Discovery: A New Player In The UK’s Beverage Industry

Business Model

General description of the business – Discovery

Discovery is the name for the business entering in the food industry offering Asian drinks, seeds and cakes, as a newcomer with very promising future. It will be located in Northern part of England in the United Kingdom and later on, it will expand to entire parts of United Kingdom. It is established to serve customers better than the rival by providing Asian quality products and services thus meeting the customer needs at reasonable prices. This is because the local beverages providers are providing drinks, which are not organic, natural and healthy in the England according to the customers’ needs. This makes customers who want organic, natural and healthy drinks not satisfied, thus providing an opportunity to satisfy that need. (Burnett and Burnett, 2013). It is also established to change the taste of the consumers who are used to local drinks. Such drinks are ginger tea cooked by fresh tea leaves and fresh thin slices of ginger not dry tea bags, milk-ice coffee among others which are processed by the workers of the shop. It also offers efficient customer services such as embracing the appropriate technology to serve the customers through the website and social media platforms, unlike its rivals. These are what differentiate our business from the other players in the industry who are offering similar products and services.

Discover targets students and older people for their drinks, seeds and cakes. This is because young people want to explore and take new stuffs including drinks and older people are very keen on their diet by taking prescribed food most of them are organic and natural. Thus we mostly target young people who want to discover new drinks and essential coffee tastes and looking for a place to chat and relax. In addition to that, we also target older people who want to enjoy different drinks that are recommended to them as they relax. We are aiming to become the most trusted brand in offering Asian and local drinks in future. Our mission and vision concerns offering quality Asian drinks to our customers to satisfy their needs fully and expand in all parts of United Kingdom and across the world.

The target population for the Discovery is the young generation and older people in England. The weather in the United Kingdom such as in England and Scotland has been very cold over the years and the increase in demand for drinks has been high. People thus are taking a lot of hot drinks to make their bodies warm and refreshers (Kendon and McCarthy, 2015). They have been used to the local types of drinks which they also similar to the one they prepare at their homesteads, thus, Discovery comes in with new types of drinks from Asia that are very natural, organic and healthy. The market opportunity and the gap that exists due to lack of an alternative drinks that are most of the time recommended for healthy purposes. Often customers do not get a steady supply of the drinks and cakes especially from the small shops offering drinks, because of financing and stock out problems, Discovery sought to bridge that market gap by offering steady and all-the-time drinks, which are also takeaways. The market leaders in the food industry have also concentrated on offering drinks to the high profiled individuals and state functions, so Discovery comes in place to cater for individual customers who are middle and low-income earners because it offers different quality of drinks with different prices for all our customers (Buttriss, 2018).

Target Market

Discovery’s target market in the United Kingdom is based demographic, geographic, and behavioral characteristics as shown below;

Table 1 Target Market Analysis

Demographics	Gender	Both male and female (Young and older ages) Different ages reasonably from 15 to 25 and above 50 years Not Applicable High, middle and low-income earners The United Kingdom and international people
Age
Occupation
Income
Nationality
Geographic	Location	North England
Behavioral characteristics	Benefits of drinks	Natural drinks because they are from fruits. Healthy drinks because they are from fruits, they contain vitamins, and others are energized. Organic drinks Convenience Refreshment Clean services
Rate of use	High
Loyalty	Strong and medium

Discovery offers all types of drinks from Asian and other healthy from the United Kingdom, seeds, and cakes. It also specializes in supplying all types of function on orders and individual takeaway services to its customers. Their drinks from Asian include;

Name of drink	Ingredients
Ginger tea	Fresh tea leaves Fresh thin slice of ginger
Tamarin and Dracontomelon	Fruits
Sugar
Milk-ice coffee	Coffee
Condensed milk
Hot water
Filters

These are not only the drinks from our shop, there are other, which we only blend, import when they are ready for consumption, order from high profile fruit vendors and supermarkets.

SWOT analysis

SWOT analysis is displayed in the appendices as appendix 1

Marketing objectives

Discovery enterprise plans to diversify its business in several cities in Northern part of England areas where there is an opportunity, increase customer base and quality services in order to build its business income consistently and years. The development rate every year is assessed to be 15% and offers of 100,000 units of all beverages all in all per annum as per the venture’ deals conjectures

Disclosure will create deals and showcasing systems, for example, valuing procedures, advancement techniques, put methodologies among others keeping in mind the end goal to enter into the market and gets expanding piece of the pie.

Disclosure represents considerable authority in beverages, for example, ginger tea cooked by crisp tea leaves and new thin cuts of ginger not dry tea sacks, drain ice espresso among others. Infiltration estimating methodology will be utilized as a part of first to advance the association’s items through augmenting its topographical scope and offering of bundles of merchandise at bring down costs than a solitary item, to build their client base inside the briefest time conceivable, at that point other suitable valuing procedures will be embraced with due time, for example, evaluating at premium and economy valuing. Disclosure offers its beverages at a fluctuated value contrasted with the quality and amount.

The firm will initially set up its fundamental store in Manchester and extend to cover the North Part of England, at that point cover the whole United Kingdom and make remote direct speculations while executing its area procedure (Popescu and Wu, 2007). As Discovery fundamentally offers Asian beverages in the United Kingdom, it has joins from the Suppliers from Asia, from the United Kingdom for the beverages, those are locally accessible, from Asia’s providers from different nations and the end clients.

Discovery is located in a strategic place to enable it to distribute its products in a wide market. The location also helps the business to evaluate its competitors since it is easy to access big markets like Asia.

SWOT Analysis

To advance its items, Discovery publicizes and makes consciousness of its reality through deals advancements, truck promoting, attention, and advertising, web-based showcasing and through the regular media (Vassileva and Nikolov, 2016). These techniques are received in light of the fact that they are generally shabby and are broadly utilized as a part of advancing items and administrations. With a specific end goal to bring issues to light through the brand mindfulness over the brand through the conveyance systems, Discovery embraces the force technique.

The principal contenders of Discovery endeavor are the Starbuck, Costa, and Café Nero, which offer Asian beverages in happy seasons and amid occasions. They are the market pioneers with the qualities of having better administration groups, low operational costs, forceful, centered promoting, solid capital base, and make steadfast clients (Bohari, et al., 2017). Disclosure will receive focused systems, for example, Anoff lattice as they develop, separation among others so as to counter the adversary contenders (Richardson and Evans, 2007). Deeside and Sivery Tweed firms have not put well in innovation where clients can put orders, in this manner Discovery will guarantee it has a task site with each one of those highlights.Table 3 Competitor Analysis

Criteria	Starbuck	Costa	Café Nero
Nature and History	Opened in the year 1971 in a place called pike	Founded in 1971 in London	Founded in London in the year 1990
Product/Service range	This is the largest coffee house	A UK second largest coffee house	It serves the cold and worm delights in Europe
Price range	Venti Filtered coffee £2.25 among others	Flat white-primo on average £2.50 among others	Espresso (In) £1.65 among others

Despite having several rival firms in the industry offering similar drinks, seeds and cakes, Discovery has some competitive edges, which it uses to compete in the industry in order to survive and expand in future. These competitive advantages include:

• Asian drinks which are not locally available such as ginger tea cooked by fresh tea leaves and fresh thin slices of ginger not dry tea bags, milk-ice coffee among others
• Organic and natural drinks
• Healthy and clean drinks
• Better customer services such as efficient communication channels
• After sales services such as packing and free deliveries for an interval of one-kilometer radius
• Online services such as online ordering and all information on the website

Discovery’s business model is described as follows:

Key Partners · Asian suppliers · United Kingdom suppliers · Ingredients from Farmers · Customers · Logistics partners	Key activities · Processing drinks · Serving customers · After sale services	Value Proposition · Organic drinks · Healthy drinks · Natural drinks · Use of technology	Customer Relationship · Customers’ feedback · Direct customer contact · Loyalty cards
Cost structures · Input materials · Transportation · Employees salaries · Online services e.g. website · others	Key resources · Fresh ingredients · Fruits · Condensed milk · Fresh tea leaves · Fresh thin slices of ginger	Channels · Hotlines for deliveries · Online marketing · Physical location	Customer Segment · Demographic: Young people between 15-24 years and older people from 50 years · Geographical: Leeds and Chester · Behavioral: search for a reliable alternative for Asian drinks that have health benefits.
Revenue streams · Revenue from the sale of drinks, seeds, and cake.

Operational structure

Operational structure involves the way in which exchanges and business forms are being done (Foss and Knudsen, 2013). Revelation is going by the general chief who settles on key choices of the undertaking and administers the general execution of the firm. Disclosure embraces the level authoritative structure to limit the levels of pecking order and administration (Bolman and Deal, 2017). For a new company, a compliment hierarchical structure is more proper to diminish the administration costs and for closer and solid connections between the supervisors and the workers. There are offices including a couple of representatives and others workers are in excess of one office in light of the fact that the business is in its underlying phases of development and extension. Such divisions are; human asset, Accountant, stock office, tasks, and specialized office, authorities and different administrations. Every one of the divisions work as an inseparable unit with the goal that clients can be completely fulfilled by sticking to their particular requests. The operational structure will extend in future to cook for every particular region of concentrate, for example, innovative work, showcasing divisions among others to upgrade self-sufficiency, specialization, and duty bookkeeping.The organizational structure of Discovery

Marketing Objectives

For the financial year ending December 2019

Profit and Los	2017	2018	2019
Sales revenue per month	216,540	219,860	221,730
less cost of goods sold	95,230	99,740	107,530
Gross profit/ net sales	121,310	120,120	11,4200
Expenses
Salaries	23,230	32,320	23,430
Advertising & marketing	77,530	7,8230	73,560
Utilities (electricity, gas, water)	863.430	7,647.4	6,737.4
Bank charges	5,833.3	5833.3	5,833.3
Telephone	5,677.5	5,337.5	6748.7
Rent & rates	1,5630	1,5630	1,5630
Repairs & maintenance	2,324.5	2,341.2	2,395.5
Stationery & printing	5,766.5	5,686.5	7,537.8
Insurance	2,000	2,000	2,000
Total expenses	13,8851.9	12,2701.7	14,3872.7
NET PROFIT before tax (Net Income)	(17,541.9)	(25,81.7)	(29,672.7)

The expenditure for the first year is 195,118.71+ 70,000.01 (on start up one time expenditure) to amount to 265,118.71 Pound Sterling.

Income	Pound Sterling
Sales	316,541
Cost of goods sold	145,480
Gross profit	171,070
Expenditure
Salaries	49,769
Advertising & marketing	88,997
Utilities	10,555.94
Bank charges	6,999.98
Telephone	10,143.69
Repairs & maintenance	5,436.66
Rent	19040.51
printing & Stationery	7,102.43
Insurance	2,551
Total expenses per year	195,118.70
One-time expenses	70,000.01
Balance carried forward	2881.29

From the information given in the balance sheet, the profits have not break even in 2019. We expect that, it will break even by the end of 2019. The business is targeting to make 15000 starling pounds by the end of 2019. However, the business profitability is not stable still to achieve this. Therefore, it sells at 10 starling pounds per unit.

15000/ (100-80) = 7500 units

The business must sell 7500 units to achieve its dreams by 2019. The continuous raise of the losses in the 3 years need to be addressed by the marketing and financial strategies.

For the first year of the business, Discovery won’t equal the initial investment, yet it is promising to begin having positive figures in the benefit before assessing. Deals are expanding bit by bit, it is contributed by the forceful advertising of the undertaking and productive in the activities. A considerable lot of the costs, for example, pay rates and repairs and upkeep are expanding on the grounds that the firm will build its client base in this way requiring numerous workers and because of expanded tasks and machine limit along these lines expanding their adjusting. Net benefits are encountering expanding pattern throughout the months because of increment in deals and cost of merchandise individually. Best Farm is especially centered around marketing and advancing its items and administrations to infiltrate into the market throughout the months. This is appeared in the expanding pattern throughout the years from June and May in the Profit and Loss. Bank charges, which are speaking to the bank credits from Royal Bank of Scotland and Standard Chartered Bank, are steady, this implies the loan costs are settled throughout the months, the back cost will be allotted similarly in months (Drake, et al., 2017).

Balance sheet for the year ending 31 December 2019

Current assets       Pounds                Pounds

Cash   20 000

 Accounts receivable 15 000

 stock 150 000

 Total Current Assets  185 000

 Non-Current Assets    

 Plant and equipment   50 000

 Business premises 650,000

 Vehicle  70,000

 Total Non-Current Assets   770 000

Total assert        955 000

 Current Liabilities 

 Accounts payable   25 000

Tax    45 000

Total Current Liabilities  70 000

Competitor Analysis

Non-Current Liabilities   

 Long term business loan     500 000

Total Non-Current Liabilities 500 000

TOTAL LIABILITIES   570 000

NET ASSETS  385 000

OWNERS EQUITY 385 000

The business is planning to budget the available funds among many activities like, transportation, marketing, advertising, remunerations, rewards, repair and maintenance, cleaning and purchasing of raw materials. It has come to its discovery that, it needs to increase the budget to increase the efficiency and productivity levels.

The business also must include in the budget the legal fees which varies according to the performance of the business. Sometimes if this is not planed, it may get the business as a surprise. It has also to keep money for emergencies like market change, natural factors, accidents and many more.

Conclusions

The discovery business is looking forward to improving its productivity by improvement in managerial sector, operational sector, marketing and advertising. It is now planning to grab a wider market share and increase its capitalization. The marketing strategies explained is the crucial part which will create the impact on the sales and hence the profitability.

Nevertheless, the business is doing well with the economy as it becomes a clonal changer. It must adapt to various economic environments which have different strengths of risks. Risk analysis here is the fundamental factor considered most. The risk solved is the profit gained. If every step is followed, then the business has a great future (Richardson, M, & Evans, C 2007).  

The cashflows depends on the expertise of the management. The management should have a good planning technique to foretell the future of the business by just playing with the figures. This has also a great impact in coffee sales revenues.

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