Coffee World Business Plan

BUSINESS PLAN OF INTHANIN COFFEE SHOP

PIMPATRA SORNPRASITH

An Independent Study Submitted in Partial Fulfillment

of the Requirements for the Master of Business Administration Degree

(International Program)

May 2010

Copyright 2010 by Naresuan University

This independent study entitled “Business plan of Inthanin Coffee Shop”

submitted in partial fulfillment of the requirements for Master Degree in Business

Administration (International Program) is hereby approved.

………….………………………………………..

(Associate Professor Suthinan Pomsuwan, Ph.D.)

Advisor

…………………………………………………...

(Srisuda Chongsithiphol, D.B.A.)

Director, Bangkok Academic center

Naresuan University

May 2010

ACKNOWLEDGEMENT

Without kind and great support from many wonderful people, this independent

study would not have been accomplished. I would like to express my gratitude to them

here.

First of all, I wish to express my deepest thanks to Assoc. Prof. Dr. Suthinan

Pomsuwan and Dr. Krairoek Pinkaeo my advisors, who have devoted a great deal of their

time to read the earlier draft of my business plan, provided their invaluable guidance and

encouragement throughout every stage of its development. I really appreciate Mr. Donald

Antone and Ms. Shylah Antone from English support department who assisted me in

checking English grammar.

Special thanks to Dr. Srisuda Chongsithiphol, the Director, Bangkok Academic

center Naresuan University and Dr. Sarinna Areethamsirikul for helpful suggestions to

complete this business plan. Moreover, I wish to give sincere thanks to my friends for

their advice, suggestions, and hospitality throughout the two years of hard time in this

program. Finally, but most importantly, I am extremely grateful to my beloved family;

dad, mom, sister, brother, my boss and my colleagues for giving me will power. Thanks,

Miss. Chawanda Petchsuwan, my close friend for Inthanin coffee shop’s information.

There may be other people who are not mentioned here but have contributed to

this work. I also want to thank all of you.

Pimpatra Sornprasith

Title BUSINESS PLAN OF INTHANIN COFFEE SHOP Authors Pimpatra Sornprasith Advisor Associate Professor Suthinan Pomsuwan, Ph.D. Academic Paper Independent Study M.B.A. in Business Administration

(International Program), Naresuan University, 2009

Keywords Inthanin, Coffee shop, Coffee business

ABSTRACT

The purpose of this study was to check the feasibility of Inthanin coffee shop

franchise. The increasing demand in coffee and beverage together with relaxation

prompted the beginning of Inthanin coffee shop.

As, life styles of people who live in Bangkok changed fast, they want more

convenience in their lives. Inthanin coffee shop could respond to the question in their

hearts. As coffee lovers they could drink good taste coffee within a short time and

under relaxing atmosphere in Inthanin coffee shop. However, coffee business is highly

competitive; therefore price mechanism and quality are important keys to succeed in

coffee business. Moreover, the decoration style of Inthanin coffee shop is based on

green concept, that is the style in trend at present.

As, Inthanin coffee shop is located at Nawamin road where there are many

competitors such as Starbucks, Coffee Sister and Flower and Coffee, it is determined

to provide the “best cost provider” strategy. The price range begins at 35 THB. That is

a good price that can compete with Starbucks. When compare with Coffee Sister and

Flower and Coffee shop it has the same range of price. However, Inthanin coffee shop

has good management, good brand franchise and well known brand more than others.

Indeed, Inthanin coffee shop is a good pioneer in coffee business at Nawamin road.

The project’s initial investment is 830,680 THB. The owner can have return

on investment within only one year allowing payment of loan within 5 years. Total

loan is 200,000 THB paid at 40,000 per year. The rate of return is 81%.

According to the independent study, coffee business key factors depend on

location, price and quality. This business plan will show how to do coffee business as

well.

LIST OF CONTENTS

Chapter Page

I BUSINESS SUMMARY…………………...…………………….. 1

Business Overview……………….……………...........…...…….… 1

Product/Service Features………...…………...........……...…….… 2

Market Analysis………....................….……………………........... 6

Market Strategy…………........................………………….…….… 7

Key Financial Objectives…………..…………...........…...…….… 11

II DETAILED PLAN…………………….....………………………… 12

Business Structure………………………………...........…...…….… 12 Management and Ownership………...………...........…...…….… 13 Key Objectives………………………………................…...…….… 14 Market Analysis………………………………..............…...…….… 14 The competitors………………………………..............…...…….… 15 Product/Service………………………………................…...…….… 21

Product or Service production…………………………............… 26 SWOT Analysis…………………………....................................… 27

III FINANCIAL PLAN................................................................... 29 Key Objectives and Financial Review……......……….…….… 29 Establishment Cost………………………….................…...…….… 29 Profit and Loss……………………...…………...........…....…….… 30 Cash Flow……………………………….......................…...…….… 31 Balance Sheet………………………………...........…..........…….… 32 Breakdd-ddeven Analysis……………………….......…...…….… 34

LIST OF CONTENTS (CONT.)

Chapter Page

IV SUPPORTING DOCUMENTATION.........................…… 35

V ACTION PLAN.............….…...............................................…… 36 REFERENCES.................................................................................................. 39

BIOGRAPHY………………………………………………….............................. 41

LIST OF TABLES

Table Page

1 Analysis competition in fresh coffee ………......……......…….....… 18

2 SWOT Analysis …………………….……...........….......….….......… 27

3 Establishment Costs ……....……………………….….................…… 29

4 Profit and loss ……………..……....................................….……… 30

5 Cash Flow ……...……........................................….......................… 31

6 Balance Sheet ……….......…...............…...............................……… 32

7 Breakss-sseven analysis………....................................….........…… 34

8 Action Plan. ..................................................................................... 37

LIST OF FIGURES

Figures Page

1 The pattern of Inthanin coffee shop.….....…..............................….. 3

2 Inside Inthanin coffee shop.............................….......................…… 3

3 In front of cashier counter …..........................................................… 4

4 Outside Inthanin Coffee shop …………......................................…… 4

5 Furniture insides coffee shop …......…........................................…… 5

6 Outside Inthanin coffee shop was decorated by trees ….................. 5

7 Porter’s Five Forces Model ……........................................................ 6

8 New choco ice c for winner season …........….................…............... 8

9 Hot beverage cup for take away …........…........................................ 9

10 Hot beverage cup for drinking in the shop …................................… 9

11 Plastic cup for ice..................................................................….......... 10

12 The organization chart of Inthanin coffee shop................................ 12

13 Employee of Inthanin coffee shop..................................................... 13

14 Logo Starbucks................................................................................... 15

15 Logo Coffee World............................................................................. 15

16 Logo Black Canyon............................................................................ 16

17 Logo Au Bon Pain.............................................................................. 16

18 Logo Café Amazon............................................................................ 17

19 Logo Caffe ’D’ Oro............................................................................ 17

20 Location of competitors in 3 square meter........................................ 20

21 Espresso machine with vapour pressure............................................ 21

22 Variety of products............................................................................. 23

23 Food menu set..................................................................................... 23

24 Sausage menu set................................................................................ 24

25 Recommendatory menu...................................................................... 24

LIST OF FIGURES (CONT.)

Figures Page

26 Sales amount of coffee products since 2002 to 2005........................ 35

1

CHAPTER I

BUSINESS SUMMARY

At present, a coffee shop is an interesting business in Thailand, because the

characteristics of people in Thailand changed. Especially, in Bangkok, human life

style has changed following modern style such as officer and worker. As, a coffee

shop seem to be a location for appointment; therefore, the coffee shop business

responded to customer need.

Inthanin coffee shop is interested in a franchise at Bangjak petrol station,

under green concept, therefore we can summarize Inthanin coffee shop as a better

choice than other coffee shop franchises.

From the information for evaluate potential of Inthanin coffee shop, the rate

of return is 81 % and the owner can have return on investment within only one year,

that can return loan within 5 years, that total loan is 200,000 baht by paid in 40,000

per year. Therefore, Inthanin coffee shop has attractiveness of return profit and in

trends. It will be the first choice.

Business Overview

As a coffee shop franchise in Bangjak petrol station is Inthanin brand.

Intanin coffee is focused on people who like fresh coffee by roast, by order; therefore

this is another channel for consumer, beside a department store. The Bangjak petrol

station is the location of Inthanin coffee; it is a co- business among petrol, coffee shop

and supermarket. The management and image of Bangjak petrol emphasizes modern

decoration, environment and clean characteristics, that is why view is important to

support customer need. When compared with other competitors such as Starbuck

coffee, Black canyon, 94O C coffee; Inthanin coffee has sale point different from

competitors. However, there are high competitors, which have the same sales points

such as Banrai coffee, Coffee D’Oro, Amazon and etc.

2

Products of Inthanin coffee shop are hot and cold beverages; there are

coffee, Coco, fruit milk shake. Prices of coffee are beginning at 35 baht to 55 baht for

beverage.

Investment in coffee shop is very interesting in that it uses consumer favors

to drink more coffee. Therefore, Inthanin coffee shop is one interesting choice, that

can get return on investment within 3ss-ss5 years

Product/Service Features

Generally, the main points of Inthanin coffee shop are recognized easily by

the products and place.

Characteristics of coffee shop place have 3 types of patterns.

1. ss Shop (Stand – Alone)

It may be a building or shop, where areas have more than 50 square meters.

The stand – alone shop may be a community, department store, office building, Petrol

station and Plaza.

2. ss Corner/Kisok

This is a medium coffee shop, where areas have 6 square meters. Generally,

image is corner within building, department store and Plaza. This kind has low seats.

3. ss Cart

A minimum coffee shop, where areas have 3 square meters and can move for

finding suitable location. That is why it can approach closely the customer.

In this case, Inthanin coffee shop will be invested to be a shop

(Stand ss - ss Alone).

Products

The types of coffee are several, such as hot beverage, cool beverage and

another. Hot Beverage: hot latte, hot espresso, hot cappuccino, hot coco, hot milk, hot

milk tea and hot green tea. Cool Beverage: ice latte, ice espresso, ice cappuccino, ice

coco, ice milk, ice tea, ice lemon tea and ice green tea. Fruit Ice: strawberry milk

shakes, Kiwi shake.

An important part for the achievement of Inthanin coffee shop is service

mind. All employees are trained about manner and service mind. Moreover, songs are

important part too, that can establish comfortable image. Decoration is created by soft

3

and brown color. Most materials in furniture are wood, which shows natural and

relaxing images. Tree growing is one key to attract customers also.

Figure ss 1 ss The pattern of Inthanin coffee shop

Figure ss 2 ss Inside Inthanin coffee shop

4

Figure ss 3 ss In front of cashier counter

Figure ss 4 ss Outside Inthanin Coffee shop

5

Figure ss 5 ss Furniture insides coffee shop

Figure ss 6 ss Outside Inthanin coffee shop was decorated by trees

6

Market Analysis

According to Kasikorn research center, 2009, coffee market was predicted at

22,000 million in value, which was decreased 12 % when compared with the

previous year. The reason would be economic recession in the first haft of 2009, that

reflected customer need. Customer has more money saving trend. Moreover, target

groups were workers, whose proportion of un Ss - ssemployed people were

higher. Another point, was that healthy trends were strong trends, therefore some

consumers changed from drinking coffee to fruit and vegetarian beverages.

At the end of the year there would be higher customer need for drinking

coffee. Therefore, interest in the coffee shop business existed. Factors reflected higher

customer need, maintaining quality and strategies for creating coffee drink varieties

(Coffee product in 2005, July 24, 2009).

Coffee shop is interesting for making money, especially that people have

passion in coffee.The aim of Inthanin coffee shop business plan is to gain income

more than 150,000 baht per month, that is why income per day would be 5,000 baht.

Analysis with Five Force Model

Figuredd7ddPorter’s Five Forces Model

1.ddSegment rivalry: At present, coffee businesses have high competitors.

There are so many productions and coffee shops, most of which present different

quality, taste and decoration to be factors of choice for customers. Therefore, Inthanin

7

coffee would emphasize on quality, taste and image of coffee shop following sales

point. Giving customers more value when compared with their money is ensured by

incorporating good- to-excellent products, which attributes at a lower cost than rivals.

The best target is lowest (best) costs and prices compared to rivals offering products

(Thomson, J et al, p134).

2. ddBargaining power of suppliers: Even though, Inthanin coffee shop is

one franchise, which does business not a long time, but there is high bargaining

power of suppliers, because it does business with Bangjak petrol station. This is one

important reason, why Inthanin coffee shop would be an important choice for

customers.

3. ddBargaining power of buyers: Bargaining power of buyers is high

because there are so many products such as several beverages, several food sets and

others. Therefore, it can attract customer to buy products from Inhanin coffee shop,

because it can respond customer need in variety.

4. ddThreat of substitute products: For the coffeedd-dddrinking lover, in

their opinion, they cannot find some products to substitute coffee. While, other

customers, fruit beverages would be the other choice.

5. ddThreat of new entrants: Entrants in coffee business or other competitors

is easily done, because investment would be low budget to high budget. Therefore,

coffee businesses have high competitors.

To sum up, coffee business is high in competition. Therefore, it should use

market strategies for establishing brand loyalty. The results of brand loyalty, include

buyers’ repeat in buying and would be an important factor to expand new market.

Therefore, they should emphasize on quality of products, deeply understand customer

insight and approach their customer needs.

Market Strategy

Inthanin coffee shop has several market strategies, that are as follows:

1. ddA bestdd-ddcost provider strategy

Generic competitive strategies are five variations to be identified by the

company for creating competitive strategies. Each company strategy should approach

8

patterns of actions to fit its own matter and industry environment ( Thomson,J et al,

p134).

In this case, they use the bestdd–ddcost provider strategy. Giving customers

more value when compared with their money by incorporating gooddd-ddtodd-

excellent products, which attributes at a lower cost than rivals. The best target is

lowest (best) costs and prices compared to rivals offering products (Thomson,J et al,

p134).

2. ddProduct R and D activities

The aim of product R and D activities is improvement of product designs

and performance features, increased end product and applications (Thomson, et al, p

145).

Inthanin coffee business has policy to develop and create new products for

responding to customer each season. For example, in summer, they have new ice

beverage menu, in the winner, they have new choco ice menu.

Figuredd8ddNew choco ice for winner season

9

3. ddPackaging strategy

Inthanin coffee shop has types of cups for hot and ice beverages.

-ddHot beverage

Inthanin coffee shop has two patterns of hot beverage cup. One is for dinking

inside and another is for take away. Both of these have the logo of Inthanin coffee

shop on skin. This strategy establishes brand awareness.

Hot c cup for take away

Figuredd9ddHot beverage cup for take away

Figuredd10ddHot beverage cup for drinking in the shop

-ddIce beverage

10

Figuredd11ddPlastic cup for ice

Moreover, during New Year festival, there is a decorated package of cookies

to be given as gift.

4. ddMerger and Acquisitions

The combination of the assets and liabilities of two companies is corporate

merger. In a merger of firms that are approximate equals, there is exchange of stock

in which one company is shareholder of the other company at a certain ratio.

(Mergers and acquisitions, n.d) In this case, Inthanin

5. ddDistribution strategy

Inthanin coffee shop undertakes responsibility by Koe Jak company. That is

the subdd-ddcompany of Bangjak Petroleum public company limited. That is an

important strategy because there are so many distribution and maintainance of the

right to do coffee business for Inthanin coffee.

6. ddWireless zone

Customer target groups are various types such as official, student, housewife

and etc. Especially, student and official groups usually use internet, therefore,

wireless service zone at Inthanin coffee shop can attract customers.

7. ddSelling Support

Inthanin coffee shop sets campaign with customers. The details are as

follows:

-ddCollecting star card, which accumulates score. For example, customers

collect 10 scores; they can get one free beverage.

11

Key Financial Objectives

The key financial objectives have been developed using previous months’

data for the existing store, tracking trends in revenues and expenses. A

fivedd-ddmonth track of sales, accounts receivables and payables, and inventory from

a yeardd-ddend benchmark were also utilised.

The key financial objectives are:

-ddto reduce the overdraft from 200,000 to 150,000 THB

12

CHAPTER II

DETAILED PLAN

Business Structure

Inthanin coffee was taken responsibility by Koejak co., ltd, which was merged

by Bangchak public company limited. Koejak company is professional in coffee

and beverage, located at 43/132, 136 M. 5, Bangbon subdd-dddistrict, Bangbon

district, Bangkok 10150.

Figuredd12ddThe organization chart of Inthanin coffee shop

This chart shows Inthanin coffee shop’s organization chart, that presents

procedure of duty, evaluate and control process to control quality in franchise

business. However, This chart will be the initiation step of investment; after that if

Koejak co.,ltd

Owner of Inthanin c

Bangchak Public company limited

Sellers Accouter

Auditor

13

entrepreneur can approach in Inthanin franchise already, that will be adjusted in the

part of Koejak company. However, an auditor has responsibility to check and

evaluate results of work every month per each time.

Management and Ownership

Directordd–ddPimpatra Sornprasith

Pimpatra Sornprasith has a 6dd-ddyear experience in sales. She has a strong

background in service and sales field.

Auditordd–ddChawanda Petchsuwan

Chawanda Petsuwan has experienced auditing in many shops. Her

responsibility is checking and evaluating the Inthanin coffee shop.

Staff

There are four staff members of Inthanin coffee shop. They are fulldd-

ddtime employees, but they work in period time. Inthanin coffee shop opens between

6.30 am to 9.00 pm, therefore, they have to manage time following the details as

follows.

Staff can be divided into two types of responsibility, such as seller and

accountant.

Sunday - Saturday

-dd6.00 am to 5.00 pm: one staff per period



Figuredd13ddEmployee of Inthanin coffee shop

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Key Objectives

The objectives for Inthanin coffee shop are to:

-ddsucceed in coffee business, to get profit and maintain quality of service

-ddmaintain a financially healthy business by exceeding breakdd-ddeven

targets by at least 10 %

-ddachieve monthly and yearly sales target

-ddaim to improve sales of coffee, beverage, bread, biscuits and cakes over

the year by 10 %

-ddbegin marketing to new consumers and competitor’s existing supporter

base through mail-outs and promotions to maintain current growth in sales and

service revenue

Market Analysis

At present, people favourite coffee drinking, therefore coffee business

expands continuously. Moreover, in the eye sight of investor thinks about coffee

business, which would be making money business. That’s why, coffee shop has

established rapidly in 4dd-dd5 year later. Because of supporting factors, those are

below.

1. ddStarbucks pioneers coffee business in Thailand, therefore

consumers began to perceive several coffees and establish brand awareness. Besides,

it established culture to drink coffee at shop. That is new trend, so entrepreneur has to

decorate your coffee shop and it may be increasing various service supports such as

internet wireless zone, magazine, song.

2. ddAt present, the consumer admires drinking coffee that means good life

style. Focusing on target groups who have high competence to buy and these target

groups would have high power in buying in future such as students, managers,

officers, etc.

3. ddFranchise business is famous for new investors that will be successful,

even though they lack experience in that business. However, the amount of buyers in

franchise business was decreased because there are several reasons to support success

such as system management, location, coordinator, opportunity to make profit,

working capital and etc. Therefore, investors should study and recognize

15

circumspectly. The important things for investors are studying about gain before

investing.

The Competitors

Analysis competition in fresh coffee

Fresh coffee market has several competitors such as Starbucks, Coffee

world, Black Canyon, Au Bon Pain, Amazon café,

Starbucks

Figuredd14ddLogo Starbucks

Company Starbucks Coffee (Thailand) Co.,ltd

Foundation Founded in 1971 and started in Thailand in 1998

Target group Ages between 22dd-dd50 years and high income.

It has variety of products, several coffee tastes including spin ice coffee,

increased topping, biscuits, cakes, teas and other breads.

Coffee World

Figuredd15ddLogo Coffee World

Company Coffee world corporation Co., ltd.

Target groups Ages of target group are between 18dd-dd45 years, who

are in the young executive groups. It has variety of products, variety of coffee tastes

and bakery goodies

16

Black Canyon

Figuredd16ddLogo Black Canyon

Company Black canyon (Thailand) Co., ltd

Foundation Founded in 1993

Characteristic of product Several types of coffee, foods and bakeries of

more than 200 kinds

Initial cost to do business no less than 6,800,000 baht (FAQ, n.d.)

Branches More than 200 branches in seven countries; there are 190

branches in Thailand (Company back ground, n.d)

Au bon pain

Figuredd17ddLogo Au Bon Pain

Company Au Bon Pain Company

Foundation Founded in 1978 Boston, USA and started in Thailand

1997 (about, n.d)

Characteristic of products Variety of products, a few type of coffee; they

have more various foods, sandwiches and bakeries

Target groups Workers who love sandwiches

Branches 35 branches in Bangkok and 5 branches upcountry

(Locations, n.d)

17

Café Amazon

Figure 18 Logo Café Amazon

Company PTT Public Company Limited

Target groups Travellers and Workers

Branches 146 branches

Initial cost to do business 2,000,000 baht

Products Variety of products, various types of beverages and some

bakeries (aircraftcoffe, n.d)

Caffe’ D ’ Oro

Figuredd19ddLogo Caffe ’D’ Oro

Company Golden Cream Company

Products Variety of products, a few types of coffee; they have

various foods, sandwiches and bakeries.

Target groups Traveller

Branches 70 branches in Bangkok and boundary (café’D’oro, n.d)

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Tabledd1ddAnalysis competition in fresh coffee

Brand

Price

Distribution

Strong point

Weakness point

Starbucks

75 to

180

Baht

Department store,

Building, Travel

location in main

cities such as

Chiangmai,

Phuket, Pattaya.

Starbucks is leader in

premium fresh coffee

business and they have

customer loyalty. Besides,

they had more experiences

in selling coffee aboard

They have weakness point:

cost of toasted bean coffee

transportation from USA,

cost of fresh bean coffee

from Kenya and Costarica:

high cost of management,

lack of designing power.

Coffee

World

55 to

90

Baht

Department

stores, Office

building, Cinema

and several

travel locations

such as

Chiangmai and

Pattaya.

Coffee world merges with

B2S shop, therefore there

are more distributors.

There is high cost in

management, therefore,

some brands lose.

Black

Canyon

55 to

180

Baht

Department stores

and petrol station

Black canyon has been

around for 10 year, so

Black canyon is a well

known brand. Moreover,

they have expanded to

Singapore and Malaysia.

Black canyon has no clear

premium coffee image,

because, they do not only

emphasize fresh coffee, but

also on several foods.

Therefore, their image on

premium fresh coffee is not

clear. Moreover, trends of

distributor channels of

Black canyon changed to

petrol stations, where good

locations are already

reserved. It is not easy to

find out good locations to

do business. However, that

is repeat service areas with

Amazon café

19

Table 1 (Cont.)

Brand

Price

Distribution

Strong point

Weakness point

Au bon

pain

start at

50

Baht

Department stores

and office

building

There are various foods

and bakeries, therefore

those attract consumers.

Most locations of Au

bon pain are department

stores, which are

appointment places.

Au Bon pain cannot set

positioning clearly in

premium fresh coffee.

Café

Amazon

start at

45

Baht

Petrol Station

PTT station is leader of

petrol station; therefore

they have advantage in

high amount of

customers, who take

service at PTT Petrol

Station.

Cost to start is rarely high.

Caffe’D’

Oro is

Thai brand

35 to

50

Baht

Shell petrol

station,

Department store,

Hospital, Office

building

They can get advantage

from travellers who buy

fuel in shell petrol

station.

There are high

competitors.

20

Analysis of competitors with area zone information

Figuredd20ddLocation of competitors in 3 square meter

The figure shows location of coffee shops, located nearest Inthanin coffee

shop in 3 square meter areas zone. The direct competitors are three shops such as

Starbucks, Flower and Coffee, Coffee sister. They are direct competitors. Direct

competitor means sellers have same group of buyers and their products fill demand in

the same way of the other (Direct Competitors, n.d.).

Analysis

The direct competitors of Inthanin coffee shops are three shops; first,

Starbucks is located at Carrefour branch Nawamin road. Price will be

90dd–dd160 baht initially per one coffee is 90 baht; hot latte one cup is 90 baht.

Starbucks is premium market and they attract customers who buy stuffs from

Carrefour. Some of the target groups are students and businessmen. Therefore,

the difference in price between Starbucks and Inthanin coffee shop can separate

21

target group. Customer’s Inthanin coffee shop group is medium level who have

income in medium range.

When comparing Inthanin coffee shop with Flower and coffee shop,

there is different position in the market. Flower and coffee shop attracts

customers who buy flowers and consume beverage when they wait for their

flower order. Prices of both are not different.

An important competitor of Inthanin coffee shop is coffee sister who has

high effect on market share of Inthanin coffee shop. They are located at Caltex

petrol station at Nawamin 61 road. However, this shop has a small area: It is

approximately 6 square meters and there is no clean car service business. unlike

Bangjak petrol station which has various shops serving travelers such as

cleaning car service, Thai massage, supermarket and coffee shop, while shell

petrol station has supermarket shop and coffee shop. That is why Bangjak

petrol station attracts more than shell petrol station in customer eye sight.

Indirect competitors

Indirect competitor is seller who sells product in a different way, that is

alternating choice to purchase (Indirect competitor, n.d). In this case, indirect

competitor is fruit beverage shop nearest to Inthanin coffee shop. However, that shop

is small and sells only orange juice. Therefore, it does not affect the coffee shop so

much.

Product/Service

Inthanin coffee shop includes various products such as coffee, tea, ice

fruit spinning and bread. Inthanin coffee shop uses espresso machine with

vapour pressure.

Figuredd21ddEspresso machine with vapour pressure

22

Basic of making coffee is taking roast coffee bean into hot water. The

difference method of espresso machine is using water vapour pass grinding

roast coffee to be coffee water. The high quality of coffee brewing depends on

several factors, as follows:

-ddGood qualityof coffee bean pass through proper roasting and

grinding procedure

-ddClean water is treated by filter

-ddSuitable temperature of water is 94dd-dd98 degree Celsius

-ddBrewing and grinding equipment must work under suitable condition

For example, coffee bean passed grinding too much; it will be strong

taste because it use a long time more than rough grinding coffee.

Beverage Recipe

Generally, most coffee shops have individual recipe; menus of each

shop are different and will be reflected on the name.

International recipe of coffee beverage

Espresso: Using strong roast Arabica in Italian roast type or espresso

roast to brew with 1dd-dd1 ½ onz per time.

Cappucino: Espresso with hot milk (150dd-dd170 degree Celsius) and

covered with hot foamed milk about 6 onz for hot cappuccino. Iced cappuccino

uses cream to replace the foamed milk.

Mocco: Increasing chocolate syrup into espresso 1 onz, hot milk and

covered with cream and chocolate powder.

Latte coffee: 1 Onz of espresso with one cup of hot milk and covered

with foamed milk.

Quality Control and Maintenance for Coffee

Correct process of maintaining quality of raw materials is essential because

it will still be fresh for a long time. The important factors to maintain coffee beans

are several such as temperature, light, air and humidity.

-ddKeep coffee in closed container.

-ddKeep coffee in cool air. Don’t store coffee near hot places or sunlight

because it will lose its aroma quickly.

23

-ddDon’t keep coffee in refrigerator because coffee will absorb food odour.

Besides, taking coffee container in and out from the refrigerator several times, will

lead to humidity.

-ddGrinding coffee bean to stock should not exceed more than 1 month; the

shop should grind suitable quantity of coffee beans for consumers.

Products and Service

Inthanin coffee shop has so many products such as beverages, breads

and biscuits, sausages, menu set, waffle cake and others.

Figuredd22ddVariety of products

Figuredd23ddFood menu set

24

Figuredd24ddSausage menu set

Figuredd25ddRecommendatory menu

25

Products of Inthanin coffee shop are various types.

Menu food sets consist of various menus, which are as follows:

Roti, sausage and fried egg: 45 baht

Two pieces of bread with jam or butter : 20 baht per set

Waffle and Jam: 35 baht

Roti and Ham : 40 baht

Roti with chilli and chicken : 35 baht

Big hot dog: 32 baht

Ham cheese : 35 baht

German Sausage set

Set 1

-ddcheese sausage 1 piece 50 baht

-ddMinimart sausage 1 piece

-ddGarlic bread 3 piece

Set 2

-ddCheese sausage 1 piece 75 baht

-ddMinimart sausage 1 piece

-ddBacon sausage 1 piece

-ddGarlic bread 3 piece

Set 3

-ddGarlic sausage 1 piece 80 baht

-ddPolis sausage 1 piece

-ddGarlic bread 3 pieces

Set 4

-ddBacon sausage 3 pieces 85 baht


Set 5

-ddGarlic sausage 3 pieces 105 baht

-ddGarlic breads 3 pieces

Set 6

-ddGarlic sausage 1 piece 45 baht


26

Set 7

-ddBacon sausage 1 piece 70 baht

-ddBacon stick 4 piece


Set 8

-ddMinimart sausage 1 piece 95 baht

-ddGarlic sausage 1 piece

-ddBacon stick 1 piece

- Garlic bread 3 pieces

Set 9

-ddBacon sausage 1 piece 100 baht

-ddGarlic sausage 1 piece

-ddBacon stick 4 pieces


Set 10

-ddMinimart sausage 1 piece 65 baht

-ddBacon sausage 1 piece


Moreover, there are a lot of biscuits such as butter bread baking, pine apple

sandwich bread, butter cake and cookies.

Service

Inthanin coffee shop is a full-service shop with coffee beverage. The services

include several things:

-ddGood songs to serve customers

-ddMagazine, book, and cartoon book are made available to the customers in

shop

-ddRelaxed atmosphere: air condition, soft and nice seat

-ddWireless lan

Product or Service Production

Products are produced locally. Cost of each product comes from Koejak

company and also includes services.

27

SWOT Analysis

Tabledd2ddSWOT Analysis

SWOT Analysis

Strengths Weaknesses

-ddInthanin Coffee shop is a well known

brand.

-ddCoffee business is still responded by

consumers.

-ddGood place: nearest commodities,

school, bus stop station, market, villages,

located on Nawamin 76 road.

-ddVarious products when compared

with competitors

-ddCoffee shop is located at Bangjak

petrol station, where other services such

as washing car care, massage service,

minimart

-ddWorking under audit by Koejak

policy to control quality of products,

service and image

-ddOther services for customers such as

magazines, news paper, songs, wireless

zone

-ddGood control of management under

Koejak company

-ddManagement under central control

incurs disadvantage: additional, new

products, creating new promotion

-ddPaid Franchise fee per month and

year

-ddSales amount depends on seller, so it

is a sensitive factor to control sales

amount

28

Tabledd2dd (Cont.)

SWOT Analysis

Opportunities Threats

-ddCoffee drinking trends gained

response from customers in increasing

rate.

-ddInthanin coffee shop should find

alliance to do trade continuously, coffee

seller joins with book shop, other

companies for delivery of coffee

-ddHigh competitors such as Amazon

café, Starbucks, Café’D oro

-ddIncreased Interest rate will curb

spending by families/employees

-ddNot keeping up with latest trends and

technology developments

-ddNearest specialised coffee shop is

only 1.2 km away

29

CHAPTER III

FINANCIAL PLAN

Key Objectives and Financial Review

Sales and Marketing:

-ddto achieve sales per month is 180,000 baht

Establishment Cost

Interest loan 8 % per year

Payment liabilities time 5 Year

Tabledd3ddEstablishment Cost

Investment Budget

Source

Description Total Owner Creditor

Non-current asset

Calculator machine 15,000.00 15,000.00 -

Espresso machine 80,000.00 80,000.00 -

Equipment in coffee shop 400,000.00 200,000.00 200,000.00

Total non- current asset 495,000.00

Payment before initiation working

Register and Decoration 210,000.00 210,000.00 -

Land Deposit 25,680.00 25,680.00 -

Working capital 100,000.00 100,000.00 -

Net total of cost 830,680.00 630,680.00 200,000.00

30

Tabledd3dd (Cont.)

Description Year 1 Year 2 Year 3 Year 4 Year 5

Loan 200,000 160,000 120,000 80,000 40,000

Payment of loan 40,000 40,000 40,000 40,000 40,000

Interest rate 15,000 12,000 9,000 6,000 3,000

Total loan 160,000 120,000 80,000 40,000 -

Profit and Loss

Tabledd4ddProfit and Loss

Profit and Loss

Year 1 Year 2 Year 3 Year 4 Year 5

Sales 1,864,800 2,160,000 2,448,000 2,662,200 2,723,400

Variable cost 773,892 896,400 1,015,920 1,104,813 1,130,211

Margin 1,090,908 1,263,600 1,432,080 1,557,387 1,593,189

Fixed cost 559,720 592,600 608,974 626,161 644,200

Profit before initiation 531,188 671,000 823,106 931,226 948,989

Interest 15,000 12,000 9,000 6,000 3,000

Profit before taxes 516,188 659,000 814,106 925,226 945,989

30 % tax 154,856 197,700 244,232 277,568 283,797

Net profit 361,332 461,300 569,874 647,659 662,192

31

Cash Flow

Tabledd5ddCash Flow

Cash flow Year 1 Year 2 Year 3 Year 4 Year 5

Net profit 361,332 461,300 569,874 647,659 662,192

Depreciation 99,000 99,000 99,000 99,000 99,000

Other cash out payment 42,000 42,000 42,000 42,000 42,000

Interest 15,000 12,000 9,000 6,000 3,000

Taxes 154,856 42,844 46,532 33,336 6,229

Liabilities 63,936 10,121 9,874 7,344 2,098

Dividend - 23,065 5,429 3,889 727

Remaining goods in stock -14,918 -2,362 -2,304 -1,714 -490

Cash flow 721,206 687,968 779,405 837,514 814,756

Cash flow

Current asset - 495,000 - - - -

Register and Decoration - 210,000 - - - -

Land Deposit - 25,680 - - - -

Cash flow of investment - 730,680 - - - -

Finding cash flow

Loan 200,000 - - - -

Payment loan - 40,000 - 40,000 - 40,000 - 40,000 - 40,000

Payment interest - 15,000 - 12,000 - 9,000 - 6,000 - 3,000

Payment dividend - - 23,065 - 28,494 - 32,383 - 33,110

Share investment 630,680 - - - -

Total cash flow 775,680 - 75,065 - 77,494 - 78,383 - 76,110

Cash 766,206 612,903 701,911 759,131 738,647

Plus Beginning Cash Flow - 766,206 1,379,109 2,081,020 2,840,151

Ending Cash Flow 766,206 1,379,109 2,081,020 2,840,151 3,578,798

32

Balance Sheet

Tabledd6ddBalance Sheet

Balance Sheet

Asset Year 1 Year 2 Year 3 Year 4 Year 5

Current asset

Cash 766,206 1,379,109 2,081,020 2,840,151 3,578,798

Debtor - - - - -

Goods in stock 14,918 17,280 19,584 21,298 21,787

Total Current asset 781,124 1,396,389 2,100,604 2,861,449 3,600,585

Non - current asset 396,000 297,000 198,000 99,000 -

Register and Decoration 168,000 126,000 84,000 42,000 -

Land deposit 25,680 25,680 25,680 25,680 25,680

Total non current asset 589,680 448,680 307,680 166,680 25,680

Total asset 1,370,804 1,845,069 2,408,284 3,028,129 3,626,265

Debtor and Liabilities

Creditor 63,936 74,057 83,931 91,275 93,374

Taxes 154,856 197,700 244,232 277,568 283,797

Dividend - 23,065 28,494 32,383 33,110

Current Liabilities 218,792 294,822 356,657 401,226 410,280

Borrowing 160,000 120,000 80,000 40,000 -

Total liabilities 378,792 414,822 436,657 441,226 410,280

Equity 630,680 630,680 630,680 630,680 630,680

Retained profits 361,332 799,567 1,340,947 1,956,223 2,585,305

Attributable to equity 992,012 1,430,247 1,971,627 2,586,903 3,215,985

Total liabilities and

equity

1,370,804 1,845,069 2,408,284 3,028,129 3,626,265

33

Tabledd6dd (Cont.)

Cash flow Statement

Year

0 Payment cash at the beginning of the financial

year - 830,680.00

1 Cash inflow 766,205.60





Net present value Calculation at 30 %

Net present value of cash inflow ฿ 1,770,121.09

Less Net Present Value of Cash outflow -830,680.00

Net present value (NPV) ฿ 939,441.09

Rate of return 82 %

34

Breakdd-ddeven analysis

Tabledd7ddBreakdd-ddeven analysis

Breakdd-ddeven point Year 1 Year 2 Year 3 Year 4 Year 5

Contribution margin 1,090,908 1,263,600 1,432,080 1,557,387 1,593,189

Rate of contribution

margin

59 % 59 % 59 % 59 % 59 %

Breakdd-ddeven point per

year

956,786 1,012,991 1,040,981 1,070,360 1,101,197


month

79,732 84,416 86,748 89,197 91,766


day

2,658 2,814 2,892 2,973 3,059

Interest loan 8 % per year

Payment liabilities time 5 year

Description Year 1 Year 2 Year 3 Year 4 Year 5

Loan 200,000 160,000 120,000 80,000 40,000

Payment of loan 40,000 40,000 40,000 40,000 40,000

Interest rate 15,000 12,000 9,000 6,000 3,000

Total loan 160,000 120,000 80,000 40,000 -

35

CHAPTER IV

SUPPORTING DOCUMENTATION

Coffee market trends 2dd-dd3 years ago were growing continuously.

According to Kasikorn bank research, predicted sales amount of coffee product in

2005 was 21,000 million baht with 10 % growth rate. They separated coffee market

to be instant coffee, canned coffee and premium coffee (fresh coffee) and sales targets

were 9,300 million baht, 7,000 million baht and 4,700 million baht continuously

(coffee product in 2005: sales growth in 10%, 2005).

Figuredd26ddSales amount of coffee products since 2002 to 2005

In the past, coffee market in Thailand is instant coffee only, but coffee

market in Thailand has high sales amount and there are few competitors. All of these,

will attract new investors. Important competitors of instant coffee are premium coffee

or fresh coffee and coffee in can. However, instant coffee is interesting to new

investors too, because there are still new brands of instant coffee in the market.

Sales amount of coffee products from Kasikorn bank research since 2002 to 2005

0

2000

4000

6000

8000

10000

12000

2002 2003 2004 2005 year

baht

Instant coffee Can coffee Premium coffee

36

CHAPTER V

ACTION PLAN

Prepare a mini 12 month Action Plan. This should include: marketing costs,

activities, actioned by who and when. This plan will then become a checklist of the

key actionable items and the time they have to be done by, including who is to do

them. The tasks should not be too detailed or else they become unworkable. See

example below.

Marketing

-ddInthanin coffee shop wants to establish a new product, that is sandwich

Inthanin. The point of sales for the new product is fresh and made to order. Therefore,

customer receives quality product and other choice for menu set. Sandwich menu

includes Avocado with baked chicken sandwich. They include whole wheat bread and

avocado. As avocado and whole wheat are highly beneficial, it is suitable for Inthanin

coffee shop.

-ddEstablishing new product under franchise brand is controlled by the

organization. In this case, Pimpatra Sornprasith should create an outline or plan and

cook new products to present for manager and marketing team of Koejak company.

After, they approved the taste and feature of avocado with baked chicken sandwich

already, they will create marketing materials and advertisement.

-ddWhen considering several views such as taste, image, cost, price, how to

make order and etc.; the marketing team and Pimpatra Sornprasith will establish

advertisement, brochure and marketing plan to present to the management team of

Koejak company. After that, the launch of the product will be approved and

implemented.

-ddThey will design a brochure when plan has already been approved; it will

be shown and the actualization of the marketing plan follows in the next steps.

37

Tabledd8ddAction Plan

Key Objectives Task By Whom By When

MARKETING

Determine Launch

Plan

Outline Plan Pimpatra

Sornprasith

9 June

Agreement and decision

on implementation

Pimpatra

Sornprasith

Marketing team

9 July

Marketing and

advertisement

Marketing team

Pimpatra

Sornprasith

9 August

Create a Brochure Agree concept Marketing team 18 August

Approval of copy Marketing team 10 September

Print Marketing team 15 October

Brochure ready for

distribution

Marketing team 15 November

Sign by Koejak Manager

company and

marketing team

11 December

REFERENCES

35

REFERENCES

Au bon pain Thailand. (n.d.). About. Retrieved April 28, 2010, from

http://www.aubonpainthailand.com/th/about.

Air craft coffee. (n.d.). About. Retrieved April 29, 2010, from

http://www.aircraftcoffee.com/index.

Kasikorn research. (2009). Coffee product in 2005. Retrieved April 19, 2010, from

http://www.kasikornresearch.com/TH.

Café’ D’oro. (n.d.). Career. Retrieved April 20, 2010, from

http://www.caffe-d-oro.com/career.html.

Black canyon coffee. (n.d.). Company back ground. Retrieved on March 10, 2010,

from http://blackcanyoncoffee.com/branches/list-branches.php.

Center for advantage. (n.d.). Direct Competitors. Retrieved April 18, 2010, from

http://www.centerforadvantage.com/ci/directcompetitors.htm.

Marketing MiMi hu. (n.d.). Indirect competitors. Retrieved April 30, 2010, from

http://en.mimi.hu/marketingweb/indirect_competition.html.

Au bon pain Thailand. (n.d.). Location. Retrived March 22, 2010, from

http://www.aubonpainthailand.com/th/about.

Investopedia. (n.d.). Mergers and acquisitions. Retrieved April 24, 2010, from

http://www.investopedia.com/university/mergers.

Thomson,Jr, StricklandIII and , Gamble,E. (2008). The relationship between a

company’s strategy and its business model (16th ed.).USA: McGraw Hill.

BIOGRAPHY

41

BIOGRAPHY

Name - Surname Pimpatra Sornprasith

Date of Birth January 23, 1979

Address 59/28, Serithai 43, Bungkum, Klongkum, Bangkok,

Thailand

Workplace UHM Co.,Ltd, 185/3, Radamri road, Lumpini,

Pathuwan, Bangkok, Thailand.

Position Supervisor

Work Experiences

2003 Water Doctor Co.,Ltd, Bangkok, Thailand

2001 UAE Co.,Ltd, Bangkok, Thailand

Education Background

2001 B.Eng. (Environmental Engineering), Kasetsart

University, Bangkok, Thailand

Documents

Coffee World Business Plan