Enterprise Development: Juway’s Café

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Introduction

Background of Juway’s Café

Juway’s Café started in 1999 as a small business outlet that was started by Juwariya in Maldives. From a humble beginning, this firm was able to grow rapidly in the service industry, overcoming a number of challenges in the process. The management of the firm remained resilient in the face of stiff market competition.

Currently, Juway’s Café is one of the leading food outlets in Maldives. Besides offering various products to clients who visit its stores, the firm also offers catering services for events like weddings, birthday parties, and corporate functions, among others.

Although 2015 has been predicted to be a year full of numerous challenges to the business fraternity in this country, Juway’s Café has a clear game plan on how to overcome these challenges.

An interview with the owner of this business clearly shows that this firm is prepared to deal with the problem of decreasing number of tourists in the country.

Background of the service industry

The service industry in the country has experienced massive growth over the past few years. In this paper, the focus will be on the hospitality industry as part of the service sector. This industry heavily relies upon the tourism industry. An influx of tourists into this country always boosts business in this industry.

According to Kusluvan (2003), some events in the recent past have caused uproar in the international community, hurting the service industry, especially the tourism sector. Strict application of Shariah laws have made some tourists to avoid visiting this country.

Main Target Market of Juway’s Café

Juway’s Café’s main target market comes from the local population. As the owner of this firm stated, this café targets the local consumers, especially those who may want catering services for various events such as those discussed above.

The international tourists who visit the country from time to time also make another attractive market segment for this firm. According to the statements of the owner of this firm, Juway’s Café is planning to look for markets beyond the borders in the near future.

Competitive advantage of Juway’s Café

The high number of firms in this industry has made it very competitive, making it necessary for Juway’s Cafe to find ways of gaining competitive edge over its market rivals. To understand the competitiveness of this firm, conducting a SWOT analysis will be necessary at this stage.

Strengths

Juway’s Cafe has been able to remain competitive in the hospitality industry because of a number of reasons that may be considered its strength. The experience in the industry is one of its major strengths. This firm started its operations in this industry at a time when competition was not very stiff.

It witnessed the massive changes which brought with it a new strong wave of competition into this industry. This wealth of experience has enabled this firm to predict new market forces and how to deal with them in a way assures it of success.

Another major strength that has enabled this firm to overcome market challenges is its team of dedicated and highly experienced employees. Juway’s Cafe is known for its unique capacity to retain its highly skilled employees. This is majorly because of the strategies put in place by the leaders of this firm.

Weaknesses

It is also important to note that this firm has a number of weaknesses that have limited its ability to achieve the expected success in the market. One of the major weaknesses of this firm, as noted from the interview, was the location of its stores. Some of its food stores are not strategically located.

Another issue was the distance to be covered to get some of the raw materials. According to Walker (2012), the cost of transportation may affect the profitability of a firm.

Having long cover from the sourcing points to the retail stores means that this firm has been spending a lot of money on transportation. Such long distances may also lead to breakage of the goods on transit.

Opportunities

The market presents a number of opportunities that this firm should take advantage of in order to enhance its competitive capabilities. According to Lehmann and Winer (2008), emerging technologies may be seen as either threats or opportunities, depending on the approach that one takes to deal with them.

The emerging technologies may bring an opportunity to introduce a new production system which is lean and more effective than the existing systems. The new communication tools can also enable Juway’s Cafe to interact easily with its clients in the market.

This makes it easy to monitor and respond to the changing market trends as may be appropriate. The increasingly globalised international market offers Juway’s Cafe an increase in the market. The firm is yet to make an emphatic presence in some markets in Asia-Pacific.

These markets could be the magical key to its prosperity if the management can be serious about it (Temporal, 2010). The emerging middle and upper class in the country is another opportunity that this firm should not ignore.

Threats

The external environment presents some threats that must be dealt with to avoid their negative consequences (Keegan & Green, 2013). The threat of new entrants into the local market is expected to go high as many firms struggle to expand their operations in the global market.

Any new firm that has the capacity to withstand such a competitive environment can easily join this market, and this can make the market to be very competitive.

External Forces Affecting Juway’s Café

In order to understand the strategic issues that affect Couch in the market, it will be necessary to conduct a detailed analysis of its external environmental forces. As McKeown (2002) suggest, using tools such as PESTEL and Porters Five Forces may be beneficial at this stage in order to develop a comprehensive understanding of the dynamics in the market.

Political environment

The political environment may have serious consequences to the internal activities within a firm. According to Griffeth and Hom (2001), political instability may lead to serious insecurity within a country. Achieving success in a lawless country is not possible.

Juway’s Cafe has flourished because of the peace that has been experienced in the Maldives. This country has enjoyed a long political stability. The political class has also made an effort to avoid any direct interference with the business community.

Economic environment

The economic environment in Maldives has remained relatively stable over the years (Starling, 2011). Other than the 2009 economic recession that hit the country, the markets where this firm operate have experienced economic prosperity.

Social environment

The social forces have a strong influence on the trends in the hospitality industry. According to Grigoroudis and Siskos (2010), the socio-cultural beliefs have a major impact on the purchasing patterns of the consumers. In the Maldives where Juway’s Cafe operates, the social environment is relatively diversified.

Although majority of the population are Muslims, the society is opening up to Western civilisation. In such a diversified environment, this firm will need to find ways of meeting the unique needs of different classes of its customers.

Technological environment

Technology has transformed the production strategies used at this firm. When Juway’s Cafe started in 1999, the technology had not reached the current levels. The firm currently uses machines to enhance speed, standardisation, and quality of the products. Technology has also transformed the marketing strategies used by Juway’s Cafe.

The firm now uses social media such as Facebook and Twitter to reach out to its targeted customers. Technology has also enhanced the interaction between the firm and its customers.

Ecological environment

Ecological issues also have an impact on the macro environment. The world is becoming very sensitive of the levels of greenhouse gases in the air and other agents of pollution (Novikova, 2009). Pressure has been mounting on all the manufacturers to cut down their emissions of greenhouse gases into the atmosphere.

This means that firms such as Juway’s Cafe will need to ensure that their production strategies conform to the new environmental policies.

Legal environment

The legal environment is another macro environmental factor that has affected the operations of Juway’s Cafe. According to Hernon and Whitman (2000), no firm can operate in a lawless region.

A firm needs laws that will guide its relationship with other stakeholders and protect it from unfair practices that may be a threat to its existence (Lindenau-Stockfisch, 2011). The legal systems in the Maldives have enabled this firm to operate without unnecessary interruptions.

Business Challenges Faced by Juway’s Café in the Year 2015

According to the interview by Juwariya, the year 2015 has brought with it some challenges which have affected its revenues. One major challenge is the reduction in the number of tourists visiting the country. Over the recent past, the number of international tourists visiting the country has reduced significantly.

Local tourism is also very sluggish. Stiff competition in the market is also worsening the competition. According to Kronberg (2011), competition may be a serious threat to a business’ prosperity if it is not handled carefully. The increasing number of new entrants has reduced the size of market share for this firm.

The stagnation of the economy is also another issue that Juwariya mentioned as an issue that is affecting business. Instead of eating in hotels, some people now prefer taking their meals at home as a way of adjusting to the increasing cost of living in this country.

This means that the firm has to adjust its operations by reducing its volume of production. This means that there will be reduced profits because of the low sales.

Opportunities for the Juway’s Café in the near Future

According to Juwariya, the biggest opportunity for this firm is the prospects of going global. The current population is this country is estimated to be 393,500 (Gaurav, 2013). This is a small population considering the expansion plans for this firm. Going global will, therefore, offer it a wider market than what it currently has.

The security measures put in place by the government has also offered an opportunity for this firm to expand its operations. The intended infrastructural developments scheduled to take place, especially in the road sector is expected to offer this firm a further advantage in the market.

According to Juwariya, with improved transport system, the cost of operations will go down. The process of getting the raw materials from the suppliers will be simpler and will take a shorter time.

Views from the Entrepreneur about the Sector

The interview with Juwariya revealed a lot about this sector of the industry. It also enabled the researcher to understand the views of the entrepreneur about this sector of the economy. According to this entrepreneur, the hospitality sector has not been given enough attention by the government.

This is seen not only in the annual budgets, but also in terms of marketing the country internationally. The government has done little to market the tourism sector to the international community.

Juwariya also feels that the sector has a potential that can only be exploited if the stakeholders in this country makes an effort to improve the infrastructure and other support industry. He noted that the sector still over relies on tourism, something that needs to be addressed by the relevant stakeholders.

Actions to be taken to Overcome Problems and to Ensure Business Sustainability

To ensure business sustainability, Juwariya noted that a number of actions will have to be taken by different stakeholders to address specific problems. On the issue of infrastructure, he noted that it is the responsibility of the government to build transport network and other enabling structures within the country.

It is also important to look for the market beyond the local borders. Increasing awareness of this country is another issue that may help increase the number of visitors into the country.

Another action that will need to be taken is to enhance the security in the country. This will enable the players in the hospitality industry to operate 24 hours in a day.

Key success Factors to Ensure Success and Future Growth of Juway’s Café

Understanding the key success factors may be critical when analysing environmental forces that may affect the operations of the firm. One of the greatest success factors at Juway’s Cafe is the long experience it has had in the hospitality industry.

The firm has been in the operations since 1999. It has an understanding of how to deal with the emerging trends in this industry.

The acquisition of highly experienced employees to work in the production department also means that this firm is in a better capacity to come up with innovative products and production strategies that will help in cutting down the cost of operations.

The firm has also introduced new strategies that encourage and define how to manage change in the workplace. The proactive approach to change makes it easy to deal with the new disruptive forces that may affect the normal operations of the firm.

Discussion

The discussion above has demonstrated that Juba Cafe has managed to withstand the market forces in this country. According to Juwariya, the owner of this business, the management has been keen to ensure that it offers the best products at the right time and competitive prices. The 4 Ps of marketing mix discussed below has benefited it a lot.

Product

The product element is the first factor that the management of Juway’s Cafe has laid a lot of emphasis on in the recent past. It is offering products that exceed the expectations of the customers. However, other competitors have been keen on improving the quality of their products as well.

For this reason, the management will need to ensure that the quality of these products is maintained in order to meet the expectation of the customers.

Price

The pricing element is also important when defining the marketing approach that a firm uses in the market (Aaker, 2009). Customers value the pricing strategies because it not only defines their ability to access such a product, but it also tells them of the value of the product itself.

According to Cook (2005), highly priced products are easily associated with high value in the market because it targets the rich. On the other hand, low priced products are considered to offer poor quality as it targets the poor.

This makes it very challenging for a firm to set an appropriate price that will not devalue the product, but at the same time attract more customers. Jain (2011) says that it is very important to understand the market segment targeted in order to know their buyer behaviour.

It is important to understand their capacity and expectations when they are looking for a food outlet. The management will also need to evaluate the market trends to determine the prices charged by other existing players and the view of customers about these prices. It should then determine its cost of operation (Nash, 2000).

With this knowledge, the firm will be in a position to set competitive prices that will not jeopardise its profitability. The firm should avoid evoking price wars, especially given the fact that it is a new entrant in the market.

Place

The place element of the marketing mix entails having the product at the right place in the right time. Customers need to have the product readily available in the market (Kuballa, 2007).

This will specifically apply when looking at the outside catering products offered by this firm. The management will need to ensure that the products are delivered to the clients at the right time in their designated place.

Promotion

The promotion element is very important when defining sustainability and profitability of a firm. Currently, Juway’s Cafe uses the social media, especially Facebook, to reach out to its target audience. The firm will need to compete with the existing players for the small market.

This requires superior promotional campaign strategies that will endear it to the customers in the market (Knight, 2006). The promotional campaign methods should be specific in targeting the right consumer segment in this market. The campaign must be appealing to the target market.

Conclusion

It is clear from the analysis above that Juway’s Cafe is one of the emerging food outlets in this country. The hospitality industry is playing a major role in the country economy.

However, factors such as low population and little attention given by the government are some of the issues that are hindering its expansion. Juway’s Cafe has a potential to expand its market coverage if the management can manage external environmental threats such as increased competition in the market.

References

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