Bozz Café in Nice: Business Plan

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Executive Summary

Activity

The proposed Bozz Café is different from the typical establishments found around Nice, France. The enterprise will adopt a business concept that offers entertainment, socialization, and communication in an ambient setting while delivering the best coffee in the industry. Bozz Café is the answer to the increasing demand for a restaurant that offers a relaxing atmosphere and access to the internet at no cost.

Market

The business will be located in Nice. Nice is the second-largest city in the southern part of France. It is situated on the coast of the Mediterranean Sea and near the Italian border. The city is 71.9 square kilometers. It is estimated to have a population size of 348,721 people. The city is visited by many tourists because of its attractive sceneries and comfortable climate. Bozz Café will offer free internet services in an ambient atmosphere. The main anchor product will be coffee. The facility will offer special blends of coffee as per the customer’s demands. The thinking behind the different brews is motivated by the fact that Nice is a cosmopolitan town. The Bozz Café will apply various marketing strategies to the business.

Financial Information

The projection is to attain gross sales revenue of $50,000 month-on-month. The company should attain the break-even point by the sixth month.

Strengths of the Project

1. No other enterprises are offering a combination of coffee and free internet to customers in Nice, France.
2. There is a vibrant population of students and professionals in Nice, who will form the target market for the café.
3. The investors are entrepreneurial graduates. As such, they have experience in the operations of start-ups.
4. There is an existing gap in the market that can be filled by Bozz Café.

Perspectives

Besides access to the internet for academic purposes, technological innovation has proved to be an important communication tool. It is a phenomenon that facilitates the transfer of information between different persons. It has turned the world into a global village. The internet café business has spread all over the leading cities, including Nice, France. Europe was one of the first regions to benefit from internet connectivity due to its advanced infrastructure and a highly educated workforce. The gross revenue for the start-up is expected to be $50,000 month-on-month.

Proposed Operation

The money for the start-up will be raised by the investors. Also, the partners will approach financial institutions for loans to meet the capital outlay of the venture. For the first year of operations, the investors will require $202,500. Out of this amount, $74,500 will go into marketing, while the rest will be used to acquire the premises and cover for other overhead costs, such as the purchase of assets. The five partners will have equal shares in the business.

Introduction

Consumption of coffee in France has registered steady growth in the recent past. The gourmet coffee has registered the strongest growth in the industry. French coffee drinkers are demanding. With the addition of foreign tourists and students, the delivery of excellent café services calls for dedication. Nice is characterized by a gregarious population and rainy winters. As a result, the city has always been an ideal location for café businesses. The situation is enhanced by the growing population of foreign students in the town. The development calls for more than just a coffee house (Gloess et al. 620). As such, Bozz Café will occupy a niche market that seeks to build a regular and loyal customer base. The objectives will be achieved through the provision of great coffee experience coupled with added advantages. The added advantages will include access to the internet and a relaxing environment close to the students’ residencies.

In this paper, the author will provide a business plan for the proposed Bozz Café. The business plan will capture, among others, the positioning and marketing strategies that will be adopted to promote the café. Also, a financial plan for the proposed business will be provided. The business aims to capitalize on the Nice’s position as a major tourist destination in Europe. The city also has a vibrant student population that will be targeted by the new business.

Key Dates

The company will start operations in January 2017. Within the first month, the investors will acquire the premises, renovate the restaurant, install the required equipment, and hire the employees. Officially, operations will start on 15^th January 2017. Concerning marketing, the website for the company will be launched by the 20^th of January, 2017. Advertisements on the local newspapers and radio stations will also be conducted in January. Advertisements on the local television will start to air in February 2017, after the business has been opened. Flyers and brochures will be printed and distributed by the end of March 2017.

Historical Evolution of Operations

The market research conducted revealed that there is no business in Nice, France, that is offering a combination of a restaurant and a cybercafé. As such, data on the historical evolution of sales, net income, and workforce in recent years is lacking.

Market Analysis

Nice City: Background Information

The city of Nice is open and laid-back. Life in this part of France can be described as liberal and lively. The city offers a lot in terms of excitement for students and the general population. The town is built on tolerance and the people are friendly to a wide range of social orientations. The three hundred days of sunshine makes the city a happy and relaxed place to live in. The city is accessible from different parts of Europe. Visitors can access the town through the Nice Cote d’Azur Airport, the third-largest international airport in France (Internet Commercial Information Services Ltd. par. 5).

Nice is one of the earliest settlements in Europe. It has a long and illustrious history. The city has a strong cultural tradition, which is backed by national theatres, museums, opera houses, casinos, and concert halls. It is home to two international universities. The institutions are Universite Pierre et Marie Curie and the University of Nice Sophia Antipolis. The universities undertake world-class research with the Universite Pierre regarded as the largest medical and scientific complex in France. The city is also home to many higher education institutions that offer postgraduate degrees out of the university framework (Internet Commercial Information Services Ltd. par. 8).

The Growth of the Internet Industry

Internet connectivity had flourished in archives and libraries before the rest of the world took notice. The limited facilities and the lack of access to computers in schools led to the emergence of cybercafes where students could access the internet to meet their academic needs and requirements (Damodaran 2). Internet is used for, among others, academic purposes. It has become a major communication tool. Access to the internet has facilitated the transfer of information between persons living in different parts of the world (Aronsson and Rickard 21). In essence, this technology has turned the world into a global village.

The internet café business has taken root in large cities in the world, such as Nice, France, to meet the increasing demand for information. Europe was one of the earliest regions to benefit from the internet. The continent was able to take advantage of the technology due to its advanced infrastructure and a highly educated labor force. Some of the leading internet corporations in the world have set up research centers in major cities in Europe to facilitate the development of innovative technologies in the information and communication industry (Aronsson and Rickard 22). It is against this background that Bozz Café seeks to venture into the business of providing internet and associated technology services to the residents of Nice.

Bozz Café is different from the conventional establishments found around Nice, France. For starters, the enterprise will adopt a business concept that combines entertainment, socialization, and communication in an ambient setting. At the same time, the customers will be provided with some of the best coffee in the industry. Bozz Café will seek to address the increasing demand for restaurants that offer a relaxing atmosphere and access to the internet at no extra cost. The customers want a convenient establishment where they can socialize and access the internet to accomplish their various tasks (Damodaran 9). Access to the internet should be affordable without economically, socially, or politically isolating the users. The overarching objective is to provide the community with a place where individuals can socialize, enjoy entertainment, and have access to the internet for purposes of communication. The services will be provided in one house with various choices of seating arrangements. As such, the café will combine the services offered by competition by bringing them under one roof. It will provide a wide range of prices to meet the economic abilities of the community. The Bozz café will strive to maintain high-quality standards for both services and goods.

Company Location

The business will be located in Nice, France. Nice is the second-largest city in the southern part of France. It is located on the coast of the Mediterranean Sea. It is near the Italian border. The city is approximately 71.9 square kilometers. It is estimated that 348,721 people live in the city (Internet Commercial Information Services Ltd. par. 2). The city is a major tourist destination in Europe. Tourists are attracted to the town’s beautiful sceneries and mild climate. The city is famous for its warm Mediterranean climate and the beautiful coastline. Besides tourism, the town has an active port and hosts a wide range of thriving businesses. Also, it has a thriving technology sector that has attracted foreign investment. Nice has a well-developed infrastructure. The city is linked to other towns and countries through a wide network of well-maintained motorways (Internet Commercial Information Services Ltd. par. 8).

A successful café business can be located in a wide array of facilities, such as free-standing buildings. The business may also be located in an existing building that could be converted and customized to accommodate the specific operations of the venture, such as the café. The Bozz Café will be located at an upcoming building along the Avenue de la Californie in the Sky Valley-Côté Jardin building.

Marketing Analysis

Bozz Café faces an exciting opportunity as the first-entrant in the local internet café market. The consistency in the popularity of coffee drinking and the increased usage of the internet is regarded as a winning business concept in other markets (Keyes 123). The combination is expected to produce a similar success story in Nice. The target market has shown consistent growth in the recent past. As such, Bozz Café is faced with a large number of customers since the business will offer a much-needed service. Such a combination is a requisite factor for success.

The following attributes of the target market are necessary for growth:

• The student population in Nice continues to show steady growth.
• Office workers and Professional and in the area continue have a steady growth.
• Local teens and young adults continue to be a significant contribution to the foot-traffic.

Market Needs

The coffee industry in Nice has experienced a rapid growth in the last decade. There are several coffee houses that have been established in the city. Such establishments have a sizable clientele (Internet Commercial Information Services Ltd. par. 8). There are several factors that contribute to the growing demand for well brewed coffee in Nice. The growth of the student population has significantly increased the number of coffee drinkers in the city. The opening of many offices within Avenue de la Californie area has also seen the growth of professional and office workers to a sizeable population. As such, the demand for coffee is likely to grow exponentially.

The growth of internet services experienced worldwide can be viewed as the beginning of an economy hinged on the evolving technology infrastructure. There is enormous potential associated with the growth of the internet business (Porter 18). In the near future, online connectivity will be as necessary and as common as the telephone. Establishing itself as the first internet café within the Avenue de la Californie locality, Bozz Café will enjoy the advantages associated with first movers. Such advantages include name recognition and a solid customer base. At the beginning, Bozz Café will have 100 percent of the local market. However, with time, competitors will penetrate the market (Porter 81). The goal of Bozz Café will be to consistently maintain a fifty percent share in the market.

Market Trends

Restaurants are the cornerstone of many economies in the world. They avail employment and career opportunities to millions of people globally and in the local communities. It can also be observed that the internet has, to a large extent, become a center of conversation among various social groups (Wenzel 7). The discussions may be based on internet sites that some individuals have visited or on internet-based businesses. Such discussions could also take place in some of the latest chat rooms. Nevertheless, such discussions cannot take place in the office or at the family dinner table. Consequently, there is a need for a comfortable place where people can share their experiences in comfort as they enjoy a relaxing cup of coffee. Bozz Café aspires to provide an unforgettable experience to the customers.

Analyzing Competition

Competitive advantage

Bozz Café is set to be a successful enterprise because it is a response to a real need for the kind of services it will provide within the neighborhood of Nice. The locality does not have a café with the concept that Bozz is based on (Internet Commercial Information Services Ltd. par. 2). Most of the establishments are either only cybercafés or purely restaurants. Bozz Café will include modern elements, such as internet and a relaxing atmosphere, imbued with a cool ambience. The café will also offer superior customer service and a perfect mix of coffee and fresh snacks.

Bozz Café will be the only establishment offering free internet connectivity for both computer and smartphone devices through the Wi-Fi connectivity. There is a need for such services since the area hosts many students and professionals. The students and professionals do not have access to a place that combines socialization, relaxation, and the ability to catch up on communication while enjoying a good cup of their favorite coffee. Bozz aspires to be the answer to such needs (Keyes 12).

Whereas the partners are inexperienced in business, there is a team of advisors from the faculty of entrepreneurial studies who are supporting the enterprise as part of the faculty’s social responsibility target and the enhancement of the institution’s contribution to the success of the students’ ventures. Some members of the faculty have successfully established start-up ventures elsewhere. Consequently, the Bozz Café team has the support of a knowledgeable support team that is willing to dedicate effort and time in advising the partners on the appropriate management model and practices for their business.

The location of the café offers a key competitive advantage. The café will be located at the Sky Valley-Côté Jardin building along the Avenue de la Californie. The location is vibrant and hosts many activities. There are many pedestrians and the building is surrounded by many student residencies (Internet Commercial Information Services Ltd. par. 3). In addition, there are many people working within the neighborhood. During the day, there are many tourists, office workers, students, and residents strolling on the brick-paved and flower-lined sidewalks. The area is always bustling with human traffic, which should deliver the needed foot traffic to the café.

Finally, Bozz Café will offer a menu selection of the best coffee by identifying the suppliers of the best beans. The goal of the enterprise is to build a clientele based on the services, products, and environment. It is assumed that if the three factors are met, the café will be able to maintain the customer base and, if possible, build on it in the future. Being the only café that offers dining facilities combined with free access to the internet is a factor in the competitive edge.

Competition

For a business to succeed, it is essential to understand the competition. Competition should be analyzed even where the services and goods on offer fill a unique gap identified in the market (Porter 27). The marketplace will often have some organizations that may be offering something similar or a substitute that satisfy the needs and desires of the customers (Kotler et al. 38). As a result, it is important to find out what drives a customer to choose a service over another.

Competition occurs either as direct or indirect. The first type of competition obtains in situations where an organization is offering similar products and services. The second type of competition involves enterprises competing for the same market. As a result, the type and amount of rivalry will have an impact on the operations of the new venture. Consequently, it is useful to consider the obtaining competition when designing the business plan (Porter 82). Such a move ensures that the incoming enterprise has a significant edge in the industry.

Consumers often consider various factors when choosing what outlets to patronize. Such factors include pricing, service levels, location, and product features. However, not all consumers will choose the same factors. That is why competition exists (Kotler et al. 26). As a result, it is important to position the venture to deliver an innovative mix of alternatives. The aim is to serve the needs of a different type of customer. For instance, an organization that is in the business of dealing with luxury products often does not compete at pricing. On the other hand, the businesses that intend to serve the working-class customers will often offer the same product as competition, but at a lower price. Understanding the position of rivals in the market will help the new entrants to note the unaddressed needs that can be met by their new venture.

The Avenue de la Californie neighborhood has several restaurants and hotels that serve coffee. There are a few cybercafés that specifically offer only internet services. The cybercafés are small and cramped-up facilities that do not offer the comfort that many internet users operating outside their offices or colleges would require (Internet Commercial Information Services Ltd. par. 7). The cybercafés are not likely to offer much competition. The restaurants, on the other hand, may choose to upgrade their services and introduce the internet services. The Bozz Café’s plan envisions such an outcome. That is why the café focuses on the provision of a comfortable and ambient environment that is difficult to replicate in the established restaurants and cybercafés.

Direct competition: Cybercafés

The available internet cafes in Nice City include Stay Connecting, which is located along the 20 Avenue of the California, Nice, France. The café is equipped with four computers and six telephone booths that connect to the internet. Internet Access is another internet café. It is equipped with 12 computer stations, flat screen monitors, as well as high speed printing connections. The café also offers scanning and fax services (Internet Commercial Information Services Ltd. par. 3). Cyber-Point is a small café located at the heart of Nice next to Massena, the square of the city. The café offers high speed connection with webcam and other chat software. It offers subscription rates for people who wish to stay longer.

There are other small cybercafés. However, the above mentioned cafés are the most popular ones and are near the location identified for Bozz Café. They only offer cyber services and, as a result, are not in the same league as Bozz Café. It can be concluded that the location does not have many competitors and the existing competition does not have the same business concept as Bozz Café.

Indirect competition: Hotels

It is another form of rivalry common in today’s markets. It describes a situation where enterprises in the market are dealing with goods and services that are slightly different from those provided by one’s business. The firms are targeting the same niche market with the aim of meeting identical needs (Kotler et al. 38). Almost all businesses face some form of indirect competition. As such, it is important to identify the various ways through which the needs of the customers can be met. The business should come up with strategies to overcome such competition. To this end, the business can create a powerful competitive edge over the other enterprises.

The established hotels and restaurants in Nice have limited offers on internet connectivity. Most offer the services to guests only. The main target for Bozz Café is the population made up of learners and the working class in the city. However, the services offered by the restaurants indirectly compete with those that Bozz Café intends to offer (Porter 22). In spite of this, providing free internet connection and the possibility of socialization and relaxation may compensate for the business that may go to competition.

Activities of the Firm

Building a Successful Startup Business

In order to build a successful enterprise, the founder or founders must first do something that has not been done or invent a new product (Rumelt 81). Analysts argue that in today’s world, the business frontier is technological in nature. It is observed that the technology should be viewed across all fields and not just in the computer industry. It is also important to note that in the world of business, there is vertical and horizontal progress (Rumelt 88). Horizontal progress is equated to globalization, which translates into doing more of what has proved to be working. Vertical progress, on the other hand, is the evolution of new and better methods of doing something. That is what is needed to create a successful startup enterprise in the competitive business world. In addition, it is observed that for a startup enterprise to succeed it must have a plan. It should also be bold, able to create new services and products, as well as have sales as a major priority. Bozz Café will embrace these elements in its endeavor to challenge the existing status quo in the internet café industry.

Like is the case with many ventures, the starting point for Bozz Café entails the development of a business concept. The concept will be followed by an analysis of the market. Finally, the venture will involve the identification of the suitable location for the business. It is important to note that the location should complement the concept. The identified location is determined by the niche market (Zagat and Zagat 12). The selected area hosts many international students who are in need of a place that offers relaxation, as well as the amenities that allows for working either on their own or in groups. To this end, Bozz Café will be designed to accommodate the needs of private individuals. At the same time, it will accommodate group activities if and when required. The café will also offer free access to the internet to enable the patrons carry out their work.

The location was identified after taking into consideration a number of factors that are critical to the success of an internet themed café. The first consideration was the demographics of the region. The concept of demographics can be viewed from two major perspectives. They include the consideration of the potential customers and the significance of the proximity of the location (Zagat and Zagat 16). For a service business, such as Bozz Café, proximity and accessibility are critical. The demographic profile of the target market is composed of young international students. The students come from diverse cultural backgrounds. The café will be a facility that allows the students to socialize and share in their cultural diversities. It will offer the much needed meeting and socializing point.

The second group comprises of the local people familiar with the internet and expressing a desire for an inviting and progressive atmosphere. The people desire an environment where they can get out of their homes, offices, or colleges to enjoy some great coffee and free internet access. The group is made up of office workers and business people in the city of Nice. While the target market is the large student population, consideration is also given to the local community. The local community is presumed to have a stable economic base that can sustain a healthy environment for the café business (Internet Commercial Information Services Ltd. par. 9).

The foot traffic factor is also critical to the selection of the appropriate location. A café business is highly dependent on human traffic (Keyes 12). As such, being located in an area where many people pass by and being accessible are considerations that are made in the selection of a location for Bozz Café. The business is centrally placed. It is also located on the ground floor of the building. As such, it is accessible to most people, including those with disabilities.

Consideration should also be given to accessibility by car. Whereas the business is located on a busy street, the availability of ample parking was a significant factor in choosing the location of the café. Both customers and suppliers will find it easy to access the parking lot. In addition, the building is accessible day and night. Bozz Café will be located along Avenue de la Californie in the Sky Valley-Côté Jardin building. The building is centrally located and easily accessible to the Nice population. It is a high-rise residential building. The ground floor is occupied by several businesses as a side usage. The building is the second tallest structure in Nice. The Bozz Café will occupy 1,500 square foot space. The space should be enough to accommodate the operations of the business (Gloess et al. 619).

The Bozz Café will include a lounge, a storefront restaurant, several rooms that can accommodate small groups, and a large hall that can be used for various events, such as group parties, private functions, and public lectures. All the rooms will be internet enabled through cable and Wi-Fi. What this means is that the clients will enjoy unrestricted access to the internet. The clients can also choose to either use the small rooms or work from the lounge. The setting allows for people to work together or as individuals. Besides working, individuals can also just sit in the lounge and socialize while enjoying a great cup of coffee of their choice. The café will offer different types of coffee, including espresso, Espresso Panna, Caffe Latte, Cappuccino, Caffee Mocha, and Carmelo Maccachino. The menu will also feature tea, snacks, and drinking water. The objective is to offer the customers a unique and innovative environment for relaxation and socialization while enjoying great coffee (Patterson 88).

Company Ownership

Types of ownerships

From the time the entrepreneurial bug hits some people, there are many things that need to be taken into consideration before the process of starting the business can begin. To start with, there is need to consider the legal aspect of the enterprise (Patterson 81). There are several business structures to choose from. The various business structures have their own benefits. The proposed Bozz Café will adopt one of these structures.

The sole proprietorship form of business ownership

According to Rumelt, the sole proprietorship is the most popular type of business organization that is available to new entrepreneurs venturing into the market (91). In a sole proprietorship, the ownership is held by one individual. All the responsibilities are taken by the owner. Such a business may evolve from a hobby and converted into a legal entity. It may run as an enterprise offering services and goods to the consuming public. A sole proprietorship has its share of benefits to the owner. One of them entails the simplicity of its creation (Porter 12). Some of the other advantages include low start-up capital and easy control of the business. In addition, there are profit incentives and less legal restrictions when starting a sole proprietorship. Finally, it is easy to discontinue the operations of the business should the owner wish to close down the business.

In spite of the above benefits, there are a few disadvantages associated with a sole proprietorship. One of them may include lack of skills. For example, the owner of the business may not have all the requisite skills necessary to manage the business successfully. There is also the problem of capacity restriction, limited access to start-up capital, and lack of continuity (Stevens et al. 29). In most cases, a sole proprietorship business ends with the death or retirement of the owner.

Partnership form of business

The difference between a partnership and a sole proprietorship is the number of partners who share the liabilities, assets, and the accruing profits associated with the business. As observed above, a sole proprietor is a single individual. On the other hand, a partnership is made up of several individuals who come together to venture into business (Teece 190). It should also be noted that the sharing of the assets, liabilities, and profits may not always be in equal measure. The distribution of these elements is dependent on the shares held by each of the partners. The shareholding is determined before the partnership is legally formed.

The roles of the various partners may also be used to define the level of participation in the business enterprise. For example, there are general partners. In this case, the individuals assume the responsibilities of the business undertaking. In addition, a general partner actively takes part in the management of the enterprise (Teece 180). There are also limited partnerships. In this form of ownership, the liabilities of the partners are limited to their financial contributions. In most cases, such a partner does not participate in the running of the business. The limited partners can further be divided into two categories. The two are dormant and silent partners (Keyes 99). Both categories are used to describe partners who are inactive in the management of the business.

In France, the common types of partnerships are general and limited partnerships. In both cases, the owners are required by law to make their financial statements public. The requirement is especially applied on those businesses that have more than fifty employees and a financial turnover of more than 20 million Euros (Keyes 99).

Like sole proprietorships, partnerships are also easy to establish. The partners can bring to the enterprise complementary skills. The individuals can also increase the amount of capital available to the enterprise. In addition, it is important to note that a partnership can attract limited partners if extra capital is needed. The form of business ownership is also associated with flexibility in decision making. The reason is that it is a small company and the people involved in the decision making processes are few and accessible (Aronsson and Rickard 28).

Corporation

A corporation is a different type of business ownership compared to the sole proprietorship and partnership establishments. For example, a corporation is a registered entity with its own legal identity. Most significantly, the business is legally separated from the owners (Kotler et al. 234). As such, a corporation can engage in contractual relationships. In addition, it can sue and be sued, as well as pay taxes. In the sole proprietorship and partnership types of businesses, the owners take full responsibility of the ventures, including the operation and liabilities associated with the undertaking. Another difference is that corporations have a responsibility to the government and to the society. Consequently, they are obliged to make annual reports on their financial operations. The financial reports are made public.

Limited Liability Company

Limited liability companies are businesses that are managed like partnerships. However, they enjoy the protection of liabilities like a corporation. In such an organization, the law requires the business to have at least two owners with limited liabilities. The owners have no restrictions in the running of the daily operations of the enterprise (Gloess et al. 59). The most significant factor in the LLC is that the business enjoys the advantages that are associated with partnerships and corporations. It is important to note that one of the main advantages of LLCs is that the business is able to enjoy the limited liabilities protection. In addition, there is easy transferability, sharing of ownership, and ease of raising capital.

Bozz Café’s Service Business Analysis

The coffee retail service industry in Nice, France, is experiencing a measured growth. The internet café and restaurants can be described as approaching the mature stage in the product lifecycle. There are several elements behind the rise in demand for well brewed coffee in Nice. There are various universities and graduate colleges in the city. The students are the main drivers behind the demand for good coffee. Consumers in the South of France demand for strong and freshly brewed coffee. The population also demands for specialty drinks. Nice is developing into a haven for coffee enthusiasts. Consequently, Bozz Café would like to take a leading position in the provision of coffee in a relaxed and trendy outlet.

Just as the consumption of coffee is steadily growing, the popularity of the internet is increasing. Surfing the internet may be seen as an addictive undertaking. However, it can also be a source of entertainment and educational materials. The skilled and heavy users of the internet required a relaxed ambiance. They also require a suitable and relaxed place where they can interact with the modern technology. Consequently, Bozz Café will provide the patrons with free internet in an accommodating and novel environment. The patrons will be able to enjoy a tasty cup of their favorite coffee.

Due to competition, the café entrepreneurs must find ways of differentiating their business from the others. The aim is to gain and maintain a business competitive edge (Wenzel 8). The owners of Bozz Café realize the importance of differentiation. They are convinced that a combination of a coffee shop and internet café is a recipe for good business. The lack of established cybercafés in Nice City means that Bozz Café will be accessing a profitable place in the market.

The business of Bozz Café will be anchored on the provision of exemplary services. In other words, the success of the business will depend on the quality of the services offered to the customers. The quality will entail consistent delivery with the aim of exceeding customer expectations. To achieve the envisaged service delivery, Bozz Café has to design a program dedicated to quality service programs. The programs will include going to great lengths to find the right individuals with the passion to teach and share internet experiences. The employees will be experienced, knowledgeable, and always eager to please the customers. Their performance will be regularly assessed through internal processes and customer surveys.

The enterprise will retain the services of a Customer Happiness Executive. The duties of the CHE are to monitor the levels of happiness among the customers. The executive will also develop the customer satisfaction programs, respond to their concerns, monitor happiness levels, and keep track of the general wellbeing of the clients.

Product and Service Offering

Bozz Café will offer a wide range of products. The products include:

• Hot drinks in the coffee range, such as espresso, cappuccino, macchiato, and café latte. The outlet will also have a wide range of tea products.
• Cold drinks, which will include freshly squeezed juices, milkshakes, smoothies, iced tea, iced coffee, sparkling water, as well as energy and soft drinks.
• Hot snacks, which will include hot and cold tartes, as well as sandwiches.
• There will also be salads, fruits, and desserts.
• The café will also offer pastry and bread.
• The snacks will include French fries, chocolate bars, nuts, crackers, and jerry beans.

The services will consist of:

• Food and beverage preparation.
• Meeting room rental.
• Free Wi-Fi.
• IT services, which will include computers. The computers will be fitted with the latest software and applications, scanners, printing machines, and charging stations.
• The café will also provide work stations, which will be fitted with round tables, sofas, chairs, and bean bags.
• Additional products will include pens, branded stationeries, sticky notes, highlighters, and markers.
• Additional services will include current magazines, small lockers, branded takeaway cups, and cup holders.

Start-Up Costs for Bozz Café

Overview

Bozz Café’s start-up costs should cover the necessary coffee making equipment, site renovation, and the necessary communication gadgetry. The IT equipment essential to provide Bozz Café’s customers with the internet contributes to a large part of the start-up costs. The cost relates to computers and the necessary accessories. Two printers with photocopying capabilities and one scanner will be required. Additionally, funds will be required for the coffee equipment including an espresso machine, a roaster, and a coffee grinder (Teece 180). An estimated figure will be set aside for these purposes.

Start-up expenses

The table below is an illustration of the start-up expenses that will be incurred to establish the proposed Bozz Café business:

Table 1: Start-up expenses for Bozz Café.

The table below is an illustration of the start-up requirements for Bozz Café:

Table 2: Start-up requirement.

Additional Activities

The activities carried out by Bozz Café will include food and beverage preparation. The food and the hot drinks will be made on site. The coffee will be prepared on order. It will be made on order because of the taste preferences of the customers given that Bozz Café wants to avail various blends of coffee that include a range of different drinks. The same applies to the range of tea. The café will also prepare the pastries and other snacks on site.

The internet will be on high-speed connections through both Wi-Fi and fixed cable. The connectivity will be free of charge, but the other IT-related facilities will be available at a small fee. The IT services will include computers, which are fitted with the latest software and applications. Other services entail scanners, printing machines, and charging stations for smartphones and laptops.

The café will also provide work stations, which will be fitted with round tables, sofas, chairs, and bean bags. The stations will be in the main lounge and on the terrace restaurants. For the guests who wish to use the private meeting rooms, they will have to pay a minimum fee that will be charged on an hourly basis. Additional products will include pens, branded stationeries, sticky notes, highlighters, and markers. The items will be offered as a complimentary after the hire of the meeting rooms. Additional services will include small lockers, branded takeaway cups, and cup holders. Again, these items will not be charged. The costs will be included in the price of each item. The small lockers will be available on a short free loan for the storage of personal items while the customer is within the premises.

Coffee Products

Description of the coffee

Coffee was discovered as a refreshing and social drink in the fifteenth century. Since then, many communities have adopted the beverage as a regular drink. As the beverage became popular, different communities developed various brewing methods (Teece 180). The methods are a reflection of the various cultural differences among coffee lovers (Gloess et al. 622). Personal preferences also influenced the development of extraction methods. The methods are characterized by the extraction pressure, process, tools, and the volume to be extracted. Coffee extraction methods are also distinguished between what is referred to as a lungo and espresso (Gloess et al. 610).

The latter is a concentrated drink. It is made using pressurized hot water. The beverage is supposed to be consumed immediately. A lungo is not as concentrated and is served in a big cup. In most cases, the size of the cup depends on cultural practices. The drink is mostly drunk with milk. A lungo can be made in various ways. They include extraction through high pressure, passing hot water over ground coffee, or by boiling the coffee for a certain period (Gloess et al. 612). The preferences for specific coffee extraction modes among the customers are informed by several elements. The elements include the client’s cultural, social, and economic background. The preferences may also be influenced by financial considerations, habits, or flavor.

The brewing process of making a coffee drink involves passing hot water over roasted and ground coffee beans. The brewing can be done slowly through filter, drip, cafetiere, percolator, or the French press. In the last few decades, coffee technology has improved and changed the commercial brewing process (Gloess et al. 623). The process uses the espresso machine. The process that uses the espresso machine involves passing hot water or milk under pressure through the ground coffee. Slow-brewed coffee is often referred to as only coffee. As such, in the world of coffee, the two types are either the slow-brewed or the espresso coffee. The drinks are further divided by different strengths. To this end, some coffee drinks are made with milk or added cream. Some may also use steamed or foamed milk. In some countries, some coffee drinks may be made with alcoholic liqueurs, while others serve a combination of espresso with coffee and, in some instances, with tea.

With the coming of the Gaggia machine, it became possible to serve espresso with milk. The development led to the ‘outgrowth’ of the process as latte and cappuccino. The wave of making coffee using the Gaggia method started in the United Kingdom. It later spread to the United States and the rest of the world, especially with the spread of the Italian coffeehouse culture (Gloess et al. 615). The coffee culture was spread through the establishment of coffeehouses.

Methods of making coffee

Drip method of making coffee

The drip filtered process makes a great cup of coffee. The coffee is brewed by passing water over roasted and ground coffee beans held in a filter. The hot water is allowed to seep through the ground coffee. The process allows for the absorption of the coffee oils, essence, and flavors under gravity. The used coffee is retained in the filter and the dripping drink is collected through a carafe or coffee pot (Gloess et al. 610). The slow process allows the hot water to pick the coffee flavors and oils, which goes into the making of a tasty cup of coffee.

French press (Cafetière)

In the French press brewing method, the drink is brewed by putting the ground coffee in an empty beaker. Hot water is then introduced. After a few minutes, the plunger in the beaker is pressed to separate the grounded coffee and hold it at the bottom. The coffee can then be served. The waiting period before pressing the plunger may depend on the consumers’ preferences. To this end, some enthusiasts prefer to wait for more than five minutes (Gloess et al. 612).

Percolation method

In the percolation method, a coffee percolator pot is used by continuously cycling the boiling water through the grounded coffee using gravity. The cycling of the brew is maintained until the required strength is achieved (Gloess et al. 611). The percolators are available in standalone and stove-top types. The process has, however, been replaced by the drip coffee makers.

Types of coffee beverages

Espresso

An espresso coffee drink is made through an espresso machine. The machine is used to force boiling water under pressure through a certain quantity of finely ground coffee (Gloess et al. 611). The coffee is compacted and held in a container. The result is a dense brew with a high concentration of dissolved solids. The brew is characterized by creamy foam at the top. The espresso is also used as a base for other types of coffee brews, such as cappuccino, latte, Americano, macchiato, and mocha.

Caffe latte

Caffe latte simply means coffee with milk. The drink is made from a third of espresso, two-thirds of hot milk, and topped with foamed milk. Caffe latte is a popular brand of coffee across the world (Gloess et al. 615). It is preferred by consumers who like a dash of milk with their coffee. The basic characteristics of caffe latte are the crème color and foamed milk. In most cases, it is served with some artwork on the milky foam.

Latte macchiato

Latte macchiato is similar to the café latte. It is made from plenty of hot milk and a dash of espresso coffee. The coffee is added on top of the milk (Gloess et al. 616). The drink is characterized by a light color and coffee marks at the top. It is preferred by individuals who are not ardent fans of coffee. However, these same people appreciate the status associated with a caffe latte.

Cappuccino

Cappuccino is a popular coffee that originated in Italy. It is made of a third of espresso coffee, a third of hot milk, and a third of foamed milk (Gloess et al. 611). The drink may also be served with a little chocolate powder on top. It is characterized by a crème color and a layer of foam milk. Cappuccino is served in a large cup.

Caffe Americano

Caffe Americano is prepared by simply adding hot water to espresso. It has the same strength as brewed coffee but has a different flavor (Gloess et al. 611). The coffee brew is made either of a single shot or double shots of espresso mixed with a little hot water.

Decaffeinated coffee

For the health-conscious coffee drinkers, the caffeine content can be reduced through various decaffeination processes. The aim is to give what is popularly known as a decaffeinated coffee (Gloess et al. 611). The decaffeinated coffee can also be consumed as espresso or regular coffee. Bozz Café will be brewing decaffeinated coffee for those customers who prefer their drink without caffeine.

Snacks and Drinks

Snacks and drinks are additional products. The guests can enjoy a hot snack or a cold drink from the main lounge. The cold drinks will include sodas and fruit drinks extracted from fresh fruits in order. The café will not, however, serve alcoholic drinks.

Internet Connectivity

Internet access and connectivity is the process that allows individuals and organizations to access the internet through the use of computers, computer terminals, and mobile devices. Once a user is connected, they can access the services provided through the internet. Such services include access to their email and the World Wide Web. Internet service providers deliver the service through various innovative technologies that have a diverse range of speed and data signaling rates (Damodaran 8). Internet connectivity will be provided on high-speed broadband. Access to the service will be free to all customers using any product available at the café.

Products Synergy

Synergy is the increase in value. It is often generated by the combination of two entities to create a more valuable entity (Kotler et al. 56). In this case, it will involve the combination of the two types of services. The operating synergy produced by combining coffee, internet access and space to relax and socialize will offer economies of scale. It will also create an opportunity for better pricing, as well as higher growth potential. The combination of a restaurant and internet services should complement each other to deliver a one-stop-shop that allows the customers to get benefits that would otherwise be availed by two different business settings. Such synergies should allow for higher growth in the existing café market.

Future Growth Areas

After the Bozz Café is well established, it will be possible to transform it into a hub that provides various e-services that go beyond the webchat and browsing. The growth of internet services, such as e-stores, e-ticketing, payment of bills, shopping, as well as online games, will be exploited. The bottom line is to offer a convenient place that delivers value and improves the quality of the user’s life (Damodaran 5).

Strategy and Development Plan

Bozz Café: Vision, Mission, and Objectives of the Company

Vision

Over the next one year, Bozz Café expects to be the leading internet café in Nice. The goal is to be the provider of the fastest internet connection and the greatest cup of coffee at the Avenue of the California neighborhood. By continuously reinvesting in the café, the enterprise plans to keep adopting new technological innovations to provide the customers with the best that modernization can offer in communication (Kotler et al. 89).

Mission Statement

Boss Café’s mission is to be the internet café of choice among the student population, local professionals, as well as the visiting tourists. The company will strive to provide the customers with the best internet connectivity and the greatest brewed coffee in Nice.

Objectives

The purposes of stating the objectives of a business involve quantifying what the enterprise wishes to offer, such as goods and services. The next consideration is to identify who the products and services are targeted. In essence, the entrepreneur should identify the target market. The setting of the objectives forms the basis of identifying the appropriate marketing strategies. The most appropriate approach is to use the SMART theory (Kotler et al. 29; Porter 109). What this simply means is that the objectives should be specific, measurable, actionable, realistic, and time-bound.

Financial objectives

The financial objectives involve starting a business with the potential for growth and establishing a strong customer base. The founders of the Bozz Café estimate to make a 10% profit rate per year. The revenue will cover the costs of running the business, including paying the salaries of the employees.

Marketing objectives

The marketing objectives will be geared towards the realization of incremental business growth and remaining ahead of the competition. Bozz Café will offer the best coffee in town, an ambient atmosphere, ample parking, and free internet connectivity. The company will also sign contracts with suppliers to enable it to provide the customers with the required goods and services without a hitch (Porter 91).

Social objectives

The Bozz Café will be the social hub for the students and professionals around Nice. It will also be the preferred café for the local youth. It will be a socialization place where people can gather over a hot cup of the best coffee available in the neighborhood.

Overarching objectives

Bozz Café has two overarching objectives. The first is to build the sales turnover following the growing student population in Nice. The second is to increase the profit margins of the establishment by attracting more customers, including the local professionals, office workers, and visitors to the city of Nice (Rumelt 99). The café is a start-up company with clearly set goals, which are focused on the provision of professionally brewed coffee and access free internet. All the products will be provided in an ambient environment that is suitable for relaxation and socialization. The services will be priced according to the prevailing rates in Nice.

Bozz Café’s Business Model

The expansion and growth of the global economic outlook have significantly altered the relationship between distributors and buyers. The emergence of innovative technology and an open trading environment allows consumers to access more choices (Porter 288). As a Consequence, organizations have been forced to focus more on the customer. The emergence of technology has significantly lowered the cost of accessing essential information. Such development helps in finding and delivering customer solutions (Teece 174).

The new business environment has also escalated the need to address the needs and desires of the consumers. It has also created the need to deliver value through the provision of new services and goods. Without a model, it is difficult for enterprises to deliver value from innovations (Teece 174). The creation of revenue streams is, nevertheless complicated due to the expectation of users that the services should be availed without a cost. Bozz Café is about to launch a business model where access to the internet will be free for customers who patronize the establishment.

Several elements are used by economic theorists to evaluate the effectiveness of a particular business model. It is important to note that a business model helps in the creation of value propositions that consumers should find compelling. The model is also essential to the success of the enterprise (Teece 175). Consequently, it is viewed as a continuing task. It can also be observed that despite the proliferation of superior technology and good leadership and governance, such developments are not adequate to offer sustainable profits. The situation is especially complex in situations where the business model is poorly adapted to the competitive environment (Teece 175).

The business model adopted by Bozz Café is anchored on the need to leverage the complementary nature of access to the internet and the coffee business. By offering the convenience of enjoying great coffee and free access to the internet, the enterprise aims to attract a loyal customer base that will continuously patronize the outlet. Also, the location that has been identified is a perfect set up for the provision of internet speed that is not available in other regions. Bozz Café plans to offer internet at no extra cost and a brewed coffee experience that is not available in any other facility. Also, the premise will offer an ambient environment that is also not available in any other location within the Nice City’s neighborhood (Internet Commercial Information Services Ltd. par. 9).

Revenue Model

Overarching revenue model

The revenue model will target multiple income streams that often complement each other. The revenue stream will consist of coffee sales, snacks, and the leasing of the meeting rooms. Internet access will be provided free of charge as long as the customer has enjoyed a cup of coffee (Kotler et al. 22). However, it will be capped on the internet usage of two hours.

The coffee shop is expected to generate the largest share of sales and revenue in the first few years of operations. The coffee shop will generate revenue from the sale of various types of blended coffee and related products. Besides, the café will have a wide range of coffee products and pastries, all enjoyed within an environment that is inviting to individuals and groups of people who would like to engage in laid-back socialization. Additionally, the enterprise will solicit for a catering business from the professionals and the businesses located within the vicinity (Aronsson and Rickard 43).

Facility rentals

The facility rentals will form a small cog in the revenue stream. The café will offer several rooms that can be used for meetings and various occasions, such as discussions and teaching sessions. Given that Nice has a large international student population, it is expected that there will be a need for inter-cultural events aimed at the promotion of the inter-racial cohesiveness of the institutions (Internet Commercial Information Services Ltd. par. 2). Bozz Café is positioning itself to be at the forefront in the promotion of such activities as part of its wider promotion efforts.

Porter’s Model

To understand where Bozz Café stands in comparison to the competition, it is helpful to revisit the five competitive forces described in the Michael Porter model. According to the model, a marketing strategy should address the threats and opportunities that exist in the enterprise’s external environment (Porter 87). On the other hand, the competitive strategy should be directed and informed by the dynamics and structures that prevail in the industry. The five forces identified in the Porter model are used to determine the intensity of competition. In essence, they are used to determine the attractiveness of the industry. The attractiveness is shaped by profitability. Consequently, the objective of the enterprise is to shape and mold the competitive forces to suit the needs of the enterprise.

The figure below is a representation of Porter’s model:

The model shows that according to the traditional economy, competition drives profit downwards (Porter 72). It is assumed that competition is not perfect. In addition, it is assumed that the enterprises are not passive. As such, the trend is to strive for competitive advantage over competitors. Consequently, by applying the industry concentration ratio, it is possible to arrive at the desired level of competition market share. It is noted that a rise in concentration is an indication of a huge market share that is controlled by the well established enterprises. The case is different in a low concentration situation. Here, the market supports a number of small players. However, none of them controls a major market share. Such an industry is competitive (Porter 88).

The market analysis done for Bozz Café indicates that the internet café market is composed of small cybercafés with none having any dominance. The market situation shows that Bozz Café is in a unique position to exploit the gap between the existing cybercafés and the need for an internet café that goes beyond the traditional offer of internet connectivity only.

Based on the argument advanced in the Porter’s model, it is apparent that the power of the buyer is a significant factor in the assessment of competitiveness. It reflects the impact that the consumers can have on the industry (Porter 88). In the prevailing situation, Bozz Café seeks to target the student and professional population seeking a relaxing environment. The target population can also afford to pay for the services and goods provided.

Product Positioning

The segmentation, positioning, and targeting process is a formulated approach that has gained recognition in business management. Many marketers recognize the differences between the targeted segments and other broader segments. Consequently, the opportunity to harness and focus resources on a specific set of customers is attractive. The reason is that it offers purpose and direction to both the marketing program and the overall business orientation (Kotler et al. 88). The act of segmentation recognizes the fact that it is impossible to be everything to everybody. Consequently, the role of segmentation is to offer rationality in the identification of target customers. The positioning process utilizes the knowledge and understanding gleaned from segmentation to design the advertising proposition aimed at securing a worthwhile position in the minds of the targeted consumers.

Promotional and advertising activities are used to emphasize the diversity between the services and products by highlighting their distinctive features. As a result, they create unique appeals to the targeted consumers. As such, the differentiation is often used as a convergence for the demand of specific products and services. It can also be argued that the targeting of specific and defined segments of the market may lead to divergent demands in a given heterogeneous industry (Rumelt 123). The objective is achieved through the satisfaction of the needs of a defined market.

However, the management should be awake to the fact that the differentiation and segmentation need regular reviews to accommodate the changing needs among the consumers. As such, the strategy determination should be regarded as the overall management decision that significantly influences the performance of the business. It requires facilitative policies, which impact on the production and the marketing activities (Porter 199). It is noted that the overarching management decision is also influenced and directed by other organizational factors. Such factors involve the willingness and ability to control costs.

Product positioning is, therefore, perceived as a marketing approach that outlines the methods and strategies a company should adopt to market its services and products to the customers. The company creates an image of the product based on the targeted customers. The image is created through the application of several marketing tools. The tools include promotion and location. There is also the product and the prevailing prices (Patterson 91).

The best place to start evaluating Bozz Café’s positioning is to assess the knowledge of the services in the target market. The target market is the demographic that is most likely to benefit from the services offered by Bozz Café. The needs and interests of this segment have been established. The market is the student and professional communities in Nice. Their needs involve an ambient and comfortable place where they can easily access the internet as they enjoy a good cup of coffee. In addition, they need a place where they can socialize over a cup of coffee.

Reaching the consumer is about choosing the appropriate channel of distribution. Bozz Café’s target market is composed of students attending university in an urban setting. The students also reside within the locality of the enterprise. Accessibility has, therefore, been used as a mode of positioning the services. The company will also use the pricing strategy to leverage its competitiveness. It is important to note that the enterprise does not seek to undercut the competition. However, the pricing will be attractive compared to what is offered by the rivals.

The customer’s emotional engagement, which is the intangible element of the positioning and segmentation combination, is an integral response to the efforts of satisfying the niche market (Kotler et al. 123). Its aim is to focus the attention of the consumers on the product and not on the company. However, in the case of a business like Bozz Café, which in itself is a brand, it will be important to not only identify the products to be advertised, but to also to focus on the outlet as a significantly recognizable entity that offers the wholesome coffee and internet experiences in a relaxing atmosphere. The idea should be to position in the clients’ minds that Bozz Café is the ultimate experience in the café culture. Consequently, the positioning of the café as a brand should reflect real customer experiences instead of offering manipulative approaches.

Positioning Strategies

There are many product positioning strategies. It is necessary to evaluate how the enterprise will market the products and services. The business will take a logical approach in the selection of the positioning strategy. To start with, it is important to understand that the positioning of the services is a definition of the company in the minds of the customer. It is essential to create an identity or an image for the service and the company. The name of the business is a key ingredient of the identity. A significant element in choosing the positioning of Bozz Café is the recognition of its sustainable competitive advantage of its service as compared to the competitors. Marketers opine that a product has sustainable competitive advantage if it has unique offerings that the competitors lack, and which can last in the long-term (Keyes 36). Bozz Café has the unique offer of great coffee, free internet, and a comfortable place to socialize. The competitors either offer internet at a cost or provide coffee without access to internet. It is estimated that as the pioneer of the coffee/internet interface, Bozz Café will be a few years ahead of competition. It is envisaged that the café will operate for about three years with its unique brand before other entrants get into the market. The enterprise strategies envision the addition of other internet services that add value to the customers. Such services will be incorporated as new innovations in the internet market. They include e-ticketing and e-shopping.

Bozz Café will position itself as a social hub. The enterprise will build a social environment for the student and professionals within the neighborhood. The social environment envisaged is one that provides room for socialization while at the same time offering the customers the conveniences provided by internet access and the experience of drinking good coffee. Coffee is a social drink that brings friends together. At Bozz Café, the main fair is the coffee. It will be brewed to the customers’ requests. Bozz Café recognizes that the customers hail from different cultural backgrounds. As such, they may be used to different methods of making coffee. The organization will invest in experienced barristers and the necessary tools to make this drink.

Strategies and Implementation

Bozz Café will operate on three strategies. The first entails winning over internet users among the student population. As already indicated, the business will provide the customers with a friendly environment and free internet. The aim is for Bozz Café to attract a dependable student and professional clientele base. The strategy will include:

• The provision of free high speed internet connection.
• Provision of scanning facilities.
• Provision of printing facilities.
• Provision of private rooms.
• Provision of access to powerful software and applications.

The second strategy will focus on pulling the coffee lovers. The group is made up of people who enjoy their coffee in an ambient and relaxing environment where they can unwind and socialize. The target group of customers is important to Bozz Café since they will form the backbone of the enterprise. The enterprise revenue will largely be generated from the consumption of coffee. As such, Bozz Café plans to attract the customers through:

• Freshly brewed coffee
• Availing hot snacks
• Cold drinks

The third strategy will involve the setting up and building of a social environment for the customers. The social environment that offers relaxation, socialization, and coffee would attract customers that may not be users of the internet. However, after regularly patronizing the outlet, such customers will also get to realize the value of easy and free internet.

Key Risk and Success Factors

Risk factors

There are several risks that could affect the success of the business.

Financial risks

The financial commitment pledged by the partners may be low in comparison to outside borrowing. Consequently, the business is likely to be exposed to a high gearing ratio. The situation may escalate when the interest rates get adjusted upwards (Damodaran 2). In the absence of alternative borrowing, the business will strive to retain all its profits in the midterm to enable it meet the repayment of the bank loans.

Market risks

The envisaged business and customer base may not realize the expected number of customers. The business will have to innovate further to gain the market share. However, the research done indicates that there is a real need for such an enterprise. The business will, nevertheless, engage on focused promotion to create adequate awareness among the targeted group of consumers.

Human resource risk

A successful business is dependent on a knowledgeable, skilled, and competent workforce. The business is likely to face a high recruitment and maintenance of staff cost. However, Bozz Café will encourage the sharing of knowledge to cushion it in the event that a key member of staff decides to leave. It is essential for the business to develop an active staff development program to mitigate the loss of staff.

Economic risks

The economic risks may be diverse. The increase in the cost of utilities, rise in the interest rates, and the depreciation of the currency are all economic risks (Keyes 122). The economic growth within the larger French economy may also pose a risk to the business.

Technological risks

Changes in communication technology often happen after a short time. It is essential for the business to strive to keep up with the technological changes to remain competitive and also to exploit the opportunities availed by the developments.

Critical Success Factors: Strategy Evaluation

Once a strategy has been identified, designed, and implemented, it is important to monitor the progress so that the necessary remedial measures can be taken where necessary. Without strategy control and evaluation measures, there is no way of finding out if the identified strategy is working as intended or not (Kotler et al. 88). It is noted that strategic evaluation entails the assessment of the progress made by the enterprise. The strategic evaluation provides information that helps in the assessment of the effectiveness and progress of the strategy (Rumelt 3). There are several criteria that are used in setting the goals for the strategy. The results of the plan are then weighted against the goals. If these goals are in tandem with the results, then the strategic actions can be used again in the future depending on the situation.

Strategy is concerned with the identification of objectives and goals. Many people find it easier to set goals and make efforts towards the realization of those objectives as opposed to their evaluation. However, Rumelt notes that goals and objectives are not strategies (99). A strategy acknowledges the challenges and seeks to provide approaches that could overcome the problems (Rumelt 5). Consequently, the goals are best viewed as wishes, while strategies are regarded as strategies, methods, and steps that an enterprise takes to achieve the identified objectives, including strategic evaluation. All organizations are accountable to their shareholders. As such, the board of directors in a private organization plays a significant role in the strategic evaluation. The board has to screen and evaluate the operational decisions made by the management and their environmental and business implications. In the same manner, the chief executive officer is charged with the responsibility of making various management and administrative decisions. The decisions include those that relate to control and evaluation. They are evaluated by the majority shareholders.

In many organizations, the comprehensive strategy evaluation is not conducted regularly. In most cases, the evaluation is triggered by changes in management or poor financial performances. Many business theorists contend that the irregularity of the strategy evaluation eliminates the need for routine and automatic inferences (Rumelt 7). It is argued that an annual evaluation of the strategies may yield some information on the efficiencies of the enterprise. However, it may inhibit a broad-ranging reflection on the business. Additionally, a well designed strategy does not need regular reformulation. The reason is that it is itself a framework for continuous problem solving mechanism.

Product Life Cycle

Since it takes some time to roll out a new business or product, sales growth is slow during the initial stages. There are several identifiable causes for this, including delays and the reluctance of the customers to change their buying behaviors. Profits are also depressed during the initial stages because of reduced sales, as well as promotional and distribution expenses. In manufacturing industries, companies spend a lot of money in attracting distributors. The promotional spend is also high as the enterprise engages in activities that are geared towards informing and attracting potential customers and conducting product trials. At the introduction stage, companies focus their selling efforts on the buyers who are ready to make a purchase. It is also observed that the prices are high due to the low output rates (Patterson 111). There may also be issues to do with the technology, as well as the high margins needed to support the marketing expenditures, which are considerably high at this stage. Bozz Café’s market entry will be supported by the advantage of an innovative business and product concept that should see the target market respond with enthusiasm.

It is noted that the market pioneers often gain an advantage. However, the proprietors of Bozz Café are aware that this is not always the case. There may be several weaknesses that are associated with new products. The weaknesses include improper positioning of the products and the depletion of funds during the development stage. The entrepreneur may also lack funds to compete with more resourceful enterprises. In addition, the new startup may suffer from poor managerial experiences. As such, successful imitators are likely to enter the market by offering low prices, using brute market power, and continuously improving on the product (Keyes 34). Bozz Café has to accept that competition will enter the market, perhaps with lower prices. In such an eventuality, the enterprise should be ready to lower its prices.

The second stage in the product life cycle is the growth phase. The phase is associated with a sharp rise in sales volume (Keyes 34). The sales are often driven by early adopters who often wish to test the new innovations. It is at this stage that new investors are attracted by opportunities and profitability. Prices may fall a little or remain stable. Depending on the level of competition, companies may increase their promotional and marketing expenditures to meet the competition and continue informing the consumers. It is possible that at the growth stage, the sales may grow faster than the marketing expenditure. Consequently, there may be a drop in the promotional and sales ratios (Kotler et al. 22).

The profit witnesses a steady increase as the promotional costs are covered by the high sales volumes. The cost of producing a single unit also reduces faster than the change in prices as a consequence of lessons learnt. To sustain the rapid growth, the enterprises have to improve the quality of the product, as well as introduce new features. The company may also decide to introduce new products and models to support the original offering. The promotion activities may also move from creating the product awareness to promoting preference. Finally, the enterprise may opt to reduce the prices in response to the price-sensitive customers.

After experiencing the rapid growth, the product enters the maturity stage. The stage lasts longer than the two stages previously mentioned. However, it poses some challenges to the management. The strategies at this stage are often characterized by product modification, market alterations, as well as changes in the marketing mix. The company will seek to expand the market for the mature products, convert the non-users, and try to win competitors’ customers. An innovative company may also convince its existing loyal customers to increase their product usage. The product modification is achieved through quality and features improvements. Such improvements may be on product functionality, durability, speed, reliability, or taste. It should be noted that the changes pose the risk of being imitated and may not deliver value in the long run. The marketing mix modification is attained by the company’s attempts to play with such elements as pricing, distribution, sales promotion, advertising, and personal selling (Porter 21).

The final stage in the product life cycle is decline. For several reasons, the sales of many products eventually decline. Such reasons may include changes in technology, variations in consumer taste, and increased competition from domestic or foreign entities. The factors lead to overcapacity, price wars, and the erosion of profits (Aronsson and Rickard 32). Some organizations may exit the market, while those that remain may withdraw from the marginal segments. A third reaction is further reduction of prices and a cut in promotional budgets.

The product lifecycle concept is an essential tool in the interpretation of market and product dynamics. The concept helps the management to characterize the major marketing challenges that affect each stage of the lifecycle. It also helps in the development of alternative marketing strategies. When used as a control tool, the concept helps organizations to measure the performance of the product, especially when compared to similar items in the past (Kotler et al. 88).

Marketing and Sales Plan

Overview

A business success is highly dependent on the marketing efforts undertaken by the owners to promote their products. Marketing management results in the use and application of various tools, including competitive strategy to make an insightful analysis of the industry within which the enterprise is operating (Kotler et al. 96). Such tools may include the Porter’s five forces and analysis of the strategic competitors. Depending on the market, the regulatory context may also be an important factor to evaluate in details. When making the competitor analysis, the entrepreneur creates a detailed profile of the competing businesses in the chosen market. The assessment focuses on the relative competitive strengths, as well as weaknesses, through the development of a SWOT analysis (Kotler et al. 96). The analysis may also evaluate the competition’s cost structures, where the profit comes from, and the competitors’ resources. It may also highlight competencies, product differentiation, competitive positioning, and historical responses to significant industry developments.

It is essential to invest in marketing research to gather the data needed in performing accurate and informative analysis. To get such data, it is important to conduct market and marketing research through a variety of techniques and methodologies. After making a critical market evaluation and gathering the data, the entrepreneur turns to the development of the marketing strategy (Kotler et al. 98). The marketing strategy is influenced by customer segmentation. The segmentation is determined by size and growth potential. It does not have pricing issues. Additionally, the organization should have adequate resources and the ability to compete and meet consumers’ needs while making a profit.

The major implication in choosing the target segments is the allocation and dedication of resources to gain customers in the identified segment. In addition to the segmentation decisions, it is also necessary to identify the organization’s desired position in the minds of the targeted consumers. In most cases, positioning is viewed as the encapsulation of the benefits of the product. Such benefits will help to distinctly differentiate the brand from the competition (Kotler et al. 99). For instance, Bozz Café wants to offer a convenient socialization environment with the ability to access free internet and coffee. The business wants the customers to associate it with a good internet experience, tasty coffee, as well as a stimulating and relaxing atmosphere. After the organization has gained adequate understanding of its customer base and the competitive environment, it can make strategic decisions through the development of a marketing strategy (Kotler et al. 102). The strategy is designed with the intention of maximizing revenues and profits.

The production and marketing of products are the major factors of economic life in a society. All enterprises perform these functions to meet the commitments they have to their owners, consumers, and the society. The organizations create a benefit and utility, which can be viewed as the need-satisfying power of the product. The utility comes in four different types. They include form, place, time, and ownership. The form is created by transforming raw materials into finished products. On the other hand, the marketing provides the specifications of consumer preferences, while the production function is directly responsible for the creation of the utility (Patterson 32). The marketing function is responsible for the creation of the utilities of time, place, and ownership. Time and place arise when the customers get the products whenever and wherever they want them. Finally, the transfer of title to the goods happens at the time of purchase. Consequently, this creates the ownership utility.

The basic definition of a business purpose is viewed as the ability to create a customer. The creation means the identification of needs in the market. It also entails identifying the needs that the enterprise can profitably meet. Finally, it involves the creation of an offer that can convert the potential users into customers (Patterson 35).

Marketing

The marketing framework

The elements that go into the design of a marketing strategy include the target market, product, place, price, and promotion. A combination of these elements is used to satisfy the needs identified in the target market. An organization’s marketing activities are mostly focused on the customer. Consequently, market driven enterprises start their strategy with a detailed understanding and description of the targeted market or the group of consumers that the enterprise decides to focus its marketing efforts on (Patterson 38). Once a target market is identified, the marketers direct their activities towards gaining a profit while satisfying the niche.

Marketing is viewed as the process of planning and implementing the strategy to deliver services and goods to the consumers. The elements of promotion activities are viewed as the 4Ps. The four facets are involved in the marketing mix (Patterson 46). The first refers to the product that the enterprise is offering to the consumers. The product may be characterized by various traits. The attributes include quality and presentation. There is also the range of the product, as well as its promises to the consumers. The second P stands for pricing. It is used in reference to the cost incurred by the consumers to acquire a given product.

The third P is used to refer to the promotional activities that the organization will engage in to create awareness of the product in the marketplace. Such awareness is created through advertising, publicity, promotional activities, and sales. The last P denotes the place or the distribution channels that are to be used to bring the products to the consumers (Patterson 56). For manufactured products, the distribution channels may comprise of the wholesalers, retailers, and sales representatives. As such, the marketing mix can be described as a set of marketing tools that organizations use to meet their marketing objectives within their chosen market. It is observed that different businesses will emphasize more on certain Ps than on others in their marketing mix.

According to marketing gurus, the most effective plans are the ones that identify and exploit the synergy existing between the products, distribution, pricing, and promotion. The marketing practitioners observe that a unified promotional strategy that cuts across the product line presents a consistent image of both the product and the enterprise in the customer’s mind (Patterson 67). It is imperative for an enterprise to select products that are complementary in order to exploit the economies of scale in the procurement of raw materials, production, and distribution.

Determining marketing objectives

Most investors start their venture by identifying the goals of their business. When this is done, the entrepreneur can then develop the necessary strategies for the marketing mix. The identification of the mix is essential as it guides the direction of the marketing plan. The marketing objectives are the pillars that contribute towards the overall achievement of the business objectives. They must have a timeline and include a sales forecast. Bozz Café’s marketing objectives will be driven by the desire to achieve a market share of fifty percent in the internet and coffee industry in Nice and a sales turnover of $60,000 within the first year of operations.

Product

Product strategy

The products that gain success are the ones that deliver to the consumers a wide range of benefits that are perceived to be greater than the cost. Consumers focus more on the benefits of the item or service they are paying for. They are not interested a lot in the features. Consequently, identifying the benefits and attributes of the products helps the entrepreneur to formulate the appropriate marketing strategies (Kotler et al. 99). It also helps in the differentiation of the product from those of the competitors. Such differentiation helps in the pricing and subsequent positioning strategies.

Product features and benefits

Features are the attributes of a service or good that carry the benefits. They are often described as model, design, size, color, functionality, brand, quality, or shelf life (Damodaran 7). The features that represent the services offered by Bozz Café, for example, are great coffee, ambient atmosphere, a nice socializing environment, and free access to the internet.

Benefits are viewed as the advantages a service or a product conveys to the consumers. The attributes are not easily detectable. The reason is that they are intangible in most cases. In most cases, the persuasive uses are those that meet financial and emotional needs. Financial rewards are associated with saving money and the increment of an income. The emotional rewards, on the other hand, make the consumer feel good. They include being more self-confident, as well as social and environmental consciousness (Stevens et al. 89). Boss Café will provide the above benefits by offering a social environment and savings by providing free internet and affordably priced coffee. The students and professionals will have the benefits of socializing with their equals and sharing their experiences.

Product challenges and associated strategies for service businesses

With the development of the service industry, marketers realized that the marketing of services are not the same as that of goods. Some characteristics of services pose problems in the application of the marketing mix variables, such as the 4Ps. Most services are characterized by intangibility, inseparability, and heterogeneity. They are also characterized by perishability. To cope with these problems, additional 3Ps were added to the marketing variables. They include the process, people, and physical evidence. The process solves the problem of variability associated with services. It achieves this through the provision of a blueprint (Kotler et al. 123). On the other hand, the physical evidence is used to solve the issues associated with the intangibility of the services. As such, through the creation of service environment, personnel, and equipment, the physical evidence attempts to turn the intangible elements into tangible products. The last P focuses on the service providers. They are an integral part of the service. The providers can influence the perception of the quality of the service to a large extent.

It is important to note that Bozz Café is most likely to offer more services than products. Selling a service is different from offering a product. For example, a service is intangible. It is mostly associated with a process, a technique, comfort, and enjoyment. The strategy is to package the services in a manner that makes the benefits seem tangible to the patrons (Kotler et al. 19). At Bozz Café, the emphasis will be on enjoyment of a tasty cup of choice coffee, the offering of a relaxing environment, and provision of free internet. In addition, the café will support the socialization of like-minded people from different cultures. The above are some of the benefits that enrich the individuals’ lives. It may not be possible to offer materials that would make the services more tangible. As such, the association of the coffee, free internet, and an environment that promotes socialization should make the customers feel that they are getting benefits worth their money. Consequently, the bundling of the free internet with coffee makes the services more discernible. The above are the pillars of a great internet café with a difference.

SWOT Analysis

The table below is a SWOT analysis of Bozz Café:

Table 3: SWOT analysis.

A SWOT analysis is composed of the strengths of an enterprise, the weaknesses, opportunities, and threats facing the organization. The understanding of each of these elements is significant to the start, management, and sustenance of a business (Teece 190). Before commencing on a venture, including an internet business, it is important to have enough knowledge regarding the outs and the ins of the venture. That is how a SWOT gets into the picture. The analysis helps in the evaluation of the advantages and disadvantages to make it possible for the investor to see what lies ahead and to keep track of the unwanted possibilities. It also helps them to take advantage of the emerging opportunities.

Strengths

The strength of an enterprise is highly dependent on what the partners and owners can do to the organization. It depends on the knowledge that the team has managed to amass, including the clarity of their vision (Kotler et al. 54).

Knowledgeable staff

The strength of Bozz Café includes a knowledgeable and friendly staff. It also means that the partners have a significant knowledge of the operations, including what is involved in the provision of internet connectivity and the brewing of coffee. The partners must appreciate that not all the customers who wish to use the internet are exposed to technology. There are many customers who do not know how to open a document or access the internet. Consequently, helping such clients engage with the internet experience gives them a reason for repeat visits.

State-of-the-art technology

Bozz Café understands that the customers are increasingly becoming sophisticated. They are conscious of the development in technology and expect the business to have invested in good processors and high speed internet connectivity. However, they would appreciate to access the service free of charge. The only requirement is that they will spend on a cup of coffee since there are no charges for internet.

Upscale ambience

Having knowledgeable and friendly employees, together with high technology equipments, is important. However, the value of such investment is easily eroded if the environment is not accommodating. The facility must be clean, cool, and comfortable. The factors are essential, especially when the clients include professionals and students who are involved in research programs. It is understood that no one can work in a messy situation.

A clear vision of the target market’s needs

It is important for the establishment to keep in touch with the things happening around it. The operators should be aware of what is happening to the community, especially to the targeted market segment. In addition, it is essential to keep updates on the development around the business and the evolving customers’ needs. Such updates allow the business to quickly respond to the changing needs and be the first to offer new services. The competitors will eventually catch-up, but being the first to meet such needs will mold the business image and build a brand. A brand creates loyalty and trust (Kotler et al. 32).

Bozz Café envisages and carries these advantages. The café will be the first one to combine internet services, coffee, and a friendly ambience. The enterprise is anchored on the provision of services that other internet cafés and restaurants cannot offer simultaneously. The aim is to give the city of Nice an experience that is sociable and appealing to the sensibilities of the consumers. To come up with the envisaged business, Bozz Café aims at filling a gap. At the same time, it will offer the community a place where tasty coffee can be availed as people enjoy and socialize. It is meant to be a meeting place where people create living memories.

Weaknesses

The only weakness that could be recognized is failing to plan appropriately before hand and failure to develop the strengths that have been previously identified.

Technological changes

Whereas technology changes rapidly, it can be turned into strength if the business partners keep in touch with the developments in technological innovations. The partners should also adapt to such changes constantly. Technology may be seen as a weakness initially. However, the company may appreciate its technological inadequacies and make them a major development factor.

The cost of maintaining the state-of-the-art-hardware

Maintaining and upgrading the hardware could be one of the significant weaknesses of Bozz Café. Upgrading the hardware attracts a cost. However, the enterprise does not earn a penny from internet access. To succeed in the competitive internet business, it will be important to regularly upgrade the technology to keep up with the improved speed and software, which may also include new applications. The important thing to understand is that the change in technology means that new consumer groups are created. What this means is that the enterprises that have adopted the new technology are the first beneficiaries of the new innovations (Zagat and Zagat 8). Bozz Café should adopt an open window policy where the adoption of new technology is concerned. Such a perspective would essentially turn a weakness to an opportunity. All what it takes is to maintain a plan on when and how to upgrade the technology. Most innovations in the communication and information industry last for two to three years. It is possible to have a plan that can accommodate such a timeframe in the changes in technology.

Opportunities

Evolving technology

Technology is constantly evolving. What this means is that it also constantly creates new opportunities for internet café operators. As technology evolves, new users are created. The usefulness of technology constantly attracts new users. As such, the customers for the internet cafe will keep increasing. It is important for the enterprise to keep on doing the right things to maintain the customer base while building on the clientele.

The creation of social bonds

The internet has become a medium of bringing people together irrespective of the distance between them. Bozz Café, as a social entity, can also exploit the internet socialization by providing up-to-date communication devices, such as webcams and associated headsets. In addition, the café environment should be imbued with a social setting atmosphere where people not only socialize on the social media, but also interact with the other patrons over a cup of their preferred cup of coffee. The entity should invest in highly skilled staff that will assist the patrons who wish to engage in internet enabled social media. Such practices enhance the social experiences of the customers and guarantee repeat patronage.

Threats

The threats that face Bozz Café’s concept are beyond the firm’s control. There are two threats that could impact negatively on the operations of the firm.

Falling internet cost

The connectivity cost for internet home users may drop. The internet service providers are always adjusting the home connectivity cost to encourage home users to make a habit of using the services at home. However, the target market may not be the type that needs to add such costs to their monthly expenditure. Such development will not affect Bozz Café directly.

Emerging local competitors

As Bozz Café grows, it is likely to attract competitors who wish to use its business model. However, the investors anticipate having three or more years before competition can enter the market segment. As such, the enterprise will concentrate on building on its strength and continuously exploiting the opportunities that arise. Ultimately, keeping in touch with the strengths of the competitors and discovering what they are doing is the best defense.

Marketing Mix

Bozz Café’s marketing efforts will be directed towards the creation of a loyal customer base that is expected to use the facility and the services provided on a daily basis. The café will be located at a central area within a walking distance for most of the customers, especially the students. Most of the student residences are located within the neighborhood.

Services and Service Marketing

The use of the internet continues to increase at a rapid pace (Patterson 88). The internet is also easy to access. The affordability of the connectivity to the information superhighway has become a necessity in life. Consequently, Bozz Café will provide the target individuals with easy access to the internet. In addition, the customers will be able to buy a cup of high quality coffee. Consequently, the patrons will socialize in a comfortable environment. The business will serve people of all ages. The target includes those individuals looking for a high end, distinctive, educational, and original service (Patterson 88). The café will be differentiated from the other entities by its free internet. Currently, there is no business in Nice that is offering free internet. The offer is an innovative marketing strategy that is bound to attract many users. It is anticipated that people will enjoy a cup of coffee as they interact with the internet and with each other.

Pricing

Bozz Café will base the pricing for the coffee and the other specialty drinks on the average cost used by the other coffee houses. The difference, however, will be on quality and variety. Bozz Café will be offering more than the espresso offered by the other restaurants. The idea to provide a wide variety of coffee menu is informed by the number of foreign students who may be used to the consumption of coffee brewed using different methods. The sustainability of the business will be anchored on the coffee business. As such, it is necessary to be innovative and to accommodate the various flavors that the customers may demand. As for the internet, the access will be free. The other services, such as scanning and printing, will be charged depending on the prevailing charges. The use of the private rooms will be charged on an hourly rate.

Promotion

Bozz Café’s promotion activities are estimated to cost about $50,000. The money will be used to build a brand and a dependable customer base. The café’s marketing efforts will largely be concentrated on the local market. The campaign will be run through 2017. It will have an annual increment of 10% to match the increased sales. It is anticipated that the marketing budget will be approximately 20% of the gross sales. The specific marketing efforts for the first year will include the following:

Website marketing

The traditional forms of communication with the consumers are based on a one-way discourse. The forms of communication include advertising on the newspapers, promotional posters, and distribution of flyers. The channels are still vital for offline activities. The internet has also become a significant marketing tool. The internet communication model goes a notch higher than the other channels. It encourages communication between the enterprise and the customer. Interacting with the customers offers valuable feedback on the current practices and on new ideas.

A successful café is based on quality products, service, and loyalty. Customers patronize cafes because of the quality of the products, convenience, and proximity to their homes. Consequently, the online universe offers multiple opportunities for café entrepreneurs to improve on loyalty, gain valuable feedback, increase the customer base, and improve the bottom line. A website is a virtual shop front that has the advantage of being open 24 hours a day. It is essential for Bozz Café, being a dealer in internet services, to have a website that communicates its brand values, menu, and contact details. Many consumers turn to the internet to locate internet cafes that are within their neighborhood, particularly those that are in close proximity (Kotler et al. 29).

The advent of social media has introduced new channels of communication. A business like Bozz Café, which promotes socialization, can benefit from the use of the social media as an advertising tool. The entrepreneurs will start a blog that discusses matters to do with coffee. In essence, the idea is to promote activities on social media as a way of driving online traffic. The internet marketing will be complemented by advertising in the local television channels, local newspapers, radio stations, brochures, and flyers.

The print media

The print media is often viewed as a high-involvement medium. It demands active left-brain activity from the customers. As such, the development of the print adverts needs special care if it has to attract the attention of the consumers. The advert has to command and engage the attention of the reader to enable the messages to be absorbed and understood. Print media include newspapers and magazines. Bozz Café will initially advertise on local newspapers only.

The readership of local newspapers in Nice is well established. Many people, including the students, depend on the newspapers for local news. Consequently, the print is a reliable and credible source of information. It has a recognizable competitive audience. As such, advertisement through the newspapers is plausible for the various reasons given above. In addition, the papers have a wide coverage.

Broadcast media

The broadcast media transmits either visual or audio stimuli electronically. It includes television commercials and radio advertisement. The media is popular in Nice. For advertisers, it is seen to have a high significance because of its intrusive value. The media allows for sound and moving images. The elements place it at a higher reach of the consumer.

Radio

There are several local and national radio stations in Nice. Radio advertising creatively engages the consumer. The listeners are called to use their imagination to visualize the auditory cues embedded in the message. The radio is an appropriate advertising medium because of its flexibility, low cost, and high audience segmentation.

Television

The television medium is the ultimate advertising channel. The reason is its ability to use both visual and audio cues in the development of the advert message. Bozz Café will air its advertisements on the two leading television stations in Nice.

Marketing Research

In 2016, the entrepreneurs conducted a market survey to evaluate the viability of the business before launching it. The findings were used to establish market needs and pricing. The entrepreneurs will continue to conduct regular surveys on the existing and potential customers. The findings will be used to design new marketing programs and to monitor the performance of the current promotional activities.

The research also found that there are several well established internet cafes and restaurants in Nice. However, none of them offers a combination of an internet café and a restaurant. In addition, there is no business that offers free access to the internet. As such, there is an opportunity to position the business at the high-end market of internet and coffee lovers.

Buying Patterns and Competition

Most enterprises operate in what is referred to as growing markets. The markets make it easy for such organizations to profitably operate without the worry of competition. However, some markets register a slow growth. In some cases, there is no growth at all. In such circumstances, the businesses can only increase their sales revenue by taking customers from their rivals (Wenzel 3). Even in growing markets, organizations still face competition because profitability often attracts new entrants. The new entrants force the existing enterprises to react in order to retain their sales volumes. It is acknowledged that for an enterprise to effectively compete in its chosen market segment, it must continuously provide value to the consumers. The value must be consistently communicated. The entrepreneurs cannot leave the business planning to other people. They have to understand their customers’ needs and the problems affecting them. With the help of such knowledge, the business person can avail to the customers, including potential ones, the products that meet their needs (Wenzel 4). In most cases, the products are offered at lower prices than those of the competing businesses.

Competition is often viewed as the struggle between organizations operating in the same market. The entities compete for customers, sales volumes, and profits in situations that are not profitable to all of them. It is important for Bozz Café to singularly identify the enterprises that are serving similar products (Wenzel 3). In addition, Bozz Café must take into consideration the type of customers served by competing enterprises and their geographical locations. Other considerations involve the packaging of the products and the prices charged.

Most significantly, the strengths and specialties that may distinguish the business must be highlighted. Such knowledge can be effectively utilized in making decisions on whether to offer the same products or come up with different ways of meeting the customers’ needs (Wenzel 4). In this scenario, Bozz Café has a good idea that differentiates it from the existing enterprises both in the coffee segment and the internet services. The business model is designed to generate sales and revenue from selling coffee while offering internet services with for free. The model is a radical move from the businesses that are making money from the sale of internet services.

The adoption of the duality of the provision of product and service by Bozz Café means that the enterprise is dealing with two types of competition. The business will face competition from the local coffee sellers. In addition, Bozz will have to deal with internet service providers. However, Bozz Café has an advantage. Its offer of free internet services leaves it with only the coffee retailers to compete with. The competition between the coffee houses creates an industry with similar costs. The average retail price is $8 for a kilo of coffee beans.

Financials, Budgets, and Forecasts

Anchoring the marketing plan

The marketing plan is anchored on the following factors:

• The marketing budget is 20% of the sales values.
• The creation of a strong brand is essential to the success of Bozz Café.
• Continuous marketing is a critical aspect of Bozz Café’s business plan.
• The relationship between what is spent on marketing and the revenue generated should be positive to a certain point. The entrepreneurs are aware that a marketing budget that is based on 20% of sales can deliver the anticipated revenue. Any additional spending can only create additional revenue.
• The entrepreneurs understanding of the local market, the need for a strong brand and emphasis on marketing gives Bozz Café a competitive edge over the existing cafes, as well as the potential competitors.

Sales Forecast

Overview

When dealing with sales forecasting, it is important to understand the fundamentals of sales projection. As such, it is important to separate a few aspects of sales projections. The separation offers a clear picture of sales prediction, its purpose, and usage. In addition, the forecasting methods can be used to identify the indicators that are likely to affect the sales prediction.

A sales forecast can be viewed as a good guess of demand for a service or good. The guess is accompanied by a set of assumptions. However, the purpose of the sales forecast is to predict the quantity of services or goods that will be bought (Aronsson and Rickard 9). The predicted figures help in the control of the cost of inventory and subsequent transportation. The sales forecast can, as a result, be assumed to be a management control system. It can be compared with a budget since the two have almost similar attributes. The only difference is that a budget is presented in financial units. On its part, a sales forecast can be presented through physical or financial components. Another difference is that a forecast can be made for any period. In addition, it can be adjusted whenever indicators reflect some changes in the forecast. A budget is more rigid because of its resource demanding process.

The theoretical argument on the use of sales forecasting is to have a prediction of the future. Enterprises can also use the prediction as a basis for the revision and implementation of the plans in order to achieve the required outcomes (Aronsson and Rickard 10). Forecasts are important management tools, especially when the future is viewed as uncertain. In most cases, organizations only revise their forecasts when the predicted outcomes are unsatisfactory. As a result, it can be observed that sales forecasts set a workable future sales volume. It gives an indication of what to purchase and produce, as well as setting the logistical, marketing, and financial processes in motion. On the other hand, operational plan articulates how the organization will achieve the desired results (Aronsson and Rickard 12). Both processes depend on each other and should not be confused.

Being a startup company, Bozz Café does not have historical data on the performance of the organization. In addition, the company does not have access to data that could represent the industry trends. The reason is that there is no enterprise that has adopted the concept yet. As such, Bozz Café will use educated estimates on what could lead to profits and a growth path. The sales forecast can be adjusted as the business grows.

One-year sales forecast

The first-year revenues are based on the assumption of a growth rate of 10% month-on-month. The estimate may seem ambitious, but the entrepreneurs are confident that with a strong emphasis on marketing, Bozz Café can realize good business from the first day of opening. After the first year of operations, it is estimated that the business will realize a 10% annual growth. The plan, however, will be reviewed as the operational activities generate new information.

The table below is a sales forecast for 2017:

Table 4: Sales forecast for 2017 financial year.

Break-even analysis

Overview

The breakeven point represents the number of sales needed to cover total costs. The costs, in this case, include fixed and variable expenses. At the breakeven point, the total profit is zero. It is only possible to break even if the value of sales is greater than that of the variable cost (Kotler et al. 43). Once a company has managed to surpass the breakeven price, it can begin to make a profit. Bozz Café is in an industry that is capable of earning high gross profit margins. The variable costs are low. It is estimated that the variable cost stands at 25%. With improved business in the future, the value is likely to decrease to 20%. The figure below is a representation of the break-even point analysis:

The fixed cost for Bozz Café is 7,500 Euros. The costs are inclusive of facility lease, hardware, payment of debts, and other expenditures that the café has to cater to every month. Since the costs are fixed, they are not affected by either an increase or a decline in sales (Porter 82).

The table below represents the entity’s break-even analysis:

Table 5: Break-even analysis for Bozz Café.

Expense Forecast

The marketing budget is expected to remain at 20% of sales. The strength of Bozz Café is anchored on its brand-building capacities. The aggressive marketing budget reflects the importance of marketing activities. The budget in the subsequent years will remain at 20%. However, the expenditure can be adjusted upwards should efficiencies of scale or sales allow. Appendix 1 highlights the marketing expenses.

Controls

The marketing plan aims to give an outline of the strategies and programs that will actualize the sales goals. The entrepreneurs have identified the following steps in the realization of the marketing goals:

• The building of an innovative, unique, and upscale environment that will differentiate Bozz Café from the other internet cafes and coffee shops.
• The promotion of Bozz Café as an entity that promotes social cohesion.
• The creation of a working environment for students and local professionals.
• Enjoying free internet.

Implementation Milestones

The Gantt chart below is an illustration of the milestones, which include the sales goals and the deadlines for the projects that would directly impact on the marketing budget. The milestones are assigned to a manager who will oversee the completion and success of the task. The success or failure will be tracked through regular reviews of planned-versus actual achievements every quarter.

Figure 3: Bozz Café’s implementation milestones: A Gantt chart.

Organization

After careful consideration, which was informed by research findings, the owners of Bozz Café have decided to register the business as a limited liability company. Their decision was informed by the advantages that are associated with such an organization. The company is going to be registered in France as a limited company, but the operations will initially be based in Nice. The shared capital is estimated at 50 million Euros. The company will not be expected to declare its financial reports. The reason is that the number of workers is not likely to be more than ten at any given time (Wenzel 8). It is also anticipated that the total assets will not exceed two million Euros.

The Bozz Café is the idea of five entrepreneurial graduates from the University of Nice, France. During their undergraduate studies, the five owners worked in a local café, which purchased its coffee beans from a local coffee roaster. They developed a taste for coffee and became avid drinkers of the beverage. The job exposed them to the many varieties of coffee, as well as to the retail form of business. After graduation, Philippe, one of the partners, was employed by a restaurant chain as a business development executive. The position provided him with additional exposure to the larger food and beverage industry (Wenzel 2). The entrepreneurial students have come together to start the first café with dedicated internet connectivity in Nice.

The Bozz Café will have a seating plan for 50 patrons in the main lounge. However, there will be several private rooms with additional sitting capacity. There will also be the main events hall that can accommodate approximately 200 customers. As such, the Café will occupy 1500 square feet, which will hold the dining room, the lounge, the hall, three small rooms, a kitchen, and the storage room.

Bozz Café is owned by five entrepreneurial graduates with equal shareholding. The partners will form the management team. The decision-making process will be handled by the five owners through consultations. The daily activities of the organization will be handled by the managing partner with the assistance of a barista and an IT specialist. The service will be delivered by four part-time workers. The employees will be working for thirty hours a week for $10.50 an hour.

Given that the enterprise is dependent on the brewing of tasty coffee as one of the key business drivers, it is important to hire an experienced barista who is conversant with the industry. Since Bozz Café will be catering to people from different cultures, the barista will meet the various coffee tastes associated with the customers’ backgrounds.

Financial Objectives

Overview

The financial objectives of the business plan feature a twelve months sales projection, cash flow projection, and a balance sheet. It also includes a breakeven analysis. The documents reflect a reasonable estimate of the café’s financial future. The twelve-month projection gives the business owners an idea about the necessity of the planned activities for the business to make a profit. At Bozz Café, the cash flow projection is supported by the business credit policy. Being a service business, the company will not provide credits. Customers will be served with what they will have paid for. The idea is to offer the customers flexibility on the use of the space available and the ease of leaving at will without worrying about unpaid bills.

Revenue

The marketing plan is designed to generate revenue and profit through sales and promotional activities. The revenue objective of Bozz Café is to generate $50,000 month-on-month during the first year of operations. Appendix 2 is an illustration of the revenue expected to be generated by the business.

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Appendix

Appendix 1: Bozz Café’s Major Marketing Expenses

Appendix 2: Sales forecast

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