Strategic Plan for Collegiate Café

Final Paper Requirement for MNGT 7- B – Strategic Management

Submitted by:
Josehb Efren P. Naca
Thereza Mulig
Karen Jean Suan
Olive Grace Olvina
Mary Grace Bolasa
Jenielyn Ranque

I. BASIC INFORMATION

a. Business Name: Collegiate Café

b. Nature of the Business
Collegiate Cafe is a local coffee shop with a mini library feature. Proposed to be located
at E. Cabrera St., Tunga-Tunga Maasin City, Southern Leyte. This cafe will provide a friendly,
comfortable atmosphere where customers can receive quality coffee drinks and baked goodies
at reasonable prices. The cafe will offer a variety of coffee choices to the customers from
cappuccinos to lattes, espressos, and regular coffee made with various coffee beans specially
handled by a barista, frappes of different flavors, and accompanied by baked goodies such as
cookies, biscuits, and flavored breads. Collegiate Cafe will be open from 8:00 A.M. to 8 P.M.
Monday-Saturday. The unique characteristic that makes this café different from others is that it
will provide customers access to various genres of books from fiction to educational textbooks
that may be used as learning references for different collegiate programs for free, if used in-
shop, and for rent, if taken outside. In terms of entertainment, classical music will be played for
everyone to enjoy. Also, a freedom board is available for customers where they may freely
express their emotions or to use as background for photos of them sharing coffee memories
together.
Collegiate Café is open to everyone, especially to college students, to help them balance
their mental health through social connection, and to inspire them in their schoolwork by
providing them with a student-friendly interior design and ambiance. The café will provide a
comfortable and relaxing setting where people can feel comfortable, away from the distractions
in their living space. They may freely use this neutral environment for low-pressure social
situations.

c. Proposed Location
The proposed location of Collegiate Café is located at E. Cabrera St., Tunga-Tunga,
Maasin City, Southern Leyte. This is the previous Ciudad Restaurant and Bar. The location was
chosen because it is near the schools and is accessible, which will be an advantage for the
 café considering the theme it’s going for. This is sure to be the best, easily-accessible location
where our beloved customers can find comfort and peace of mind.

II. STRATEGIC DIRECTION

a. VISION STATEMENT
To be the leading coffee shop in Maasin and in the Province with an excellent
offering of coffee services, gourmet food and best reference of books.

b. MISSION STATEMENT
Collegiate Café strives to provide customers with the best cup of coffee partnered
with quality service and a mini library with a variety of genres from fiction to references for
different collegiate programs. We consider it a privilege to be able to provide this little corner
of relief to our dear customers, be it for leisure or scholastics.

c. STATEMENT OF PHILOSOPHY
“Your focus deserves a nice cup of coffee.”
Collegiate Café aims to become a place that sparks rejuvenation and momentum
within people. With great determination, we want to provide college students, and jaded
people alike, a place for relaxation and a nice cup of coffee handled by the gentlest of
hands. We also aim to treat wisdom delicately, so we strive to shelve our mini library with
the best books there are. We want our customers to have the best experience inside our
café, where they can read each phrase in their books without any worries. It is with all our
integrity and passion that we hope anyone who steps inside Collegiate Café will have a
great time and know that they deserved it.

d. CORE VALUES
• God Centered
We always believe that we should put God in everything we do so that it will be
fruitful and meaningful. We always start and end our day of operation with a prayer.

• Excellent customer service

Our focus is our customers, both internal and external. Everything we do revolves
around ensuring that all our customers have positive and productive contact with us.

• Accountability
We take responsibility for our actions and are accountable for the results achieved.

• Professionalism
We always maintain professionalism in the workplace and always promote a
positive and satisfying work environment.
 • Environmentally Friendly
Safeguarding our mother nature so that we can live in a safer and better
environment is also in our topmost priority and with that said, we use recyclable and easy
to dispose materials.

• Continual Improvement
We constantly evaluate our services and actively elicit, listen and act upon
information for continuous improvement, actively promoting innovative practice in all that
we do and are involved with.

III. EXTERNAL ENVIRONMENT ANALYSIS

a. GENERAL ENVIRONMENT
Political factors affecting the Collegiate Café
Due to the recent COVID-19 pandemic, operating a new coffee shop can expose
itself to different types of political environment and political system risks. Maasin City is stable
in terms of political concerns and relations. Entry of new businesses will not have any
concerns related to it aside from those brought by the COVID-19 pandemic. Other factors to
consider are the following:
● Trade regulations & tariffs related to Consumer Goods
● Pricing regulations
● Taxation - tax rates and incentives

Economic factors affecting the Collegiate Café

As a result of the COVID-19 pandemic, unemployment has increased and people's
disposable money has reduced, reducing the company's earnings and customer’s purchasing
power. People are spending more cautiously and not as much on expensive products after
the outbreak. It affected the exports of the coffee beans globally. But as the effects calm
down at present, people are meeting out already and the exports are back on track which
gives a new hope for Collegiate Café.

Some other factors to consider:

o Inflation Rates

Sociocultural factors affecting the Collegiate Café

Collegiate Cafe is aimed to become the go-to place for many students, especially
those in college, as they are our primary market. But even in a specific primary market, the
café is open even for local workers and residents, coffee lovers and book lovers. Thus, the
meeting of different cultures, beliefs, and preferences will be unavoidable. Now-a-days the
trends of lifestyle of the new generation are changing, so the Collegiate Café will take extra
care in considering the following factors:
 ● Changes in trends and preferences. Students tend to closely follow the trends
and Collegiate Café will make sure to adapt as well so as to not lose the interest
of the customers. Seasonal events and products will be offered to address the
customers’ changing preferences.
● Transitioning of Generations. Collegiate Café will focus on Millennials and Gen-
Zs to continue piquing their interest. Still, it’s important to consider the preferences
of past generations as well as the generations to come.
● Changes in lifestyle and work patterns. Local residents and workers are part of
our market and with the current issues of the pandemic, the lifestyle and work
patterns of the people can change drastically. Collegiate Café ensures flexible
service, either in-store and web-based, in order to adapt to these changes.
● Health Concerns. Collegiate Café will hire a barista to handle the brewing of coffee
and a few staff to serve. Everyone will be dressed appropriately in accordance with
health concerns due to the pandemic.

Technological factors affecting the Collegiate Café

Collegiate Cafe aims to provide customers with quality coffee by hiring a barista to
brew and make the coffee, of course with enough support from machines for efficient service.
Though it may be time-consuming, less reliance on ready-made processes creates more
opportunities for new methods in coffee making and discovery of new flavors. In consideration
of the pandemic, Collegiate Café will ensure that the barista and staff that will handle the
coffees and other products are fully vaccinated and dressed appropriately for serving. So, in
terms of technological concerns, Collegiate Café will focus on the following:

● Utilization of Social Media. Social media will be utilized to advertise the shop
through aesthetically pleasing photos and posts. Accounts in various social media
platforms will be created for customers to easily browse through the offers of the
café. It will also be used to efficiently collect data and feedback from customers
while also adapting to the changes brought by the pandemic.
● Web-based service. Collegiate Café will also consider opening up its own site to
further blend in to the continually-advancing technology and in respect to the
effects of the pandemic.
● Creative Interior. Collegiate Café will also continually innovate different ways to
attract new customers; changing the design of the cup of their coffee, improving
the interior designs, and offering seasonal events and products.

Legal factors affecting the Coffee industry

● Legal framework for contract enforcement. Collegiate Café swears to comply
to the legal framework of all contracts to be made for the operation of the shop,
 especially for the contracting for supply of coffee beans and for other outsourced
products.
● Food and drink regulations. Coffee contains caffeine, so Collegiate Café falls
under food and drink regulation. The café will ensure that the ingredients used for
the products are properly prepared and complies with the regulations.
● Intellectual property protection. Since Collegiate Café offers access to various
books, we will make sure to protect the rights of the authors. Also, any innovations
for the products offered in the shop will also be properly filed for IP.
● Legal Compliances and Permits. Collegiate Café will faithfully comply with the
necessary processes to legally put up the café and procure the necessary permits
to reassure the customers regarding the trustworthiness of the café.
● Labor Laws. Collegiate Café will prioritize the well-being of its staff as the
operation of the café relies on them. Labor laws and employee engagement
programs will be effectively applied. Collegiate Café will not tolerate any unethical
behavior towards customers and the staff all the like.

Other factors to be considered are:

● Addressing complaints of the customers to avoid legal problems.
● Legal requirements on expansion.
● Ethical Standards

Environmental factors affecting the Collegiate Café

There are several environmental challenges facing the world today. Climate change
and its erratic and extreme weather patterns create droughts and diseases, all of which can
impact the quality and growth of coffee beans. The majority of these issues concern the food
and beverage industry. Some environmental factors to consider are:
● Safe to Consume Ingredients. Collegiate Café will focus on using healthy and
safe to eat ingredients. Collegiate Café will make sure that its contract supplier
properly prepares their coffee beans and likewise does not harm the environment
in doing so.
● Use of Recyclable Materials. Collegiate Café will prioritize taking care of the
environment by using recyclable materials to reduce waste.

Other concerns include:

• Water Consumption.
• Other farming methods.

b. INDUSTRY ENVIRONMENT
Competitive Rivalry
• Number of Competitors
 Collegiate Café has a fair number of competitors within its scope. Unfortunately, it
has lot of direct competitors that sell the same products, has the same audience, and
compete for the same potential market, the most active of which are:

o Café Lattea. A stall offering coffee and pastries as well as fry & grill foods, but at
pricy costs. They are exclusively open 24 hours a day and accept deliveries at
nighttime.
o TeaLab Cafe. A coffee shop offering coffee-based milk tea products and takes
pride in using real tea, real cream and milk update description.
o Giuseppe Cafe. A café offering various types of coffees and delicious desserts
such as cakes and pastries.
o Sweet Rose Cakes & Pastries. A pastry shop offering various types of cakes and
pastries as well as snacks and coffee. Their shop is known for their attractive
interior design.
o Ganda’s Amora. A coffee shop known for its cozy interior that makes customers
relax and their various coffee flavors offered. The interior is surrounded by books
and magazines that customers may read as they enjoy their drinks.
o Coffee Diaries. A coffee shop with a nice and quiet ambiance. They offer various
flavors of coffees and cakes and even offer promos regularly.

• Diversity of Competitors
The major competitors’ prices range from Php 100-200 for the same serving that
Collegiate Café offers. In terms of competitors' marketing strategies, they have great logos
and catchy taglines that they use in advertising. They also use social media platforms to
take orders, promote their business, and get customer feedback. They also utilize this to
spread their holiday discounts & promo offers. Coffee shops are known for taking pride in
their interior and ambiance and the same goes for the competitors; they exhibit their shops’
interior with aesthetic and trending designs to excite and attract customers. Most of the
competitors are also located within the city where lot of customers are present, especially
students and workers.

• Quality Difference
Most of the competitors offer the same products as Collegiate Café. But Collegiate
Café takes pride in its products’ quality. Most of the competitors rely on coffee-making
machines to offer quick service but Collegiate Café offers coffee handled by a barista to
ensure topnotch quality.

Supplier Power
Collegiate café’s coffee faces the weak force or bargaining power of suppliers. Porter’s
Five Forces analysis model considers this force as the influence that suppliers have on the
company and its industry environment. The following external factors contribute to the weak
bargaining power of suppliers on Collegiate Café:

o Moderate size of individual suppliers (moderate force)

o High variety of suppliers (weak force)
o Large overall supply (weak force)

The moderate size of individual suppliers is an external factor that imposes a moderate
force on Collegiate Café. However, the high variety of suppliers weakens their bargaining
power. For example, suppliers have various strategies and competencies that they use to
compete against each other, with the aim of gaining more revenues by supplying more
materials, such as coffee beans, to Collegiate Café. The bargaining power of suppliers is further
weakened because of the large overall supply. For instance, there are many suppliers of coffee
and tea around the world. This external factor limits the influence of individual suppliers. The
overall effect of the external factors in this component of the Five Forces analysis is the weak
force or bargaining power of suppliers on the company. Another consideration is the company’s
policy of diversifying its supply chain as a way of addressing the trends identified in the general
environment analysis of Collegiate Café. Such policy weakens suppliers’ power. As a result,
suppliers’ bargaining power is a minor strategic issue in managing the business.

Buyer Power
Collegiate Café has the strong force or bargaining power of buyers or customers. In
Porter’s Five Forces analysis model, this force is based on the influence of individual customers
and groups of customers. In Collegiate Café’s case, the following external factors contribute to
the strong bargaining power of customers:

o Low switching costs (strong force)

o High substitute availability (strong force)
o Small size of individual buyers (weak force)

In this component of the Five Forces analysis model of the business, the bargaining
power of buyers is among the most significant forces affecting the company. Based on the low
switching costs, customers can easily shift from Collegiate Café to other coffee shops. In
addition, the high substitute availability means that customers can stay away from Collegiate
Café if they want to, because there are many substitutes like instant beverages from vending
machines. These strong factors overshadow the fact that individual purchases are small
compared to the company’s total revenues. The small size of individual purchases equates to
the weak influence of individual buyers on the business. Despite such weakness, the other two
external factors strengthen the bargaining power of customers. Thus, this component of the
Five Forces analysis shows that the bargaining power of customers is a top-priority strategic
issue. Collegiate Café’s marketing mix or 4Ps provide support for brand strengthening to
partially address the bargaining power of consumers.

The Threat of Substitution

• Number of substitute products available
▪ Shops that offers brewed coffee products alone, such as those from the
competitors
▪ Other beverage-focused stalls and shops, such as Milk Tea shops
▪ Pastry shops, such as Panny’s and local bakeries
▪ The Provincial Library

• Buyer tendency to substitute

There is a very high threat from substitutes in the coffee and pastries industry.
Many coffee drinkers consider tea, hot chocolate, and energy drinks to be reasonable
substitutes for coffee. Consumers may also resort to cheaper products when thinking of
buying either only coffee or only baked goods such as those from local stores and bakeries
which offer cheaper prices.
Considering the target market’s purchasing power, they may also choose to brew
their own coffee rather than buy it from a shop since these substitutes does the same job
as store-bought coffee at lower costs. Although these substitutes may have lesser quality
than the products we offer, consumers who are tight in budget may not prioritize this
anymore.
Lastly, there is a Provincial Library in the area which is accessible to everyone.
Although our café offers a variety of books and of different genres, the provincial library
offers the same and with a wider range. It also does not cost them to enter the provincial
library.

The Threat of New Entry

Collegiate Café faces the moderate force or threat of new entry. In Porter’s Five Forces
analysis model, this force refers to the effect of new players or new entrants in the industry. In
this business case, the following external factors contribute to the moderate threat of new
entrants against Collegiate Café:

o Moderate cost of doing business (moderate force)

o Moderate supply chain cost (moderate force)
o High cost of brand development (weak force)

The moderate cost of doing business is associated with the variability of the actual cost
of establishing and maintaining operations in the coffeehouse industry. For example, the cost
 of operating a small coffeehouse is lower compared to the cost of operating a coffeehouse
chain. In relation, smaller cafés have lower supply needs and corresponding supply chain costs.
These external factors enable smaller firms to do business and compete against Collegiate
Café. On the other hand, brand development is costly. In the context of the Five Forces analysis
model, this condition reduces the threat of substitution. For example, small coffeehouses do
not have enough resources to develop their brands. The combination of these external factors
imposes the moderate force or threat of substitutes against the company. Thus, this Five Forces
analysis shows that the threat of substitution is a significant but limited issue in Collegiate Café’s
strategic management.

IV. INTERNAL ENVIRONMENT ANALYSIS

a. Resource Analysis
Collegiate café’s resources answer the questions ‘is it valuable?’, ‘rare?’, ‘inimitable?’
and ‘organized?’

o Valuable
Collegiate café will use valuable resources and have a unique business
concept making sure that it is at its advantage, maximizing it that meets the needs
of the primary customers. Collegiate café by taking advantage of its valuable
resources it will have a positive effect towards the business. It will neutralize
competition in the industry with an internal capability.

o Rare
Collegiate café will be the first coffee shop with a mini library that makes it
unique and rare among any other coffee shop in the city. Its mini library mainly
shelves various textbooks and references on different programs to help college
students in their studies. Aside from textbooks, its mini library will also contain
different genres of books for the best interest of any bookworm. Thus, this coffee
shop will manually brew its coffee by barista for premium quality which makes it
rare among any other coffee shops that brewed its coffee by machine.

o Inimitability
Collegiate café offers imitable products, services and its business concept
but what makes it not easily to be imitated is that it is costly. Being the first coffee
shop with a mini library in the heart of the city it will surely establish its brand and
would gain loyalty from its customers which will be at its advantage and challenging
on the competitor that will imitate its business concept. Also, with its location that
is accessible and close to different colleges it is hard to imitate and would require
in depth feasibility study.
 o Organization
Collegiate cafe with its in-depth internal analysis helps in organizing the
management systems, processes, structures and culture in capitalizing on
resources and capabilities. With that, it ensures the business to sustain its
competitive advantages.

Outsourcing
Traditionally, a business process is outsourced so that a company can save significant
operational costs. Nevertheless, there were some reports that suggest that this is not always true.
This increase in cost is due to the failure to clearly specify the desired requirement or outcomes
by the client or company. Collegiate café will outsource its pastries products, books for its mini
library. Outsourcing will lessen the operational cost.

b. SWOT Analysis

STRENGTHS WEAKNESSES

● A Twist in the Concept

● Optimistic Brand Attitude
● Manual Operation
● Experience your niche
● Unestablished Brand
● Quality products and services at reasonable
prices

OPPORTUNITIES THREATS

● Creative innovation ● Creative Competition

● Gathering a crowd ● Price Sensitivity
● The Power of Social Media ● Consumers’ Purchasing Power

STRENGTHS
• A Twist in the Concept
Collegiate Café will introduce a new theme of coffee shop to the area by combining
a cup of coffee and a learning experience through its mini-library space. So far, there are
yet to be shops in the area who offer the same concept.

• Optimistic Brand Attitude

Collegiate Café will pride itself in its bright-smiled, warm service. Everyone at
Collegiate Café will be serving with merry smiles, making sure that customers are able to
enjoy their time inside the café. The café will value the customers’ interests and will make
sure to serve them with respect and delight.
 • Experience your niche
Collegiate Café will offer a comfortable space for anyone who seeks rest and a
quiet area for those who want to spark up their learning momentum. The interior of the shop
is designed in a minimalistic way to give off a warm ambiance for customers to relax. And
while customers may choose to enjoy their own space, Collegiate Café also serves as a
place to connect as customers may also meet people of the same interests as them. We’ll
make sure that our staff and workers know what customers seek and serve them delicately.

• Quality products and services at reasonable prices.

Customers may enjoy quality coffee and pastries at Collegiate Café handled by
trained, delicate hands at reasonable prices and rest assured, this is without compromising
the products’ quality. Collegiate Café’s coffees are brewed by a barista with enough
equipment support to assure the premium quality of coffee served.

WEAKNESSES
• Manual Operation
While Collegiate Café promises to offer quality products, this also means that
there’s reliance on manual work. It may be somehow beneficial to rely less on machines
but manual work is time-consuming and costly as well.

• Unestablished Brand
Coffee shops and other beverage-focused shops are slowly crowding within the
area so Collegiate Café, which is new and even offers a different theme, may see it as a
challenge to gather a customer base the same as its competition.

OPPORTUNITIES
• Creative innovation
Collegiate Café will rely its coffee-making on manual work so it is easy to be
creative and experiment new methods to better serve customers and create unique flavors
of coffee, even seasonal events and products. Customers’ choice of books may also help
the café know which ones piques the interests of most people and creates an opportunity
to provide a variety of books that suits the customers’ tastes.

• Gathering a crowd
Collegiate Café, while it's open to everyone, is geared towards a specific market.
Its location serves as an opportunity to attract the eyes of customers who are most likely to
be intrigued by the café’s theme.
 • The power of social media
Collegiate Café will advertise through social media platforms to better reach
customers. The café’s Instagram-able interior may encourage customers to post on social
media sites and it may serve as a free advertising opportunity for the café.

THREATS
• Creative Competition
As previously mentioned, coffee shops and other beverage-focused shops are
slowly increasing in the area and there’s no stopping new ones from entering with their own
unique themes.

• Price Sensitivity
Prices of ingredients are always changing and any increase may affect the prices
of the products. But prices can only be increased up to a certain limit, otherwise it won’t be
reasonable. These propose threats of slow accumulation of profit and larger expenses

• Consumers’ Purchasing Power

Collegiate Café’s target market has limited sources of funds, especially students
who may consider cutting off on leisure expenses. It may affect their consumption of coffee
and pastries which may be considered a luxury.

V. DISTINCTIVE COMPETENCY
• Unique Business Concept
Our coffee brewing and preparation will rely on manual work by a barista and
equipment support to ensure the quality of the drinks. In Collegiate Café, it’s not just about
the food and the drinks but also the learning experience. Its mini library will assist young
students in achieving their goals by providing them with free, in-shop access to books that
meet their needs. Collegiate Café also boasts its student-friendly interior that will provide
customers with the perfect ambiance for finishing their due work, for recuperating, or for
sitting down and quietly read a good book.

• Mini Library
The mini library of Collegiate Café is one of a kind in the city. Its mini library mainly
shelves various textbooks and references on different programs to help college students in
their studies. All books are free for access for in-shop customers and are also available for
rent outside the café for seven (7) days at most. Aside from textbooks, its mini library will
also contain different genres of books for the best interest of any bookworm.
 • Accessibility
Collegiate Café derives its name from one of its primary consumers which are the
college students. With its proposed location, it is accessible to its market which serves as
an advantage for the café.

VI. STRATEGIC PLAN MATRIX

a. Products and Services
• Hot or Cold Series. Collegiate Café will offer coffee in different forms. Customers may
choose between drip or brewed coffee. Other choices include black coffee, americano,
cappuccino, and lattes in different variations, all of which are available as hot or iced.

• Frappe Series. Collegiate Café will also offer frappes in different flavors, some of which
are vanilla, macha, caramel macchiato, and fruit flavors.

• Chocolate Series. Collegiate Café also offers chocolate beverages, either hot or iced, for
customers who prefer non-coffee drinks.

• Add-ons. Add-ons are available for the drinks and may include pearls for frappe or toppings
such as whipped cream, crushed chocolate biscuits, and more.

• Baked Goodies. Coffee tastes better with accompaniment. Cookies and biscuits of
different variations are available to go with any drink. Variations of plain and flavored breads
will also be available.

• Rent-a-Book. Collegiate Café’s mini-library is accessible to all in-shop customers. For

customers who wish to continue their reading at home, several books will be available for
rent, charged for every day rented, and can be rented for seven (7) days at most.

b. Market
• Primary: Collegiate Café's primary target market, as the name implies, are college
students. This works as an advantage because Maasin City is home to various colleges
such as Saint Joseph College, College of Maasin, and more. The overall ambiance of
Collegiate Café will provide these striving college students energy, motivation and a place
where they can enjoy a cup of coffee to recuperate. In addition, our mini library mainly
shelves various textbooks and references on different programs to help college students in
their studies. Overall, Collegiate Café is tweaked for the best interest of college students in
the vicinity.
 • Secondary: Collegiate Café is also open for other students, local workers and residents,
coffee lovers and book lovers. Everyone needs a cup of coffee from time to time and
Collegiate Café will provide them with the best cup of coffee in town. Aside from textbooks,
our mini library will also contain different genres of books for the best interest of any
bookworm. The aesthetic interior also provides great ambiance for Instagram clicks. As
much as Collegiate Café is aimed towards college students, we also aim to be a place of
interaction between people of the same interests as well as a room for solace and
rejuvenation.

c. Business Model Canvas

• Value Proposition
Collegiate Café offers a wide range of beverages, coffee, and gourmet food for
every customer. Our products and services are excellent and of the quality expectations of
our customers. The company is dedicated to creativity and innovation in preparing the
products and services to fit the customers’ needs.
The gourmet food, coffee offerings and best reference of books to our customers
come along with the ultimate café dining experience in a modern, relaxed, and peaceful
environment.
• Customer Segment
Our gourmet food and coffee target a whole range of customers from as long as
they can access the café. The café most serve the college students and other regular
customers. The market is undifferentiated and any customer can buy coffee as long they
are coffee lovers and gourmet food of their choice. Our services quality features are a
unique brand of coffee, innovative services, quality beverages, and affordability offer the
best niche to the target market.

• Channels
The coffee shop is located in the heart of the city. This location is strategic and full
of prospective customer traffic. This will offer convenience to our customers and also play
a role in reducing cost in the value chain, which ultimately has an impact on prices of
gourmet food and coffee. The business intends to grow and have a way of serving their
client in a more convenient way by incorporating technology. This will also help in building
a competitive edge in the coffee lovers’ market.

• Customers Relationships
The coffee house is open for 8 hours every weekday of the week and provides its
customers with ample time to share their preferential drinks and foods in a modern, serene,
comfortable environment, customers are valued and given the best services they deserve.
The owner is the quality manager and all the customers’ suggestions are directed to his
office for action. The business expected to increase the bonding with its customers by
building a mobile application which can be used to check for available services as well as
foods and other integrated entertainments.

• Revenue Streams
Collegiate café had become a brand name among the coffee lovers with quality
beverages in the city. This increased the number of customers frequenting Collegiate café
making the sales per day increase. Collegiate Café is self-sufficient with enough cash flow
to cover all the contingent expenses. Most revenue is gained from the sales of coffee and
gourmet foods which are the main serving in Collegiate café. To add on more revenues,
the business intends to have rental books to the customers who wants to bring the book in
their own space.

• Key Resources
For Collegiate Café to be marketable, it needed key resources for value addition in
the value chain. The key resources to Collegiate Café are the customers who frequent the
café every day of their daily serving. Others are human resources, a machine for coffee
preparation, food kitchen, and fridge as well as brand name, and a new relationship.
 • Key Partners
For successful business and market leadership, beneficial and mutual partnerships
are inevitable. Collegiate Café has relationships with other coffee shops, suppliers, forum
and communities, specialized magazines, and influencers like bloggers. Each one of these
will be engaged for a specific purpose(s) which will add value to the services offered.

• Key Activities
Collegiate Café focuses mainly focus on producing quality coffee and beverages
which are up to the standards and meet the expectations of the customers. Collegiate Café
also does promotional activities to attract more customers and retain the old ones. It has
also created a well-established channel of giving feedback to the management hence
creating a loop of getting feedback.

• Cost Structure
For any production to be complete, there are costs associated with it. Collegiate
Café incurs both fixed costs and variable costs as well as acquisition cost for the machine
which will be appropriated in the final product. Fixed costs include payment of salaries and
rent. Variable costs include electricity bills, water bills, and others.

d. Competitive Advantage
The streets of Maasin City are bustling with various establishments that quickly adapt
to this generation's trends. Recently, there’s been great hype about beverages, especially
coffee and tea inclusive drinks. What sets Collegiate Café from all other coffee and beverage
focused shops is its unique theme. Compared to competitors, Collegiate Café offers a
learning experience along with its high-quality products. With our mini-library feature, student-
friendly interior, and barista-made coffee, Collegiate Café will surely pique the interest of
many. Even with the numerous competitors, Collegiate Café will sure to shine. Being the first
to present this kind of theme in Maasin City will be advantageous for Collegiate Café.

e. Long-Term Objectives
i. Financial
Table 2.1. START-UP COST & INVESTMENT
Pre-operating Expenses
A. Permits, Licenses and Other Fees 50,000.00
B. Marketing 100,000.00
C. Rent 180,000.00
Total 330,000.00
Table 2.2
Capital Expenditure
D. Leasehold Improvement 700,000.00
E. Equipment 140,000.00
F. Kitchen Utensils 30,000.00
G. Furniture & Fixtures 331,650.00
H. Café Technology 50,985.55
I. ISO 9001 300,000.00
J. Intangible Assets 39,663.00
Total CAPEX 1,592,298.55

Table 2.3
INVESTMENT & CAPITALIZATION
Pre-operating Expenses 330,000.00
CAPEX 1,592,298.00
Working Capital 1,418,424.80
Total Investment 3,340,722.80
Capital 3,000,000.00
Loan 340,722.80

Table 3. Demand Forecast Table

Estimated Total Q1 of
Customer Distribution Percentage
Population 2022
High School Students 2,000 15% 300
Senior High School Students 3,200 15% 480
College Students 10,000 60% 6000
Other Customers 1,300 10% 130
Total 16,500 100% 6,910

Table 4.1

HOT COFFEE 40% 2,764

Size Distribution Sales Volume Selling Price Revenue

Tall 50% 1382 100 138,200.00
Grande 35% 967 115 111,205.00
Venti 15% 415 130 53,950.00

TOTAL 100% 2764 303,355.00

 ICED COFFEE 25% 1,728

Size Distribution Sales Volume Selling Price Revenue

Tall 50% 864 100 86,375.00
Grande 35% 605 115 69,575.00
Venti 15% 259 130 33,670.00
TOTAL 100% 1728 189,620.00

FRAPPE 15% 1,037

Size Distribution Sales Volume Selling Price Revenue

Regular 70% 726 69 50,094.00
Large 30% 311 89 27,679.00
TOTAL 100% 1037 77,773.00

COFFEE BLEND 20% 1,382

Size Distribution Sales Volume Selling Price Revenue

Regular 70% 967 85 82,195.00
Large 30% 415 95 39,425.00
TOTAL 100% 1382 121,620.00

20% 1,382
Add-ons Distribution Sales Volume Selling Price Revenue
Espresso 40% 553 50 27,650.00
Milk 15% 207 50 10,350.00
Pearls 10% 138 10 1,380.00
Whipped
25% 346 60 20,760.00
Cream
Syrup 10% 138 20 2,760.00
TOTAL 100% 1382 62,900.00

Total Revenue (Drinks) = 755,268.00

Pastries:
Outsourcing Cost = 100,000.00 (3 months)
Projected Mark-up = 20%
Revenue = 100,000.00*1.20 = 120,000.00

Book Rentals:
Outsourcing Cost = 100,000.00
Rent: 50.00 per day
Demand: 10% = 691
Revenue = 50.00*691 = 34,550.00
 EXPECTED REVENUE = Php 909,818.00

Profitability objectives
To increase the revenue stream
• First Year : To gain 10% profit
• Second Year : To gain 20% profit
• Third Year : To gain 40% profit
• Fourth Year : To gain 60% profit
• Fifth Year : To double our Investment

ii. Marketing
Place. Initially, Collegiate Café will sell its products through its brick and mortar.
Eventually, the company will offer some of its products through its online store. This
approach served as a major integration of e-commerce into the company’s
strategies. Mobile apps will allow customers to conveniently place their orders online
so they could easily get their food and drinks at the café’s brick and mortar. This
part of Collegiate Café’s marketing mix shows how the firm adapts to changing
times, technologies, and market conditions.

Price. Collegiate Café will use a premium pricing strategy. In the marketing mix
context, this pricing strategy takes advantage of the behavioral tendency of
people to purchase more expensive products on the basis of the perceived
correlation between high price and high value. The company’s coffee products are
more expensive than most competing products. Through this pricing strategy,
Collegiate Café maintains its high-end specialty image. Still, the company strives to
develop and actually provide high quality products and satisfactory customer
experience in its coffeehouse. This part of the marketing mix directly relates to
Collegiate Café’s generic competitive strategy, in helping the business maintain its
premium brand image.

Product. This component of the marketing mix focuses on what the business offers
to customers. Collegiate Café will continue to innovate its product mix to capture
more of the food and beverage market. The company adds or modifies product lines,
with the aim of expanding its market reach and growing its market share.
The following are the main categories of Collegiate Café products:
▪ Coffee
▪ Coffee Blend
▪ Baked goods
▪ Frappuccino
▪ Other foods and beverages
 Promotion. Collegiate Café will promote its products through interpersonal relations
and communications, although advertising is also part of the promotional approach.
In this case, Collegiate Café’s promotional mix is as follows:
▪ Word-of-mouth marketing
▪ Advertising
▪ Sales promotions
The company also advertises its products through print media, and the
Internet. This part of Collegiate Café’s marketing mix shows the core significance of
word-of-mouth marketing, advertising, and the supporting roles of sales promotions
for business.

Operations: Collegiate Café will start to purchase, roasts, and sell quality coffee
beans and related products. Although the company was young, the potential for
growth was exponentially high. To maintain the quality standards and heritage, if
coffee was roasted a little longer compared to other coffee makers to maintain
intense flavor. The company will also acquire a modern kitchen and coffee machines
all with the aim of maintaining quality services and products.

iii. Production
One of the key strategies that Collegiate Café will follow as it will start its
operation is that of product differentiation offering differentiators such as premium
product mix, locations, coffee beverages reputation and supreme customer service that
translated to building a premium valued brand which is costly to imitate for competitors.

iv. HR
Collegiate Café is new in the coffee sale market and only had three employees.
In its growth trajectory much of human resource development needs to be done to
facilitate employee training and growth. The company has used human resource
policies to ensure that its employees are satisfied and motivated in their work. The
employee’s development encourages them to be ethical and customer oriented while
going about their work.

f. Strategic Actions
• Generic Strategy
Collegiate Café plans to use differentiation, emphasizing its mini-library feature to
accompany its coffee products and baked goodies. To keep things different from
competitors, Collegiate Café will offer various genres of books and educational references.
In relation, Collegiate Café will also use this feature to promote its student-friendly interior
to attract its primary target market, college students. Collegiate Café will also feature
barista-made coffee to differentiate itself from others. In order to boast these features,
 social media platforms will be utilized as a majority of the target markets use it on a regular
basis. Aesthetic photos and posters will be spread online and off to showcase its unique
offers, hopefully garner good comments to boost its reputation, and become the “talk of the
town” as it opens.

• Grand Strategy
Collegiate Café will use product development as its grand strategy. No matter how
unique a business starts, it will still become a “norm” once new competition flows in. In
order to keep its uniqueness, Collegiate Café will continuously introduce creative events
and promos that will emphasize the features it boasts. Coffee is a pretty basic product so
Collegiate Café plans to create seasonal, innovative variations of its coffee products. This
way, it will keep the customer’s interest while also setting itself apart from its competition.
Collegiate Café mini-library will also be featured in special and seasonal events. Collegiate
Café has a Rent-a-Book feature where customers are allowed to rent a book for seven (7)
days at most. To innovate this offer, there will be events where customers are allowed to
donate pre-loved books and educational references as well as an event where customers
can trade books. These seasonal and special events will be Collegiate Café’s effort on
innovating its offers.
In the long run, Collegiate Café will also consider using market development. There
are plans to set up an online store where customers can order for delivery. Instead of just
using social media advertisements, accounts will also be created specifically for the café
on various social media platforms (Facebook, Instagram, Twitter, etc.) where events and
special offers are advertised. This will allow Collegiate Café to reach a wider range of
customers.

Other specific strategic actions to be taken are as follows:

• Negotiate better deals. Collegiate café will be outsourcing its baked goods and its raw
coffee beans. While the focus of the strategies to be used for the cafe is to keep its
uniqueness, Collegiate Café will try to reduce costs so that customers can avail its
products at reasonable prices, considering that the primary market, college students,
will be concerned for their expenses. There will also be efforts to renegotiate Collegiate
Café’s rental agreement.
• Seasonal Events. As previously stated, there will be seasonal and special events
featuring both the products and the mini-library of Collegiate Café. Book events, such
as Trade Fairs, will be regularly scheduled throughout the year. Seasonal variations of
its coffee drinks will be introduced for a limited time. This will keep the customers’
interest piqued.
 • Appreciation for regulars. A loyalty card program will be implemented to appreciate
the café’s regular folks. The program may include special access to new products
and/or gifts and benefits once they reach a certain amount of purchase.
• Interior Design Maintenance. Collegiate Café boasts its offer of a student-friendly
interior where students may study comfortably. It will be important to keep the
ambiance in check as well as tweaking it for special events.
• Social Media Accounts. Online advertisements can only do so much. Without a
proper page for customers to check, interest may fade easily. So, Collegiate Café plans
to create its own social media accounts, mainly for Facebook and Instagram, where
the café’s promotional materials as well as announcements for events or promos will
be easily available to potential customers.

g. Measures for Success

Collegiate Café will consider its success based on the following:
○ Profitability. In five (5) years’ time, Collegiate Café should be able to double of the
amount invested initially.
○ Patronage. Within the first year of operation, Collegiate Café should be able to gain
several customers in the loyalty card program. This will prove that Collegiate Café
became the customers’ choice over substitutes.
○ Customer Satisfaction. Collegiate Café will conduct regular surveys on customers’
satisfaction both to the products and services. There should be positive feedback within
the first six (6) months of operation, then maintain and improve these results for the
following periods.