INFOSYS.

110 BUSINESS SYSTEMS:

DELIVERABLE 2: BUSINESS SECTION
2014

Name Tianhang Wang
NetID Twan328
Group Number: 236
Website Link: http://infosys1102014group236.blogspot.co.nz/
Tutorial Details Tutor: Day: Time:
Kit-wah Huang Wednesday 12am
Time Spent on Assignment: 20hours Word Count: 1432







































A Report about Fresh Cafe Store in China

1. Introduction

Fresh Cafe is a start-up company which focuses on transmitting the culture of coffee and providing
quality coffee and a cozy environment for customers. Under the background of economic growth, an
increasing number of people tend to pursue a quality life. The original instant coffee obviously fails to
satisfy the need of these customers. This company will try to offer good coffee, and meanwhile, favorable
services. The following part will present more details about the running of this company, including its
vision, development potential, suppliers, strategy, etc.

2. Business Section

2.1 Vision: To spread the culture of coffee and integrate quality coffee with quality life

2.2 Industry Analysis

The industry I will operate in is the fresh coffee industry. According to the Five Forces Model of Porter,
five forces can be utilized to assess the attractiveness of this industry.

Force High/Low Justification
Buyer power high Every year from 1987 to 2006, the total consumption of coffee
beans in China reached 6,469 metric tons, which made China
rank the 74
th
in the world. However, with the economic growth,
China is likely to become a huge potential market for coffee
consumption given its large popularity (Yang, et. Al., 2012).
Besides, an increasing number in China began to accept original
coffee and like this culture.
Supplier power low The supplier power is relatively low because there are not many
quality coffee shops at present in small cities. Nestl remained
the leading player in coffee in 2013 (Hot drinks), but it does not
open cafes. Most coffee shops are located in large cities including
Beijing, Shanghai, etc. For instance, Starbucks is primarily
targeted at high-end consumers in the first-tier cities, while few
shops are set in middle cities (Burkitt, 2012).
Threat of
substitute
products or
services
low Coffee can be substituted by a lot of products, as there are a
great variety of drinks, such as milk tea, tea, other soft drinks, and
so on. But, there are few substitutes for culture coffee. Although
other drinks can meet the customers demands in some sense,
they fail to provide coffee-related culture, or the cozy environment
which can be offered by a delicately designed coffee shop.
Threat of new
entrants
high Considering the large coffee market, there are many companies
and individuals who want to enter the industry. Take Starbucks as
an example. Its vision is to create a third good place for people to
communicate (Burkitt, 2012). Now, it is also considering
expanding market in second- and third-tier cities in China. There
are other individualized coffee shops.
Rivalry among
existing
competitors
high The rivalries include three kinds: foreign brands such as
Starbucks, Costa, native brands including UBC Coffee and other
personal coffee shops.
Overall attractiveness of fresh coffee industry: in the future, the coffee industry is likely towards
sustainability (Kolk, 2012). Meanwhile, culture will be an increasingly influencing factor in the
transmission of coffee, so those who can integrate culture and coffee are more possible to achieve
success (Tucker, 2012). Considering the increasing popularity of coffee and the rise of Chinas economy,
the fresh coffee industry is quite attractive, and can have a good market in some emerging cities in
China.

2.3 Customer and Needs

Fresh Cafe will be established in some second-tier and third-tier cities in China at first, such as
Shijiazhuang, Jinan, capital of Hebei and Shangdong Province, respectively. Its consumers are
white-collars, college students, well-educated people, businessmen, etc. All these people share some
features, such as caring for culture and life quality, seeking for ways to release themselves, and having
stable economic sources. They need a good place to socialize, release pressure and enjoy life.

2.4 The Product and Services

Fresh Cafe tries to provide a comfortable place for them to share ideas, have fun and enjoy coffee. The
coffee store will be decorated in a simple and natural way, embedded with some cultural elements. Our
products include kinds of coffee and some desserts. Besides, some facilities will be offered for them to
play games. Regarding services, there is not many service staff, so that the customers can make
themselves at home. They can serve themselves and do what they like, or even make coffee for
themselves. In addition, soft background music will be played to spice the atmosphere. The decoration,
products, and services are all tailored to meet their physical and psychological demands. In short, Fresh
Coffee commits to the principles of quality coffee, easy life and green environment, so that the customers
can have a harbor to escape from the pressure of urban life.

2.5 The Suppliers and Partners

Fresh Cafe Store has suppliers to offer good coffee beans, tableware, raw materials for making desserts
and other food. All these suppliers will be selected strictly so as to ensure the quality of goods. Coffee
beans will be imported from Brazil directly. Besides, we also need suppliers to offer tables, chairs, sofa
and other decorative products on an irregular basis.
Therefore, partnerships will be developed with local food producers, decorative products manufacturers
and so on. Besides, a partnership will be established with some new media, like some chatting
networking, so as to promote the company.

2.6 Strategy

As for the strategy, Fresh Cafe carries out the 4P strategies, including, product, price, promotion and
place.

The coffee and other products involving desserts, cakes will be guaranteed of high quality and good taste.
Besides, customers are allowed to make suggestions, based on which, the products will be modified.
While ensuring the quality, Fresh Cafe does not use high pricing strategy. The prices will be kept middle
ranged, which can be afforded by the common people. As said, it does not hire many employees. The
costs saved will compensate for the price. Promotion is mainly through word-of-mouth transmission.
Fresh Caf believes that quality speaks for itself. By improving the products and services, it can maintain
the loyalty of consumers who will spread the information among new customers. Besides, holiday
discounts and new product discounts will be used to draw attention from perspective customers. Place
strategy is direct sales, which means that customers can enjoy the products and services in the store.

2.7 The Most Important Value Chain Activity

Marketing is the most important value chain activity for Fresh Cafe Store. Nowadays, brand image and
popularity plays an increasing important role in business activities, especially in the catering and service
industry. For a start-up company, good marketing strategies are very important. In particular, there are so
many stores and shops offering a large variety of coffee, drinks. At first, it may be very hard for Fresh
Cafe to attract customers, so to have its name heard comes first.

2.8 Two Business Processes

In the marketing activity, there are two important business processes, namely, understanding market
needs, and promoting of discounts. The models for these processes are as below.

Model for Business Process One































Identifying problems and
making questionnaires
Carrying out investigations

Sorting up the information
Having trial
surveys
Not effective
Modifying the questions
Next
Making reports
Model for Business Process Two



















2.9 The Functionalities

In the process of understanding customers demand, the computer can be used to distribute
questionnaires online. Also, SPSS statistical software can be used to organize the final data. In the
second process of discounting, the information of promotion can be distributed online, so that more
customers can know the news. Another function is that computer can help to calculate the results during
the sales season.

2.10 Systems

Decision support system: this system can offer support for the decision making of Fresh Cafe Store. In
the processes of market investigations and promotion activities, there are many decisions, including
choosing the investigation focus, the participants, the degree of discount, etc.

Collaboration system: this system can facilitate the flow of information among different departments. For
instance, after the investigation results are organized, they can be shared in the production and HR
departments, so that the entire store will be kept on the same page.

Customer relationship management system: it can help Fresh Cafe to record customers information and
inform them of further discount information.

2.11 Summary table: Value Chain to System
Value Chain
Activity
Processes Functionalities Information systems

Marketing and
sales
1. understanding
market needs
a. Information
distribution
b. Data statistics
1. Decision support system
2. Collaboration system
3. Customer relationship
Discount information
release
The implementation of disounts
Discount modification
Result synthesizing
2. promoting of
discounts
a. Discount
release
b. Sales
calculation
management system

3. Conclusion

Fresh Cafe commits to providing a natural and relaxing coffee drinking place. By spreading culture coffee
and improving internal atmosphere, it aims to satisfy the white collars and well-educated businessmen,
students, etc. Given that there is a huge potential market in the second-tier and third-tier cities in China,
Fresh Cafe store hopes to take up these markets by properly tackling the value chain activities and
business processes.

References:

Burkitt, L. (2012). Starbucks plays to local Chinese tastes. WSJ. com.

Hot Drinks. N.d. Coffee industry market reports, market share, statistics, trends. Retrieved from:
http://www.euromonitor.com/coffee.

Kolk, A. (2012). Towards a sustainable coffee market: Paradoxes faced by a multinational
company. Corporate Social Responsibility and Environmental Management, 19(2), 79-89.

Tucker, Catherine M. (2011). Coffee culture: Local experiences, global connections. Routledge.

Yang, S. H., Hu, W., Mupandawana, M., & Liu, Y. (2012). Consumer Willingness to Pay for Fair Trade
Coffee: A Chinese Case Study. Journal of Agricultural and Applied Economics, 44(1), 21.