for promoting products and also for effective customer relationships. Competition is very high in tea and coffee industry, and it can be judged from the fact that no company is successful in achieving a market share of more than 5% in this industry. Growth rate of coffee and tea industries reflect that opportunities are available but GTC shop require innovative products and technological based solutions for achieving competitive advantage in market. GTC shop will introduce the products at comparatively low prices for increasing market share at early stages of market entry. Employees training is necessary for ensuring that human resources capabilities and professional experience contribute towards achieving organizational objectives rather than becoming a liability. Employees should be motivated by offering effective compensation and benefits package, and also by providing opportunities that can help in achieving objectives related to personal career development. Selling price is $2 each for coffee and tea products, and projection show that company is going to generate a revenue of 1,000,000 in first year of operations. Owner is going to invest 30% of total start-up costs and 70% will be generated through debt financing. GTC shop is projected to be profitable in next 3 years and it can further help in expanding the organizational activities to other cities in Australia.
Table of Content
TOC \o "1-3" \h \z \u 1. Introduction PAGEREF _Toc21104353 \h 52. Business Model Canvas PAGEREF _Toc21104354 \h 52.1. Customer Segments PAGEREF _Toc21104355 \h 72.2. Value Proposition PAGEREF _Toc21104356 \h 72.3. Customer Relationships PAGEREF _Toc21104357 \h 72.4. Channels PAGEREF _Toc21104358 \h 72.5. Key Activities PAGEREF _Toc21104359 \h 72.6. Key Resources PAGEREF _Toc21104360 \h 72.7. Key Partners PAGEREF _Toc21104361 \h 82.8. Revenue Structure PAGEREF _Toc21104362 \h 82.9. Cost Structure PAGEREF _Toc21104363 \h 83. Market PAGEREF _Toc21104364 \h 83.1. Size and Capacity of Market PAGEREF _Toc21104365 \h 83.2. Growth rate, Competition and Barrier to Entry PAGEREF _Toc21104366 \h 83.3. Trends Affecting Companies in Industry PAGEREF _Toc21104367 \h 83.4. Segmentation of Market PAGEREF _Toc21104368 \h 93.5. Target Market PAGEREF _Toc21104369 \h 93.6. Major Competitors PAGEREF _Toc21104370 \h 103.7. Potential Customers PAGEREF _Toc21104371 \h 104. Operations and Technology PAGEREF _Toc21104372 \h 104.1. Development of Technology PAGEREF _Toc21104373 \h 104.2. Impact of Changes in Technologies PAGEREF _Toc21104374 \h 104.3. Options for Manufacturing Products PAGEREF _Toc21104375 \h 114.4. Options for Sales and Distribution PAGEREF _Toc21104376 \h 114.5. Resources Required for Development PAGEREF _Toc21104377 \h 114.6. Laws and Regulations Related to Business PAGEREF _Toc21104378 \h 114.7. Ethical Issues PAGEREF _Toc21104379 \h 115. Human Resources (HR) PAGEREF _Toc21104380 \h 125.1. Technical and Management Experiences of HR PAGEREF _Toc21104381 \h 125.2. Responsibilities and Roles PAGEREF _Toc21104382 \h 125.3. Ownership Structure PAGEREF _Toc21104383 \h 125.4. Employees Requirements PAGEREF _Toc21104384 \h 125.5. Company Growth Strategies PAGEREF _Toc21104385 \h 136. Finance PAGEREF _Toc21104386 \h 136.1. Projected Revenues PAGEREF _Toc21104387 \h 136.2. Start-up Costs and Equipment/Capital Costs PAGEREF _Toc21104388 \h 146.3. Projected Profit and Loss Statements for Next Three Years PAGEREF _Toc21104389 \h 146.4. Sources of Finance PAGEREF _Toc21104390 \h 147. References PAGEREF _Toc21104391 \h 15Appendices PAGEREF _Toc21104392 \h 18Appendix A: Start-up Costs for GTC shop (Year 2020) PAGEREF _Toc21104393 \h 18Appendix B: 3 Years Profit and Loss Statements for GTC shop PAGEREF _Toc21104394 \h 18Appendix C: Assumptions for Making Profit and Loss Statements PAGEREF _Toc21104395 \h 19
Individual Business Model and Plan
1. Introduction
Businesses based on innovative ideas can achieve competitive advantages in continuously growing and changing business environments. In order to achieve high revenues and profitability, the business venture is planned to be opened in city of Sydney, Australia. A start-up entity based on business idea is developed for providing organic tea and coffee to customers in Sydney. Start-up company is going to be known as Global Tea and Coffee (GTC) shop. The policy of providing high quality and organic products at comparatively low prices will be adopted by GTC shop. Introducing high quality and organic products at low prices should help the GTC shop in increasing market share and achieving competitive advantage. GTC shop also developed strategy of using environment-friendly packaging for completing its corporate social responsibility (CSR). The report is developed for presenting business model and plan for GTC shop and detailed analyses are conducted for ensuring that plan contain different perspectives.
2. Business Model Canvas
Outlined business model canvas for GTC shop is mentioned below.
Table 1: Developed Business Model
Key Partners
1. Coffee and tea machine makers
2. Organic coffee beans and tea producers
3. Advertising firms

Key Activities
1. Product manufacturing
2. Research and development
3. Marketing and sales
4. Human resource management
5. Supply chain management

Value Propositions
1. High-quality coffee and tea products
2. An excellent and unique environment for customers
3. Effective organizational culture for treating customers and employees with dignity and respect

Customer Relationships
1. Marketing campaigns for advertising information about products
2. Membership card option for availing different discounts
3. Communication with customers through social media platforms and mobile application

Customers Segments
1. Millennial generation
2. Freelancers
3. Professional executives


Key Resources
1. Human resources with innovative ideas
2. High-quality organic coffee beans and teas
3. Manufacturing equipment
4. Environment-friendly packaging material
5. Technological based platforms for selling products


Channels
1. Company shop
2. E-commerce website and mobile application


Cost Structure
1. Shop rent
2. Human resources salaries and wages
3. Investment in technological advancements
4. Tea and coffee equipment
5. Environment friendly packaging

Revenue Structure
1. Revenues from coffee and tea products

Discussion of business model elements is mentioned below.
2.1. Customer Segments
Customer segments include Millennial generation, freelancers and professional executives. According to Australian Bureau of Statistics, Millennial generation income has fallen by 8% in 2015-2016 as compared to income in 2005-2006 (Whiteford, 2018). It indicates that coffee and tea products with low prices are going to attract Millennial generation. According to a survey, number of freelancers increased from 3.7 million in 2014 to 4.1 million in 2015 (Prwire, 2015). Freelancers are a very important segment for GTC shop. A number of people employed in Australia were 12.58 million in 2018 (Plecher, 2019). Professional executives are another important segment for GTC shop and it is expected they are going to contribute a lot in profitability. Executives are usually willing to pay high prices for premium products.
2.2. Value Proposition
High-quality organic coffee and tea products are essential for customers. Shop environment should reflect its organizational culture for employees and customers.
2.3. Customer Relationships
The membership card is offered by GTC shop for the customers. Different kinds of discounts can be availed through membership card. Continuous communication with customers will be achieved through social media platforms and mobile application (Bartosik-Purgat, 2018). Customer relationship is important to overall goodwill of company.
2.4. Channels
Coffee and tea products are sold at the shop in Sydney and also through company website and mobile application.
2.5. Key Activities
Continuous research and development are required for manufacturing high quality products. Effective human resource management help in achieving effectiveness in operational activities. Supply chain management contribute towards ensuring that organic materials for coffee and tea products are available in short term and long term period of time. Marketing activities help in promoting the products and contribute towards achieving high revenues and profitability.
2.6. Key Resources
Human resources with innovative ideas are essential for continuous development of new products and services. Environment-friendly packaging policy adopted by GTC shop reflect that management is willing to invest large amount of financial capital for completing its corporate social responsibility (CSR).
2.7. Key Partners
Organic material producers for tea and coffee products are important key partners. Long term partnership with advertising companies is essential for promoting the products.
2.8. Revenue Structure
GTC shop source of revenue is one. Company will generate revenues by selling coffee and tea products.
2.9. Cost Structure
Main cost elements of GTC shop are rent, salaries and wages, training, installation of technological-based equipment’s and platforms, and environment-friendly packaging.
3. Market
Australia market research for the company is mentioned below.
3.1. Size and Capacity of Market
Australian cafes and coffee industry is reflecting a continuous growth. Revenue of cafes and coffee industry is expected to grow at a rate of 2.5% to $9.9 billion through 2018-2019 (IbisWorld, 2019). The profitability of companies is getting affected due to continuous rising competition. Expected revenues from tea industry are $1184.2 million in 2019 (Statista, 2019). Tea and coffee industries have lot of potentials and new companies can generate high profits by utilizing opportunities.
3.2. Growth rate, Competition and Barrier to Entry
Industry is showing positive growth in recent years. According to a research, Australian coffee market is expected to grow at a CAGR (Compound Annual Growth rate) of 5% during 2019-2024 (Mordorintelligence, 2018). The barrier to entry is also low in coffee industry and due to this, it is expected that competition is going to rise further (IbisWorld, 2019). Café Latte is the most popular product followed by Cappuccino and Flat White (Granwal, 2019). Tea market is expected to grow at a CAGR of 3.5% during 2019-2024 (Statista, 2019). GTC shop can utilize the growth rates of coffee and tea industries for achieving high performance.
3.3. Trends Affecting Companies in Industry
12700238506000Environmental awareness among the customers and cafe shop owners is creating a positive impact on companies in the industry. It is important to mention that about 2.6 billion coffee cups are thrown every year in Australia (Clifton, 2019). Cafe owners are investing large amount of financial capital for achieving environmental sustainability. Rising competition trend is also creating a positive impact because organizations are installing more technological-based solutions for achieving operational efficiency. Roy Morgan research indicates that at least 50% of Australian drink one cup of tea per week and it is even reflected in figure mentioned below (Roy Morgan, 2016). Statistics in figure indicate that more tea is consumed with an increase in age.
Figure: Australian Tea drinkers of Different Ages
Source: (Roy Morgan, 2016)
3.4. Segmentation of Market
Coffee products are likely to be consumed equally by customers belonging to different age groups. On the other side, statistics reflect that more tea is going to be consumed with an increase in age (AFN Staff Writers, 2016).
3.5. Target Market
Most important segment of target market is Millennial generation. According to brand transformation manag...