SWOT Analysis Of Green Cafe And Characteristics Of Hospitality Industry

SWOT Analysis of Green Cafe

Hospitality and restaurant management has a lot of factors that are involved in it and should be managed by qualified people. Financial and marketing strategies should be set to achieve a Cafés vision and mission. In service industry, it is the service and the product that a the Café  is pushing to the market that makes the café to  stand out of the rest(Barrows, 2016). In this case, the Green Café is making strides in its marketing and cuisine for it to be recognized. It is important for the  industry to make sure that the vision and mission are in line with the financial and marketing strategies of the firm(O’Fallon & Rutherford, n.d.).

A SWOT analysis is an important tool in determining the strengths, weaknesses, opportunities and threats of the hospitality. The SWOT Analysis is paramount as it helps the management to create sound management strategies. Green Café that is located in Watertown location has all these qualities that are associated with the hospitality industry(Sant, 2012). A clear and robust business strategy is required in setting clear cut business strategies.

Strengths 

The strength of the Café include the fact that iit offers cuisine that are of great taste compared to the other competitors. The café is located at a strategic place where there is a lot of foot traffic therefore it is able to get many customers. Great prices as compared to the competitors is yet another strength that Green Café is banking on to have a competitive edge over its competitors. Also, the cafe has a competent management and staff who have extensive experience in the industry(Kainthola, 2009).

There are various strengths that are associated with green Café ,they include; contribution to the local economy(Barrows, 2016). For green café, local attraction will attract more people who will stay in the hospitality. In staying, they will visit local malls, restaurants and other places, so the local economy remains vibrant. High profit margins are realized when the cost of operations which includes salaries and other overheads cost are extremely lower than the revenues(International hospitality industry, 2016).

Weaknesses

 It is crucial for Green café to master its weaknesses so that it may improve on its service delivery. Some of the weaknesses include lack of packing, high utility costs and high taxation regime.

 Opportunities

The hospitality industry is a billion dollar industry and continues to grow. However, it has a lot of opportunities for  growth and advancement of the new establishment. The first opportunity for Green Café is innovation and technological advancements. Innovation led to digitalization where customers have the opportunity to book and reserve the services online. Globalization is also another opportunity where the green café will rely on its global recognition and imprint to ensure that it has added its customer base(International hospitality industry, 2016).

Market Characteristics of the Hospitality Industry

Threats 

This is also crucial in analyzing SWOT analysis as there are several threats that this café faces. As a huge revenue maker, the industry has been encroached by many small economical cafes also known as boutique alternatives. There is also the threat of a shrinking economy in the country which is a prevalent condition and a worse than expected economy undermining the purchasing power of the customers(Perry, 2009).

There are several market characteristics that are associated with the hospitality industry and therefore Green Café should possess them . They include the following;  as a service industry requires great service and high levels of customer satisfaction in order to make it big in the industry. Being a highly competitive industry, the general service to a customer will determine the number of customers that will remain loyal to the hospitality(Walker & Miller, 2015). In green café, the management has employment highly competent staff to take customer service to the next level. The battle is won on this front, the better the service the bigger the number of customers.

The next characteristic is product differentiation and similarities. This industry has a lot of similarities as it take care of peoples need, therefore, a product sold maybe a cuisine will only be differentiated and made better for it to be absolutely different from the rest (Walker & Miller, 2015).Intangible service characteristics means that the service provided cannot be touched or seen but can be felt. There are also perishable services characteristics which mean that the service won’t last long and will not be felt in the long term. Inseparable service means that there is customer experience. There are also shift work services that will be introduced at the  Café where hospitality industry being employer employees its staff in shifts because of its 24 hour services all year long. The different shifts include rotational shifts, apart shifts and many more (Nykiel, 2011). This is meant to provide a comprehensive all around service that is particularly favoring the employees so that they do not tire (Walker & Miller, 2015).

Last but not least, the general satisfaction of guests will determine the affection of the café to the customer and bring in return customers. A customer is endeared to the service that is provided to him and will only come back if the service stands out from the rest. It is also a risky business as many hotels and cafes will shut down after some time due to loss of customers(Choudhary, 2013).

Financial Management of Green Cafe

Prudent financial management requires competent and qualified staff that is able to handle the job under the stipulated guidelines in accounting. It is imperative for a new establishment  like green café to have strong financial management structure for its operations(Choudhary, 2013). The business will only survive if its management of finances is done with impeccable touch. Managers, accountants and finance officers all work together in their various departments to ensure that green cafes operations are efficient. To get the true picture of the company, financial statement analysis is done to give the forecasted trend and make certain managerial decisions(Mathews, 2008).

Statements of financial analysis, financial ratio analysis and budgets also help in making decisions that help a company to focus on the future(Legrand, Sloan & Chen, n.d.).

There are various importance of ratio analysis for this café which includes

1) Decision and plans

The management of green café is able to make decisions and formulating plans and policies for future needs. They evaluate the efficiency and performance demands of a company to realize its goals and visions. 

• Investment decisions

In this case, green café may decide to expand or not to expand based on their analysis of financial statement. As a small café, the vision of the company is to expand and have a large network. The analysis will ensure that management makes decisions that are relevant and important.

• Extension of credit decisions

After analysis of financial analysis, the company can be able to determine whether there is need to take further credit or not for expansion or operational efficiency. If the determining ratios are good, it is good for the company to take a credit facility.

• Shareholding decisions

If Green café has several shareholders or even publicly trading, the shareholders may decide to retain, relinquish or buy more of the shares of the company based on the financial analysis. Poor financial analysis reports means that the shareholders may decide to sell their shares due to poor performance and vice versa(Brigham & Ehrhardt, 2017).

Site evaluation is an important aspect when determining the best place to locate the restaurant. The following are the factors that we will consider when setting up Green Café which is located in water town shopping outlet. The size of the restaurant is 40m² of dining area which accommodates 28 customers and a table capacity of seven(Tesone, 2015). The Café’ is located at a central point in the town. The site is located at a very strategic place. Also, we recognized that foot traffic is very important for us to get customers. We do not want to be tucked away in a corner where people are likely to pass us by(Pratap, n.d.).

The traffic outside the location is sufficient to meet the café needs. Traffic is heavy in the morning and in the evening , during the day, traffic is moderate. When traffic is high, this is the time that we are likely to get a lot of customers this also includes the lunch hour period.

The café is located at a good place which is easily accessible to customers, suppliers and employees. It is on a busy street where it is easy for cars to get in and out of the parking lot(Barrows, Powers & Powers, 2009). The café is also accessible to people with disabilities and the parking is ample.  

Monthly rent is relatively low at $8000 but this is due to the location in which the business is located. However, janitorial services are included in as part of the rent which also covers insurance for the building and maintenance.  Generally, the cost is well within our budget and considering the business potential in the area, the rent is not too high(Jayanti Prakash., 2013).

Supply and Demand information analysis

Watertown shopping outlet is a busy centre where a café business can easily thrive.  There are two other cafes within the locality but still competition is not too high.  The area in which the café is situated has a lot of industries, banks and also has  a residential area. This means that the population is relatively high.  Our target customers include people working in this area most of them being employees of major companies and industries located in the area. There has been a high demand of restaurant and eateries in the area given that only two restaurants have been in existence in the area(DeFranco & Lattin, 2007).

The restaurants have been located near each other. The area has a population of over 60,000 people which is sufficient to sustain the business for growth purposes.

Domestic consumption of coffee has been on the rise with the Preparations such as capuccino, latte, mocha, frapuccino and cold drinks have been protagonists in the change of trend.The three cafes in the market are offering the same type of menu, therefore differentiating is what will make us have return customers(Singh & Dewan, 2009).  The advantage that Green Cafes have as compared to there other two cafes in the area is that we have the best chefs, waiters and waitresses who offer the best service and unbeatable prices.  Green Café has an edge over its competitors because it is located at a strategic place as compared to the other two restaurants.  

There are many characteristics of a successful coffee Cafe  business that should be taken into account when setting up a cafeteria, for example, the basic aspects to combine are the quality of the food and drinks and good customer service, although we should not forget that customers also seek a great atmosphere and an innovative concept (Olsen, West & Tse, 2014).

The appropriate location is when your cafe is close to many potential customers, places near office buildings, universities, large hospitals and shopping centers can bring you a large number of customers; It is essential that before starting a business you choose the best place to put it. Remember to always keep in mind these tips to start the cafeteria(Madura, 2018).

The flavor of the drinks and the excellent service are what will keep your business open, but if we add an excellent location, your opportunity to increase sales and customers is much greater. 

To be able to choose the best location it is necessary to check the amount of people who circulate near the potential premises. If in addition to obtaining an excellent location you have the opportunity to rent or buy a local car service, that is a better option(Baum, 2011).The publicity of the inauguration of a cafeteria is quite important. You must focus on the qualities of your business, according to the needs of your local customers. An advertisement on some internet sites specializing in coffee shops and coffee will attract the attention of several coffee connoisseurs. For example, offering a 10% discount on all cappuccinos during the first week of sales can attract the attention of customers who prefer this drink (Block, Hirt & Danielsen, n.d.).

For customers who tend to hold work meetings in cafeterias you can offer drinks served in covered containers, to avoid spills and splashes in important documents, this will make many of these potential customers consider your cafeteria as an appropriate place to do business (Block, Hirt & Danielsen, n.d.). This is part of what makes up a niche market.

Good cafes evoke mental images of warmth, comfort and satisfaction. Knowing the basic consumer, he prefers the good atmosphere so he goes to the coffee shops that are very successful and are always full of customers. When designing a cafeteria plan it is essential to think about promotion and growth.

References

Barrows, C. (2016). Introduction to management in the hospitality industry. [Place of publication not identified]: John Wiley.

Barrows, C., Powers, T., & Powers, T. (2009). Introduction to management in the hospitality industry. Hoboken, N.J.: John Wiley & Sons.

Baum, T. (2011). Hospitality management. Los Angeles: Sage.

Block, S., Hirt, G., & Danielsen, B. Foundations of financial management.

Brigham, E., & Ehrhardt, M. (2017). Financial management. Boston (MA): Cengage Learning.

Brigham, E., & Houston, J. Fundamentals of financial management.

Choudhary, V. (2013). Hospitality industry. New Delhi: Centrum Press.

DeFranco, A., & Lattin, T. (2007). Hospitality financial management. Hoboken, N.J.: John Wiley & Sons.

Jayanti Prakash. (2013). Hospitality revenue and finance management. New Delhi: Centrum Press.

Kainthola, V. (2009). Principles of hotel management. Chandni Chowk, Delhi [India]: Global Media.

Legrand, W., Sloan, P., & Chen, J. Sustainability in the hospitality industry.

Madura, J. (2018). International financial management. US: Cengage Learning Custom Publication.

Mathews, J. (2008). Hotel management. Jaipur, Raj., India: Pointer Publishers. 

Olsen, M., West, J., & Tse, E. (2014). Strategic management in the hospitality industry. Harlow: Pearson.

O’Fallon, M., & Rutherford, D. Hotel management and operations.

Perry, I. (2009). Safety puzzles for the hospitality industry. Amherst, Mass.: HRD Press.

Pratap, S. Finance management in hospitality sector. 

Singh, U., & Dewan, J. (2009). Hotel management. New Delhi: APH Pub. Corp., in association with Indian Institute of Management.

Tesone, D. (2015). Principles of management for the hospitality industry. London: Routledge.

Walker, J., & Miller, J. (2015). Supervision in the Hospitality Industry, 8th Edition. New York: Wiley.

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