Entry Technique for a UK Espresso House

As it was written in the first paper, I want to open up Cafe business in the United Kingdom. I have mentioned the political, economical, and cultural information. Now I am going to analyze the restaurant market. So this paper covers the next aspects: Market Success Examination, in particular rules and types of procedures, resources, market size, and risks; Within the Part B Market Admittance Evaluation will be reviewed. And, finally, the part C will be about Market Access Implementation Strategy.

Part A. Market Success Analysis

Market size (potential to generate income providing service)

For successful beginning my cafe I will know the market size of the market I have chosen. Cafes have many types, for example, string of coffeehouses like Starbucks and Costa Coffee, and autonomous cafes and store-based cafes. Cafes provide such services as wedding caterers, coffee or food out, corporate kitchen, etc. So, the cafe market in the united kingdom offers a broad variety of services. In order to succeed in this type of market I feel that "Coffee House" should provide best quality service and really tasty food and refreshments.

There are several a huge selection of coffee houses. Included in this about 50 coffee shops that will be the most popular. This means that there is huge competitiveness among these cafes. In addition, it is said that there are more coffee outlets than in any other country in London. Turnover of the UK caffeine market in 2002 amounted to at least one 1. 5 billion pounds, of which 342 million belong to the 15 largest network brands. For instance, now Starbucks has more than 400 subsidiaries. This means that to be able to compete with such huge chain the Coffee House will need to have such interesting things that any restaurant could not compete. About might be found I will discuss later. Frankly, it is quite high-risk to start such business in London because of large amount of rivals and such big string as Starbucks. I should examine professional services and recycleables in order to learn how to earn this competition.

Resources (educated or non educated laborers, professional services, raw materials)

In order to make good refreshments a barman should know how to do it as well as make must be taught how to prepare food. There are a lot of different barmen and cook schools in the united kingdom. Therefore, people should get best education in order to work as barmen or make in the Espresso House. Also non educated people can work in the cafe as cleaners, loaders, and securities. Other personnel such as director, book-keeper, manager of security, and etc. must get bachelor diplomas.

There are many cafes offering different services, for example, catering, coffee out, Wi-Fi, etc. The Coffee House will work day and night. There people will in a position to pay attention to good music, chat, read latest papers and mags, take exclusive coffee and go to work, eat excellent quality food. In addition they could remember their holiday seasons by ordering hall and DJ's. You will see an possibility to arrange catering from the Coffee House. Furthermore, there will be three types of menu: organic food, diet, and regular menu.

Another very important matter is recycleables which are incredibly vital in coffee industry. The main material for The Espresso House is caffeine. Coffee is brought in from Italy to be able to reduce costs of shipping and delivery. Italy is known as one of the nice producer of coffee beans. First of all, I am going to find good supplier of coffees in London from Italy at all the fabric that produce caffeine. Then I can make an arrangement with dealer.

Regulations and Types of procedures (government red tape, tasks, and taxes)

It is a good idea to conduct business in the UK since there is the most secure political environment. Moreover, the uk is the clearest country in the world. It requires 13 days to start out business there. Also a person should get engineering permits. It takes about 144 days to obtain all the required permissions. In comparison to political environment the government requires all business to go through a great deal of red tape. In addition, government regulations have become more and more sustained. Consequently, red tape gets worse. For me, it is quite difficult to get started on business in the united states where are a great deal of regulations. I will spend a lot of time pursuing all the regulations. However, I think that the laws and red tape are necessary to certify company conformity with laws. Matching to UK authorities, decreased regulations headed to the existing economic turmoil in the market segments. That is right in the legislation of big financial business. But in my opinion, the UK authorities should reduce legislation concerning small business. Today the federal government have realized more than 150 suggestions to reduce the organizational obstacles.

As I want to open cafe in Britain, I should pay company fees. Actually, the UK has a fine tax situation for business. Though, the fees that I then found out are high enough. There are some facts regarding company taxation. The rates of company tax for a specific business for 2008 and 2009 are 21 % for companies with income of 300, 000; 21-28% for those companies that earn from 300, 001 to 1. 5 million; 28% for venture with income of 1. 5 million at least. Therefore, taxation for businesses is high: The Caffeine house must pay a gigantic amount of cash to the government. But still I tend to think that the united kingdom is a good place to start a business such as cafe. Although taxation is high, but polices will be reduced, in addition to the politics environment is steady.

Risks (financial, basic safety, and competitive)

It is better to start business in fiscally safe environment. Alas, in Britain there are a lot of kinds of hazards are high enough. For example, let's take administration finances. We are able to notice that the risk is very high. It is because London gets the role of the most important international financial centre and it makes the united kingdom quite subjected to external financial shocks. On the other hand, compared to other countries, Britain's current economic climate is almost indie on items export. Subsequently, it is less unprotected to exterior risks. What is more, the united kingdom has determined never to unite the Western single currency and keep its financial independence. Subsequently, the pound is more prone. So Britain as well as other countries has both high and low risks. It might be very hard to start business where you do not know what will happen next day. However, there are incredibly flexible labor market segments in Britain in comparison to Europe.

I should discuss the competitiveness in London. It isn't a secret that we now have a lot of small cafes. Let's say the Starbucks and Costa Espresso are the most popular cafes in the administrative centre of the United Kingdom. My goal is to help make the Caffeine House one of these popular coffee shops. It'll be very difficult to compete with such huge chains of cafes.

Part B. Market Entrance Analysis

One of the most crucial thing which really helps to flourish in starting business is choice of the right accessibility strategy. There are a few market access strategies:

offshore manufacturing

turnkey project

exporting and importing



direct investments

joint ventures


In order to choose right strategy we should consider such facts as culture of the country, population, behaviors and etc. Inside the first newspaper I discussed inexpensive, cultural, politics, and workforce characteristics. In the second paper I've already talked about such factors as market size, resources, legislation and procedures, and risks. All this information helps me to choose which strategy is the most likely. I have chosen the following three strategies: joint projects, direct ventures, and franchising. All these factors I'll follow while coming into the cafe sector.

Joint ventures

One of the strategies my company could follow is the Joint venture. The JV functions are in agreement to expand a fresh entity and a new asset by giving equity. Both gatherings have control over the company and divide resources, expenses and earnings. This plan has benefits and drawbacks. On the one hand, it offers access to new marketplaces and sectors. In addition, if two companies make the JV they share costs and dangers with each other. Also when you form the JV you access more resources. Furthermore, the JV can be for a certain time. Associates can breakdown their company and then form their own companies. On the other hand, there are some disadvantages of forming joint ventures. First, maybe it's very hard to make good interactions with my partner. Second, the composition and the type of management of the firms can be quite different. Finally, I will have to share my earnings with another person which will not attract me. For my business, I'd not choose this plan because I really do not want to share anything with another company. I wish to be the only person owner of my business, because I'd like manage my company myself without interruptions.

Foreign Direct Investment

Foreign Direct Investment or FDI is the possession for the reason that country where you are going to get started on business. There are some cons because of this strategy. First of all, I should mention that the individual who begins this business would be the owner. Furthermore, it provides advanced of control of the organization functions. Also huge opportunities can be given by having knowledge about local market. It can help my company to become flexible in London. But there are some pros of the strategy. This strategy requires advanced of obligations. Furthermore, it can be difficult to operate local resources. Although there tend to be more advantages than drawbacks, I do not need to choose this strategy because of a lot of dedication and difficult operating resources. It requires a great deal of resources that we cannot afford. The type of my business could be more successful if I will follow another strategy.


Franchising is currently very common online marketing strategy. It is when two companies consent to cooperate, one of the companies permits a different one to market its products and services created of the first firm. Another company gets label, trademark and notion of selling products. There are various pluses of the strategy. First is that buying franchise in one company you can help to expand this company and make it known all over the world. Second, the business, which markets franchise, earns additional money by providing its products and services. The second company, which will buy franchise, also gets revenue by using trademark of the business. For example, a business can use the products and services of the popular enterprise. It means that the products will be demanded until the franchiser becomes a bankrupt. On the other hand, franchisee must sell only the particular product with the one hallmark not changing the idea. Additionally, franchisee could are unsuccessful providing services in the wrong manner, so consumer can easily see the company not right. After starting cafe in London I can increase my business by using Franchise strategy. I can later sell franchise to make my brand well known.

To summarize, I would like to say that when I will open up the Caffeine House I will follow the Franchise Strategy. Having studied all the characteristics of the uk and London in especially, I've come to conclusion that, in my opinion, it's the most appropriate strategy for the business I am going to open. To lessen risks I am going to have tight control the companies that will buy franchise of my coffee shop. I am the owner of my business, and, what is more, I am going to sell franchise in order to grow my business and also to enjoy better paychecks.

Part C. Market Access Implementation

I am going to open a new restaurant in London. It'll be famous in the administrative centre of the UK for its convenient location, comfy interior, and the best services, such as catering, coffee/tea out, etc. As I said earlier, my goal is to make the Coffee House one of the leading espresso shops that delivers not similar services as other cafes. I've chosen Franchise strategy to be able to succeed in coffee shop industry.

Concerning implementation, I am going to hire best personnel choosing each person carefully. The most important characteristics of the staff are professional skills and trustworthiness. All the waitress must look beautiful. Cooks must do their jobs carefully and tasty. As I am not really a resident of the united kingdom I will follow the next rules: I have to have money acquired in my own motherland; I have to have at least 200, 000.

I will create best advertising of the Coffee House and make new companies want to buy franchise. The Caffeine House will be known as the coziest place where people can time frame or maybe come to discuss and drink tasty coffee and eat excellent quality food. IT will tell about the cafe everything things and appeal to them to visit the coffee shop. If the Caffeine House will be demanded, companies will by franchise to be able to open their own Espresso House.

I professionally will control all the franchisees. Inside the agreement of cooperation there will be strict rules which franchisee are required to follow. If the guidelines are not pursued, the franchisee must give me cash back and close the cafe.

In conclusion I'd like to state that it'll be very difficult to start up the Espresso House because of higher level of competitiveness. But still, I still believe that my restaurant will succeed in London scheduled to providing best value and different services that, for example, Starbucks do not have. Let's say I am going to compete with Starbucks to be remembered as as huge as it. It'll be very difficult, I understand, but having direct goal I'll achieve it if I will try.

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