International Business Management
It is common knowledge that half of businesses fail within their first year of establishment. Others make it past the first year but end up failing within the second year. As the years continue, the chances of failing and succeeding become equal. In any case, there is usually a point at which businesses are more likely to succeed than fail. Although one may have an advantage if the business they are about to start is just another branch of a successful business they have established somewhere else, it is important to note that they will still face the same challenges faced by a person opening a fresh business from scratch (Love & Roper, 2010). The coffee business is not any different. It is good to take similar steps as those taken when establishing the original business.
Citizens in the United Kingdom drink coffee on many occasions. It is estimated that people below 65 years take an average of 13.4 cups of coffee in a week. Those above 65 years take an approximate of 11.9 cups in that one week. That means that an average coffee drinker in the UK will take at least two cups of coffee per day. Thirty-seven percent of the people who drink coffee in UK take it when black while the other 63% like adding sweeteners like sugar into their coffee. Fifty seven percent of the coffee drunk is drunk during breakfast, 34% is taken between meals while the other 13% is taken with other meals (RealCoffee, 2011).
Knowing this about the coffee drinkers in the UK, one knows that the best times to open the coffee shop is in the morning hours as this is the time most of the drinkers take it. Most customers take coffee with no other accompaniments especially if they are taking it in between the meals. However, it is always good to include other edibles for those who will come and take the coffee at breakfast time. Customers in Dubai are quite different. Their drinking cultures are different from those in London. They prefer black coffee and take from five to six cups of coffee in a day. They consume coffee this much because most use it as a substitute of alcohol.
There are quite a number of prominent coffee shops in London alone including Monmouth Coffee, milk Bar, Notes Music and Coffee, Prufrock Coffee, Tapped and & Packed, Nude Expresso, Climpson and Sons, Dose Expresso, the Espresso Room, amongst others. All these competitors have a string of branches in London and other parts of Britain. Although there are these many and all are quite strong as businesses, they have not fully satisfied the population of coffee drinkers in UK yet. Coffee being a commodity that is consumed daily and every time, it serves to the business advantage. Although each business has its own ways of attracting its customers whether it is through service, the products it serves, the prices, amongst others, there is a room for other customers. It is good to make sure that one delivers differently from their competitors so that to not only be successful but to stay successful (Godsmark, 2004, pp. 137).
One major way of being ahead of the competition is selling at a cheaper price then the competitors but quality coffee. As the customers increase, then one can use other tricks as they slowly increase the price in order to operate at a reasonable profit. It is always good to get regular feedback from the customers as one is trying to please them after all. Since this is an already established business, using the extra capital to employ highly skilled employees, will serve the business the greater and the long-term good. One has to pay the extra cost for the extra skills.
Other Critical Forces
Analyzing the suppliers is another factor that one needs to look at when they become successful in business. Having the wrong suppliers can be a fast road to the fall of a business even after it has become well established. Having the wrong suppliers usually leads to having deliveries of poor quality coffee and other supplies that may be needed, having late deliveries, high cost supplies, and so on. Some coffee suppliers in the UK are Gourmet Coffee Roasters and Suppliers, Smiths Coffee Company, Bewleys Coffeeman, Café Marseilles Ltd., Deepmills Coffee, Edgcumbe Tea and Coffee, amongst many others. The main goal is to establish the best suppliers who are friendly in terms of their sales offers, their punctuality, the quality of the products they offer and their other general terms that will affect the business (Hodgetts & Kuratko, 2008, pp. 92).
The type of service and the products being offered is the other factor to be considered when the business becomes successful. It would not be right or wise especially in the business field to open up a shop, make it succeed by attracting customers for offering quality coffee and good services, and then disowning these things when the business becomes successful. The above-mentioned coffee shops are just a few of the hundreds of the competitors in the coffee business. Making sure that the coffee made is of best quality and the services offered are the best, will keep the business ahead of the competition (Hodgetts & Kuratko, 2008, pp. 211).
New ways of making the coffee or serving it depending on the tastes and preferences of the customers will also be constantly reviewed in order to keep the customers interested. As mentioned earlier, customers in Dubai prefer black coffee while those in London prefer white and cappuccino. The coffee made in Dubai is more than that in London. This is because of the different consumption levels between the two countries.
The last but not least factor to consider when the business is successful is the administration department of the business. The business might have good suppliers, it may stay ahead of its competitors, have as many customers as it can manage and offer good quality services and coffee, but if the wrong form of administration comes into place at any single point of the business, it may be a disaster to the business. In some cases, the disaster is so bad that the business is unable to recover. Good managers and other relevant administrators will be put in place in order to ensure that the business is always on its ‘toes’ (Gleim, 2008, pp. 119).
Barriers into the Coffee business and How to overcome them
One of the major barriers is the presence of competitors. Some coffee shops are well established and have a number of branches all over the country. Other might be single business but with a strong clientele. The many shops dealing with coffee is also a barrier. With all these in mind, one can overcome this competition barrier. Making sure that keeps on at what attracted the customers in the first place is one way. This means that the business offers quality coffee, good services, knows what the completion is up to so that it is able to stay ahead, and so on. Coffee is like food. People are always consuming it all the time and the market can never have too many coffee sellers (Godsmark, 2004, pp. 167).
Another barrier is the lack of skilled cheap labor. When beginning a business, even if it is a branch of another business, it is best to start with as little capital as possible although not at the compromise of quality. However, quality and skilled labor is expensive and more so in a foreign country. The best solution to this challenge is to make sure that one hires the not so highly qualified, and then advance as the business grows. One can also start with a few, with some multi tasking, then separate the duties as the business grows.
A number of challenges can develop in the home country (Dubai), which may affect the business in the UK. For example, taking business outside the Dubai borders is not as cumbersome as establishing one in the foreign country. The main challenge is getting the correct papers signed in order to present them to the foreign country. In order to avoid such major incidences, it is best to keep a clean business record. Some misconduct, like delaying tax payments, failure to follow the laws and the regulations put in place, amongst others, can be part of the delays experienced (Richardson & Gilmartin, 2007, pp. 85).
Some challenges that can be met in the foreign country (UK), are like delaying of the registration of the branch/new business, discrimination, although not very common due to ones race, using all the tricks and ways of the country of origin, in this foreign country without researching without doing the necessary adjustments in order to adapt. It is important to make sure that one learns all the procedures taken and the documents needed in establishing a coffee business in UK. Another way to avoid some of these challenges can be taken care of by researching on the coffee shop business in the UK so that a business owner can easily adapt into the environment without much struggle. For example, people in Dubai drink more coffee than those in the UK. They take an average of 3.5 kg in a year as compared to the people in UK who consume approximately 2kg (RealCoffee, 2011).
The international environment also plays a role in the success of a business or the failure of it. This is mostly evident with the way the price of coffee varies in the international market. If the buying price is too high, then it affects the suppliers coffee price. If the business does not make the necessary adjustments, the business may suffer losses, which end up affecting the business negatively. The lack of coffee or the abundance of it in the international market also affects the business. If the coffee does not satisfies its demand, running the business becomes a challenge. On the other hand, if the coffee is excess of its demand, then the price are low hence it affects the business positively. When it comes to the international challenges, an individual business can do very little or almost nothing. One can only adjust to the prices of the coffee in relation to the prevailing market price if it posses a real threat to the business. For example, prices may be raised a little when the price is high and it might be dropped when the coffee price in the market is low.
Business Success in an International Environment
One major thing that one should do when penetrating the international markets is to make sure than proper research about the particular field or market for that matter is done. One must research on how the coffee prices fluctuate in the market, and how they affect the targeted country. It is also good to assess how the availability of the coffee in UK and what other ways are used to access it when it is in lack through the normal channels. It is very frustrating and disappointing if one manages to open a coffee shop, then have it close down after a few years due to lack of supplies or supplements (Gleim, 2008, pp. 79).
Although UK’s politics does not directly affect the businesses in the country as what happens in other countries, it is best to establish the effect of the current politics on the business. The Coffee business is a major business to many politicians. Their lack of professionalism and self-interests brings many price fluctuations in the international market. It is good to make strategies on how to overcome such challenges when the come up. One of the major ways is by interviewing owners or people who have been in the coffee shop business in UK for quite some time. Reading business materials and especially those that target the coffee business will also be of help. It is also good top use the previous experiences gotten from running the business in Dubai. Some international challenges are common to all (Richardson & Gilmartin, 2007, pp. 279).
As we look at the local and international environment. It is most important to consider and adapt to the ways of the local environment, as one will be satisfying the local people. One of the ways of adapting is by making the coffee according to what the locals want. If the London customers like cappuccino and white coffee, then that is what should be made. It is also good to try to introduce some ‘tricks’ used in Dubai. Try to see how they work for the people in London. They might put one ahead of the competition.
All businesses have their own challenges and the coffee shop business is not an exemption. It faces challenges internally, externally and internationally. However, like any other business, it has as high chances of succeeding. Using the above solutions to the named challenges and then applying other knowledge that will be acquired as the business grows in UK, the business will surely be a success. The experience gotten from running the multiple coffee shops in Dubai will of great help in establishing the business in UK. One of the major things that will be done is to customize some strategies used in making the business in Dubai a success into the UK environment.
It is also good to put in charge a good manager who has run such a business in this foreign country. This will make work much easier. Although this can be quite expensive, it is worth it. It is important to note that most business rue apply to all businesses. The only thing that one does is just adjust them a little in order to suite their business. All in all a business has as many chances of succeeding as it has of failing. When one applies the right strategies and policies, then it has a higher chance of succeeding (Hodgetts & Kurakto, 2011, pp. 246).
GLEIM, I. N. (2008). Business management skills. Gainesville, Fla, Gleim.
GODSMARK, E. (2004). How to open a financially successful coffee, espresso & tea shop. Ocala, FL, Atlantic Pub. Group.
HODGETTS, R. M., & KURATKO, D. F. (2008). Small business management. Hoboken, NJ, Wiley.
LOVE, J. H., & ROPER, S. (2010). Knowledge, openess, innovation and growth in UK business services. Coventry, Centre for Small and Medium Sized Enterprises, Warwick Business School. http://www2.warwick.ac.uk/fac/soc/wbs/research/csme/research/working_papers/wp109.pdf.
REAL COFFEE (2011). Consumption Facts, RealCoffee. Co.uk. Roast and Post Coffee Company. Retrieved from http://www.realcoffee.co.uk/Coffee-Encyclopedia/Trivia/Consumption-Facts/.
RICHARDSON, J., & GILMARTIN, H. (2007). Wake up and smell the profit: 52 (+1) guaranteed ways to make more money in your coffee business. Northern Ireland: Indiego.