BUSI-1620

PASSAGE THROUGH PARIS

000 971976
 TABLE OF CONTENTS

I. Business Idea and Value Proposition………………………………… 2

II. Main Industry Vulnerabilities and Market Dependencies…………. 3
III. Customer Requirements……………………………………………… 5
IV. Business Strategy……………………………………………………… 6
V. Main Marketing Aspects……………………………………………… 8
VI. Finance and Revenue Model………………………………………….. 9
VII. Suppliers………………………………………………………………. 10
VIII. Recruitment…………………………………………………………… 11
IX. Conclusion…………………………………………………………….. 11
X. References…………………………………………………………….. 12
XI. Appendix……………………………………………………………… 15

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 I. Business Idea and Value Proposition

The café culture in high streets has become increasingly popular in the UK with 80% of people
visiting coffee shops once a week and 16% visiting on a daily basis (Ceuta, 2019). Coffee is
the most popular drink in the world, in the UK alone approximately 95 million cups of coffee
are consumed each day (British Coffee Association, 2018). The market value of the coffee
industry in the United-Kingdom was worth £2,435 million in in 2020 (Mintel, 2020). This is a
37.5% decrease from the market value in 2019, which was of roughly £3,900 million, due to
the global pandemic that enforced lockdown restrictions obligating coffee shops to shut down
their services. However, the market is expected to return to its original value in 2025.

Passage Through Paris is a café that offers an immersive experience to its customers by giving
them a short escape from ‘real-life’ to make them feel like they are in another city; Paris. In
order to deliver this experience, the café will have to serve French products and be decorated
in a manner that makes its consumers believe that they are in a different country. The original
unique selling point of this café was to bake fresh macaroons on the go to sell to its customers,
however, the research conducted has proven this idea not successful and therefore the focus
will be on the experience the café offers.

The objectives of Passage through Paris is to grow in terms of profitability and brand
awareness. By focusing on growth, the café will benefit from improved economies of scale as
the demand will increase, and, become protected against competitors as it will gain a better
reputation which will make it harder for other independent or franchise coffee shops to take
away its market share. Depending on the success of the café, it can be imagined that it will
expand in another country following the same concept.

As of 2012, London was the sixth biggest French city with between 300,00 and 400,000 French
citizens (Ash, 2012). This is a market that Passage through Paris could potentially target since
foreigners aim to settle in as soon as possible, and thus, look for their ‘community’. However,
Brexit has occurred since then, which has impacted the number of French citizens still residing
in the United-Kingdom and therefore this information should be researched further.

In 2017, the majority of people visiting France came from London and the United-Kingdom
with 12.7 million tourists (Latest France Tourism Statistics & Industry Trends, 2021). More
recent statistics show that in 2019, 1,848,000 trips to Paris were made by British citizens with
an average age of 40 years (British visitors in Paris Region, 2020). This implies that numerous
british citizens enjoy visiting France and thefore there is a potential market that would be
interested in Passage through Paris as they could use the café as a gateaway.

Moreover, popular alternative immersive experiences in London include restaurants such as

‘Dans le noir’ a restaurant famous for its dining in the dark concept, offering a sensory
experience, as well as the Fat Duck, located only an hour away from London, which also offers
multi-sensory cooking to its customers and is more focused on delivering molecular
gastronomy. Additonally, London is also known for its ethnic enclave – Chinatown, offering a
variety of East Asian cuisine whilst allowing visitors to experience a new culture as big event
such as the Chinese New Year take place and attracts more than 17.4 million visitors each year
(The Ultimate Guide to visiting Chinatown, 2021). This suggests that there is an interest for
services beyond just sit-in restaurants and thus a real potential for Passage through Paris to
become successful. However, for more accuracy on the subject, statistics on the number and
frequency of Londoners visiting Chinatown would serve useful.

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 Figure 1: Covent Garden along with location of Passage through Paris (seen on map).

The Figure 1 above shows the location of the café in Covent Garden. The mission and vision
statement of Passage through Paris are as follows:

The mission:
“To become your escape when things get a little tough, re-energizing and uplifting your
spirits.”

The vision:
“To let your imagination fly away by sipping coffee in an immersive environment, making you
truly believe you are somewhere far away.”

II. Main Industry Vulnerabilities and Market Dependencies

To successfully assess the industry vulnerabilities and market dependencies, it is important to

perform an analysis of the micro-environment along with the macro-environment of the coffee
industry. This can be achieved by carrying out the PESTLE framework and Porter’s Five
Forces which will help summarize the strengths, weaknesses, opportunities and threats of the
business.

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Micro-Environment

Porter’s Five Forces (Appendix 1) is a fundamental tool used to evaluate the attractiveness of
the industry by looking at competitive advantages and business rivalry (Anton, 2015).

Looking at the various impacts outlined, we can deduce that overall the industry is highly
competitive due to the high number of rivals that offer the same services to customers. The
barriers to entry are low meaning anyone can enter the market, and the threat of substitute is
moderate. The bargaining power of buyers is also strong since there are many competitors but
could be lowered if an excellent customer retention strategy is adopted by the café to gain
customer loyalty. It is important to note that the most visited coffee branches in the Inner and
Greater region of London are Costa and Starbucks (Mintel, 2020) – two well established
franchises that will be difficult to compete with without offering a different unique selling
point. On the other hand, the bargaining power of suppliers is low since Passage through Paris
will bake pastries on-site and hence the supplies required are basic (flour, eggs, milk etc.). As
a result there are numerous suppliers to choose from which will benefit the café as it can switch
from one supplier to another without adding great costs to the business.

Consequently, in order for this business idea to be viable, the café will have to differentiate
itself from its competitors and attract a different target market to sustain a competitive
advantage.

Macro-Environment

The PESTLE model (Appendix 2) analyses the key factors of the environment that might affect
the business (Johnson et al., 2017). From this we can derive the main opportunities and threats
presented to the business as seen in Figure 2.

Opportunities Threats
- Growing demand - Brexit
- Health Consciousness - Store bought coffee machines
- Resurgence of Tea - COVID
- Sustainability in Business
Figure 2: The Main External Factors Affecting Passage through Paris.

Based on the analysis, it was identified that the increasing demand in coffee and concerns
around sustainability and health will provide an opportunity for the café to grow and reach a
wider market. Since there is a trend towards health consciousness, the café will be able to
acquire products that satisfy the customers, including herbal teas and organic products, which
also link to the improved sustainability of the business. Overall, these opportunities are closely
tied together which gives an advantage to the café.

Various threats were also outlined, including the uncertainties revolving around COVID such
as the risk of another lockdown and social distancing measures which will impact footfall.
Consequently, the success of the café will depend on the easing of lockdown restrictions, for
instance, a surge of customers will be seen once it is lifted, which will be beneficial for the
business. On the other hand, the current ban on international travel suggest that consumers will
remain in the UK which could increase customer turnover in the café (Roach, 2021).

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III. Customer Requirements

As part of the primary research (Appendix 3), a survey was sent out to 46 individuals to gather
information on the customer requirements and viability of the business idea. Based on the data
collected, 64% said that the idea of an immersive café was appealing to them. The main factors
highlighted from the survey and secondary research are as follows;

70% said that when they visit a café they would prefer to sit in rather than take-away. This
entails that the square foot of Passage through Paris should be large enough to
accommodate a high number of customers since it is an independent coffee shop, and thus
it offers different services from the typical coffee chains who receive larger amounts of
take-away orders. Additionally, to enhance sales the café should create a mobile app since
ordering coffee through digital methods is becoming increasingly popular amongst the
younger consumers. This should be implement in the business strategy – the consumer
loyalty schemes points can be tracked via the app and it would attract Gen Z consumers.

51% would rather eat pastries as complementary food with their drink. This was
particularly useful since the original unique selling point (USP) for the café was to sell
freshly baked macaroons on the go. However, the answers from the survey have confirmed
that this USP would not be beneficial, leading to a change of perspective; selling an
experience rather than a product.

91% were concerned with the freshness of products which links back to what was
mentioned in the PESTLE regarding the shift towards health consciousness. The Mintel
report (2020) supports this as it found that 39% of Britons think that cafés should sell
healthy drinks such as kombucha or kefir. As a result, the coffee shop should incorporate
and promote alternative drinks to support health.

Regarding the qualities when choosing a coffee shop, the population answering the survey
said the most important factors they considered in chronological order were: noise level,
price, quality of food and atmosphere, with the noise level being the most important.
Knowing this, the business strategy should focus on adopting these qualities to attract as
many consumers as possible.

The Mintel Report (2020) also carried out an analysis to find the optimum target group and
it’s distinction compared to the overall sample. The answers were recorded from 2,000
individuals above the age of sixteen. Looking at Figure 3 we can infer that consumers from
there is a preference for office amenities in coffee shops including faster Wi-fi and power
outlets. These are important customer preferences to note and the café should ensure it
delivers these to reach a wider market.

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 Figure 3: Coffee Shops Chi-squared Automatic Interaction Detection, September 2020.
Source: Mintel, 2020

Based on the Mintel (2020) report, independent coffee shops are most popular among
Generation X (ages 40 to 55) and Baby Boomers (age 56 to 74). This information should
be researched further to see whether that is still the case as it would undermine the original
target market identified by the café and hence Passage through Paris would have to adopt
a different marketing strategy.

As mentioned in the value proposition, London has a large French expat community which
is an opportunity for the café to attract a new market since French people will look for the
French community in London as they want to settle in fast.

Even though primary research carried out in the form of surveys provides various advantages
especially in terms of costs and audience reached, there are certain limitations associated with
this method. For instance, sampling issues may occur, i.e. not knowing enough about the
characteristics of the population taking the survey, or even self-selection bias (Wright, 2005).
Since the majority of answers to this survey is from friends and family, the results may be bias
which makes it harder to estimate whether the business idea is actually viable or not. As a
result, any future research should target diverse samples for more accuracy.

IV. Business Strategy

The VRIO framework (Appendix 4) is a tool used to evaluate the resources and capabilities an
organization has obtained and how they can be used to achieve a competitive advantage over
its competitors (Barney and Hesterly, 2010). A firm can reach a sustainable competitive
advantage only when the strategic benefits it is creating cannot be implemented by its rivals.
After the analysis is completed, the strengths and weaknesses are clearly identified.

Strengths Weaknesses
- Location of café - Higher costs – set as weakness
- Leadership and vision - Slow brand awareness

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 - Café atmosphere - High competition
- Marketing and advertising
Figure 4: The Main Internal Factors Affecting Passage through Paris.

Following the VRIO framework, we can assert that Passage through Paris’s resources and
capabilities are mostly categorised as a ‘Temporary Competitive Advantage’. Although this
indicates that the business is the first to acquire this competitive advantage, it is only temporary,
meaning that the resources may be replicated or substituted by rivals operating in the same
industry if they are not costly to imitate.

Rergarding the Intelectual Property Rights (IPR), the café will be able to achieve a sustained
competitive advantage once the IPRs are registered. However, accorrding to the UK
government (2021), the starting cost of registering a trade mark is of 370 GBP and since the
financial rersources of the café are currenlty limited (as other elements are prioritised), the
resource is currently categorised as a ‘Temporary Competitive Advantage’ but it may change
as the business evolves depending on the strategy adopted by the café.

The café will have the ability to ability to charge a higher cost for its products due to the café
atmosphere which distinguishes it from its competitors, however, this may be seen as a
disadvantage for certain consumers and results in a weakness for the business. Furthermore,
the décor contributing to the atmosphere will allow Passage through Paris to have a more
unique and focused marketing since it will leverage off people promoting the café through
Instagram posts.

The development of business strategy refers to the “evaluation and selection of potential
strategies that could be adopted by the organization to gain and sustain competitive advantage”
(Edgar, Stonehouse and Campbell, 2011). Once the internal and external analysis are
completed, the strengths, weaknesses, opportunities and threats identified can be used to form
the business strategy. The TOWS Matrix (Appendix 5) can now be used to visualize what the
best strategic decisions are for the development of the business idea (Weihrich, 1982).
Following this, the SFA framework, as seen below, is then used to provide guidance on the
best strategy the café should adopt.

Criteria SO1: Set up a SO2: Highlight SO3: Promote the SO4: Attract
mobile app safety measures experience and high-end clientele
and location ethical side of café
Suitability 5 4 5 5
Feasibility 4 3 4 3
Acceptability 4 3 5 4
Total 13 10 14 12

According to the table, the best strategic option is to promote the ethical side of the café, thus
in order to meet its objectives, Passage through Paris should adopt a focus strategy. The café
needs to differentiate its products to maximize brand awareness and reach a wider market
whilst reducing competition among its rivals.

Maximize brand awareness: Since the ultimate goal of the café is to deliver a unique
experience to its customers, Passage through Paris could promote this concept to maximize
brand awareness as it is not common in London. Nowadays, the younger generation is all

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 about finding ‘instagrammable’ locations and posting pictures on their social media. By
attracting this market to the café, Passage through Paris would gain café free publicity.
This can be done by decorating the café in an remarkable manner but without forgetting to
add a French touch to it.

Reach wider market: Considering London is the sixth biggest French city, Passage
through Paris could potentially target this market and gain customer loyalty. The café could
offer its services for social events for the French community. By putting adverts around the
French schools and the embassy, parents could use the café to host activities, such as ‘book’
clubs or networking events for French citizens who have just moved to London to bring the
community closer together.

Reduce competition: This can be achieved through differentiation. Since there is a shift
towards health consciousness, Passage through Paris can expand its product portfolio by
offering a variety of organic drinks which will give the café an advantage compared to its
rivals who fail to provide innovative products (except during the festive seasons where they
offer temporary new hot drinks). The products sold will show the consumers that the café
partners with suppliers that provide organic resources. Moreover, one way to display the
coffee shop is ethical is by avoiding charging extra for vegan alternatives to milk.

V. Main Marketing Aspects

Passage through Paris will need to promote the café to its target market in order to gain brand
awareness and thrive as a business. After undertaking market research and understanding the
needs and wants of customers, the company can then identify the correct market segmentation
(Deepak and Jeyakumar, 2019). Following this, the development of a marketing strategy can
take place: the café should look at what message it wants to promote. This can be done through
a variety of mediums depending on the target audience identified.

The target market identified for Passage through Paris is students or young professionals
between the age of 18 and 28, from any nationality, who are looking for a café offering a nice
atmosphere where they are able to work or simply meet a friend or family. The café should
adopt a differentiated marketing, concentrating on two segments: the population of age group
18-28 and 30-45. From the primary and secondary research it was identified that consumers
are becoming more concerned with their health and therefore the café’s main message should
revolve around the healthy and sustainable products it offers.

The café can conduct various routes to market:

Google: advertising may be conducted using Google AdWords for customers in London
who are searching for a coffee shop. The advertising should remain local so that when
consumers type in ‘coffee near me’ the café will appear in the top search on google maps.
Additional google search such as ‘French café’, ‘healthy’, ‘sustainable coffee’ should
redirect towards the café. Google ads allow the café to set up a monthly budget cap and
offers a flexible service meaning the coffee shop will be able to pause or cancel its spending
on adverts at any time.

Social media platforms: Instagram and Facebook are effective social media platforms that
can be used to promote the café. Statistics found on the demographics of users in the

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 United-Kingdom indicate that the largest age group for Facebook is of 25-34 followed by
individuals aged 35-44, whereas Instagram attracts the younger generation between the age
of 16 and 24 (Statista, 2019). Engaging with both these social media platforms will help
the café reach its multisegmented market. The location and name of the café should be
available so that when customers post pictures in the coffee shop, other users may be able
to locate it clearly. Additionally, the café should set up its own Instagram account where it
regularly posts about the events taking place, such as the introduction of new beverages for
instance.

Flyers put up around French schools and in the French embassy may also attract customers
from the French community to come visit the café, notably the ones who have just moved
to London and want to integrate the community to settle in.

Passage through Paris should revisit its marketing strategy every quarter to evaluate whether
the advertising campaigns have been successful or if any adjustments, such as a change in
budget allocation, are needed for optimum benefits.

VI. Finance and Revenue Model

After constructing the cash flow (Appendix 6) of the café for the next three years, it was
determined that an initial investment of 35,000 GBP would be needed to set up the business.
This will be obtained through a bank loan with an interest repayment of 6.2% per annum over
60 months which is equivalent to 677 GBP per month (Appendix 7). The rent of the premises
is equivalent to 85,000 GBP (Appendix 8) and can be found in the Appendix along with the
costs of insurance. Regarding power, Wi-fi and marketing expenses, these can be found in
Appendix 9,10 and 11 respectively, and were chosen based on the best offers available. The
fixed costs were then added up to carry out the breakeven analysis as seen in the calculation
bellow.

It was calculated that Passage through Paris will

breakeven at 3,324 units sold per day. Since the café
operates 26 days in a month, in order to reach
breakeven 128 customers are needed per day
(assuming that each customer would purchase one
coffee and pastry). This breakeven is realistic since
it is estimated that the footfall is of 1,571 a day.
Overall this results in a Gross Margin of 82%, a
good range as coffee shops should aim for a margin
of at least 75% (Stmartinscoffee, 2021).

It is important to note when looking at the cashflow that there is an increase in sales during the
third quarter as it is the summer period thus there will be a surge in customers as people go on
holiday and will purchase drinks due to the hot weather. The same increase can be seen during
the winter as the festive seasons approach. Since the business is very transactional, the café can
manage its costs by allowing flexible working hours which would reduce any costs associated
with barista training and recruitment. Nevertheless, as the coffee shop will grow, a third barista
will be hired during the second year of the business operating to manage the increase in
customer turnover forecasted.

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Passage through Paris obtains its revenues through:

Selling beverages/pastries: the main revenue stream will come from the sales of the
products offered at the café including a wide selection of drinks (tea, coffee) as well as a
variety of French patisseries baked on-site.

Selling supplier coffee & accessories: selling the coffee brand used and re-usable cups or
mugs produced from the suppliers can also be sold in the coffee shop which would increase
their brand awareness, hence Passage through Paris would benefit by taking commissions
on each individual item sold. However, there are limitations to this revenue stream. For
instance, this implies the café will need to have enough storage to keep the items, and will
not have any influence on the price at which these are sold.

Sponsorship: the café could get sponsorship from dairy alternative companies in exchange
for the promotion of their plant-based milk through social media (i.e. Instagram posts or
café website). To enhance the revenues generated from sponsorship, the café should ensure
it delivers a robust pitch and should not be afraid to ask for more from existing sponsors.

Overall, the revenue streams remain stable, with the sale of beverages/pastries being the
biggest. One way the café can maximize its revenues would be through a loyalty programme,
which can be used as a tool to generate more income from existing customers, offering a free
pastry based on the accumulation of points received which will entice consumers to spend. In
addition, the café can monitor its costs in areas such as advertising, which is also mentioned in
the marketing aspects section of the report, by ensuring the marketing expenses are beneficial
for the business or if any lower costs alternatives are available. Lastly, if shortages of money
occur, the café could consider catering corporate events or meetings for offices that are based
close by Covent Garden.

VII. Suppliers

Passage through Paris should form good relations with its suppliers to benefit from economies
of scale in order for the business to maximize its profits and grow. When looking at the
suppliers, the café should carefully evaluate which performance objective is most critical
(Slack, Brandon-Jones and Johnston, 2013).

These are as follows;

Quality: ingredients provided should be of high quality in order to produce fine patisseries
on-site, with the correct number of supplies delivered to avoid any excess/waste.

Dependability: the supplier should be reliable and deliver on time.

Cost: the price of supplies should match the quality of the products provided, a low cost
supplier will not allow the business to produce high-end food and beverages.

Passage through Paris should carry out a benchmark analyzing the different performances
offered by the suppliers. Selecting a supplier that provides both the desired quality and

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 dependability but at higher costs than anticipated may impact the business since the costs of
the products sold would be more expensive and therefore affect the clientele.

A supplier such as Brakes Brothers (Appendix 12) would be suitable as it provides a variety of
fresh and dry store products with a range of prices to choose from. The supplier also sells dairy-
free alternatives which will help reach different target markets (such as plant-based individuals)
and promote the sustainable side of the coffee shop. Nisbets (Appendix 13), another supplier,
will be able to provide the syrups and disposable cups for an adequate price. Lastly, Passage
through Paris should find a coffee supplier that provides sustainable high-quality coffee beans
such as 80 Stone Coffee Roasters (Appendix 14); a wholesaler which does not require a trade
account and offers free shipping. Even though the company leases its coffee machine
equipment, which would be ideal for the café, it does not offer accessories such as re-usable
cups/mugs and hence would limit the revenue streams of the business. As a result, the café
should conduct further research to find a wholesaler that offers the same features as 80 Stone
Coffee Roasters with additional accessories.

VIII. Recruitment

In order to deliver this experience, the employees should speak French to each other at the café
and hence Passage through Paris should recruit French speaking baristas. When writing the
requirements section in the Job Description (Appendix 15), it is important to select rigorous
words to avoid dealing with allegations of discrimination. Instead, the recruitment process
should follow the concept of positive discrimination, that is “the specific recognition of certain
characteristics (typically sex, race/ethnicity, disability, religion, sexual orientation and age)
considered to have disadvantaged a group of people through no direct fault of their own”
(Noon, 2010). In this case, hiring French speaking employees who have knowledge of the
French culture is considered positive discrimination since it will allow the café to offer this
‘unique experience’ and therefore sustain a competitive advantage over its rivals.

During the first year, three baristas and two chefs will be hired to begin with. Afterwards, in
the following year, when the café will become more well-known and the customer turnover
will increase, another barista will be hired. Although it would be preferable that the chefs know
how to speak French, candidates will still be considered if they are able to bake traditional
patisserie that is found in France since they will not interact with customers.

The CEO will be responsible for managing the team and finances, as well as the marketing
campaigns in the first five months of the opening of the café. The CEO will also ensure that
the staff is performing well and that there is a strong positive employee morale to maximize
efficiency in the workplace. Moreover, she will have to build strong relations with the suppliers
to benefit from economies of scale.

IX. Conclusion

Based on all the information presented in this report, we can conclude that the business idea is
viable since there is a market that is interested in immersive experiences and thus the café will
be able to generate revenues and grow. Nonetheless, further investigation is required in order
to ensure the business will be viable, notably around the appropriate target market the café
should attract. Finally, the objectives of the café are attainable if the strategy identified is
appropriately followed and supported by a strong marketing campaign.

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XI. Appendix

Appendix 1 – Porter’s Five Forces

FORCE IMPACT STRENGTH

• There are low barriers to entry for the
coffee industry.
• Cafes can benefit from economies of scale
Threat of New Entrants and the overall capital required to set up the Strong
shop is not excessive (subject to the
location/rent), please rerfer to cash flow
forecast.
• Training is needed for baristas but it can be
achieved easily.
• There is an abundance of suppliers to
choose from.
• It is easy to switch from one supplier to
Bargaining Power of another as the products are relatively Weak
Suppliers similar.
• Prices are affordable since there is high
competitiveness in the industry.
• There is a high number of existing coffee
shops – these fail to differ greatly from one
Bargaining Power of another. Strong
Buyers • Although there are loyalty schemes
available to customers, it is fairly easy for
them to switch from one café to another
without paying excessive switching costs.
• There are numerous coffee substitutes
available – coffee can be bought in various
in can from supermarket.
Threat of Substitutes • Buying coffee machine and making coffee Moderate
from home.
• Railway stations – drinking coffee during
commute
• Passage Through Paris offers a unique
experience to the customers that is not seen
in other coffee chains which differentiates
the café from its competitors.
• There are many competitiors in the market
with a record of 25,892 coffee shops in the
UK in 2019 (Statista, 2020).
Competitive Rivalry • There are currently more than 400 Strong
independent coffee shops in London
(Ackerman, 2020).
• Some chains in the food-led industry such
as Pret have created low-cost coffee
subscription which adds rivals and makes
it more difficult to compete with.

15
 Appendix 2 – PESTLE Analysis

FACTOR MAIN IMPACT MACRO-ECONOMIC IMPACT

Political 1. Brexit (threat) • Impact on trade between UK and EU could increase tariffs of
importing coffee. Potential delays and bottleneck at ports
(Shalvey, 2020) – this could affect the business if the supplies
2. Ease in takeaway fail to arrive on time.
regulations • Cafés are able to provide takeaway services until March 2022
(opportunity) without going through the lengthy application process. These
relaxed takeaway regulations will allow the café to reach a
broader market (Mintel, 2020).

Economic 1. Economic outlook • Value of the coffee shop market in the UK is expected to fall
37.5% due to the pandemic, with a recovery in 2025 (Shalvey,
2020).
2. Growing demand • Demand for coffee in the UK is continuously increasing, the sales
(opportunity) in 2020 were forecasted to top £4 billion
(Hospitalityandcateringnews.com, 2020). Although the growth
in demand has slowed due to the pandemic, once lockdown
restrictions will be lifted the demand should be restored.
3. Disposable Income • According to the Office for National Statistics (2020), the median
income increased by 7% and the mean income grew by 6.2% over
the last ten years. This growth is linked to a higher income
received by households. From this we can convey that the
marginal of propensity to consumers might also increase which
will benefit the sales at the café.
Socio-cultural 1. Health • There is an increased consumption of plant-based and organic
consciousness coffees – this is an opportunity for the café to reach a wider
(opportunity) market by offering sustainable products.
• Coffee is seen as an unhealthy drink due to the amount of caffeine
it contains hence consumers are becoming more drawn to tea:
2. Resurgence of Tea Mintel’s report states that 43% of UK consumers drinking
(opportunity) outside of their home drink tea, a steep increase from 2019 where
only 39% drank tea as a hot drink including premium and herbal
teas (Hospitalityandcateringnews.com, 2020) – this is an
opportunity for the café to have a wide tea selection to satisfy
customer needs.
Technological 1. Coffee machines • An increase use of coffee pods is seen mostly by millennials
(threat) which may impact the café if consumers use their own machines
(British Coffee Association, 2018) – this is a threat to the café as
it becomes harder to attract younger customers.
• Coffee cultivations are declining due to climate change and the
rise of genetically modified coffee could change that. However
2. Rise of GMOs the products are not sold in the marketplace as consumers are
(threat) opposed to genetically modified foods. Even though there is a
long way to go, genetic mutation of coffee traits could result in
products with a longer shelf life and easier to yield (Bowles,
2018). The cafe should be careful of the suppliers it is in business
with, ensuring the products are meeting the requirement of the
customers.
3. Mobile Purchase • With the increase use of technology, the café has an opportunity
(opportunity) to create an app or join food delivery companies such as Uber
Eats or Deliveroo to deliver coffee and pastries to customers
directly which would increase revenues.
Legal 1. False advertising • Advertisement of the café should tell the truth and not mislead
(threat) customers with false information that will promote the sales. This
is something to look out for as the penalties associated with this
are: receiving a fine, prosecution or imprisonment.

16
 • The café should be registered as a food business with the local
2. Food Standards authorities. Once it is registered it may be inspected and rated
Agency (FSA) under the Food Hygiene Rating Scheme (Food Standards
(threat) Agency, 2021). A poor rating will negatively impact the café as
customers will be less trusting of the food and drink quality.
• Following the pandemic there are certain rules regarding social
3. Safety – covid social distancing, this is a threat to the café as there will be less seats
distancing (threat) available inside which reduces the customer turnover.
Environmental 1. Climate Change • Climate change is impacting the production of coffee which
(threat) could impact the business if the resource becomes more scarce as
it could increase the costs of imports. This may increase costs:
the café will have to set the prices at a higher margin hence the
2. Sustainability in price of coffee will be higher and customers will not be happy.
Business • Trend shifting towards sustainability in business. Incorporating
(opportunity) corporate social responsibility in business activities will provide
an opportunity to grow as consumers are becoming more
concerned with the environment.
3. Environmentally • Saying no to plastic cups or charging extra per cup will promotes
friendly products re-usable cups and help the business become more sustainable.
(opportunity)

17
Appendix 3 – Responses from Survey conducted – Primary Research

18
19
20
 Appendix 4 – VRIO Framework

Resources/Competencies Valuable? Rare? Inimitable? Exploitable Competitive

by the Implications
organisation?
Intellectual property YES YES NO - Temporary
rights/copyrights Competitive
Advantage
Location of coffee shop YES YES NO - Temporary
Competitive
Advantage
Vast number of healthy YES YES NO - Temporary
products available Competitive
Advantage
Coffee shop atmosphere YES YES YES YES Sustained
Competitive
Advantage
Leadership and vision YES YES YES YES Sustained
Competitive
Advantage
Effective service culture YES YES NO - Temporary
Competitive
Advantage

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 Appendix 5 - TOWS Matrix for Passage through Paris

Opportunities: Threats:
• Health Consciousness • Brexit
• Sustainability in • Store bought coffee
Business machines
• Mobile app • COVID

Strengths: SO Strategy: ST Strategy:

• Location of café
• Leadership and vision Passage through Paris can Highlighting the prime location
• Café atmosphere benefit fully from its marketing of the café and the safety
• Marketing and and advertising strategy to measures it will take regarding
advertising promote the experience the café COVID will potentially reduce
offers as well as the products the negative impact it has on
available. the footfall.
Moreover, creating a mobile
app could help attract the
younger generation and
facilitate the implementation
of the loyalty points.

Weaknesses: WO Strategy: WT Strategy:

• Higher costs
• Slow brand awareness Promoting the café’s experience The café can attract a clientele
• High competition and its efforts in sustainability that earns a higher disposable
will build up brand awareness. income so that the customers
Additionally, offering a variety will not be affected by the
of healthy alternatives will products being sold at a higher
allow Passage through Paris to cost. However, no solution
differentiate itself from its using the weaknesses is found
rivals. for this.

22
Appendix 6 – Cashflow template for Passage through Paris
 Appendix 7 – Loan repayment for Passage through Paris

Appendix 8 – Rent and Insurance for Passage through Paris in Covent Garden
Appendix 9 – Electricity usage for Passage through Paris

Appendix 10 – Wi-fi broadband for Passage through Paris

1
Appendix 11 – Marketing costs for Passage through Paris website

Appendix 12 – Potential Supplier Brakes Brother

2
 Appendix 13 – Potential Supplier Nisbets

Appendix 12 – Potential Supplier 80 Stone Coffee Roasters

3
 Appendix 15 – Job Description for Passage through Paris

Job Description

Job Title: Barista

Summary:

Passage Through Paris is a new café that is looking to hire French speaking baristas to serve
hot drinks to customers and advise them on the complementary food available. The café will
deliver an immersive experience to its customers, making them believe they are having a coffee
in Paris. As a barista, it is your job to serve coffee/tea with a big smile that will give us our
reputation as a friendly café!!

We are committed to serve fresh-quality coffee, teas and pastries to all out customers and
provide an outstanding customer service. We are looking for individuals with experience in the
speciality coffee industry who are looking to expand on their skills and challenge themselves.

If you have a great work attitude, experience in in hospitality/previously worked in a busy café
and passoniate about it, then this is the job for you!

The role includes:

• Taking order from customers for drinks and pastries

• Preparing and serving hot drinks including coffee, tea, artisan and speciality
beverages
• Cleaning duties such as sanitising, sweeping floors, washing ustensils and coffee
machines after use
• Describing items on the menu to customers and offer suggestions
• Dealing with suppliers: ordering & receiving new stock
• Receiving and processing customer payments

The ideal candidate will:

• Have good knowledge/be fluent in French

• Have previous experience in hospitality: 1 year required
• Have great communication skills
• Have good customer service skills and knowledge
• Be enthusiastic and friendly
• Be approacheable and have team player qualities

Salary: £8.41 per hour

Benefits: Discounted or free food

Schedule: 8 hour shift

Location: Covent Garden, Greater London