Market Analysis Business Plan Example
Innovative Internet Café (IIC), contrary to a typical café, anticipates offering a unique platform for entertainment, as well as communication via the Internet medium. Innovative Internet Café is the solution for addressing the ever-increasing demand. There is the demand for access to the techniques of communications, as well as volumes of the information currently existing online. In addition, there is the demand for the access to Internet at a price customers may afford, as well as in such a manner, which they are not politically, socially, or economically isolated. IIC aims at offering the society with an educational, entertaining, social, atmosphere for global communication.
The objectives of the business include educating the society on what can be offered by the Internet. Innovative Internet Café aims at providing affording access to Internet resources, as well as other services of online. Another objective of IIC is the establishment of a setting, which will bring persons with diverse backgrounds, as well as interests together in one platform. In addition, IIC anticipates creating an upscale, innovative, as well as unique setting, which will differentiate it from other Internet Café.
As the recognition of the Internet grows rapidly, affordable and easy access is inevitably becoming a life necessity. Innovative Internet Café offers people with the capacity to access the net, as well as share experiences of the Internet in a convenient setting. Persons of all backgrounds or ages will be brought together to cherish the upscale, innovative, educational, and unique environment, which IIC offers.
Figure 1: Highlights
Source: Created for this Business Plan
Summary of Innovative Internet Café
Innovative Internet Café, soon to be situated in all public schools in Washington, DC, will provide people affordable and easy access to the net. Innovative Internet Café will offer access to Usenet, WWW, email, FTP, as well as other applications of the Internet, for example, Gopher as well as Telnet. In addition, IIC will offer customers with an innovative as well as a unique environment for interaction. Innovative Internet Café anticipates appealing to persons of all backgrounds as well as ages. The instructional Internet tutorials as well as the helpful employees, which IIC offers, will appeal to individuals that never associate themselves with the age of the computer. Such educational feature anticipates attracting elderly as well as younger customers who are quickly gaining interest or curiosity in the peculiar resources, which the Internet communications have to provide. The Washington, DC, location will offer businesspersons with comfortable access to their online needs (Fidgeon 406).
Innovative Internet Café is a privately owned Limited Liability Company. Jul, Kevo, and Sidof are the majority IIC owner. Other shareholders will hold minority share as private investors. Innovative Internet start-up capital will cover site modification and renovation, cash to take care of losses for the start or first year, plus the communications gadgets significant to have customers online. The gadgets of communication required to offer Innovative Internet Café's customers with a convenient online connection as well as the other services rendered forms the largest part of the start-up capital. The capital will involve the computer terminals as well as all other costs linked to their set-up. In addition, costs will be designated or allocated for buying a scanner and two printers. Besides, costs will be designated for buying coffee making equipment, an automatic grinder of coffee and an espresso machine. An approximated amount will be set aside for modification and renovation, which will involve costs linked to preparing the business sites for start-up.
The public school was chosen as locations for the Innovative Internet Café for many reasons. The justifications for the locations include the nearness to city residents, the proximity to upscale and trendy restaurants within the city, availability of parking for customers, low rent cost, as well as easy accessibility by majority. These qualities or characteristics are consistent with the Innovative Internet Café's goal of offering a central communications hub, as well as socialization for the members of the community.
Innovative Internet Café will offer 24/7 access to FTP, WWW, Usenet, email, as well as other applications of the Internet such as Gopher and Telnet. Scanning, printing, as well as introductory classes to the Internet or its applications will be offered to the customers. Innovative Internet Café will also offer customers with an innovative and unique atmosphere for enjoying coffee, bakery items, as well as specialty beverages. In the future, as Innovative Internet Café develops, additional communications frameworks will be established. The possibility of extra units has been taken care of in the present plan of the floor. As the internet connectivity demand grows, as well as competition, Innovative Internet Café will continue increasing novel services to keep its client base seeking more.
Innovative Internet Café is experiencing the exciting opportunity of becoming the leader in public schools (within Washington, DC) cyber-café market. The consistent recognition of coffee, as well as the increasing interest in online, has been acknowledged to be a captivating idea in other markets as well as will generate similar outcomes in public schools within Washington, DC.
Figure 2: Market Analysis for year 1
Source: Created for this Paper
Strategy for Segmentation of Target Market
Innovative Internet Café anticipates serving persons that prefer a guided tour or lesson on their initial spin around the net as well as to experienced customers willing to share their enthusiasm for computers within a social environment. Additionally, Innovative Internet Café will attract local as well as traveling professionals who aspire to check or send email messages within a friendly setting. These professionals will use Innovative Internet Café’s Personal Computers, or plug personal notebooks into online connections. Innovative Internet Café’s target market encompasses a broad range of ages; young and old customers.
Factors, for instance, addiction, historical sales, as well as a current trends information guarantee that the coffee's high demand will remain high for the next 5 years. The quick development of the Internet as well as services of online, which have been experienced globally, is just an iceberg tip. The potential development of the online is huge, to a situation in which, terminal of a computer with the Internet connection will be flooded as telephone. By approximation, it can tale 10-20 years, though, for the subsequent 5 years, the Internet service provider marketplace is certain to witness tremendous development. As the first initiative to have cyber café in public schools within Washington DC, Innovative Internet Café will gain competitive advantage through recognition as well as customer loyalty. At the start, IIC will hold a hundred percent market share of the market (cyber cafe) within Washington DC. Over the subsequent 5 years, competitors will join the market. Innovative Internet Café has set an aim to sustain over 50% market share.
Segmentation of the Target Market
The customers of IIC can be grouped into two. The first category is conversant with the Internet; besides, prefers a progressive as well as inviting environment in which they may spend their leisure. The second category is unfamiliar or not conversant with the Internet; nevertheless, only waiting for the appropriate chance to join the Internet community. The target market for IIC falls between 18 and 50 years of age. Such a wide age range is because internet and coffee appeal to different persons (Sarna and Hannafin 225).
Strategy and Implementation
Innovative Internet Café has three strategies. First, IIC concentrates on attracting new users of Internet. Through offering a new friendly atmosphere, IIC anticipates to train and educate a loyal client base. Second, IIC concentrates on attracting power online users. Power online users are familiar with the Net as well as its offerings. Powers users have experience and knowledge of web browsing, which new users of Internet find exciting and attractive (Smith 303). Third, IIC concentrates on creating a social setting; a social setting, which offers entertainment and serves to pull in customers that under normal situations cannot think about the Internet use. Once on the premise of IIC, these customers seeking more standard entertainment provisions will recognize the value of entertainment the Internet may offer.
The SWOT Analysis
It offers the opportunity to evaluate the internal strengths as well as weaknesses Innovative Internet Café must handle. SWOT analysis also permits the evaluation of the threats and opportunities availed to IIC. Innovative Internet Café’s strengths involve friendly and knowledgeable employees, as well as the cost factor linked to maintaining state-of-the ability computer hardware. Such strength is significant in capitalizing on emerging chances. Such opportunities or chances involve an increasing population of users of Internet, as well as the increasing social bonds promoted by the novel Internet communities. Some of the threats to Innovative Internet Café involve fast declining cost of online access, as well as emerging local rivals (Zittrain 70).
The weaknesses of IIC include reliance on quickly fluctuating technology. Innovative Internet Café is a platform for persons to experience the Internet technology. The life cycles of the product are determined in weeks, and not months. Innovative Internet Café requires to maintain the pace of technology since most of the experience of IIC is technology (Zittrain 76). The cost factor linked to maintaining the state-of-art hardware is expensive. Innovative Internet Café must balance needs of technology with other business requirements. One feature of IIC can never be let gone for the other (Zittrain 81). Some of the opportunities for IIC are the increasing population of internet users on a daily basis. The significance of the Internet approximately equals the telephone. The need or necessity for the services offered by Innovative Internet Cafe increases as the population of Internet users grows daily. In addition, the Internet brings persons from all over the globe on one platform. IIC can capitalize on the social trend through offering a platform for local and smaller Internet communities to have physical meeting.
The Innovative Internet Café will pursue a differentiation mechanism to attain a competitive edge within the café market. Through offering services of the Internet, IIC distinguishes itself from competitors. Additionally, IIC offers a favorable atmosphere with bakery and coffee items, separating itself from rivals (Peter and Olson 45).
The Innovative Internet Café will position as an upscale Internet service provider, as well as a coffee house. It will offer high-quality espresso specialty drinks and coffee at a competitive cost. Because of the cafes' number within Washington, DC, it is significant that IIC sets fair costs for its products or services. IIC will employ advertising as the primary source of promotion (Shankar and Carpenter 9).
The Innovative Internet Café bases its charges for specialty drinks and coffee upon the analysis of retail profit offered by supplier, the business owners have been conducting coffee business for 30 years and has established a solid strategy of pricing. Establishing a fair marketplace, hourly charges, for the Internet use is more challenging since there lacks direct rivalry. For that reason, Innovative Internet Café takes into consideration 3 sources to establish the hourly price rate. The business takes into consideration the charge to utilize other internet servers, regardless of being a local networking organization or a provider like American Online (Smith 45). Ideally, internet access provider employs different pricing schemes or strategies. Some charge fee per month, whereas others charge a fee per hour. Additionally, some providers utilize a mechanism with the two pricing schemes. Therefore, it may rapidly become an expensive or a high monthly expense for the individual (Smith 159). Second, Innovative Internet Café examined how cyber cafes within other markets like Ashland or Portland go about charging Internet access. The third pricing strategy used by Innovative Internet Café is carrying out a market survey (Smith 271). After evaluating these factors, IIC settled on an hourly charge of five dollars.
The Innovative Internet Café will employ a pull technique to create consumer awareness, as well as demand. Initially, IIC has allocated 7, 000 dollars for promotional activities that entail advertising with tickets for a non-charge hour of online access within in-house promotions and local publications such as providing customers free online access time whenever they register for the Internet introduction course taught by technician of IIC. There is a plan that for future in which extra revenues will be allocated if competition arises in the market in order to keep market share.
Strategy for Sales
As an establishment considered retail, Innovative Internet Café employs some people to manage sales transactions. A requirement for IIC employees is computer skills. If a worker lacks the computer skills upon recruitment, full-time technician coaches them. Additionally, the technician assists the customers that need help. The Innovative Internet Café commitment to helpful and friendly services is among the key factors, which separates IIC from other rivals or competitors.
Management of Innovative Internet Café
The business is operated and owned by Jul, Sidof, and Kevo. The business, being small only needs a simple organizational form. Implementation of the organizational structure calls for the three individuals to make major decisions about management, besides, monitoring other business activities.
Plan of Personnel
The staff comprises of 3 part-time workers who work for fifteen hours per week for 5 dollars in an hour. Additionally, a full-time technician will be recruited to work twenty hours per week for 15 dollars an hour. The three owners are also included in decisions of management. Such simple framework offers a significant deal of flexibility as well, permits quick communication. Due to these features, few coordination challenges exist at IIC, which are common in large institutional chains. The strategy will allow IIC to adjust quickly to fluctuations within the market.
Rent Expenses: The Innovative Internet Café is leasing premises of public schools in Washington, DC at 25 dollars per month for 10 premises. The lease agreement IIC signed clarifies that it pays $25/month for 24 months. By the end of second year, such agreement of lease expires and can be negotiated.
Payroll Expenses: The owners of IIC will get a salary of 30000 dollars in the first year, 33000 in the second year, as well as 36000 in the third year. IIC anticipates recruiting 3 part-time workers at the beginning of year two at 5 dollars per hour, as well as a full-time employee at 15 dollars per hour.
Utilities Expense: IIC will pay the bill of phone generated by 13 phone lines; ten will be for modems and 3 for business reasons. The monthly service fee for every line offered by America West is 16 dollars.
Insurance Expenses: IIC has designated 1500 for insurance in year one. As revenue grows in the following years (second and third), IIC anticipates investing extra money for more insurance coverage.
Marketing Expense: Innovative Internet Café will designate 7, 000 dollars for promotional costs for the first year.
Source: Developed for this Business Plan
Fidgeon, Tamsin. World Travel Guide. United Kingdon: Highbury Columbus Pub, 2004. Print.
Peter, J P, and Jerry C. Olson. Consumer Behavior and Marketing Strategy. New York: McGraw-Hill, 2005. Print.
Sarna, Heidi, and Matt Hannafin. Frommer's Cruises & Ports of Call 2010: From U.s. & Canadian Home Ports to the Caribbean, Alaska, Hawaii & More. Hoboken: Wiley Pub, 2010. Print.
Shankar, Venkatesh, and Gregory S. Carpenter. Handbook of Marketing Strategy. Cheltenham: Edward Elgar, 2012. Print.
Smith, Tim J. Pricing Strategy: Setting Price Levels, Managing Price Discounts, & Establishing Price Structures. Mason: South-Western Cengage Learning, 2012. Print.
Zittrain, Jonathan. The Future of the Internet and How to Stop It. New Haven [Conn.: Yale UP, 2008. Print.