Kenatco Limited Market - Case Study Example

KENATCO LIMITED Student name: Institutional affiliation: Date of submission: KENATCO LIMITED Introduction In this paper, there is the undertaking of an in depth analysis of the food and beverage market. With this, there is the determination of the market trends and patterns. Through this, knowledge is developed on the various opportunities and threats that characterize the market. The movement of the market and its effect on the Australian economy is also pointed out. Through this, there is the creation of an understanding of the performance and what is in store for the market in the future. There is therefore the analysis of the hospitality industry as a whole. Industry analysis The Australian food and beverage industry is one of the largest industries in the country. This is due to the high demand that characterizes it. The rate of production and the number of people operating in the industry are very many. (Dugdale, 2010)Based on this, we seek to develop a food retail store in the country. The location of the store will be in Sydney. We seek to liaise with the major distributors and producers in the market and to produce items that will be preferred by the people in the market. This will be through the development of a high level of quality cognizant item. (Powers , 1999) We will mostly specialize on the selling of both organic and non organic foods and beverages. Through this, the diversification that we seek to put in place will aid us to attract customers from all the sectors. (Dugdale, 2010) Opportunities and threats in the industry Opportunities The reason behind the development in the food and industry market is the population and demand increase that is being experienced. It is a true concept that all people in the world demand for the supply of food and beverage items. (Monroe, 2006) We therefore seek to meet the demand that is present and to build a business that will be highly cognizant of the trends in the market. The levels of demand have been on the rise due to the population growth that is being experienced in the country. The second opportunity that exists is that the current players in the market are not able to meet the levels of demand that exist in the market. (Barth, 2001) This will be through the development of a supply and selling chain that will be able to address the levels of demand that have been on the rise. The prospects for growth for the business are also an opportunity that they should capitalize on. Through this, the benefits will be to the benefit of both the company and the people in the areas that will be served. To the company, there will be an increase in the level of returns that are made. On the part of the people, they will have ample and adequate supply of the items that they require. Technological advances in the world have also served as opportunities for the growth and the expansion of the business. This is due to the development of policies and measures that will increase the returns that are made by reducing production and other costs incurred in the processes. (Miller, 2007) Threats Despite the opportunities that exist for the operations of the market, there are many threats that are encountered in the operations. The first threat is the threat of new entrants and players in the market. New entrants into a market raise the levels and amounts of competition in the industry and the region. This reduces the returns that are made by the company in its operations. This is due to the reduction in the prices of commodities. (Dopson, 2008) Marketing concepts of the business Product The company will deal with the supply of foods and beverages. The foods will be both the organic and the non organic. In order to improve the products, we will seek the supply services of the highest quality items possible. Through the sale of high quality items, we will have market superiority in terms of the quality items that we offer to the people. (Feinstein, 2012) Price The pricing of items is very important in the product development. This is therefore enhanced by the existence of a proper mechanism for developing prices for the products. Excessively high prices have the effect of discouraging the customers of the items that are being offered to them. On the other hand, excessively low prices on the other hand raise doubts among the customers as to the quality that is being offered. The prices that are charged should therefore be made even and attainable for the people in the market. Through this, they will be affordable for the people in the market that intends to be served. Place The business seeks to be situated in the city of Sydney. In this, it will serve the population in the city. This will make it have a huge market to its disposal. The key aspect of the city is the trait of a high level of middle income population which the company will seek to serve. (Hooley, 1993) The population is also very high and this creates market for the items that are offered by the company. The company is also focusing on prime location in the middle of the city. Prime location will also put it in a place where it is easily accessible to the people. Promotion Operations of the business will only excel if there is high degrees of promotion. In respect to this, the business intends to embark on a high level and grade marketing. This will be through the social media platforms and the televised and radio broad casts. Through this, it intends to appeal to the highest number of people possible. (Berryman, 2015) Through adequate marketing, it will make the product and the people in the market aware of the advancements that are being put in place in the market. This will be to the better of the excellence of the company. Posters and leaflets will also be used in the marketing of the company and its products. Current market condition analysis The market over the recent past has been characterized by a growing number of middle income earners and livelihoods. The company, with its services seeks to serve the middle income earners. This is based on the quality and pricing of the items. (Hooley, 2004) Through this, the market will serve as a perfect ground for the development of the company. There has also been a rising trend in the consumption of the organic foods. These are some of the items that are in offer by the company. It therefore has the potential for growth and expansion. The beverage demand has also been on the rise. This is to the better of the company and its undertakings. Business organization Business budgeting In the undertaking of the operations, there are several costs that will be incurred in the start up of the business. Through this, the several policies and measures that will be put in place to source the required amounts are analyzed. Through this, the budget will be adhered to by the business. (Grimm, 2006) There is however a margin of safety in the undertaking of the budgeting process. This is to cater for the costs that might change in the undertaking of the startup process. Some of the main areas include the house lease, the government certification and licenses, the purchase of the inventory, the costs of recruiting the staff, repairs and renovations to the houses and other miscellaneous costs that are incurred. (Grimm, 2006) They are as listed below. House lease for one year - $50000 Government licenses and certifications - $ 1000 Inventory costs - $60000 Recruiting the staff - $10000 Repairs and renovations - $10000 Marketing and promotion - $10000 Additional costs - $10000 Total = $151000 Source of funding As pointed out, the business requires funds amounting to more than $150000 to finance the startup process of the business. Based on the previous and the financial analysis of the company being nonexistent, it will be difficult for the business to fully finance its activities. Through this therefore, it requires putting in place measures that will make it able to finance all its operations in an easy and an efficient manner. The business based on this, will use a combination of debt and equity financing to raise the required amounts. With this, the equity will be used to raise $51000 required amount. This will be through the sale of the shares of the company. The company intends to split itself into a share proportion. In this, it will raise 1500 shares. Each share will be worth $100. Of these, 500 will be traded to the public while the remaining 1000 will be left to the company. As a result of this, a total of $50000 will be raised for the process. The owner of the business will raise the $ 1000 that is on top of the $150,000. The balance of 100000 will be raised through debt financing. With this, the business intends to apply for a bank loan from a commercial bank to finance the activities. The loan will attract additional expenses which will all be paid by the incomes that are made by the company from its operations. Conclusion Based on the analysis above, the business will be considered to be operating in a manner that will be considered as being suitable based on the operations of the market. The business is expected to operate in strict and utmost adherence to the processes and budgets that have been put in place. Through this, it will attain all the milestones that have been set for its success. It will be to the better of the future of the business. References Barth, S. C. (2001). Hospitality law : managing legal issues in the hospitality industry. New York : Wiley . Beuchat, L. R. (1978). Food and beverage mycology. Westport, Conn: AVI Pub. Co. Dopson, L. R., Hayes, D. K., & Miller, J. E. (2008). Food and beverage cost control. Hoboken, N.J: John Wiley & Sons. Dugdale, D. (2010). Budgeting practice and organisational structure . New York : CIMA Pub. Feinstein, A. H., & Stefanelli, J. M. (2012 ). Purchasing : selection and procurement for the hospitality industry . New Jersey : Wiley . Grimm, C. M., Lee, H., & Smith, K. G. (2006). Strategy as action : competitive dynamics and competitive advantage. New York: Oxford university press. Hooley, G. J., & Saunders, J. A. (1993). Competitive positioning : the key to marketing strategy. London : Prentice hall. Hooley, G. J., Saunders, J. A., & Piercy, N. (2004). Marketing strategy and competitive positioning. New York: Prentice Hall Financial Times . Berryman, P. (2015). Advances in food and beverage labelling: Information and regulations. Miller, J. E., & Pavesic, D. V. (1996). Menu pricing & strategy. New York: Sage . Miller, J. E., Walker, J. R., & Drummond, K. E. (2007). Supervision in the hospitality industry : applied human resources. New Jersey : Wiley . Monroe, K. (2006). The pricing strategy audit : an in-company assessment to help create the best possible pricing strategy for your organization. Cambridge : cambridge . Powers, T. F., & Barrows, C. W. (1999). Introduction to management in the hospitality industry. New York : Wiley . Read More