Small Business Management: A Case Study of Cafepod

Small Business Management

Introduction

Small business is identified as small organisations that are privately operated and managed by a personal owner with a significantly low amount of investment or machinery. Cafepod is considered as the organisation for the present assignment that operates within the markets of the UK under the retail food industry. In the present context, business management plan considering the analysis of the target market along with the evaluation of competitors are included within the scope of this research. Moreover, strategies for managing the internal behaviour of the organisation will also be explained along with the internal SWOT analysis. Apart from that, strategic recommendation with the application of pivot strategies will also be provided within the boundaries of the present assignment.

Company’s background

Cafepod coffee is very famous in the UK for its products and different blends. The company was established in 2011, and now it is available in almost every online and offline retail stores. People in the UK can enjoy adventurous coffee drinks by staying at home. Peter Grainger and Brent Hadfield founded the company, and they always want to bring happiness in people life by providing them with a better coffee blend. Moreover, the cartoons and packages that are used for coffee packaging of this company are entirely recyclable. All the aluminium coffee pods of this company's UTZ CERTIFIED coffees (CAFEPOD, 2020). Besides, all the products are available in ASDA, TESCO, Sainsbury's, amazon.co.uk these online platforms.

Vision, Mission, Values and current business strategies

Figure 1: Products of Cafepod

(Source: Cafepod, 2020)

Cafepod intends to hold the vision of altering the face and market trends for coffee in the marketing regions of the UK and Europe (Cafepod, 2020). The vision of Cafepod enabled them to add a new flavour of Nespresso and thus is considered to be one of the most emerging organisations within the food and beverage industry of UK. The mission of Cafépod is to deliver good strong coffee for the coffee lovers and enrich their experience with high quality of espresso just like home (Cafepod, 2020). It is noted that optimising the financial aspects of the organisation is considered the most vital business strategy that Cafepod adopts for their business growth (Cafepod, 2020).

Analysis of the target market

Cafepod is very famous for its products and different blends. Cafepod has a unique segment of products to attract more customers towards them. The primary target customer of this company belongs to the adult's group to aged people. All the people are very attracted to this brand because of its unique product quality and sustainable product containers. However, in this coronavirus pandemic situation, the entire coffee market faces significant adverse impacts. Due to the lockdown situation, people cannot go outside of their home. As a result, all the shops and supply chain is disrupted due to the lockdown situation. In the UK 92%, coffee shops are closed temporarily due to the lockdown situation (WORLD COFFEE PORTAL, 2020). In such ways, all the target customers and company revenues are severely affected because of this pandemic situation.

Competitor’s analysis

Analysing the state of competitive behaviour concerning the organisations delivering similar products or services enables an organisation to plan their strategic movement for better sustainability. As noted by Ying et al. (2020), analysing the movement of competitors enables the analysis of current trends among the target market that enables an organisation to deliver better satisfaction to their customers. The major competitors of Cafepod are Darden Restaurants, Church's chicken and Meatheads that are associated with the food and beverage industry within the markets of the UK (Craft.com, 2020). The mentioned organisations also intend to deliver a similar category of beverages and food items to their customers. Hence, the presences of direct competitors like Darden Restaurants or Meatheads increases the number of choices available to their customers. This measure enforces Cafepod to maintain their consistency of service to retain their loyal customers by delivering better satisfaction. The course of pandemic positively negatively affected the organisation, thereby resulting with loss of loyal customers and no revenue collection during the period. It is observed that Cafepod had to hire a high number of labours and employees due to the safety recommendations that reduced the profit margin for the organisation.

Organisation and Management

A leadership team helps to understand the required factors that are highly important for the organisation. A business leadership team operates all the activities, which are directly related to the organisation. It also helps to understand the productivity and profitability of the organisation and helps to keep people motivated towards their work so that organisation can achieve more success (Khan and Wajidi, 2019). Based on which the company can identify the strengths and weaknesses of a particular organisation. Cafepod is very aware of their leadership factors and management system because based on this, they can enhance their market adaptability and brand image. Moreover, it helps to improve the weaknesses that the company is facing.

Marketing plan

4P's marketing is a part of the making mix strategies. It helps to identify the marketing options and market aspects for any organisation to build a better market image for them. By implementing this way, companies are introducing new products to the market. The four primary factors are price, product, promotion and place. Cafepod is using these factors to enhance their companies marketing strategy (Bruskova, 2019).

Figure 2: 4P’s marketing

(Source: developed by learner)

Products

The products lines of Cafepod are unique, which has a significant impact on the market. Customers are very attracted to all of this company's products. Moreover, the entire company is very aware of sustainability because it can create a good brand impact in the market.

Price

Cafepod has an extensive range of variety in their product line, and the product pricing is very different from other companies available in the market. All the available products have an attractive product pricing based on their categories. They also have premium products which are very high at a price.

Place

All the outlets of Cafepod have a very good physical presence in the market, which has significant impacts on the company's growth and marketing. Portsmouth office headquarters of this Cafepod has around 2,850 people per mile population density, which impact the company's profitability and productivity level.

Promotion

Cafepod uses the entire online and offline platform as a promotional medium to attract more people towards them. They use Facebook, Twitter and many social media platforms as their promotional medium. In such ways, Cafepod competes with the existing companies that are available in the market.

Financial Analysis

One of the key aspects of a business plan is financial analysis. According to Palepu et al. (2020), financial analysis can be defined as a process through which the financial position of a business is evaluated and analysed to understand its performance as well as suitability. For example, the financial analysis of Cafepod is going to be helpful for understanding the company’s liquidity as well as solvency. The following ratios have been calculated for Cafepod to conduct its financial analysis -

Table 1: Financial ratios of Cafepod

(Source: uk.globaldatabase.com, 2020)

The ratios shown above reflect the liquidity, as well as solvency, of Cafepod. It can be identified that the current ratio of the company has improved slightly during the last two years. However, the quick ratio reflects that the liquidity of the company has decreased from 2018 to 2019. Contrastingly, the asset-based solvency of Cafepod has improved largely during the last two years. However, despite improvement from 2018 to 2019, the equity-based solvency of the company is quite high. This reflects that the equity-based solvency of Cafepod is poor. Apart from this, it can be identified that the EBITDA of the company has increased sharply from 2015 to 2018 (find-and-update.company-information.service.gov.uk, 2020).

However, all these financial aspects of Cafepod might have been affected during 2020 due to the Covid-19 outbreak. It is because the pandemic resulted in lockdown in the UK, thereby reducing the sales of Cafepod largely. Moreover, even after the lockdown phase was over, the sales of the company were low due to restrictions in the movement of people. However, the costs of the company were high, as the stock had to be maintained and the business operations needed being continued. As a result, the net profit, solvency, as well as liquidity of Cafepod, might have been affected because of the pandemic.

SWOT analysis

SWOT analysis is considered to be an optimum framework for analysing the strength and weakness of an organisation and relatively convert the associated risk into significant opportunities. The evaluation of SWOT analysis for CafePod can be highlighted as follows:

Table 1: Internal analysis of Cafepod

(Source: developed by learner)

It is observed that Cafepod is one of the organisations that intend to offer one of the finest blends of beverages to their scustomers that substantially enable their customers to gain a higher value of service. However, the increasing number of competitors, as well as similarities among the products, gradually prevents them from applying the strategy of differentiation to attract more customers. Hence, by analysing the demographics of the customers as well as their preferences, can help Cafepod to gain a high margin of competitive advantage. Moreover, Cafepod also needs to focus on improving its supply chain for eradicating the risk of lack of raw materials or human resources.

Strategic recommendation for business growth

Strategies for the improvement of business policies and state of organisational behaviour are considered as follows:

Figure 3: Recommendations for the growth of Cafepod

(Source: developed by learner)

Introducing a new style of beverages: the introduction of a new class of products enables an organisation to significantly target a new section of customers and set a differential mark to stand apart from their competitors (Camilleri, 2018). Cafepod can apply the differentiation strategy and enable the manufacture of flavoured coffee like the top giants associated with the food and retail industry of UK. Moreover, it is also evaluated that 64 % of the population lies in the age group of 15 – 64 years (Plecher, 2020). Hence, influencing the customers for trying the new coffee style can be considered significantly easy for Cafepod.

Expansion of small outlets: Cafepod can enable the expansion of their brand image by opening a significant number of small outlets all over the UK. As inspired by Al-Omari et al. (2020), improving the quality of service by improving the accessibility of customers enables an organisation to gain a high degree of a profit margin than their competitors. Hence, the inauguration of small outlets will enable Cafepod to deliver fast and effective service to their customers which can help them to achieve better customer's loyalty than their existing competitors like Darden Restaurants. Apart from that, the operating cost of small outlets is considered to be significantly low, and thus Cafepod can ensure a high margin of profitability. Hence, the mentioned organisation can also enable the use of better promotional strategies with better availability of monetary resources conserved from business operations.

Enable the use of effective pricing strategy: pricing of a product is considered to an effective measure for influencing the customer’s behaviour of purchase. As mentioned by Camilleri (2018), the use of a penetration pricing strategy enables an organisation to apply an adequate level of dominance over the market place. Hence, the use of a penetration pricing strategy can help Cafepod to gain a massive expansion of business and increase their market share within the food and beverage industry to a higher margin. Moreover, the use of the mentioned pricing strategy can also enable Cafepod to influence their customers to accept their products with better positivity that can contribute to organisational growth in an exponential manner.

Conclusion

Based on the above discussion, it can be concluded that this report is very focused on the Cafepod Company's mission, vision and current strategies. It also helps to analyse the market of the Cafepd for their target audience and affects of the pandemic on their business. This report provides a comprehensive idea about the organisation and management plans for Cafepod and marketing strategies of Cafepod. From the above discussion, an organisation can understand the strength, weakness, opportunity and threat for the company. Additionally, it provides a comprehensive idea about the pivot strategies in terms of Cafepod.

Reference List

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Appendices

Appendix 1: Age demographic statistics

(Source: https://www.statista.com/statistics/270370/age-distribution-in-the-united-kingdom/#:~:text=In%202019%2C%20about%2017.7%20percent,to%20about%2066.9%20million%20people)