Analysis of Two Business Plans - Jolly Java and Bakery Limited - Example

Analysis of two business plans: Jolly Java and Bakery Limited Student’s name: Instructor’s name: Course code: Institution’s name: Date of submission: Table of Contents Introduction Jolly Java & Bakery Limited it’s a coffee and bakery and retail business located in south west Washington. It’s a company owned and managed by two partners Mr. Austin Patterson and Mr. David Fields. The company offers a broad range of coffee and espresso products to its customers. The coffee is from quality Columbia imported coffee beans, the company provides freshly prepared bakery and pastry products during business hours at all times (Baines, 2008). Jolly Java & Bakery Limited aims to offers its products at a competitive price to meet the demand of the middle and higher income local market areas residence and tourists. The company plans to build a strong market position in all its branches mostly situated in towns due to the partner’s industry experience and mild competitive climate in the area they operate in. Jolly Java & Bakery Limited wants to establish a large regular customer base and will therefore concentrate its business and marketing on local residents that its dominant business target market. The Daily Perc, this is a company that offers hot and cold beverages specializing is coffee blended, teas and other custom drinks. The Daily Perc also offers soft drinks, fresh baked pastries and other confections. The Daily Perc mission is a three-fold with each being an integral to their success as to the next. The Daily Perc offers its customers the ability to drive and order there choice of a custom-blended espresso drink, freshly brewed coffee, or other beverage. The Daily Perc Company focuses on two markets: the daily commuter, and the captive consumer. The daily commuter is someone traveling to/from work, out shopping, delivering goods or services or just out for a drive. While the captive consumer, is someone who is in a restricted environment that does not allow convenience departure and return (Carol, 2002). The Daily Perc will penetrate the commuter captive the consumer market by deploying drive thru facilities and mobile cafes in the most logistic and accessible places along the way. Differences and similarities between Jolly Java Ltd and The Daily perc. Both Jolly Java and The Daily Perc are managed by two partners who will also contribute financially to starting their business. Jolly Java Ltd aims to offer its products at a competitive price to meet the demand of the middle and higher income of local residents and tourists while The Daily Perc aims at meeting the demand of the daily commuters and the captive consumers. Both Jolly Java Ltd and The Daily Perc will offer a broad range of coffee blended products and bakery pastries to its consumers. At Jolly Java ltd the key to success will include competitive pricing and providing the highest quality product with personal customer service while The Daily Perc is established on three objectives that it wishes to achieve; a gross margin of 45% or more, a net after-tax profit of above 15% of sales and thirteen drive thru facilities and four fully booked mobile cafes by the end of the third year. In both two companies that is Jolly Java Ltd and The Daily Perc will market their products and services but Jolly Java Ltd will use the experience of marking of one of its partner, while The Daily Perc will use media which is radio to advertise and also use the free publicity by them getting involved in charitable organizations. JOLLY JAVA & BAKERY LIMITED Three strongest components of Jolly Java & Bakery Limited Market segmentation – this is a strong component to Jolly Java & Bakery Limited since the two partners plan to target a stream of local residence and tourist who are likely to present a high customer base.According to Baines (2008) Washington has cool climate for 8 months and hot coffee products are much in demand during that season and thus will enable Jolly Java & Bakery Limited make a lot of sales increasing their profit. Jolly Java & Bakery Limited focuses on the middle and upper income markets and this market segments consume a lot coffee and espresso products and this will enable the company make good sales. Service business analysis – Bernice (2008) argues that due to the rapid growth of the coffee industry in the US and the cool marine climate in the south west Washington that stimulates the consumptions of hot beverages throughout the year, Jolly Java & Bakery Limited has a better chance of making high sales by positioning itself at a place where customers can enjoy a cup of delicious coffee with a fresh pastry in a relaxing environment. Financial plan – it serves as a strong component for Jolly Java & Bakery Limited since the two partners; Mr. Austin Patterson and Mr. David fields are likely to raise the current financing required through the two partner’s contribution of $110000 and a borrowing of $100000 loan from SBA. Jolly Java & Bakery Limited break even analysis is based on the average of the first year figures for the total sales and this assumption will make a more accurate estimate for the real risk. Three weakest component of Jolly Java & Bakery Limited Competition and buying pattern - Jolly Java & Bakery Limited does not explain clearly on how they plan to distribute their coffee and pastries apart from them positioning themselves in a place where customers can enjoy a cup of delicious coffee and a fresh pastry. Competition also in the local area is not stiff and it does not provide the level of product quality and customer service as Jolly Java & Bakery Limited and this gives the company an upper hand to other competitors in the same market. Thus Jolly Java & Bakery Limited will succeed by offering consumers high quality coffee, espresso and bakery products with personal service at a competitive price. Target market segment strategy - Jolly Java & Bakery Limited plant to target the local residence with the company maintaining the local market share by offering personal and expedient customer service but the company does not explain how they plan to target the tourist segment. Thus the company should explain how they target to make sales from this market segment. Competitive edge - Jolly Java & Bakery Limited does not define or explain how they plan to be in a competitive edge in the tourism sector since their competitive edge is only on the low level of competition in the local area. They have clearly stated that the tourist sectors comprises of 35% of revenues and thus the company should come up with the mechanism on how they will capture this market and make sales from them thus making profits from them. THE DAILY PERC BEVERAGE RETAIL Three strongest components of The Daily Perc Market segmentation – The Daily Perc has segmented its market very well in its business plan thus this part serves as strong component in their business plan. The market segmentation will help them position their products and service to create a distinct marketing focus. The Daily Perc as a company has two different market segment: commuters and captive consumers. It has clearly defined who the commuters are and the captive consumers are. The Daily Perc as a company has also determined how it is going to access the two markets through the different delivery systems. For the commuter The Daily Perc has the drive-thru coffee house while the captive consumers The Daily Perc have the mobile café. Strategy and implementation – this is a strong component in the business plan for The Daily Perc since the company has clearly defined how they will penetrate the commuter and captive consumer market. This will be done by them deploying drive through facilities designed to handle two sided traffic and dispense customer designed. The company’s strategy and implementation will enable them define their market niche and it will influence the prices. Marketing strategy – the marketing strategy of The Daily Perc is a strong component in the business plan this is because they clearly describe how they are going to market their quality products. They have strategically placed their drive thru facilities in locations of high visibility and greater of ease of access in order to catch customers going to or from work or while they are out for lunch or shopping. The Daily Perc Company plans to implement a low cost of advertising/ promotion campaign to create awareness to potential customers. They also plan to relyon building relationships with schools, charities, and corporations to provide free publicity because of its community support program. Through the free publicity they are able to market themselves. Three weakest components of The Daily Perc Competitive edge - The Daily Perc as a company does not explain well on the competitive edge they will have over other competitors this serves as a weakness component in their business plan. There is no clear explanation by the company on the steps they will implement to stand out on their quality of services and products offered by them. It is also important that the company identify the competitors and analyze how the competition is likely to change the new venture becomes established. The company should identify the existing competitors and explain their strengths and weaknesses (Baines, 2008). Sales strategy – The Daily Perc has several strategies that they plan to put in place and these strategies are a bit costly especially by them offering out free drink coupons to those who have purchased a certain number of cups. The Daily Perc having a window sales technique such as barristers asking if the customer would like a fresh baked item with their coffee which is an extra expense that might be costly to the company due to the cost of paying the barristers. Competitive comparison - this is a weak component of The Daily Perc business plan because it does not explain clearly the competitive advantage it has over other competitors since there are many competitors offering the same products in the market. The Daily Perc considers itself to be a player in the coffee industry; however it knows the competition for its products range from soft drinks to milk shakes to adult beverages. The Daily Perc company competition will come from three sources thus the company should explain a strategy on how to have a competitive advantage over the other competitors. The company also should explain the competitor’sstrengths and weaknesses. Suggestions on how the business plan could have been improved The entrepreneurial team must be clearly identified and their skills and talent must be adequately described and if the business requires personnel with unique qualification this should be emphasized (Baines, 2008). This should clearly be stated in both the two companies that are the Daily Perc and Jolly Java ltd. The existing and potential market in both the two business plans must be described in terms of size and geographic characteristics and the business plan must provide a summary of data to validate the projections (Beryl, 2009). The market potential should also be estimated to give company a good planning strategy. The product of service must be described in terms of quality image, pricing, and distinguishing characteristics that demonstrate a distinctive competency. The companies should describe the pricing strategies so as to develop a better customer profile (Bernice, 2008). The customer can be profiled using the demographic information such as age, sex, family income, occupation, location and location of potential customers. And this should be done in both the two business plans. The Daily Perc will open its first drive thru facility on Manchester Road in the colonial square shopping center and throughout the metropolitan area while Jolly Java Ltd will open its retail establishment in the Southwest Washington. Challenges faced in the analysis and comparison of the two companies The business plans were very long as compared to the normal standard outline of the business plan and how it should be written and the number of pages it contains. But this I overcame because of the proper layout that was outlined in both the two business plans that is in the jolly java bakery and the daily Perc Another challenge was on the many financial statements that were prepared by the two companies that is Jolly Java Limited and The Daily Perc thus it was time consuming when it came to making comparisons and also it was bit confusing but I took enough time to go through and understand one by one. Five lessons learned about business planning. A business plan is a comprehensive set of guidelines for the new venture to help an entrepreneur make better decisions (Alice, 2002). The business plan always help the business owner /entrepreneur focus their ideas and it helps them in setting objectives and providing a yardstick against which they measure or monitor performance. Some of thelessons learned from business planning are: A well written plan should be short and to the point though there are some plans that require large amount of capital and thus the business plan can be long (Barkley, Ramsey and David, 2000). Also every business is different and therefore a standard business plan is inappropriate. A good business plan should take a long term view of the business and the environment, and it should clearly identify products, services, and markets. In business planning, a plan should emphasis the strengths while of the proposed venture while recognizing the weaknesses of the proposed venture. A good business plan should be accurate and easy to read and it should help an entrepreneur make better decisions. A good business plan should also be in a position to attract external finance needed for the business (Baines, 2008). It should convince investors that the business owner has identified high growth opportunities and that he has a rational program to handle the project. Competencies that I have demonstrated and to what extent Throughout this assignment now in better position to understand very well the importance of business planning. And also have acquired skills that are necessary in generating new idea from the two business plans that is the Jolly Java ltd and The Daily Perc and also have learnt some of the characteristics of a good business plan from this assignment. These characteristics of a good business plan should be easy to manage, offers a good return on investment, has a scope for growth and expansion, a readily available market, involves a minimum risk, and it is well with the goals and interests of its owners. Some of the competencies that I have demonstrated are me having a thorough understanding of the two companies through reading through their business plans and understanding how the financial statements are prepared. Another competency is on creativity since creativity is a tool for entry and survival in the business and it makes one to recognize needs and generate new business ideas and now I am in a better position to generate one business idea and follow through to completion. Finally I am in a position to form a good business plan that can be able to woe investors to take part in financing the business. Conclusion The entrepreneurial team must be clearly identified and their skills and talent must be adequately described and if the business requires personnel with unique qualification this should be emphasized. This should clearly be stated in both the two companies that are the Daily Perc and Jolly Java ltd.The existing and potential market in both the two business plans must be described in terms of size and geographic characteristics and the business plan must provide a summary of data to validate the projections. The market potential should also be estimated to give company a good planning strategy.The product of service must be described in terms of quality image, pricing, and distinguishing characteristics that demonstrate a distinctive competency. References Alice. P. (2002), Industry clusters: Developing a sustainable organizational strategy. The business Journal.75, pp. 117-135 Barkley. F., Ramsey. B. and David. S. (2000), Analysis of business plans s and structures.3rd edn. London: Longman. Baines. E. (2008), The analysis of organizational plans and strategies. Sage: London Bernice. T. (2008), The handbook of organization analysis.2nd edition. Cullompton:Willan publishing Beryl. K. (2009). .Analysis of Retail companies’ performance in Europe, UK. Sage: London Betty. K. (2009), The analysis of the organizational budgets and planning UK. Sage: London Carol. P. (2002), Organizational growth: Developing a sustainable competitive strategy. The business Journal.75, pp. 117-135. Read More