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Mocha Bplan

  1. 1. MOCHA INTERNATIONAL Mocha Café Chain Business Plan Blue Print Sherif Afifi 2008-2010
  2. 2. Table of Contents1.0 Executive Summary 1.1 Goals/Objectives 1.2 Vision, Mission and Core values 1.3 Keys to Success2.0 Company Summary 2.1 Company Ownership 2.2 Start-up Plan 2.3 Company Locations and Facilities3.0 Products 3.1 Product Description 3.2 Competitive Comparison 3.3 Sourcing 3.4 Technology 3.5 Future products4.0 Market Analysis Summary 4.1 Market Segmentation 4.2 Target Market Segment Strategy 4.2.1 Market Needs 4.2.2 Market Trends 4.2.3 Market Growth 4.3 Industry Analysis 4.3.1 Industry Participants 4.3.2 Competition and Buying Patterns 4.3.4 Main Competitors 2
  3. 3. 5.0 Strategy and Implementation Summary 5.1 Strategy 5.2 Value Proposition 5.3 Competitive Edge 5.4 Marketing Strategy 5.4.1 Positioning Statements 5.4.2 Pricing Strategy 5.4.3 Promotion Strategy 5.4.4 Distribution Strategy 5.4.5 Marketing Programs 5.5 Sales Strategy 5.5.1 Sales Forecast 5.5.2 Sales Programs 5.6 Strategic Alliances 5.7 Milestones6.0 Management Summary 6.1 Organizational Structure 6.2 Management Team 6.3 Management Team Gaps 6.4 Personnel Plan7.0 Financial Plan 7.1 Important Assumptions 7.2 Key Financial Indicators 7.3 Break-even Analysis 7.4 Projected Profit and Loss 7.5 Projected Cash Flow 7.6 Business Ratios 7.7 Exit-Strategy 3
  4. 4. 1. Executive Summary1.0 Executive SummaryA Drive- Thru Cafes in the most logical and accessible locations. The Drive-thru facilities are designed tohandle two-sided traffic and dispense customer-designed, specially ordered cups of premium coffees inless time than required for a visit to the locally owned cafe or one of the international chains.In addition to providing a quality product and an extensive menu of delicious items, to ensure customerawareness and loyalty.Mocha financial picture will be quite promising. Since Mocha is operating a cash business, the initial costis significantly less than many start-ups these days. The process is labor intensive and Mocha recognizesthat a higher level of talent is required. The financial investment in its employees will be one of the greatestdifferentiators between it and Mocha`s competition. There will be minimum inventory on hand so as tokeep the product fresh and to take advantage of price drops, when and if they should occur.Mocha chooses to become the local Drive-thru virgin of Starbucks Highlights 25,000,000 20,000,000 15,000,000 Sales Gross Margin 10,000,000 Net Profit 5,000,000 0 FY 2008 FY 2009 FY 2010 (5,000,000) 4
  5. 5. 1.1 Goals/Objectives strategic goals 1. To expand and diversify aggressively and offer above-average returns to shareholders 2. To become the leading company within the Food Service market segmentsMocha has established three firm objectives it wishes to achieve in the next three years: 1. Twenty five Drive-thru ,Three In-Line and Seven Mall locations by the end of the year 2010. 2. Gross Margin of 55% or more. 3. Net -Profit above 10% of Sales. 1.2 Vision“In five years, Mocha Café International will be well established in Saudi Arabia , Knownthroughout the KSA and expansion plans will be developed for company owned andfranchise locations in other GCC countries” Company MissionMocha Mission is three-fold, with each being as integral to our success. Provide customers the finest quality beverage in the most efficient time. .Operate and grow at a profitable rate through sound economic decisions. The high quality of attitude, fairness, understanding, and generosity between management, staff, customers, and vendors. Awareness of all these factors and the responsible actions that result will give our efforts a sense of purpose and meaning beyond our basic financial goals. 5
  6. 6. Core ValuesIntegrity - We act with honesty and sincerity in everything we do. We say whatwe mean, do what we say and build confidence in our team.Teamwork - We work towards common goals through open communication,mutual support and win-win attitudes. We respect our differences and build uponour strengths.Recognition - We ensure that peoples individual needs and successes aresupported and recognized.Innovation - We are open minded, challenging conventional thinking, improvingour processes and implementing new ideas faster than our competitors.Continuous Growth - We provide an environment where our colleagues and ourbusiness can flourish and grow.People Focus - We focus on our colleagues, customers and business associatesand they acknowledge us as preferred partners.1.3 Keys to SuccessThere are four keys to success in this business. 1. The greatest locations - visibility, high traffic pattern, convenient access. 2. The best products - freshest coffee beans, cleanest equipment, premium serving containers, consistent flavor. 3. The friendliest servers - cheerful, skilled, professional, articulate. 4. The finest reputation - word-of-mouth advertising. 6
  7. 7. 2. Company Summary2.0 Company SummaryMocha is a specialty beverage retailer. Mocha provides hot and cold beverages in a convenient and time-efficient way. Mocha provides its customers the ability to drive up and order from a trained Barista theirchoice of a custom blended Latte drink, freshly brewed coffee, or other beverage. Mocha is offering a highquality option to the fast-food and International Café.2.1 Company OwnershipMocha Café International is a Limited Liability Corporation. membership shares are currently owned by  Mr. Omar Sulaiman Al-Rajhi 35%  Mr. Abd Allah Al Fawzan 27.5%  Mr. Mahar Al-Rajhi 10%  Mr. Mohamed Salah El Khalil 27.5% 2.2 Start-up SummaryMochas start-up expenses total just SR 1,277,700. The majority of these expenses--will be used to buildthe first facility, pay deposits, and provide capital for six months of operating expenses, initial inventory andother one-time expenses.Start-up Expenses Cash for Invent.& Operating .Exp. ‫ر.س.‏111,110 ‏‬ ‫‏‬ Pre-Opening Exp. ‫ر.س.‏11,,,, ‏‬ ‫‏ ‏‬ Concept development ‫ر.س.‏111,110 ‏‬ ‫‏ ‏‬ Salaries ‫ر.س.‏111,113 ‏‬ ‫‏ ‏‬ Land Lease ‫ر.س.‏111,113 ‏‬ ‫‏ ‏‬ Total ‫ر.س.‏11,,,,7,0 ‏‬ ‫‏ ‏‬ 7
  8. 8. 2.3 Company Locations and FacilitiesMocha Café International will open ten-eleven drive-thru facilities, two- three mall facilities andone in- line facility on Riyadh over the first year. Twenty five or more drive-thru facilities will beplaced throughout KSA over the next three years.The demographic and physical requirements for a location are:  Traffic of 40,000+ on store side.  Traffic of 20,000 + for the malls.  Visible from roadway {Drive –Thru, In-Line}.  Easy access with light if less than 30,000 {Drive –Thru, In-Line}.  Suitable capacity for customers {In-Line }  Established retail shops in area. 8
  9. 9. 3.Products3.0 ProductsMocha International provides its patrons the finest hot and cold beverages, specializing inspecialty coffees and blended teas. In addition, Mocha will offer select domestic soft drinks,Italian sodas, fresh-baked pastries and cold cuts sandwiches. Mocha will add beverages suchas hot chocolate, frozen coffees, and more.3.1 Product DescriptionMocha provides its customers, whether at a Drive-thru facility or other facility, the ability tocustom order a coffee beverage that will be blended to their exact specifications. Each ofMochas Baristas will be trained in the fine art of brewing, blending, and serving the highestquality hot and cold beverages, with exceptional attention to detail.Besides coffees, Mocha will offer teas, Italian sodas, frozen coffee beverages, pastries, coldcuts sandwiches and other baked goods. Mocha will market premium items such as coffeemugs, T-shirts and sweatshirts, ball caps, and more.3.2 Competitive ComparisonMocha considers itself to be a player in the retail coffee house industry. However, it knows thatcompetition for its products range from soft drinks to other beverages.Mocha primary competition will come from three sources: 1. International coffee houses such as Starbucks, Costa Café and Dunkin Donuts. 2. Locally owned and operated cafes as Dr. Café, Coffee Day and Coffee Time etc…. 3. Fast food chains and convenience stores. 9
  10. 10. What will make Mocha Cafe stand out from all its competitors is:Mocha Café will be providing products in the most convenient and efficient way available--ei atone of Drive-thru shops. This separates Mocha from the competition in that its customers wontneed to find a parking place, wait in a long line, wait for a seat, and clean up the mess left by aprevious patron. Mocha customers can drive or walk up, order their beverage, receive and pay forthe beverage, and drive off.3.3 SourcingMocha purchases its coffees from LAWEIN. Mocha also has wholesale purchasingagreements for other products with Major Brands.Fulfillment equipment suppliers include Rezaza , joetrade and other suppliers.Mochas computer equipment is provided by Digicom3.4 TechnologyMocha will be using state-of-the-art, two-sided, Drive-thru facilities to provideconvenience and efficiency for its clientele.3.5 Future Products As seasons change, Mocha will be offering products that will enhance sales and satisfy its customers desires. During summer months, Mocha will subsidize lower hot beverage sales with frozen coffee drinks, as well as soft drinks, and other cold beverages such as FCB{carbonated slush beverage}and FUB{uncarbonated slush beverage} . Mocha will also have special beverages during seasons, such as Karkada, Qamar el din during Ramadan period.Mocha`s primary desire will be to listen to its customers to ascertain what they are looking formost, and provide it. 10
  11. 11. 4.Market Analysis Summary4.0 Market Analysis SummaryMocha International will focus on two markets: 1. The Daily Commuter- someone traveling to or from work, out shopping, looks for a place to hangout, delivering goods or services, or just out for a drive. 2. The Captive Consumer- someone who is in a restricted environment that does not allow convenient departure and return while searching for refreshments, or where refreshments stands are an integral part of the environment.4.1 Market SegmentationMocha will focus on two different market segments: Commuters and Captive Consumers. Toaccess both of these markets, Mocha has two different delivery systems. For the commuters,Mocha has the Drive-thru and Mall coffee house. For the captive consumer, Mocha has theMobile Cafe.Commuters are defined as any one or more individuals in a motorized vehicle traveling frompoint "A" to point "B." Mochas greatest concentration will be on commuters heading to or fromwork, out shopping, looking for a place to hangout, or those out on their lunch break.Captive Consumers would include those who are tethered to a campus environment, or in arestricted entry environment that does not allow free movement to and from. Examples wouldinclude high school and college campuses, where there is limited time between classes, andcorporate campuses where the same time constraints are involved.4.2 Target Market Segment StrategyMochas target market is the mobile individual who has more money than time, and excellenttaste in a choice of beverage, but no time to linger in a cafe. By locating the Drive-Thrus in hightraffic/high visibility areas, this unique--and abundant--consumer will seek Mocha out andbecome a regular guest. 11
  12. 12. 4.2.1 Market NeedsIslamic Legislation Continues To Impact Eating-out HabitsSaudi Arabia is a very strict Islamic country and is governed according to Islamic rules andlegislation. Consumption of alcohol is forbidden in the country, which has resulted in the non-existence of bars and pubs in the country. Furthermore, cinemas, entertainment clubs and otheractivity related clubs are illegal therefore dining out is the only source of entertainment outside ofthe home. However, the separation of men and women has a detrimental effect on theperformance of some types of consumer foodservice outlets, for example women are notallowed to consume meals in full-service restaurant outlets unless accompanied by a malemember of their family, which limits their ability to eat in such an outlet to either the evening orweekend.OutlookDespite anticipation of legal reform in Saudi Arabia and the implementation of more liberallegislation, it is not expected that such reform will take place in the near future, thus eating outand for example frequenting coffee shops outlets is expected to remain as one of the onlysources of entertainment over the forecast period. This is expected to have a positive effect onthe expansion of shopping centers in Saudi Arabia, as people will choose to gather in shoppingcenters and spend time with their friends and family.ImpactThe restrictions on various types of entertainment and the strict Islamic legislation in SaudiArabia have a positive impact on consumer foodservice overall, as the lack of cinemas, nightclubs, recreational parks and other such entertainment related establishments has increased thepopularity of consumer foodservice outlets such as cafés outlets, fast food outlets and full-service restaurants outlets. 12
  13. 13. Changes to Lifestyles Drive GrowthSimilarly to in other parts of the world, consumer lifestyles in Saudi Arabia have undergonechange, from traditional to modern. Increased exposure to expatriates, predominantly from theWestern world, has led to changes in lifestyle among the local population, with people adopting amore westernized lifestyle.The number of expatriates in the kingdom exceeds six million people comprised of Asianexpatriates, Arab expatriates and Western expatriates from Europe and the US. The diversity ofthe community in Saudi Arabia has contributed to the increase in popularity of sectors such asfull-service restaurants, for example outlets that serve Indian, Indonesian and other types ofAsian food, cafés/bars, fast food and 100% home delivery/take away.OutlookDespite the trend in Saudi Arabia towards nationalization, the economy of Saudi Arabia isexpected to remain dependent on foreign labor and therefore the change in lifestyles, towardsmodern lifestyles, is expected to accelerate over the forecast period.ImpactThe impact of the change in lifestyles of local consumers and the continued steady influx ofexpatriates are expected to be most obvious in certain sectors of consumer foodservice, such asfast food and full-service restaurants. Demand for food from such channels will come mainlyfrom Asian and Western expatriates and local consumers with high incomes.It is also expected that 100% home delivery/take away will witness much stronger growth overthe forecast period as a result of the change in lifestyles of local people who are expected toincreasingly favor freshly prepared meals from this channel. 13
  14. 14. Demographic Changes Boost Value Sales of Consumer FoodserviceIn 2005 Saudi Arabia experienced the second strongest demographic growth among thecountries in the Middle East. Since 1980 it has witnessed average annual growth in itspopulation of over 4%, so that in 2006 the total population was approximately 24,891 million.Saudi Arabia has a young population, as around 52% of the total population is comprised of 15-to-64-year-old citizens, many of whom work. This and the strong expatriate community in SaudiArabia are demographic factors that have contributed to the strong growth of fast food. Chainedfast food outlets are popular with young citizens, especially students, as they offer rapidlyserved, inexpensive meals and they provide an informal location in which young people canspend time with their friends. Most fast food outlets also contain a play area, which encouragesfamilies with children to visit fast food outlets rather than other types of consumer foodserviceoutlets such as full-service restaurants outlets.OutlookThe working age population of Saudi Arabia, namely 15-to-64-year old citizens, is expected toincrease from over 14 million in 2006 to well over 18 million in 2015 at an average annual growthrate of 3%. The population of Saudi Arabia is expected to remain relatively young and thus tofurther drive the growth of consumer foodservice. All sectors of consumer foodservice areexpected to record positive constant value growth over the forecast period owing to thesedemographic factors.ImpactWhile these demographic factors are expected to continue to have a positive impact on valuesales of consumer food service over the forecast period, they are expected to particularly benefitfast food and cafés/bars, owing to the popularity of chained fast food outlets and cafés outletsamong the younger generation and citizens of working age, who are keen to mix with differentcultures and adopt a Western lifestyle. 14
  15. 15. Innovation and Diversification Play a Central Role in CompetitionCompetition in consumer foodservice in Saudi Arabia is intense especially among multinationalbrands. The ever-increasing popularity of consumer foodservice is placing pressure on allplayers. Therefore, marketing and public relations play a major role in helping to increaseawareness of specific brands and to increase their value as a result.TV advertising and printed marketing alone is not sufficient to maintain a strong position inconsumer foodservice in Saudi Arabia due to the escalating competition. As a result companiesare forced to be more innovative with regard to their product offerings and to focus on the needsof consumers, for example by using more local ingredients and local flavors, as well as to targetspecific consumer groups.OutlookCompetition between the different players in consumer foodservice is expected to continue andto increase over the forecast period in line with the growth of consumer foodservice, owing toexpansion in the product portfolios of existing brands and the entrance of new brands.The number of shopping centers is also expected to increase over the forecast period, mainlydue to the extremely hot climate and this is also expected to affect the level of competitionbetween leading brands such as Starbucks, Burger King and McDonald’s and between localbrands such as Herfy and Mochachino, as they strive to establish greater presence.ImpactThe impact of competition on consumer foodservice is positive and is expected to be to thebenefit of consumers. As traditional methods of marketing such as TV advertising and printedadvertising is not enough, players are expected to become more innovative. For example,greater diversification of menu choices, adoption of local products and ingredients and moregenerous rewards and promotions will be key. Furthermore, renovation of outlets and the offer ofmore facilities such as access to the internet and home delivery will hugely contribute to thesuccess of a brand. 15
  16. 16. 4.2.2 Market TrendsConsumer Foodservice Achieves Rapid GrowthConsumer foodservice has grown rapidly in Saudi Arabia, driven by increases in the GDP, whichhave been fuelled by rising oil prices and which have led to higher disposable incomes for allcitizens. This growth has also been supported by the strong culture of eating out, which providescitizens with one of the few sources of entertainment, owing to the absence of bars and pubs inSaudi Arabia.Religious Tourism Has A Positive ImpactMore than two million people visit Saudi Arabia on an annual basis during the Hajj season. Inaddition, approximately another million people visit the country throughout the year to performUmrah with the highest number of visitors arriving during the holy month of Ramadan.The high number of visitors, whether for religious or other reasons, has a large and positiveeffect on the performance of consumer foodservice, especially sectors such as fast food, full-service restaurants and cafés/bars (owing to the popularity of coffee shops).Increasing Popularity of Shopping CentersThe number of large-scale developments for shopping centers in all regions of Saudi Arabiaincreased significantly over the review period. This has boosted the popularity of fast foodoutlets, coffee shop outlets and ice cream parlours in particular. Due to the extremely hotclimate, many people tend to stay indoors where there is air-conditioning, for example inshopping centers, which is a major reason for the increasing popularity of shopping centres inSaudi Arabia. The lack of entertainment options has also given shopping centres an edge, aspeople often opt to socialize in them. A large number of new shopping centers are expected toopen in Saudi Arabia over the forecast period4.2.3 Market GrowthOverall growth was seen throughout the foodservice industry in 2006 with increases in bothGeneral value sales for consumer foodservices as well as outlet numbers. Among the differentsectors, café are achieving the highest growth rates; however, other sectors Including fast foodand full-service restaurants continue to perform well. Strong expansion strategies for chainedoutlets to expand across the Kingdom has enabled them to capture a Wider market and aided inthe growth in value terms. 16
  17. 17. Table 1 Units, Transactions and Value Sales in Consumer Foodservice: 2001-2006 2001 2002 2003 2004 2005 2006Units 11,605.0 12,173.0 12,706.0 13,170.0 14,256.0 14,730.0Transactions (mn) 1,333.6 1,424.1 1,517.0 1,585.8 1,707.2 1,799.2SR million current prices 12,689.1 13,504.2 14,423.6 15,332.8 16,758.9 17,683.5SR million constant 12,689.1 13,473.2 14,306.6 15,158.3 16,450.4 17,186.2 pricesSource: Official statistics, trade associations, trade press, company research, store checks, trade interviews, Euromonitor International estimatesTable 2 Units, Transactions and Value Sales in Consumer Foodservice: % Growth 2001-2006% growth 2005/06 2001-06 CAGR 2001/06 TOTALUnits 3.3 4.9 26.9Transactions 5.4 6.2 34.9Value current prices 5.5 6.9 39.4Value constant prices 4.5 6.3 35.4Source: Official statistics, trade associations, trade press, company research, store checks, trade interviews, Euromonitor International estimates4.3 Industry AnalysisThe coffee industry has grown by tremendous amounts in K.S.A. over the past five years. Evengeneral coffee sales have increased with international brands such as Folgers, and MaxwellHouse reporting higher sales and greater profits.KSA is definitely a coffee country and the coffee industry is reaping the rewards.Consumer Foodservice by Independent Vs Chained Outlets: Units/Outlets 2006outlets Independent Chained TotalConsumer foodservice by type and 11,674 3,056 14,730 chained/independentCafés/bars 1,549 189 1,738Full-service restaurants 776 274 1,050Fast food 8,982 2,371 11,353100% home delivery/takeaway - 63 63Self-service cafeterias 8 22 30Street stalls/kiosks 359 137 496Pizza consumer foodservice 107 269 376Source: Official statistics, trade associations, trade press, company research, trade interviews, Euromonitor International estimates 17
  18. 18. Consumer Foodservice by Eat in Vs Takeaway 2006% value analysis Eat in Takeaway Total100% home delivery/takeaway - 100.0 100.0Cafés/bars 91.6 8.4 100.0Consumer foodservice by type and 73.6 26.4 100.0 chained/independentFast food 63.0 37.0 100.0Full-service restaurants 93.0 7.0 100.0Self-service cafeterias 74.6 25.4 100.0Street stalls/kiosks - 100.0 100.0Source: Official statistics, trade associations, trade press, company research, trade interviews, Euromonitor International estimatesConsumer Foodservice by Food Vs Drinks Split 2006% value analysis Food Drink Total100% home delivery/takeaway 95.0 5.0 100.0Cafés/bars 63.0 37.0 100.0Consumer foodservice by type and 73.1 26.9 100.0 chained/independentFast food 75.5 24.5 100.0Full-service restaurants 71.0 29.0 100.0Self-service cafeterias 70.5 29.5 100.0Street stalls/kiosks 55.0 45.0 100.0Source: Official statistics, trade associations, trade press, company research, trade interviews, Euromonitor International estimatesSales in Consumer Foodservice by Location 2001-2006% value 2001 2006Stand-alone 56.7 52.5Retail 21.6 25.6Travel 11.6 9.8Leisure 4.1 4.9Hotels 6.1 7.2Total 100.0 100.0Source: Official statistics, trade associations, trade press, company research, trade interviews, Euromonitor International estimates 18
  19. 19. Eating out patterns differ in Saudi ArabiaThe consumer foodservice industry increased by 36% in terms of outlets, 45% for transactionsand 44% in value sales over the review period. Eating out patterns differ from other countries inthe Middle East and North Africa. Islamic regulations forbid serving alcohol in any restaurants orpublic premises. Therefore, there are no bars or pubs in the Kingdom. Foodservice restaurantsare required to diversify by finding products other than alcohol to attract consumers. Mostrestaurants also try to adapt to the traditions and cultures in Saudi Arabia, by for example,having separate sections for men, women and families allowing the two groups to use differententrances to the outlet.Great potential in the Saudi Arabian industryGrowth of the consumer foodservice industry was dynamic over the review period. In valueterms, sales reached SR20 billion in 2004 demonstrating a constant CAGR of 7%. This wasmainly due to strong population growth. 8,400 units operating in 2004 generated 1 billiontransactions in the year. Eating out is a very important leisure activity among Saudi Arabians asthere is not much entertainment at night. Families like to go out to a restaurant, especially atweekends as a change from dining at home. As outings are restrained, and women are notallowed to go out alone, eating out becomes the main activity at the weekend along withshopping.Fast food popular among young Saudi Arabians and familiesFast food was the most popular area within the consumer foodservice industry during the reviewperiod. Fast food registered 45% growth in outlets, 51% and 57% in transactions and value salesrespectively. Fast food chains are very popular among the young generations, especiallystudents, who have a lot of spare time and like to meet at night for a quick meal. In addition,satellite TV channels are a great influence towards Western trends in fast food such asMcDonald’s and KFC. However, the boycotting of American companies affected their salesduring the review period, although they recovered in 2004. Families also prefer fast food to full-service restaurants, as the whole family can dine together. International brands are the mostpopular although they face stiff competition from Saudi chains and independent fast food. Saudichains offer Arabic food and are very popular especially in chicken fast food. Saudi investors areaggressive with regard to marketing and many Saudi chains now have a presence in Egypt,Lebanon, Kuwait, and countries in Asia.Saudi Government consolidates efforts to attract more touristsThere are more than 10,000 natural, historical and cultural sites in Saudi Arabia. The Kingdomalso plays host to 534 literary and story-telling events and 61 folklore festivals, including theannual Janadriyah festival. The Kingdom needs an additional 50,000 hotel rooms and 74,000furnished units by 2020 to meet the expected growth in the number of tourists as well as toservice domestic tourists. Saudi Arabians had been spending more than $25 billion on foreigntourism at the beginning of the review period, although many stopped visiting America andEurope for holidays, partly after 11 September 2001 and partly for economic reasons. The arrivalof more tourists is welcomed by the foodservice industry. When group’s of tourists come for theHajj, it is common for travel agencies to order menus from delivery outlets for the entire group forthe duration of the visit. 19
  20. 20. 4.3.1 Industry Participants Leading Chained Café/bars Brands by Number of Units 2006Brand Global Brand Owner outletsCone Zone Cone Zone Co 250Baskin-Robbins Dunkin Brands Inc 165House of Donuts House of Donuts 115Seattles Best Coffee Focus Brands Inc 71Mö venpick Mö venpick 55 Holding AGStarbucks Starbucks Corp 50 Restaurant CoDunkin Donuts Dunkin Brands Inc 34Consumer Foodservice by Independent Vs Chained Outlets: Units/Outlets 2006outlets Independent Chained Total chained/independentCafés/bars 1,549 189 1,7384.3.2 Competition and Buying PatternsThere are four general competitors in Mochas drive-thru market. They are the internationalspecialty beverage chains, such as Starbucks and Costa Café, local coffee houses--or cafes--with an established clientele and a quality product, fast food restaurants, and conveniencestores. There is a dramatic distinction among the patrons of each of these outlets.Patrons to a Starbucks, or to one of the local cafes, are looking for the "experience" of the coffeehouse. They want the ability to "design" their coffee, smell the fresh pastry, listen to the soothingmusic, and read the local paper or visit with an acquaintance. It is a relaxing, slow pacedenvironment.Patrons of the fast food restaurants or the convenience stores are just the opposite. They haveno time for idle chatter and are willing to over-pay for whatever beverage the machine can spitout, as long as its quick. They pay for their gas and they are back on the road to work. Althoughthey have the desire and good taste to know good from bad, time is more valuable to them. 20
  21. 21. Competitors to the Mobile Cafes on campuses would include fast food restaurants--assumingthey are close enough to the consumer that they can get there and back in the minimal allottedtime, vending machines, and company or school cafeterias. The consumers in this environmentare looking for quick, convenient, fairly priced, quality refreshment that will allow them topurchase the product and return to work, class, or other activity.4.3.4 Main CompetitorsWhen measuring head-to-head, direct competitors, we have found that there are none in thearea. Mocha will be the first double-sided, drive-thru coffee house in the area. However, there isstill significant competition from traditional coffee houses and other retailers.International Chains:Starbucks, one of the international leaders with 50 outlets across the kingdomSeattles Best Coffee from 71 franchised locations in fiscal year 2006. Dunkin Donuts with 34locationsMocha believes it has a significant competitive advantage over these chains because of thefollowing benefits:  Drive-thru Service  More Substantial Customer Service  Community Benefit  Selection  Higher Product QualityLocal Cafes:The toughest competitor for Mocha is the established locally owned cafe. Mocha knows thequality and pride that the local cafe has in the product purchase by their customers. Any localcafe has a customer base that is dedicate. The quality of beverages served at an established 21
  22. 22. cafe will surpass any of the international chains.The competitive edge Mocha has on the local cafes is based on the attributes of:  Drive-thru Service  Consistent Menu  Quality ProductDrive-thru Coffee Houses:There is not a drive-thru specialty beverage retailer with significant market presence in KSA. Theonly company with similar depth to that of Mocha is Dr. Cafe; However, Dr.Cafe has limited itscorporate footprint to Mid-Region and the Western Region.In the drive-thru specialty beverage market, Mocha has a competitive edge over the smallerretailers, and even Dr. Cafe , due to:  Consistent Menu  Quality Product  Supply Discounts  Valued Image  Greater Product SelectionFast Food and Convenience Stores :These are two industries where Mocha will experience a certain level of competition. Theinternational fast food chains and convenience store chains already serve coffee, soda, andsome breakfast foods. The international fast food chains obviously know the benefits and valueto customers of drive-thru. Mocha knows that within the specialty coffee and tea market, thequality of the products sold will be much greater than what can currently be purchased at fastfood and convenience stores. Mocha knows the quality of our products, along with the additionof domestic soft drinks and the ease of drive-thru, gives it a competitive edge over fast food andconvenience stores. 22
  23. 23. Other competition:The Mocha knows that once it has entered the market and established a presence, others will tryto follow. However, Mocha believes that the corporate missions and even the organizationaldesign will be imitated, but never duplicated. Mocha will constantly evaluate its products,locations, service, and corporate missions to ensure that it remains a leader in the specialtybeverage industry5.Strategy and Implementation Summary5.0 Strategy and Implementation SummaryMocha will penetrate the commuter and captive consumer markets by deploying Drive-thru ,mall,In-Line facilities and Mobile Cafes in the most logical and accessible locations. The Drive-thrusare designed to handle two-sided traffic and dispense customer-designed, specially orderedcups of specialty beverages in less time than required for a visit to the locally owned cafe or oneof the national chains.Mocha has identified its market as busy, mobile people whose time is already at a premium, butdesire a refreshing, high quality beverage or baked item while commuting to or from work.In addition to providing a quality product and an extensive menu of delicious items, to ensurecustomer awareness and loyalty, as well as positive word of mouth and four walls marketing.5.1 Strategy PyramidsMochas strategy is to show people that it has an excellent product and convenient accessibility. 23
  24. 24. To execute on this strategy, Mocha is placing the Drive-thrus and Mobile Cafes at easilyaccessible locations throughout the country. Mocha is pricing its product competitively andtraining the production staff to be among the best Baristas in the country. Then, through couponsand display ads at the locations,In so doing, Mocha has: 1. Provided a customer with a quality product at a competitive price. 2. Provided the customer with a more convenient method for obtaining their desired product. 3. Provided the customer direct -mailing programs and community involvement programs.5.3 Value PropositionThe Drive-thru facilities provide a substantial value proposition in that the customer does nothave to find a parking place, exit the vehicle, stand in line to order, wait for the beverages aheadof him to be produced, pay a premium price for average product, find a place to sit, clean up theprevious patrons mess, then enjoy their coffee ... assuming they have sufficient time to lingerover the cup.Mocha concept is that the customer drives up, places the order, receives a high quality productat a competitive price, and drives away, having wasted little time in the process.5.3 Competitive EdgeMochas competitive edge is simple. Mocha International provides a high quality product at aCompetitive price in a Drive-thru environment that saves time.5.4 Marketing StrategyFirst and foremost, Mocha will be placing its facilities in locations of very high visibility and greatease of access. They will be located on high traffic commuter routes and close to shoppingfacilities in order to catch customers going to or from work, or while they are out for lunch, or ona shopping expedition. The Drive-thrus are very unique and eye-catching, which will be abranding feature of its own. 24
  25. 25. Mocha will be implementing a low cost advertising/promotion campaign which could involvedrive-time radio, but not much more.Mocha Word of mouth has always proven to be the greatest advertising program a company caninstill.5.4.1 Positioning Statements  For busy, mobile people whose time is already at a premium, but desire a refreshing, high quality beverage or baked item while commuting to or from work.  For our most important target market who crave new coffeehouse option Mocha satisfies that need. We will offer the customer an experience unlike anything he has currently available5.4.2 Pricing StrategyMocha pricing will be comparable to the competition, but with the value-added feature ofimmediate, drive-thru service and convenience.Our food and drinks options are priced to give us an attractive margin while at the same timeoffering value to the consumer. We want repeat business. We also want the experience toremain fresh5.4.3 Promotion StrategyWe will promote our company name almost more than the product itself, because to besuccessful we have to stand for brand –name integrity and excellent menu offerings. therefore ,our promotion strategy including focusing on 1. Local radio concentrating on drive time radio Mocha will experiment with different stations, keeping careful track of results 2. Mocha expects the facilities and signage to be a substantial portion of our advertising. However, in the start-up phase, Mocha needs to let people know where to look for the facilities. 25
  26. 26. 5.4.4 Distribution StrategyMocha will locate Drive-thru facilities in high traffic areas of the city where it knows workingcommuters will be passing.Mocha will also make arrangements for the Café units to be at as many Malls , Residential,businesses areas and events as possible every year, so that new customers, those who come infrom areas where Mocha may not have a Drive-thru facility, can be reached and those who didnthave the time to stop5.4.5 Marketing ProgramsAdvertising and Promotion :In the first year, Mocha plans to spend S.R.98, 000 on advertising and promotion, after theopening of the first Drive-thru. This would not be considered a serious advertising budget for anybusiness, but Mocha also believes that word-of-mouth advertising and free beverage couponswill be better ways to drive people to the first and second locations.In the second year, Mocha is increasing the budget to S.R. 236, 000, since it will need topromote several locations, with particular emphasis on announcing these openings and all theother locations. .In the third year, Mocha will increase its advertising and promotion budget to S.R.418, 000, withthe majority of the advertising budget being spent on drive time radio. As in the previous years .5.5 Sales StrategyThere will be several sales strategies put into place, including posting specials on high-profititems at the drive-up window. The Baristas will also hand out free drink coupons to those whohave purchased a certain number of cups or something similar. Mocha will also develop windowsales techniques such as the Baristas asking if the customer would like a fresh-baked item withtheir coffee. 26
  27. 27. 5.5.1 Sales ForecastIn the first year, Mocha anticipates having 7 Drive-thru locations, 2 Mall locations and one In –Line location in operation. The first location will open in the first month of the year 2008 and befully operational beginning on the 1st day of July2008. The second Drive-thru will open 1 monthlater. Mocha is building in a certain amount of ramp-up for each facility while commuters becomefamiliar with its presence. The Outlets will generate 365,000 Transactions in the first year ofoperation, or approximately SR. 4.9 million in revenue.In the second year, Mocha will add two more Outlets and, in the third year, Mocha will add anadditional 13 outlets with different facilities. The addition of these facilities will increase therevenue from a total of over 858000 Transactions or SR .11.8 million in the second year and1,469,600 Transactions or just over Sr.20 million in the third.Mocha is also showing revenue from the commerce portion of our website, where it will sell"Mocha" t-shirts, sweatshirts, insulated coffee mugs, pre-packaged coffee beans, and otherpremium items. Mocha is not expecting this to be a significant profit center, but it is an integralpart of the marketing plan -- as a function of developing our brand and building productawareness. Mocha expects revenues from this portion, to begin in the second fiscal year, toreach SR. 44000 initially, and SR.82, 500 in the third fiscal year.Total first year unit sales should reach 365,000, equating to revenues of SR.4, 905,000. Thesecond year will see unit sales increase to 858,000, or SR.11, 828,000. The third year, with theaddition of such a significant number of outlets, we will see unit sales increase to 1,469,600,equating to gross sales revenue of SR.20,922,600 million 27
  28. 28. Sales Yearly Website Sales/Premium Items 75,111,111‫‏ ر.س .‏‬ ‫‏‬ In-Line Cafe #1,#2,#3 Mall Cafe #5 ,#6 ,#7 71,111,111‫‏ ر.س .‏‬ ‫‏‬ Mall Cafe #3 ,#4 Mall Cafe #1 ,#2 Drive-thrus #23, #24, & #25 05,111,111‫‏ ر.س .‏‬ ‫‏‬ Drive-thrus #20, #21, & #22 Drive-thrus #17, #18, & #19 Drive-thrus #14, #15, & #16 01,111,111‫‏ ر.س .‏‬ ‫‏‬ Drive-thrus #11, #12, & #13 Drive-thrus #8, #9, & #10 5,111,111‫‏ ر.س. ‏‬ ‫‏‬ Drive-thrus #6 & #7 Drive-thru #5 Drive-thru #4 1‫‏ ر.س.‏‬ ‫‏‬ Drive-thru #3 10 outlets 12 outlets 13 outlets Drive-thru #2 FY 2008 FY 2009 FY 2010 Drive-thru #1Sales Forecast FY 2008 FY 2009 FY 2010TransactionsDrive-thru #1 54,000 64,800 74,520Drive-thru #2 44,000 52,800 60,720Drive-thru #3 40,000 48,000 55,200Drive-thru #4 36000 43,200 49,680Drive-thru #5 20000 24,000 27,600Drive-thrus #6 & #7 56000 67,200 77,280Drive-thrus #8, #9, & #10 0 132000 151,800Drive-thrus #11, #12, & #13 0 108000 124,200Drive-thrus #14, #15, & #16 0 96000 110,400Drive-thrus #17, #18, & #19 0 0 132,000Drive-thrus #20, #21, & #22 0 0 120,000Drive-thrus #23, #24, & #25 0 0 108,000 28
  29. 29. ‫2#,1# ‪Mall Cafe‬‬ ‫000,07‬ ‫000,48‬ ‫006,69‬‫4#,3# ‪Mall Cafe‬‬ ‫0‬ ‫000,06‬ ‫000,96‬‫7#,6#,5# ‪Mall Cafe‬‬ ‫0‬ ‫0‬ ‫000,09‬‫3#,2#,1# ‪In-Line Cafe‬‬ ‫00054‬ ‫00047‬ ‫001,511‬‫‪Website Sales/Premium‬‬‫‪Items‬‬ ‫0‬ ‫000,4‬ ‫005,7‬‫‪Total Transactions‬‬ ‫000,563‬ ‫000,858‬ ‫006,964,1‬‫‪Unit Prices‬‬ ‫8002 ‪FY‬‬ ‫9002 ‪FY‬‬ ‫0102 ‪FY‬‬‫1# ‪Drive-thru‬‬ ‫ر.س.‏11.30 ‏‬ ‫‏‬ ‫ر.س.‏15.30 ‏‬ ‫‏‬ ‫ر.س.‏11.00 ‏‬ ‫‏‬‫2# ‪Drive-thru‬‬ ‫ر.س.‏11.30 ‏‬ ‫‏‬ ‫ر.س.‏15.30 ‏‬ ‫‏‬ ‫ر.س.‏11.00 ‏‬ ‫‏‬‫3# ‪Drive-thru‬‬ ‫ر.س.‏11.30 ‏‬ ‫‏‬ ‫ر.س.‏15.30 ‏‬ ‫‏‬ ‫ر.س.‏11.00 ‏‬ ‫‏‬‫4# ‪Drive-thru‬‬ ‫ر.س.‏11.30 ‏‬ ‫‏‬ ‫ر.س.‏15.30 ‏‬ ‫‏‬ ‫ر.س.‏11.00 ‏‬ ‫‏‬‫5# ‪Drive-thru‬‬ ‫ر.س.‏11.30 ‏‬ ‫‏‬ ‫ر.س.‏15.30 ‏‬ ‫‏‬ ‫ر.س.‏11.00 ‏‬ ‫‏‬‫7# & 6# ‪Drive-thrus‬‬ ‫ر.س.‏11.30 ‏‬ ‫‏‬ ‫ر.س.‏15.30 ‏‬ ‫‏‬ ‫ر.س.‏11.00 ‏‬ ‫‏‬‫01# & ,9# ,8# ‪Drive-thrus‬‬ ‫ر.س.‏11.1 ‏‬ ‫‏‬ ‫ر.س.‏15.30 ‏‬ ‫‏‬ ‫ر.س.‏11.00 ‏‬ ‫‏‬‫& ,21# ,11# ‪Drive-thrus‬‬‫31#‬ ‫ر.س.‏11.1 ‏‬ ‫‏‬ ‫ر.س.‏15.30 ‏‬ ‫‏‬ ‫ر.س.‏11.00 ‏‬ ‫‏‬‫& ,51# ,41# ‪Drive-thrus‬‬‫61#‬ ‫ر.س.‏11.1 ‏‬ ‫‏‬ ‫ر.س.‏15.30 ‏‬ ‫‏‬ ‫ر.س.‏11.00 ‏‬ ‫‏‬‫& ,81# ,71# ‪Drive-thrus‬‬‫91#‬ ‫ر.س.‏11.1 ‏‬ ‫‏‬ ‫ر.س.‏11.1 ‏‬ ‫‏‬ ‫ر.س.‏11.00 ‏‬ ‫‏‬‫& ,12# ,02# ‪Drive-thrus‬‬‫22#‬ ‫ر.س.‏11.1 ‏‬ ‫‏‬ ‫ر.س.‏11.1 ‏‬ ‫‏‬ ‫ر.س.‏11.00 ‏‬ ‫‏‬‫& ,42# ,32# ‪Drive-thrus‬‬‫52#‬ ‫ر.س.‏11.1 ‏‬ ‫‏‬ ‫ر.س.‏11.1 ‏‬ ‫‏‬ ‫ر.س.‏11.00 ‏‬ ‫‏‬‫2#,1# ‪Mall Cafe‬‬ ‫ر.س.‏11.00 ‏‬ ‫‏‬ ‫ر.س.‏15.00 ‏‬ ‫‏‬ ‫ر.س.‏11.50 ‏‬ ‫‏‬‫4#,3# ‪Mall Cafe‬‬ ‫ر.س.‏11.1 ‏‬ ‫‏‬ ‫ر.س.‏15.00 ‏‬ ‫‏‬ ‫ر.س.‏11.50 ‏‬ ‫‏‬‫7#,6#,5# ‪Mall Cafe‬‬ ‫ر.س.‏11.1 ‏‬ ‫‏‬ ‫ر.س.‏11.1 ‏‬ ‫‏‬ ‫ر.س.‏11.50 ‏‬ ‫‏‬‫3#,2#,1# ‪In-Line Cafe‬‬ ‫ر.س.‏11.50 ‏‬ ‫‏‬ ‫ر.س.‏11.50 ‏‬ ‫‏‬ ‫ر.س.‏11.50 ‏‬ ‫‏‬‫‪Website Sales/Premium‬‬‫‪Items‬‬ ‫ر.س.‏11.1 ‏‬ ‫‏‬ ‫ر.س.‏11.00 ‏‬ ‫‏‬ ‫ر.س.‏11.00 ‏‬ ‫‏‬‫‪A/C‬‬ ‫ر.س.‏13.38 ‏‬ ‫‏‬ ‫ر.س.‏13.38 ‏‬ ‫‏‬ ‫ر.س.‏14.08 ‏‬ ‫‏‬ ‫92‬
  30. 30. ‫‪Sales‬‬ ‫8002 ‪FY‬‬ ‫9002 ‪FY‬‬ ‫0102 ‪FY‬‬ ‫‪10 outlets‬‬ ‫‪23 outlets‬‬ ‫‪35 outlets‬‬‫1# ‪Drive-thru‬‬ ‫ر.س.‏111,71, ‏‬ ‫‏‬ ‫ر.س.‏114,0,4 ‏‬ ‫‏‬ ‫ر.س.‏147,301,0 ‏‬ ‫‏‬‫2# ‪Drive-thru‬‬ ‫ر.س.‏111,7,5 ‏‬ ‫‏‬ ‫ر.س.‏114,70, ‏‬ ‫‏‬ ‫ر.س.‏141,154 ‏‬ ‫‏‬‫3# ‪Drive-thru‬‬ ‫ر.س.‏111,175 ‏‬ ‫‏‬ ‫ر.س.‏111,400 ‏‬ ‫‏‬ ‫ر.س.‏114,7,, ‏‬ ‫‏‬‫4# ‪Drive-thru‬‬ ‫ر.س.‏111,400 ‏‬ ‫‏‬ ‫ر.س.‏117,345 ‏‬ ‫‏‬ ‫ر.س.‏175,520 ‏‬ ‫‏‬‫5# ‪Drive-thru‬‬ ‫ر.س.‏111,107 ‏‬ ‫‏‬ ‫ر.س.‏111,073 ‏‬ ‫‏‬ ‫ر.س.‏110,043 ‏‬ ‫‏‬‫7# & 6# ‪Drive-thrus‬‬ ‫ر.س.‏111,47, ‏‬ ‫‏‬ ‫ر.س.‏117,,12 ‏‬ ‫‏‬ ‫ر.س.‏172,041,0 ‏‬ ‫‏‬‫01# & ,9# ,8# ‪Drive-thrus‬‬ ‫ر.س.‏1 ‏‬ ‫‏‬ ‫ر.س.‏111,74,,0 ‏‬ ‫‏‬ ‫ر.س.‏117,570,7 ‏‬ ‫‏‬‫31# & ,21# ,11# ‪Drive-thrus‬‬ ‫ر.س.‏1 ‏‬ ‫‏‬ ‫ر.س.‏111,450,0 ‏‬ ‫‏‬ ‫ر.س.‏114,43,,0 ‏‬ ‫‏‬‫61# & ,51# ,41# ‪Drive-thrus‬‬ ‫ر.س.‏1 ‏‬ ‫‏‬ ‫ر.س.‏111,027,0 ‏‬ ‫‏‬ ‫ر.س.‏110,505,0 ‏‬ ‫‏‬‫91# & ,81# ,71# ‪Drive-thrus‬‬ ‫ر.س.‏1 ‏‬ ‫‏‬ ‫ر.س.‏1 ‏‬ ‫‏‬ ‫ر.س.‏111,404,0 ‏‬ ‫‏‬‫22# & ,12# ,02# ‪Drive-thrus‬‬ ‫ر.س.‏1 ‏‬ ‫‏‬ ‫ر.س.‏1 ‏‬ ‫‏‬ ‫ر.س.‏111,140,0 ‏‬ ‫‏‬‫52# & ,42# ,32# ‪Drive-thrus‬‬ ‫ر.س.‏1 ‏‬ ‫‏‬ ‫ر.س.‏1 ‏‬ ‫‏‬ ‫ر.س.‏111,705,0 ‏‬ ‫‏‬‫2#,1# ‪Mall Cafe‬‬ ‫ر.س.‏111,142 ‏‬ ‫‏‬ ‫ر.س.‏111,407,0 ‏‬ ‫‏‬ ‫ر.س.‏111,200,0 ‏‬ ‫‏‬‫4#,3# ‪Mall Cafe‬‬ ‫ر.س.‏1 ‏‬ ‫‏‬ ‫ر.س.‏111,1,4 ‏‬ ‫‏‬ ‫ر.س.‏111,531,0 ‏‬ ‫‏‬‫7#,6#,5# ‪Mall Cafe‬‬ ‫ر.س.‏1 ‏‬ ‫‏‬ ‫ر.س.‏1 ‏‬ ‫‏‬ ‫ر.س.‏111,153,0 ‏‬ ‫‏‬‫3#,2#,1# ‪In-Line Cafe‬‬ ‫ر.س.‏111,5,0 ‏‬ ‫‏‬ ‫ر.س.‏111,100,0 ‏‬ ‫‏‬ ‫ر.س.‏115,07,,0 ‏‬ ‫‏‬‫‪Website Sales/Premium‬‬‫‪Items‬‬ ‫ر.س.‏1 ‏‬ ‫‏‬ ‫ر.س.‏111,00 ‏‬ ‫‏‬ ‫ر.س.‏115,74 ‏‬ ‫‏‬ ‫ر.س.‏‬ ‫‏‬‫‪Total Sales‬‬ ‫111,512,0 ‏‬ ‫ر.س.‏111,474,00 ‏‬ ‫‏‬ ‫ر.س.‏110,772,17 ‏‬ ‫‏‬‫‪Direct Unit Costs‬‬ ‫8002 ‪FY‬‬ ‫9002 ‪FY‬‬ ‫0102 ‪FY‬‬‫1# ‪Drive-thru‬‬ ‫ر.س.‏71.0 ‏‬ ‫‏‬ ‫ر.س.‏,2.5 ‏‬ ‫‏‬ ‫ر.س.‏51.0 ‏‬ ‫‏‬‫2# ‪Drive-thru‬‬ ‫ر.س.‏71.0 ‏‬ ‫‏‬ ‫ر.س.‏,2.5 ‏‬ ‫‏‬ ‫ر.س.‏51.0 ‏‬ ‫‏‬‫3# ‪Drive-thru‬‬ ‫ر.س.‏71.0 ‏‬ ‫‏‬ ‫ر.س.‏,2.5 ‏‬ ‫‏‬ ‫ر.س.‏51.0 ‏‬ ‫‏‬‫4# ‪Drive-thru‬‬ ‫ر.س.‏71.0 ‏‬ ‫‏‬ ‫ر.س.‏,2.5 ‏‬ ‫‏‬ ‫ر.س.‏51.0 ‏‬ ‫‏‬‫5# ‪Drive-thru‬‬ ‫ر.س.‏71.0 ‏‬ ‫‏‬ ‫ر.س.‏,2.5 ‏‬ ‫‏‬ ‫ر.س.‏51.0 ‏‬ ‫‏‬‫7# & 6# ‪Drive-thrus‬‬ ‫ر.س.‏71.0 ‏‬ ‫‏‬ ‫ر.س.‏,2.5 ‏‬ ‫‏‬ ‫ر.س.‏51.0 ‏‬ ‫‏‬‫01# & ,9# ,8# ‪Drive-thrus‬‬ ‫ر.س.‏11.1 ‏‬ ‫‏‬ ‫ر.س.‏,2.5 ‏‬ ‫‏‬ ‫ر.س.‏51.0 ‏‬ ‫‏‬‫31# & ,21# ,11# ‪Drive-thrus‬‬ ‫ر.س.‏11.1 ‏‬ ‫‏‬ ‫ر.س.‏,2.5 ‏‬ ‫‏‬ ‫ر.س.‏51.0 ‏‬ ‫‏‬‫61# & ,51# ,41# ‪Drive-thrus‬‬ ‫ر.س.‏11.1 ‏‬ ‫‏‬ ‫ر.س.‏,2.5 ‏‬ ‫‏‬ ‫ر.س.‏51.0 ‏‬ ‫‏‬ ‫03‬
  31. 31. ‫91# & ,81# ,71# ‪Drive-thrus‬‬ ‫ر.س.‏11.1 ‏‬ ‫‏‬ ‫ر.س.‏11.1 ‏‬ ‫‏‬ ‫ر.س.‏51.0 ‏‬ ‫‏‬‫22# & ,12# ,02# ‪Drive-thrus‬‬ ‫ر.س.‏11.1 ‏‬ ‫‏‬ ‫ر.س.‏11.1 ‏‬ ‫‏‬ ‫ر.س.‏51.0 ‏‬ ‫‏‬‫52# & ,42# ,32# ‪Drive-thrus‬‬ ‫ر.س.‏11.1 ‏‬ ‫‏‬ ‫ر.س.‏11.1 ‏‬ ‫‏‬ ‫ر.س.‏51.0 ‏‬ ‫‏‬‫2#,1# ‪Mall Cafe‬‬ ‫ر.س.‏71.0 ‏‬ ‫‏‬ ‫ر.س.‏,2.5 ‏‬ ‫‏‬ ‫ر.س.‏51.0 ‏‬ ‫‏‬‫4#,3# ‪Mall Cafe‬‬ ‫ر.س.‏11.1 ‏‬ ‫‏‬ ‫ر.س.‏,2.5 ‏‬ ‫‏‬ ‫ر.س.‏51.0 ‏‬ ‫‏‬‫7#,6#,5# ‪Mall Cafe‬‬ ‫ر.س.‏11.1 ‏‬ ‫‏‬ ‫ر.س.‏,2.5 ‏‬ ‫‏‬ ‫ر.س.‏51.0 ‏‬ ‫‏‬‫3#,2#,1# ‪In-Line Cafe‬‬ ‫ر.س.‏71.0 ‏‬ ‫‏‬ ‫ر.س.‏,2.5 ‏‬ ‫‏‬ ‫ر.س.‏51.0 ‏‬ ‫‏‬‫‪Website Sales/Premium‬‬‫‪Items‬‬ ‫ر.س.‏11.1 ‏‬ ‫‏‬ ‫ر.س.‏15.0 ‏‬ ‫‏‬ ‫ر.س.‏15.0 ‏‬ ‫‏‬ ‫‏‬ ‫8002 ‪FY‬‬ ‫9002‏ ‪FY‬‬ ‫‏‬ ‫0102 ‪FY‬‬‫‪Direct Cost of Sales‬‬‫1# ‪Drive-thru‬‬ ‫ر.س.‏301,573 ‏‬ ‫‏‬ ‫ر.س.‏510,,43 ‏‬ ‫‏‬ ‫ر.س.‏520,150 ‏‬ ‫‏‬‫2# ‪Drive-thru‬‬ ‫ر.س.‏144,007 ‏‬ ‫‏‬ ‫ر.س.‏007,503 ‏‬ ‫‏‬ ‫ر.س.‏053,,03 ‏‬ ‫‏‬‫3# ‪Drive-thru‬‬ ‫ر.س.‏114,107 ‏‬ ‫‏‬ ‫ر.س.‏105,047 ‏‬ ‫‏‬ ‫ر.س.‏102,333 ‏‬ ‫‏‬‫4# ‪Drive-thru‬‬ ‫ر.س.‏17,,007 ‏‬ ‫‏‬ ‫ر.س.‏012,,57 ‏‬ ‫‏‬ ‫ر.س.‏005,113 ‏‬ ‫‏‬‫5# ‪Drive-thru‬‬ ‫ر.س.‏110,170 ‏‬ ‫‏‬ ‫ر.س.‏147,300 ‏‬ ‫‏‬ ‫ر.س.‏142,000 ‏‬ ‫‏‬‫7# & 6# ‪Drive-thrus‬‬ ‫ر.س.‏170,,33 ‏‬ ‫‏‬ ‫ر.س.‏040,010 ‏‬ ‫‏‬ ‫ر.س.‏005,,00 ‏‬ ‫‏‬‫01# & ,9# ,8# ‪Drive-thrus‬‬ ‫ر.س.‏1 ‏‬ ‫‏‬ ‫ر.س.‏101,44, ‏‬ ‫‏‬ ‫ر.س.‏123,402 ‏‬ ‫‏‬‫31# & ,21# ,11# ‪Drive-thrus‬‬ ‫ر.س.‏1 ‏‬ ‫‏‬ ‫ر.س.‏10,,000 ‏‬ ‫‏‬ ‫ر.س.‏100,05, ‏‬ ‫‏‬‫61# & ,51# ,41# ‪Drive-thrus‬‬ ‫ر.س.‏1 ‏‬ ‫‏‬ ‫ر.س.‏170,3,5 ‏‬ ‫‏‬ ‫ر.س.‏172,,00 ‏‬ ‫‏‬‫91# & ,81# ,71# ‪Drive-thrus‬‬ ‫ر.س.‏1 ‏‬ ‫‏‬ ‫ر.س.‏1 ‏‬ ‫‏‬ ‫ر.س.‏110,42, ‏‬ ‫‏‬‫22# & ,12# ,02# ‪Drive-thrus‬‬ ‫ر.س.‏1 ‏‬ ‫‏‬ ‫ر.س.‏1 ‏‬ ‫‏‬ ‫ر.س.‏111,07, ‏‬ ‫‏‬‫52# & ,42# ,32# ‪Drive-thrus‬‬ ‫ر.س.‏1 ‏‬ ‫‏‬ ‫ر.س.‏1 ‏‬ ‫‏‬ ‫ر.س.‏110,350 ‏‬ ‫‏‬‫2#,1# ‪Mall Cafe‬‬ ‫ر.س.‏110,070 ‏‬ ‫‏‬ ‫ر.س.‏140,015 ‏‬ ‫‏‬ ‫ر.س.‏130,045 ‏‬ ‫‏‬‫4#,3# ‪Mall Cafe‬‬ ‫ر.س.‏1 ‏‬ ‫‏‬ ‫ر.س.‏117,453 ‏‬ ‫‏‬ ‫ر.س.‏150,,00 ‏‬ ‫‏‬‫7#,6#,5# ‪Mall Cafe‬‬ ‫ر.س.‏1 ‏‬ ‫‏‬ ‫ر.س.‏1 ‏‬ ‫‏‬ ‫ر.س.‏115,005 ‏‬ ‫‏‬‫3#,2#,1# ‪In-Line Cafe‬‬ ‫ر.س.‏112,1,7 ‏‬ ‫‏‬ ‫ر.س.‏14,,000 ‏‬ ‫‏‬ ‫ر.س.‏553,020 ‏‬ ‫‏‬‫‪Website Sales/Premium‬‬‫‪Items‬‬ ‫ر.س.‏1 ‏‬ ‫‏‬ ‫ر.س.‏111,07 ‏‬ ‫‏‬ ‫ر.س.‏15,,40 ‏‬ ‫‏‬‫‪Subtotal Direct Cost of Sales‬‬ ‫ر.س.‏337,,20,7 ‏‬ ‫‏‬ ‫ر.س.‏270,070,5 ‏‬ ‫‏‬ ‫ر.س.‏010,024,4 ‏‬ ‫‏‬ ‫13‬
  32. 32. 5.5.2 Sales ProgramsCorporate Tasting Events- Mocha plans to host tasting events for customers on a quarterlybasis. Each quarter, at the introduction of each season, Mocha will be adjusting its menu toreflect the changes in the flavors served.Drink Coupons- We will be giving away drink coupons as awards. This encourages the personto come in for their free beverage and bring a friend or buy a baked item or a package of ourpremium coffee. The Drive Thru units will also be distributing coupons for special menu items ornew product introductions.5.6 Strategic AlliancesMocha will depend heavily on alliances with its core suppliers and we will always search for newalliances with other brands, as well as our alliances with the Drive-thru facility manufacturers andconsumable products providers. However, we will always be looking for better quality products,more favorable pricing, or more timely delivery from other potential alliances.5.7 MilestonesThe Milestone table reflects critical dates for launching the first Drive-thru and subsequent Drive-thrus, as well as deployment of the other units. Mocha also defines our website launch, andother key markers that will help us measure our success in time and accomplishment. 32
  33. 33. Milestone Start Date End Date Budget ManagerOpen First Drive-thru 1/11/2007 1/1/2008 ‫ر.س.‏111,550 ‏‬ ‫‏‬ OpsOpen Second Drive-thru 1/12/2007 1/2/2008 ‫ر.س.‏111,550 ‏‬ ‫‏‬ OpsOpen Third Drive-thru 1/12/2007 1/3/2008 ‫ر.س.‏111,550 ‏‬ ‫‏‬ OpsOpen Fourth Drive-thru 1/3/2008 1/4/2008 ‫ر.س.‏111,550 ‏‬ ‫‏‬ OpsOpen Fifth Drive-thru 1/5/2008 1/6/2008 ‫ر.س.‏111,550 ‏‬ ‫‏‬ OpsOpen Drive-thrus 6 and 7 1/6/2008 1/8/2008 ‫ر.س.‏111,103 ‏‬ ‫‏‬ OpsOpen Drive-thrus 8, 9 and 10 1/10/2008 1/1/2009 ‫ر.س.‏111,500 ‏‬ ‫‏‬ OpsOpen Mall Cafe #1,#2 1/4/2008 1/7/2008 ‫ر.س.‏111,123 ‏‬ ‫‏‬ OpsExpand to Eastern Region 1/1/2009 1/3/2009 ‫ر.س.‏111,103 ‏‬ ‫‏‬ OpsLight Website 6/1/2009 8/15/2009 ‫ر.س.‏111,50 ‏‬ ‫‏‬ OpsOpen First Franchise 1/2/2011 1/3/2011 ‫ر.س.‏111,550 ‏‬ ‫‏‬ FinanceInitiate Exit Strategy 10/1/2010 1/1/2011 ‫ر.س.‏111,50 ‏‬ ‫‏‬ FinanceTotals 030,53222‫ر.س.‏‬ ‫‏‬ 33
  34. 34. 6. Management Summary6.0 Management SummaryMocha is a relatively flat organization. Overhead for management will be kept to a minimum andall senior managers will be "hands-on" workers. There is no intention of having a top-heavyorganization that drains profits and complicates decisions.At the zenith of this three-year plan, there will be four "Executive" positions: General Manager,Financial Manager, Operations Manager and Marketing Manager. There will be other mid-management positions, such as Purchasing Manager and district managers for every four Drive-thrus, and a facilities manager to oversee the maintenance and stocking of the Cafes, as well asoverseeing the maintenance and replacement of equipment in the outlets.6.1 Organizational StructureThe organization will be a relatively flat one, since the majority of personnel are involved inproduction and there will be a relatively low headcount in management.There are three functioning groups within the company: Operations, Sales and Marketing, andGeneral and Administrative. For purposes of this plan--and to show the details of adding seniorlevel management—Mocha has broken management down as a separate segment, but it is anintegral part of the General and Administrative function.Operations involve the Baristas, or Customer Service Specialists, who will be manning the Drive-thrus and Mobile Cafes and blending the beverages for the customers. Sales and Marketing willhandle the promotion and scheduling of the Mobile Cafes, as well as the promotion of the Drive-thrus and the Community Contribution program. General and Administrative manage thefacilities, equipment, inventory, payroll, and other basic, operational processes. 34
  35. 35. 6.3 Management Team GapsMocha knows that it is going to require several quality management team members over thenext three years, beginning with a district manager for every four Drive-thrus. This person willoversee the quality of product, the training of the Baristas, the inventory management, andcustomer satisfaction. Ideally, as Mocha grows, it will be able to promote from within for thisposition. This individual will be responsible for the operation of up to four drive-thrus under hismanagement. They will be required to visit between locations and possibly even joinadministrative personnel on training or marketing travel. Clearly, as the need arises, theseindividuals will ideally be selected from the operations team.By the beginning of the third year, Mocha will hire three key senior managers. They are: anOperations Manager, Financial Manager, Marketing Manager, The role of each of theseindividuals will be discussed in subsequent sections of this plan.6.4 Personnel PlanMocha expects the first year to be rather lean, since there will only be ten locations and onemobile unit--none of which will be deployed for the entire year. The total headcount for the firstyear, including management, administrative support, and customer service (production), will be46, with a total payroll of 762,00The second year, with the addition of 12 units, Mocha will add customer service personnel, aswell as 2 district managers and some additional support staff at headquarters, including an GM,Inventory Clerk, Equipment Technician, and administrative support. The headcount will increaseby nearly 124% in the second year to103 with a payroll of 1,929,000.The third year will see the most dramatic growth in headcount, due to the addition of 13 units. Inthe third year, there will also be an increase of 158% over the previous year. Total payroll for thethird year will be 3,332,100. A significant increase in the senior management team, with theaddition of Financial Manager, Marketing Manager and Operations Manager. There will also be afourth district manager, and a corporate events sales executive. Total personnel will reach 163.The General Manager : Achieve company s mission and strategic directions through effectivelyOversee, facilitate and coordinate departmental activities to maximize integration and synergy.Planning, managing & directing all functions of the company. Monitor, evaluate, and coach department’s headtowards achieving objectives and leading all strategic decisions. 35
  36. 36. The Financial Manager: will be brought on to oversee the increase in numbers of retail outlets and to manage adramatically more detailed P&L statement and to manage the Balance Sheet and inventory controls. Thisindividual will also be added in fiscal year three.The Marketing Manager: will be charged with managing the relationships with advertisingagencies, public relations firms, the media, and our website.The Operations Manager: Plan and implement operation strategy. Improve and coordinatesoperation` s activities and staff. Ensure customer satisfaction in all operation processes and salesServices. Conduct all activities to meet and exceed QSC standards. Improve staff satisfaction andMoral. Maximize profitability. Personnel Plan FY 2008 FY 2009 FY 2010 Production Personnel Drive-thru Team ‫ر.س. ‏111,723 ‏‬ ‫‏‬ ‫ر.س.‏111,04, ‏‬ ‫‏‬ ‫ر.س.‏110,057,0 ‏‬ ‫‏‬ Mall Cafe Team ‫ر.س. ‏111,030 ‏‬ ‫‏‬ ‫ر.س.‏111,407 ‏‬ ‫‏‬ ‫ر.س.‏114,470 ‏‬ ‫‏‬ In-Line Cafe Team ‫ر.س. ‏111,700 ‏‬ ‫‏‬ ‫ر.س.‏111,077 ‏‬ ‫‏‬ ‫ر.س.‏110,453 ‏‬ ‫‏‬ Equipment Care Specialist (Headquarters) ‫ر.س. ‏1‏‬ ‫‏‬ ‫ر.س.‏111,03 ‏‬ ‫‏‬ ‫ر.س.‏111,7, ‏‬ ‫‏‬ Other ‫ر.س. ‏1‏‬ ‫‏‬ ‫ر.س.‏111,07 ‏‬ ‫‏‬ ‫ر.س.‏111,07 ‏‬ ‫‏‬ Subtotal ‫ر.س. ‏111,430 ‏‬ ‫‏‬ ‫ر.س.‏111,033,0 ‏‬ ‫‏‬ ‫ر.س.‏110,,30,7 ‏‬ ‫‏‬ Operations and Marketing Personnel District Manager (Four Outlets) ‫ر.س. ‏111,5, ‏‬ ‫‏‬ ‫ر.س.‏111,577 ‏‬ ‫‏‬ ‫ر.س.‏111,113 ‏‬ ‫‏‬ Corporate Events Sales Exec ‫ر.س. ‏1‏‬ ‫‏‬ ‫ر.س.‏1‏‬ ‫‏‬ ‫ر.س.‏111,03 ‏‬ ‫‏‬ Marketing Manager ‫ر.س. ‏1‏‬ ‫‏‬ ‫ر.س.‏1‏‬ ‫‏‬ ‫ر.س.‏111,100 ‏‬ ‫‏‬ Other ‫ر.س. ‏1‏‬ ‫‏‬ ‫ر.س.‏1‏‬ ‫‏‬ ‫ر.س.‏1‏‬ ‫‏‬ Subtotal ‫ر.س. ‏111,5, ‏‬ ‫‏‬ ‫ر.س.‏111,577 ‏‬ ‫‏‬ ‫ر.س.‏111,000 ‏‬ ‫‏‬ 36
  37. 37. General and Administrative PersonnelBookkeeper/Office Administrator ‫ر.س. ‏115,07 ‏‬ ‫‏‬ ‫ر.س.‏111,20 ‏‬ ‫‏‬ ‫ر.س.‏115,3, ‏‬ ‫‏‬Warehouse/Site Manager ‫ر.س. ‏115,07 ‏‬ ‫‏‬ ‫ر.س.‏115,07 ‏‬ ‫‏‬ ‫ر.س.‏115,07 ‏‬ ‫‏‬Inventory Clerk ‫ر.س. ‏1‏‬ ‫‏‬ ‫ر.س.‏115,07 ‏‬ ‫‏‬ ‫ر.س.‏115,07 ‏‬ ‫‏‬Other ‫ر.س. ‏1‏‬ ‫‏‬ ‫ر.س.‏111,0 ‏‬ ‫‏‬ ‫ر.س.‏111,70 ‏‬ ‫‏‬Subtotal ‫ر.س. ‏111,20 ‏‬ ‫‏‬ ‫ر.س.‏111,010 ‏‬ ‫‏‬ ‫ر.س.‏115,030 ‏‬ ‫‏‬Other PersonnelGeneral Manager ‫ر.س. ‏1‏‬ ‫‏‬ ‫ر.س.‏111,007 ‏‬ ‫‏‬ ‫ر.س.‏111,007 ‏‬ ‫‏‬Financial Manager ‫ر.س. ‏1‏‬ ‫‏‬ ‫ر.س.‏1‏‬ ‫‏‬ ‫ر.س.‏111,117 ‏‬ ‫‏‬Operations Manager ‫ر.س. ‏1‏‬ ‫‏‬ ‫ر.س.‏1‏‬ ‫‏‬ ‫ر.س.‏111,150 ‏‬ ‫‏‬Purchasing Manager ‫ر.س. ‏1‏‬ ‫‏‬ ‫ر.س.‏1‏‬ ‫‏‬ ‫ر.س.‏1‏‬ ‫‏‬Subtotal ‫ر.س. ‏1‏‬ ‫‏‬ ‫ر.س.‏111,007 ‏‬ ‫‏‬ ‫ر.س.‏111,000 ‏‬ ‫‏‬Total People 46 103 163Total Payroll ‫ر.س. ‏777,000 ‏‬ ‫‏‬ ‫ر.س.‏777,909,0 ‏‬ ‫‏‬ ‫ر.س.‏770,0,,,, ‏‬ ‫‏‬ 37