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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 shops 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 Authors Advisor Academic Paper

BUSINESS PLAN OF INTHANIN COFFEE SHOP Pimpatra Sornprasith Associate Professor Suthinan Pomsuwan, Ph.D. 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 projects 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.....
Business Overview................ Product/Service Features.................. Market Analysis................................ Market Strategy.......................... Key Financial Objectives.................

1 1 2 6 7 11

II DETAILED PLAN.....
Business Structure............... Management and Ownership.................. Key Objectives.................... Market Analysis.................. The competitors.................. Product/Service.................... Product or Service production............ SWOT Analysis....................................

12 12 13 14 14 15 21 26 27

III FINANCIAL PLAN...................................................................


Key Objectives and Financial Review........ Establishment Cost..................... Profit and Loss................... Cash Flow........................... Balance Sheet...................... Breakdd-ddeven Analysis...........

29 29 29 30 31 32 34

LIST OF CONTENTS (CONT.)


Chapter Page

IV SUPPORTING DOCUMENTATION......................... V ACTION PLAN............................................................. REFERENCES.................................................................................................. BIOGRAPHY..............................

35

36

39 41

LIST OF TABLES
Table Analysis competition in fresh coffee ................. SWOT Analysis ........................... Establishment Costs ...................... Page

1 2 3 4 5 6 7 8

18 27 29 30 31 32 34 37

....................................... Cash Flow .................................................................. Balance Sheet ..................................................... Breakss-sseven analysis............................................. Action Plan. .....................................................................................
Profit and loss

LIST OF FIGURES
Figures The pattern of Inthanin coffee shop...................................... Inside Inthanin coffee shop.................................................... In front of cashier counter .......................................................... Outside Inthanin Coffee shop ...................................... Furniture insides coffee shop .............................................. Outside Inthanin coffee shop was decorated by trees .................. Porters Five Forces Model ........................................................ New choco ice c for winner season ........................................ Hot beverage cup for take away ................................................ Hot beverage cup for drinking in the shop ................................ Plastic cup for ice............................................................................ The organization chart of Inthanin coffee shop................................ Employee of Inthanin coffee shop..................................................... Logo Starbucks................................................................................... Logo Coffee World............................................................................. Logo Black Canyon............................................................................ Logo Au Bon Pain.............................................................................. Logo Caf Amazon............................................................................ Logo Caffe D Oro............................................................................ Location of competitors in 3 square meter........................................ Espresso machine with vapour pressure............................................ Variety of products............................................................................. Food menu set..................................................................................... Sausage menu set................................................................................ Recommendatory menu...................................................................... Page

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

3 3 4 4 5 5 6 8 9 9 10 12 13 15 15 16 16 17 17 20 21 23 23 24 24

LIST OF FIGURES (CONT.)


Figures Sales amount of coffee products since 2002 to 2005........................ Page

26

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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 DOro, Amazon and etc.

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

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

Figure ss 3 ss In front of cashier counter

Figure ss 4 ss Outside Inthanin Coffee shop

Figure ss 5 ss Furniture insides coffee shop

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

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

Figuredd7ddPorters 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

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

patterns of actions to fit its own matter and industry environment ( Thomson,J et al, p134). In this case, they use the bestddddcost provider strategy. Giving customers more value when compared with their money by incorporating gooddd-ddtoddexcellent 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

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

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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. follows: -ddCollecting star card, which accumulates score. For example, customers collect 10 scores; they can get one free beverage. The details are as

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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

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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.

Bangchak Public company limited

Koejak co.,ltd

Owner of Inthanin c

Auditor

Sellers

Accouter

Figuredd12ddThe organization chart of Inthanin coffee shop

This chart shows Inthanin coffee shops 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

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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 DirectorddddPimpatra Sornprasith Pimpatra Sornprasith has a 6dd-ddyear experience in sales. She has a strong background in service and sales field. AuditorddddChawanda 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 fullddddtime 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 -dd7.00 am to 7.00 pm: one staff per period -dd10.00 am to 9.00 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 competitors 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. Thats 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

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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 caf, Starbucks

Figuredd14ddLogo Starbucks

Company Foundation Target group

Starbucks Coffee (Thailand) Co.,ltd Founded in 1971 and started in Thailand in 1998 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 Target groups

Coffee world corporation Co., ltd. 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

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Black Canyon

Figuredd16ddLogo Black Canyon

Company Foundation

Black canyon (Thailand) Co., ltd 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 Foundation 1997 (about, n.d)

Au Bon Pain Company Founded in 1978 Boston, USA and started in Thailand

Characteristic of products Variety of products, a few type of coffee; they have more various foods, sandwiches and bakeries Target groups Branches (Locations, n.d) Workers who love sandwiches 35 branches in Bangkok and 5 branches upcountry

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Caf Amazon

Figure 18 Logo Caf Amazon

Company Target groups Branches

PTT Public Company Limited Travellers and Workers 146 branches 2,000,000 baht

Initial cost to do business Products

Variety of products, various types of beverages and some

bakeries (aircraftcoffe, n.d) Caffe D Oro

Figuredd19ddLogo Caffe D Oro

Company Products

Golden Cream Company Variety of products, a few types of coffee; they have

various foods, sandwiches and bakeries. Target groups Branches Traveller 70 branches in Bangkok and boundary (cafDoro, n.d)

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Tabledd1ddAnalysis competition in fresh coffee

Brand

Price 75 to 180 Baht

Distribution Department store, Building, Travel location in main cities such as Chiangmai, Phuket, Pattaya.

Strong point Starbucks is leader in premium fresh coffee business and they have customer loyalty. Besides, they had more experiences in selling coffee aboard

Weakness point 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.

Starbucks

55 to 90 Baht Coffee World

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.

55 to 180 Baht Black Canyon

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 caf

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Table 1 (Cont.)

Brand

Price start at 50

Distribution Department stores and office building

Strong point There are various foods and bakeries, therefore those attract consumers. Most locations of Au bon pain are department stores, which are appointment places.

Weakness point Au Bon pain cannot set positioning clearly in premium fresh coffee.

Au bon pain

Baht

start at 45 Baht Caf Amazon

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.

35 to 50 Baht CaffeD Oro is Thai brand

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.

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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 90dddd160 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

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target group. Customers 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

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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 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. Dont store coffee near hot places or sunlight because it will lose its aroma quickly.

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-ddDont 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

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Figuredd24ddSausage menu set

Figuredd25ddRecommendatory menu

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Products of Inthanin coffee shop are various types. Menu food sets consist of various menus, which are as follows: Roti, sausage and fried egg: Two pieces of bread with jam or butter : Waffle and Jam: Roti and Ham : Roti with chilli and chicken : Big hot dog: Ham cheese : 35 baht German Sausage set Set 1 -ddcheese sausage 1 piece -ddMinimart sausage 1 piece -ddGarlic bread 3 piece Set 2 -ddCheese sausage 1 piece -ddMinimart sausage 1 piece -ddBacon sausage 1 piece -ddGarlic bread 3 piece Set 3 -ddGarlic sausage 1 piece -ddPolis sausage 1 piece -ddGarlic bread 3 pieces Set 4 -ddBacon sausage 3 pieces -ddGarlic bread 3 pieces Set 5 -ddGarlic sausage 3 pieces -ddGarlic breads 3 pieces Set 6 -ddGarlic sausage 1 piece -ddGarlic bread 3 pieces 45 baht 105 baht 85 baht 80 baht 75 baht 50 baht 45 baht 20 baht per set 35 baht 40 baht 35 baht 32 baht

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Set 7 -ddBacon sausage 1 piece -ddBacon stick 4 piece -ddGarlic bread 3 pieces Set 8 -ddMinimart sausage 1 piece -ddGarlic sausage 1 piece -ddBacon stick 1 piece - Garlic bread 3 pieces Set 9 -ddBacon sausage 1 piece -ddGarlic sausage 1 piece -ddBacon stick 4 pieces -ddGarlic bread 3 pieces Set 10 -ddMinimart sausage 1 piece -ddBacon sausage 1 piece -ddGarlic bread 3 pieces 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 65 baht 100 baht 95 baht 70 baht

Product or Service Production Products are produced locally. Cost of each product comes from Koejak company and also includes services.

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SWOT Analysis

Tabledd2ddSWOT Analysis

SWOT Analysis Strengths -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 Weaknesses -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

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Tabledd2dd (Cont.)

SWOT Analysis Opportunities -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 -ddNearest specialised coffee shop is only 1.2 km away Threats -ddHigh competitors such as Amazon caf, Starbucks, CafD oro -ddIncreased Interest rate will curb spending by families/employees -ddNot keeping up with latest trends and technology developments

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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 Payment liabilities time 8% 5 per year Year

Tabledd3ddEstablishment Cost

Investment Budget Source Description Non-current asset Calculator machine Espresso machine Equipment in coffee shop 15,000.00 80,000.00 400,000.00 15,000.00 80,000.00 200,000.00 200,000.00 Total Owner Creditor

Total non- current asset Payment before initiation working Register and Decoration Land Deposit Working capital Net total of cost

495,000.00

210,000.00 25,680.00 100,000.00 830,680.00

210,000.00 25,680.00 100,000.00 630,680.00

200,000.00

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Tabledd3dd (Cont.)

Description Loan Payment of loan Interest rate Total loan

Year 1 200,000 40,000 15,000 160,000

Year 2 160,000 40,000 12,000 120,000

Year 3 120,000 40,000 9,000 80,000

Year 4 80,000 40,000 6,000 40,000

Year 5 40,000 40,000 3,000 -

Profit and Loss

Tabledd4ddProfit and Loss

Profit and Loss Year 1 Sales Variable cost Margin Fixed cost Profit before initiation Interest Profit before taxes 30 % tax Net profit 1,864,800 773,892 1,090,908 559,720 531,188 15,000 516,188 154,856 361,332 Year 2 Year 3 Year 4 Year 5 2,723,400 1,130,211 1,593,189 644,200 948,989 3,000 945,989 283,797 662,192

2,160,000 2,448,000 2,662,200 896,400 1,015,920 1,104,813 1,263,600 1,432,080 1,557,387 592,600 671,000 12,000 659,000 197,700 461,300 608,974 823,106 9,000 814,106 244,232 569,874 626,161 931,226 6,000 925,226 277,568 647,659

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Cash Flow Tabledd5ddCash Flow

Cash flow Net profit Depreciation Other cash out payment Interest Taxes Liabilities Dividend Remaining goods in stock Cash flow Cash flow Current asset Register and Decoration Land Deposit Cash flow of investment Finding cash flow Loan Payment loan Payment interest Payment dividend Share investment Total cash flow Cash Plus Beginning Cash Flow Ending Cash Flow

Year 1 361,332 99,000 42,000 15,000 154,856 63,936 -14,918 721,206

Year 2 461,300 99,000 42,000 12,000 42,844 10,121 23,065 -2,362 687,968

Year 3 569,874 99,000 42,000 9,000 46,532 9,874 5,429 -2,304 779,405

Year 4 647,659 99,000 42,000 6,000 33,336 7,344 3,889 -1,714 837,514

Year 5 662,192 99,000 42,000 3,000 6,229 2,098 727 -490 814,756

- 495,000 - 210,000 - 25,680 - 730,680

200,000 - 40,000 - 15,000 630,680 775,680 766,206 766,206

- 40,000 - 12,000 - 23,065 - 75,065 612,903 766,206 1,379,109

- 40,000 - 9,000 - 28,494 - 77,494 701,911 1,379,109 2,081,020

- 40,000 - 6,000 - 32,383 - 78,383 759,131 2,081,020 2,840,151

- 40,000 - 3,000 - 33,110 - 76,110 738,647 2,840,151 3,578,798

32

Balance Sheet Tabledd6ddBalance Sheet

Balance Sheet Asset Current asset Cash Debtor Goods in stock Total Current asset Non - current asset Register and Decoration Land deposit Total non current asset Total asset Debtor and Liabilities Creditor Taxes Dividend Current Liabilities Borrowing Total liabilities Equity Retained profits Attributable to equity Total liabilities and equity 63,936 154,856 218,792 160,000 378,792 630,680 361,332 992,012 1,370,804 74,057 197,700 23,065 294,822 120,000 414,822 630,680 799,567 1,430,247 1,845,069 83,931 244,232 28,494 356,657 80,000 436,657 630,680 1,340,947 1,971,627 2,408,284 91,275 277,568 32,383 401,226 40,000 441,226 630,680 1,956,223 2,586,903 3,028,129 93,374 283,797 33,110 410,280 410,280 630,680 2,585,305 3,215,985 3,626,265 766,206 14,918 781,124 396,000 168,000 25,680 589,680 1,370,804 1,379,109 17,280 1,396,389 297,000 126,000 25,680 448,680 1,845,069 2,081,020 19,584 2,100,604 198,000 84,000 25,680 307,680 2,408,284 2,840,151 21,298 2,861,449 99,000 42,000 25,680 166,680 3,028,129 3,578,798 21,787 3,600,585 25,680 25,680 3,626,265 Year 1 Year 2 Year 3 Year 4 Year 5

33

Tabledd6dd (Cont.)

Cash flow Statement Year 0 Payment cash at the beginning of the financial year 1 Cash inflow 2 Cash inflow 3 Cash inflow 4 Cash inflow 5 Cash inflow Net present value Calculation at Net present value of cash inflow Less Net Present Value of Cash outflow Net present value (NPV) Rate of return - 830,680.00 766,205.60 612,903.14 701,911.29 759,131.37 864,326.81 30 % 1,770,121.09 -830,680.00 939,441.09 82 %

34

Breakdd-ddeven analysis Tabledd7ddBreakdd-ddeven analysis

Breakdd-ddeven point Contribution margin Rate of contribution margin Breakdd-ddeven point per year Breakdd-ddeven point per month Breakdd-ddeven point per day Interest loan Payment liabilities time Description Loan Payment of loan Interest rate Total loan

Year 1

Year 2

Year 3

Year 4

Year 5

1,090,908 1,263,600 1,432,080 1,557,387 1,593,189 59 % 59 % 59 % 59 % 59 %

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

79,732

84,416

86,748

89,197

91,766

2,658

2,814

2,892

2,973

3,059

8% 5 Year 1 200,000 40,000 15,000 160,000 Year 2 160,000 40,000 12,000 120,000

per year year Year 3 120,000 40,000 9,000 80,000 Year 4 80,000 40,000 6,000 40,000 Year 5 40,000 40,000 3,000 -

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).

Sales amount of coffee products from Kasikorn bank research since 2002 to 2005 12000 10000 8000 baht 6000 4000 2000 0 2002
Instant coffee

2003
Can coffee

2004

2005
Premium coffee

year

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.

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 MARKETING Determine Launch Plan

Task

By Whom

By When

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 Approval of copy Print Brochure ready for distribution Sign by

Marketing team Marketing team Marketing team Marketing team

18 August 10 September 15 October 15 November

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. Caf Doro. (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 companys strategy and its business model (16th ed.).USA: McGraw Hill.

BIOGRAPHY

41

BIOGRAPHY
Name - Surname Date of Birth Address Pimpatra Sornprasith January 23, 1979 59/28, Serithai 43, Bungkum, Klongkum, Bangkok, Thailand Workplace UHM Co.,Ltd, 185/3, Radamri road, Lumpini, Pathuwan, Bangkok, Thailand. Position Work Experiences 2003 2001 Education Background 2001 B.Eng. (Environmental Engineering), Kasetsart University, Bangkok, Thailand Water Doctor Co.,Ltd, Bangkok, Thailand UAE Co.,Ltd, Bangkok, Thailand Supervisor