Answer:

Introduction 

The following assignment deals about some business strategies. The main point of the topic is that I want to start a new business with my friends and we need advice about how to run the business and how to implement the business strategies to make the business successful. The central problem of the fact is that we do not have so much of money to invest in. The capital investment is the factor that works behind setting up the nature of the business. There are other considerations in the assignment as well. We do not have a big amount of money to invest in so they will start a small business. Their plan is to try to make a successful business. The ways of achieving the success will be discussed with the ideas of implementing them in our set up. Our next plan is to expand the business in other locations. The primary outlet has to be set up in their home location. We have opted to open some more branches in other places so that their business will be expanded. The strategies to expand the business will also be described during the course of the assignment. Another option of expanding our business is to include some other products that would suit their business. All other relevant aspects behind setting of a business have to be discussed as well. The prospects of customer satisfaction and product quality have to be taken under consideration in the process.   

Steps to start a new business 

It is important to note the fact that opening a new business takes a lot of effort at the beginning. Many chance factors work behind the outcome of the business. It may be successful at times and in other times it may not be successful. So to make a proper and successful business I need to develop some plans to execute before starting the process. There can be used some six steps that would help to execute the plans better. These plans are-

• Writing a business plan
• Decide the budget


Decide on legal entity
Taking care of the money
Get an website
Test the sales rate

Writing a business plan

At the start of a new small business, it should always be kept simple and straight (Goss 2015). We should test our ideas first and we should decide to fix what we want from the business at the end. Next, they should have a clear reason of setting up our company. We should set their objectives and then work according to that only. They should also make a basic strategic planning for achieving the goals (McKeever 2016).

Decide the budget

In this case it has been said that we have a very low budget. It is actually always better to keep a smaller budget at the start so that the risks are less. The burn rate in the business is the rate that one spends month over month (Wolff 2013). The idea of profit should be kept in mind for about the first one to three months.

Decide on legal entity

At the start of a new business opening, one needs to go through many legal processes like licensing of the business to the local government authorities like the municipality or corporation (Steingold 2015). One should have a clear view of these prospects regarding this and fulfill all the formalities positively. It is advisable to open a sole-proprietor business so that the legal hazards would be less. However, the case here is about a partnership business and the focus will be put on that only.

Taking care of the money

The total invested money should be taken care of as the first priority. The fund for the business and the money in the personal accounts should be kept separately.

Getting an website

It is very helpful if we can open a separate website for their business. They have to secure an URL and promote their business online. It would be helpful in the shaping of their business properly.

Test sales

After sometime, the sales of the business should be tested. It would keep help to track the profits of the business.

Choice of business 

The most important part in setting up a small business is to choose what kind of business opening one need (Stutely 2012). The scenario here focuses on the fact the business owners are three students. This can be taken into account that this is their first venture as business owners and the lack of previous experience may cause them some bad experiences. So it would be advisable that we should choose some business where it would be easier to operate. Another important aspect is that we are students and they cannot give so much time to business. We must share the responsibilities in order to get enough time to do our studies.   It will be better if we start a cafeteria in the nearby location to their houses. It would save the time and we can do their pending works in time. It would not cost so much of money at the initial stage when they begin the business (Schaper et al. 2012). The profit would be shared by the three partners and they can use that profit money in their studies and as their pocket money. We can ourselves manage this business. Hopefully, it will be better if we do so.

Form of ownership 

The next phase of the discussion shifts to the form of ownership we are going to undertake. In case of small start up businesses it is better to start as sole-proprietors. It lessens the hazards that are involved in the business processes at the beginning (Steingold 2015). However, in this case it is the general partnership that has to be followed in the kind of ownership as there are three people have opted for the starting of the business. The description of general partnership lies in the fact that when two or more persons are operating a business together, it comes under the general partnership. There are some guidelines that have to be followed in the general partnership businesses undertakings. We all have to file the income tax partnership forms and they also have to tax forms as individual taxpayers. It is appropriate to take this general partnership for the new enterprise because we can operate the business together and we will be able to share the responsibilities that may occur during the course. The profit will also be distributed among the partners in same quantity. The partnership must effectively report all the essentials like their annual income, profits, losses, deductions to the government and they are not liable to pay any direct taxes (Goss 2015).

Ensuring consistent delivery of quality  

Reputation of the business

One of the most crucial aspects of starting a business and continuing it is to deliver a continual delivery of quality products (Bar-Isaac and Shapiro 2013). This is the position that helps to keep the reputation of the business high always. The product quality is the ultimate thing in the consistency of the business. It has been said earlier that there are many chance and risk factors related with business. They cannot be overlooked if the business has to be prosperous (Aziz and Hamilton 2013).

Importance of Four P’s 

The market studies say that the four P’s are very important for the development of the business (Khan 2014). The four P’s include the product, price, promotion and place. This means all the four aspects are very essential for the progress of the business. The very first component of the Four P’s is the product. Here in this case, the product is coffee and some snacks.

Customers

The college goers and people different age groups can come in the cafeteria and order coffee, snacks and sit there for sometime passing their time. This is a good way for enjoyment of the customers. It is essential that the coffee and snacks delivered to the customers should be of good quality (Czinkota and Ronkainen 2013).

Materials 

We should buy the raw materials for preparing coffee like the coffee powder, milk, sugar should be blended well and the snacks served should be tasty. Many types of coffee like the ordinary hot coffee, cold coffee, cold coffee with cream should also be available. The taste of the customers should be kept in mind and the cafeteria should be designed with class (McKeever 2016).

Importance of quality products

The product delivered can be tangible or intangible. We should always remember that the customers should never lose faith in the product quality or else it would hamper the reputation of the business. The importance of product quality is thus must be ensured (Wang 2013).

Promotion of the business: Four P’s

Another important aspect of developing a business is the promotion of the business. It includes the plans to develop the situation and achieve a better result in the future. Here it has been asked for advice which things can be done for a better promotion of the entire business. Some strategies have to be applied according to the Four P’s (Gordon 2012). Promotion is very pivotal because many things depend on how we do it.

Promoting the products

Promotion is the third component in the Four P’s (Shimp and Andrews 2012). It comes after the product and price. The product that should be served in the cafeteria should be fixed and the product quality should be ensured properly. After that we should fix the price according to the place where the cafeteria has been opened.

Socio-economic aspects

The socio-economic circumstances should be judged thoroughly by the people who are going to start the business. It has to be done because people belonging to the lower middle class and middle class will not be able to afford the food served there if the price is too high (Czinkota and Ronkainen 2013)

Advertisements 

Some ways can be adopted to attract more customers like advertising, social media marketing. Promotions should be done properly through these ways.

Some added benefits

  Another effective way is to set the air-conditioners in summer months so that the customers can get some relief. They will also feel going there to stay in air-conditioned zone in amidst the extreme heat outside. We now can introduce various food beverage items like sandwiches, pastries, soft drinks, mock tails, fruit juices, chocolate items, ice creams and others. These things will attract the new generation customers so that they will pour in if they get such things in the local areas (Proctor 2014).

New branch openings

  We can open new branches in the nearby localities and other cities after promotion through online advertisements, newspaper promotion by distributing leaflets and setting banners in the selected cities. These strategies will surely bring good results. Opening new branches will help the investors to spread their business in new areas and attracting the new range of customers. It will increase their reputation if they try this venture seriously.

Possible expansion strategies 

Expansion of business is an essential aspect in terms of the growth of the business. If a business has to grow and take a reputed place in the business industry, it has to expand its operating areas. Otherwise, the growth will be stunted and the business will slowly fade out due to continuous losses (Kumar, Gaur and Pattnaik 2012).

Definition of expansion strategy

Expansion strategy is an important marketing strategy when a company or an organization aims to increase its rate of growth as compared to the past occasions. The organization or business owners have to widen their range of business organizations in terms of customer groups, customer functioning and other activities, and it follows the expansion strategy (Kumar, Gaur and Pattnaik 2012).

Reasons for expansion strategy

The chief reasons for aiming at the expansion strategy are to survive in the market, more profits, larger market shares and benefits in social aspects. The primary aim is to grow in the market competition. The cafeteria needs to grow in the local areas as well as in the national market so that it can gain popularity. We have to apply proper expansion strategies to attain a widespread market.

Ansoff Matrix

Ansoff matrix is a tool in the spheres of marketing that is used to make strategic planning that would help to serve in developing the market operations (Hussain et al. 2013). The inventor of this strategy is the Russian American Igor Ansoff. He has described some procedures that could be used to make the proper growth in the marketing aspects (Proctor 2014). The four procedures or the four alternatives he has used in his strategic planning are called Market penetration, Market development, Product development and Diversification (Gianos 2013). These alternatives have to be discussed in this assignment to get an idea of the topic and find some ways in which they can be implemented in the context that is being discussed here.

Market penetration

Market penetration is a kind of strategy in the Ansoff matrix that has the minimum risk in it. It controls the existing capacities of many of the firms and their capabilities. It is a matter of fact that if firms maintain the market shares it will result in growth of the company. There may be some opportunities of increase in market share in case the firms reach the capacity limits. The market penetration has limits indeed (Kumar, Gaur and Pattnaik 2012).

Market development

This part of the matrix gives the idea that there can be additional market segments. It is a very good idea to develop the new market segments. If a business firm is developing its market, market development is definitely more risk than the market penetration.

Product development

It is appropriate if the strengths of the firm are concerned with the specific customers than the specific product itself. This is very risky than the increase of market share (Shaw 2012).

Diversification

This is the most risky strategy of the four growth strategies invented by Ansoff.  It requires both the market and product development and it may be outside the core competencies of the firm. It is a high risk factor. These four factors are called the ‘suicide cell’ together.

These are the possible expansion strategies that may be applied for the growth of the small business opened by the three friends. In this case, if they open a cafeteria and aim for growth they may use the product development strategy that would lead to expanding their business over other cities and states. These are the ways they should try to improve and grow (McDonald, Malcolm and Brown 2016).   

Conclusion

After a thorough study on the topic, it may be concluded that the entire topic has been covered with proper points. The situation that three friends are going to open a new small business has been taken under consideration and the advice has been given to them about what type of business they should start. All the necessary details have been given to the people. The fact that they are students has been considered and the advice of choosing the business topic has been given according to that only. The reason of choosing such topic has been clarified. The questions provided to be discussed were done as per the requirements. The ways of maintaining consisting quality of delivery are explained in detail as well. The ways in which the business can be given proper promotion have been discussed as it was needed. The marketing strategic tools were discussed with details to have a better understanding of the fact. Important diagrams have been provided with the concerned theories. The entire report has been covered as per the requirements asked for. The proper references have been provided where needed.

References

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Bar-Isaac, H. and Shapiro, J., 2013. Ratings quality over the business cycle. Journal of Financial Economics, 108(1), pp.62-78.

Czinkota, M.R. and Ronkainen, I.A., 2013. International marketing. Cengage Learning.

Gianos, J.F., 2013. A Brief Introduction to Ansoffian Theory and the Optimal Strategic Performance-positioning Matrix on Small Business (OSPP). Journal of Management Research, 5(2), p.107.

Gordon, R., 2012. Re-thinking and re-tooling the social marketing mix. Australasian Marketing Journal (AMJ), 20(2), pp.122-126.

Goss, D., 2015. Small Business and Society (Routledge Revivals). Routledge.

Hofstede, G.H. ed., 2012. The game of budget control. Routledge.

Hussain, S., Khattak, J., Rizwan, A. and Latif, M.A., 2013. ANSOFF matrix, environment, and growth-an interactive triangle. Management and Administrative Sciences Review, 2(2), pp.196-206.

Khan, M.T., 2014. The concept of'marketing mix'and its elements (a conceptual review paper). International journal of information, business and management, 6(2), p.95.

Kumar, V., Gaur, A.S. and Pattnaik, C., 2012. Product diversification and international expansion of business groups. Management International Review, 52(2), pp.175-192.

McDONALD, M.A.L.C.O.L.M. and Brown, L., 2016. 5 Strategic marketing planning. The marketing book, p.86.

McKeever, M., 2016. How to write a business plan. Nolo.

Proctor, T., 2014. Strategic marketing: an introduction. Routledge.

Schaper, M.T., Volery, T., Weber, P.C. and Gibson, B., 2014. Entrepreneurship and small business.

Shaw, E.H., 2012. Marketing strategy: From the origin of the concept to the development of a conceptual framework. Journal of Historical Research in Marketing, 4(1), pp.30-55.

Shimp, T.A. and Andrews, J.C., 2012. Advertising promotion and other aspects of integrated marketing communications. Cengage Learning.

ST Wang, E., 2013. The influence of visual packaging design on perceived food product quality, value, and brand preference. International Journal of Retail & Distribution Management, 41(10), pp.805-816.

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Stutely, R., 2012. The definitive business plan: the fast track to intelligent planning for executives and entrepreneurs. Pearson UK.

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