Culminating Task - Final Summative
Business Model-Bistro Lounger
Name: Tracy Li
25/4/2021
Table of Content
Outline of business model--------------------------------------------------------2
Business strategy------------------------------------------------------------------ 3
Marketing strategy---------------------------------------------------------------- 4
Operational plan------------------------------------------------------------------- 5
SWOT Analysis -------------------------------------------------------------------- 6
Strengths --------------------------------------------------------------------------6
Weaknesses -----------------------------------------------------------------------6
Opportunities -------------------------------------------------------------------- 6
Threats
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Human resources plan ------------------------------------------------------------7
Social responsibility strategy ----------------------------------------------------7
E-business strategy ---------------------------------------------------------------- 7
Business exit strategy
Reference
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Outline of business model
For this piece of assignment, I shall be discussing my business model and the
organizational structure that I think of implementing in my business model. The
business model will be operated on Sole Proprietorship i.e. I will be the single owner
of my business with no other partners. Though the risks in sole proprietorship are
higher, but I believe in my leadership skills and I believe I can lead my team within
my business to the highest level individually and financially. In addition to this, sole
proprietorship will help me in making decision faster (prompt decisions), business is
easily formed, taxation benefits, and benefits of easy dissolutions of business (George,
2015). For the organizational structure, I shall be implementing a Functional
Organizational Structure. My business will operate on functional organizational
structure, where the whole business will be divided into smaller groups based on
specialized functional areas and all areas directly reporting to me.
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All the departments shall be directly reporting to me. The core department of the
business would be the retail department that will be responsible for customer service
with floor team (backend kitchen and front end) and customer service staff.
Business strategy
It has been believed that, Canada is ranked among top nation to consume coffee the
most. The volume of coffee consumed in Canada amounted to approximately 4.59
million 60-kilogram bags. In Canada, coffee accounted for 67 percent of the hot
drinks market in 2014. In 2017, approximately 107.08 liters of coffee was available
for consumption per person in Canada. Out of 80 countries, Canada ranked No. 1 in
2015 when tallying up how many liters of coffee per capita they gulped down at food
service joints like cafes. Canadian loves their coffee and prefers consuming coffee
first thing in the morning ("Coffee consumption Canada 2019 | Statistic", 2019).
Therefore, I see a market demand in this industry and I plan on opening a new coffee
house in the suburbs of Toronto. The name of my coffee house will be Bistro
Lounge. Bistro Lounge will provide customers with coffee and tea products and
homemade pastries and an enthusiastic supporter of local art and music and it will
also serve as a place for business professionals to hold meetings in a relaxed
environment. With a growing demand for team and coffee beverage services and
customized service, Bistro Lounge will target professionals in the area surrounding
university of Toronto which accounts for major customers for the business. Students
who need a place to study or who want to listen to or participate in live music, and
tourists who enjoy the various museums downtown. Customers will enjoy the local
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culture while experiencing teas and as well as homemade pastries and free wireless
internet. Initially the business will operate in Toronto near University of Toronto;
however, we plan on opening the franchise in other suburbs areas of Toronto and
Vancouver.
Current Position
Tea and coffee shops in the Canada experience annual growth of about 7.50% a year,
proving they are becoming more and more popular. In fact, tea and coffee sales are
among the fastest growing categories of drink sales. This rapidly expanding
popularity exists because knowledgeable consumers and the younger generation brand
tea and coffee as trendy and relevant in today’s society. Coffee represents 75% of all
caffeine intakes in the Canada, and tea is a growing fad because of its advertised
health benefits. Coffee is also relatively cheap to buy in bulk presently: the cost of
coffee beans have plummeted since 2013 due to supply outsourcing demand, therefore
representing little of stores’ expenses to provide service ("Coffee consumption
Canada 2019 | Statistic", 2019). A few potential risks Bistro Lounge would be aware
of are its competition with several other coffee shops in Toronto. However, with
personable employees, diverse beverage options, homey feel, available meeting space,
and live local music, Bistro Lounge offers more than its competitors. There are
roughly twenty coffee shops in the Toronto area, most being small business type
ventures. However, one of our biggest competitors is Starbucks. Starbucks is
corporately operated, leaving only small room for personal interaction with
customers. Starbucks employs a glamorous and profitable business model, but they do
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not offer much meeting space for customers or promote local music and art. Bistro
Lounge offers two separate closed off rooms for meeting space for purposes ranging
from business meetings to study groups. Starbucks also has higher prices than smaller
coffee shops with little variety in their crafted drinks. At Bistro Lounge, our goal is to
also promote local music and art as well as make a profit off of our tea, coffee, and
pastry sales.
Marketing strategy
All of our teas and coffee will be purchased in bulk from an online distributor.
Customers will buy the tea bag and the cost of a cup if they plan to take it to go. Tea
bags will be priced according to their quality. Our coffee will also be purchased from
online vendors and will vary based on the week. They will be priced based on the type
of coffee and also on whether it is specially made. Our specially made coffee drinks
will include cappuccinos and seasonal mixes as well as a “Drink of the Week”
special. Pastries will be homemade in the mornings before the store opens and will be
priced between $3 and $5. All promotion for Bistro Lounge will be generated through
word of mouth, flyers, and social media to reach our target audience and to minimize
costs related to advertising in the store’s birth stage. Apart from that several discount
vouchers will be introduced for students and a reward system will be introduced for
the loyal customers and to retain them. Apart from that, we plan on having a musical
night and its advertisement will be given in university’s website and local newspaper
to advertise our coffee house.
Operational plan
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Customers will order their drink and/or pastry at a cash register and then receive a
number that coincides with their order number. An employee will then bring the
customer his or her order based on the number, and the employee will take the
number from the customer once the order has been delivered. To ensure that
customers receive their orders in a timely fashion, the employee taking the order will
write the last two digits of the exact time on the printed ticket from the sale. Our goal
is for customers to receive their orders in less than five minutes. All of our teas and
coffees will be purchased from online suppliers and will be taste tested and researched
thoroughly to ensure quality.
SWOT Analysis
Strengths
 A new startup with less cost of operations
 Lower price tag as compared to its competitors
 Organic Coffee and Tea
 Musical nights
 Conference/meeting room for professionals
Weaknesses
 Imitability of products
 Generalized standards for most products
Opportunities
 Expansion in more developing areas
 Business diversification
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 Partnership and alliances with other organization to grow
Threats
 Competition involving low-cost coffee sellers
 Higher price of raw material of coffee beans and tea
Human resources plan
Two full-time managers will be hired to oversee the day-to-day operations of the
store. Two other employees will be hired as well, but only one manager and one other
employee will work in the store per 7.5 hour shift. The owner will take over the night
shift as the manager on duty until business picks up. Regular employees will receive
$8.00 an hour, and managers will start at $9.50 an hour with plenty of opportunity for
raises as the business enters its breakthrough phase. One baker with ample experience
will be hired as well to bake the pastries. The baker will be a salaried employee with a
salary of $25,000 a year. Payroll and employee information will be handled by the
Human Resource Department. The Human Resource Department will be liable to fill
up all the vacancies in the company. The manager will be taken on board having a bit
of experience in the coffee and beverage industry. Apart from that, the finance and
accounting department will oversee the inflow and outflow of the cash and will assist
in taxation process. The finance and accounting department will be a small
department with no more than two (2) individuals having some market exposure and
MBA (finance) degrees. The procurement department will assist in the administration
work and procuring of raw material such as coffee, wheat flour and tea. Whereas, the
marketing department will be the core department in our Bistro Lounge as they will
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be responsible for promoting the business online and offline. Marketing department
will be responsible for targeting potential customers and retaining customers.
Social responsibility strategy
The social responsibility played by an organization play a vital role in their success.
Therefore, in my business I shall be focusing more on my corporate social
responsibility. Bistro Lounge will start using organic Coffee and tea with the passage
of time. In this way we shall be benefiting the nature and the environment. Moreover,
we will not engage in any child labor or make partnership with companies ever
involved in child labor. In addition to this, we shall work on projects which will help
improving soil, water, land, environment, and nature.
E-business strategy
Having e-business strategies is important to lead the industry from the front.
Therefore, I shall be using social media websites for the promotion of our coffee
house. The department of marketing within my organization would be liable and
tasked to spread as much of information on social media websites such as Facebook,
Twitter, and Instagram etc. to target more potential consumers. Moreover, our coffee
house will have an independent page and identity on all social media websites such as
Facebook, Twitter, and Instagram etc.
Business exit strategy
As my business is operated by me solely (i.e. Sole Proprietorship) therefore, the exit
strategy is easy in my business. I can quit and close the business at any time. I can
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even choose to sell off my business entirely to a new owner with all the assets I own
in my business. Therefore, my business will still have some intrinsic value as there
will be assets in my business such as furniture, music system, kitchen fryers and
utensils etc. therefore, quitting, closing and selling off the business is the simplest
solution in my business if the profit margins dropped to lowest level in the future.
Course connections
While writing this business plan I see following connections with my course.
 Communication
My whole business is based around customers. Therefore, the role of communication
is must
 Motivation
 Conflict/ Conflict management
 Decision making process
 Levels of management
 Time Management
 Learning styles
 Leadership skills
 Leadership styles & Personality traits
 Goal setting
 Organizational structures
 Building positive relationships
 Teams and team building
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Reference
Coffee consumption Canada 2019 | Statistic. (2019). Retrieved from
https://www.statista.com/statistics/448852/coffee-consumption-canada/
George, W. (2015). Benefits of Sole Proprietorship. Review, 4(7), 128-134. doi:
10.12816/0019077
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