En Business Report

7/24/2019 En Business Report

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7/23/2012

Gavin | Grace | Wei Xuan | Yi Khoon | Yu Xian

DESSERT

EMPIREASSIGNMENT 3:THE DEAL

T03


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Table of Contents

Executive Summary ........................................................................................................... 3

Background information.................................................................................................. 5

Our Mission: ......................................................................................................................... 6

Our Vision: ............................................................................................................................ 6

Objectives:............................................................................................................................. 6

Goals........................................................................................................................................ 6

Beginning 3 years: .......................................................................................................... 6

Next 5 years: ..................................................................................................................... 6

Next 10 years: .................................................................................................................. 7

Key Features and Unique selling points ..................................................................... 7

Research methodology ..................................................................................................... 8

Findings and Analysis ....................................................................................................... 9

SWOT Analysis ................................................................................................................. 15

Strengths......................................................................................................................... 15Weaknesses ................................................................................................................... 15

Opportunities ................................................................................................................ 15

Threats ............................................................................................................................ 15

S.M.A.R.T GOALS .............................................................................................................. 16

Financial Plan.................................................................................................................... 18

Forecast for 3 Years Plan .............................................................................................. 19

Return of Investment ..................................................................................................... 19

Appendices ........................................................................................................................ 20

Appendix A ..................................................................................................................... 20

Appendix B ..................................................................................................................... 22

Appendix C ..................................................................................................................... 23


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Executive Summary

In Ngee Ann Polytechnic (NP), there are no cafes or restaurants specializing in the

sale of desserts despite an increasing popularity of desserts among youths. Such

cafes are often found in town areas or neighbourhood shopping malls, but there is

none to be found at tertiary institutions where students and youths often frequent.

It is therefore proposed that a dessert caf, Dessert Empire be set up in Ngee Ann

polytechnic. The Caf will have 4 unique selling points that consist of extensive

dessert variety, affordable pricing, relaxing ambience and an educational styled

menu. This report will discuss and analyze the feasibility of setting up the dessert

caf in Ngee Ann polytechnic. Primary research was conducted via an online survey

to find out the opinions of consumers. As Dessert Empirestargeted consumers are

students, most of the respondents are made up of youths.

The results obtained from the research indicated that despite there being a strong

demand for desserts, the general opinion of consumers to the idea of a dessert caf

is mixed with most of the respondents preferring to remain neutral on the matter.

However, majority of the respondents felt that the new dessert restaurant should be

located at a tertiary institution, citing the many outlets that already exist in town areas

and neighbourhood shopping malls, and that a dessert caf would be a refreshing

sight in a tertiary institution. Another contributing factor to the above results is the

satisfaction level of desserts currently offered in tertiary schools. Most of the

respondents felt that the desserts currently being offered in tertiary institutions are

too limited and they would certainly welcome more variety provided that they are

affordable and of good quality. Lastly, almost all of the respondents felt that the

ambience of dessert stalls/restaurants is lacking with no respondent finding it


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comfortable. This is mainly due to the lack of dessert specialized outlets in tertiary

institutions.

Dessert Empire has an ambitious but realistic target of expanding to Asia and

Europe in the next 10 years. This will require an injection of $200,000 capital in

exchange for 25% equity stake of the company. Dessert Empire is expected to

breakeven within 3 years of incorporation and generates a return of investment of

(0.576), 0.268 and 0.470 for the three years respectively.

Considering the cafs unique selling points, concerns of consumers and expected

returns, it is thus concluded that the idea of a dessert caf in Ngee Ann Polytechnic

is feasible.


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Background information

Product Offered:

Desserts from every part of the world

Problem Definition:

Currently, in Ngee Ann Polytechnic (NP), there are no specific cafes or restaurants

for students to chill out and have desserts. There are a few dessert stalls in NP; 1 in

Makan Place that sells yoghurt, and there is definitely a stall in each canteen which

sells both traditional hot and cold desserts such as green bean soup and iceKachang. However, there isnt a cafe in NP which sells mainly desserts and can offer

students a place to do their projects or just hang out with their friends.

There is increasing popularity of desserts such as ice cream and yoghurt among

youths, visible from the recent spike of such parlours in recent years. For instance,

there are cafes such as Island Creamery, Udders, Cold Stone Creamery etc. selling

ice cream. For yoghurt stalls, brands such as yoguru, Frolick and Sogurt has

become increasingly common in town areas or even neighbourhood shopping malls.

Solution Proposed:

Therefore, our group propose to set up a dessert cafe in NP, offering desserts from

all over the world. It will be the first ever dessert cafe in a tertiary institution, and our

menu will be done up in a textbook concept with descriptions and history of the

dessert, so that students can savour the desserts yet at the same time, learn aboutthe dessert and beef up their knowledge about sweet treats.

Our cafe not only provides a place for students to enjoy and learn more about food, it

will also be a place for students to hang out with their friends over desserts and

forget about their troubles of meeting deadlines for projects.


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Our Mission:

To enrich consumers in both taste and knowledge of the dessert world.

Our Vision:

To be the leading caf chain specializing in desserts from all over the world.

Objectives:

The main objective of our business is to provide consumers with a wide variety of

desserts from all over the world to enjoy and at the same time, enrich consumers

awareness and knowledge about the particular dessert through our encyclopaedia-

conceptualised menu.

Goals

Beginning 3 years:Enter the market and create awareness on the brand name of the Caf among

tertiary institutions in Singapore. The menu would mainly consist of various local and

popular Asian desserts.

Next 5 years:Expand the business by opening stores across Singapore, with the main focus in the

city area. The Cafs name will be well-established in Singapore, with the menu

being more diversified and extensive by including European and Middle-eastern

desserts on top of the desserts in the existing menu.


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Next 10 years:Expand the business to the whole of Asia and Europe, with the name of the Caf

being well-known across the two continents.

Key Features and Unique selling points

Extensive dessert variety

Dessert Empire offers a large variety of desserts from all over the world. Consumers

will be able to enjoy various types of famous and delicious desserts both from their

home country and internationally in Dessert Empire.

Affordable prices

At Dessert Empire, we offer consumers our desserts at reasonable and affordable

prices. Despite this, quality is of utmost importance and it will be maintained

regardless of the price amount of the dessert. Desserts are priced according to the

amount and difficulty of preparation needed, and also according to the type of

ingredients needed. Desserts offered by Dessert Empire would be priced affordably

for students.

Cosy and relaxing ambience

In Dessert Empire, consumers dine in a cosy, comfortable and relaxing ambience,

providing them with a channel to break away from their hectic lifestyles. The design

of the caf will follow a home-concept whereby customers would feel at ease and at

home while enjoying the soothing dessert they picked.

Educational menu

Dessert Empires menu will adopt an encyclopaedia concept. Besides the usual

pictures and name of desserts, the menu will include descriptions and background

information about the type of desserts as well. Consumers will then be able to

increase their knowledge about the dessert they picked, thereby enabling them to

appreciate and enjoy their desserts to the fullest.


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Research methodology

The primary research was conducted through a survey of 5 questions and a sample

size of 30 respondents. Respondents are made up of mostly youths, who are

students studying in Singapore. This is because the target consumers of Dessert

Empire are mainly local tertiary students, since Dessert Empire aims to be the

leading caf specializing in desserts in every tertiary education institution in

Singapore. The survey focused on consumers preferences such as dining styles,

and also spending trends in typical dessert stalls. These allow us to have a clearer

picture and gain better understanding of the needs and wants of our target

consumers so as to provide quality products and services.

Target consumers

Dessert Empires extensive collection of desserts at affordable prices are targeting at

tertiary students who seek a cosy and relaxing environment to chill with friends while

enjoying a sweet and delicious dessert of their choice. The reason for choosing this

target group is because of the high demand of such places by students and also, the

lack of availability of such places as well. This target group is also relatively large

due to the size and number of tertiary institutions here in Singapore. In addition,

desserts are popular among youths and the willingness to spend on desserts is high.


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Findings and Analysis

How Frequent do you consume desserts weekly?

Figure 1: Frequency of Dessert Consumption weekly

By investigating the frequency of dessert consumption by student, we can determine

the demand for desserts among students and the feasibility of setting up a dessert

specialized restaurant. The desserts here include Cakes and Ice Cream among

others which would be included in Dessert Empires Menu. Based on the survey

results, 70% of the respondents consume dessert more than 6 times a week while

only 3% responded that they are unlikely to consume desserts in a week. The results

certainly show that there is a high demand for desserts among students in Singapore

and a dessert specialized restaurant would be viable.

3%7%

20%

70%

Never

1 - 3 times

4 - 6 times

More than 6 times


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Where would you want a dessert cafe to be located at?

Figure 2: Locations where Respondents hope to have a Dessert Cafe

Respondents were asked where they most hope for the dessert cafe to be situated

at. Among the respondents, an overwhelming 80% hope to see the dessert caf

being set up in a tertiary institution, while 10%, 3% and 7% hope to see the desert

caf being set up in Shopping malls, Neighbourhood plazas, Bus interchanges

respectively. Desserts such as cakes, ice cream and frozen yogurts are more

popular with teenagers and young adults, which would explain the huge majority

favouring a dessert cafe to be set up at a tertiary institution as most of these

teenagers and young adults are tertiary students. Despite the respondents being

made up of students, locations such as shopping malls (where teenagers and young

adults often frequent) were considered a much less popular choice compared to

tertiary institutions. This may be due to the many existing dessert outlets and stalls in

shopping malls, whereas, the variety of desserts offered in school canteens are

relatively limited. Setting up a dessert specialized restaurant would be a unique and

innovate sight, and it would also be convenient and accessible for students, who are

the main consumers of desserts.

2

1

3

24

Bus interchanges

Neigborhood Plaza

Shopping Malls

Tertiary School

0 5 10 15 20 25 30


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How favourable are you to the idea of a dessert stall?

Figure 3: How favorable are you to the idea of a dessert cafe?

In order to better gauge consumersviews and opinions of a dessert specialized caf

with a unique textbook menu, respondents were asked how favorable they are to this

idea. From the survey, 50% of the respondents were either favorable or very

favorable to the concept. 33% of the respondents were neutral while the rest were

either unfavorable or very unfavorable to the idea. The group of 50% of the

respondents who were favorable or very favorable indicated that consumer views

were relatively lukewarm. This implies that there is significant risk in setting up this

innovative concept as only half of the respondents were favorable to the idea despite

70% of the same group of respondents consume desserts more than 6 times a

week. The highest proportion of respondents falls into the Neutral level with 33%.

As this concept is relatively new, consumers might prefer to reserve their judgment

and opinion before patronizing the restaurant. Despite these however, a 50%

favorable rate indicates that there is a good initial support.

7

8

10

3

2

0

2

4

6

8

10

12

Very favorable Favorable Neutral Unfavorable Very

Unfavorable


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How do you find the desserts currently offered in tertiary schools in

terms of variety and ambience?

Figure 4: How respondents find the variety of desserts in tertiary schools

Of the 30 respondents surveyed, 19 respondents found the variety of desserts

offered in tertiary school limited. This constitute a majority of 63%, while 7 (23%) and

4 (13%) found it sufficient and wide respectively. The majoritys opinion that dessert

choices are limited is mainly attributed to the low number or lack of dessert outlets in

tertiary schools, as these desserts are often offered as a secondary product, thus

explaining the limited variety. Setting up a specialized dessert restaurant would thus

provide us with a competitive advantage and a fresh choice of dessert for students.

19

7

4

0

2

46

8

10

12

14

16

18

20

Limited Sufficient Wide

Variety

Variety


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Figure 5: How respondents find the variety of desserts in tertiary schools

28 of the respondents or 93% feel that the ambience offered when consuming

desserts is lacking while the rest (7%) were neutral. No respondents found the

ambience of dessert stalls/restaurant comfortable. This is perhaps again due to the

lack of any real dessert restaurants/cafes in tertiary schools, as desserts are often

sold in stalls located in canteens. As such, there is no real restaurant ambience. The

proposed plan for the dessert restaurant would include the renovation and

transformation of a small but strategically located area into a cosy and warm hangout

for students. This hangout would allow students to relax and take a break from

studying while enjoying our delicious desserts.

28

20

0

5

10

15

20

25

30

Lacking Neutral Comfortable

Restaurant Ambience

Restaurant Ambience


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What is the maximum amount consumers would spend on a single

visit to a dessert stall?

Figure 6: Respondents maximum expenditure on a single visit to a dessertstall

57% will be willing to spend about $5-$6 on a single visit to a dessert stall. 13% are

willing to spend $7-$8 on a single visit to a dessert stall. Another 13% are willing to

spend $2-$3 on a single visit to a dessert stall. 17% are willing to spend $3-$4 on a

single visit to a dessert stall.

With 57% of the participants willing to spend $5-$6 on a single visit to a dessert stall,

as well as the dessert consumption frequency rate of about 6 times per week, we

can therefore expect high sales revenue to be generated.

13%

17%

57%

13%

$2-$3

$4-$5

$5-$6

$7-$8


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SWOT Analysis

Strengths

Dessert Empire will be the only cafe opened in Ngee Ann Polytechnic thatspecialises in desserts. Hence, it will be the only choice for students who are in

search for a cafe within campus during free time.

There will be a wide variety of dessert that ranges from Western pastries and

milkshakes to Asian shaved ice dessert with assorted flavours. The menu will be

able to cater to every student.

The focus of the interior design of the cafe is the cosiness. The cafe will give off a

soothing ambiance with warm lightings and comfortable sofa seats. This is to allow

the students and lecturers to seek refuge from the hectic day.

WeaknessesThe menu of the cafe is generally slightly more expensive compared to the local

desserts offered in the canteens of Ngee Ann Polytechnic. Students may not be

willing to spend their limited pocket money on the desserts in the cafe on a dailybasis.

OpportunitiesThe target audience for the cafe is campus wide. Ngee Ann Polytechnic has

approximately 40,000 students. There are 5 polytechnics in Singapore currently, and

a handful of local and private universities. There is a wide potential market for

Dessert Empire to expand to other tertiary institutions and universities.

ThreatsDessert stalls at the canteens may add more variety of desserts for the students to

attract them. The canteen stalls will be able to sell the desserts at a lower and more

competitive price compared to the cafe. In addition, students may not particularly

have time to relax in a cafe during school time due to their hectic schedules and

timetable.


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S.M.A.R.T GOALS

Specific

The company is targeting at students of Ngee Ann Polytechnic who are looking for a

cosy caf to hang out and enjoy premium desserts in the campus.

Measurable

Given the popularity of desserts among youths, Dessert Empire is confident there is

a high demand for desserts among students in Ngee Ann Polytechnic.

Attainable

Students spend most of their time in school and often meet up in campus for

academic related purposes or simply to hang out. For this purpose, a caf with a

cozy and relaxing ambiance would serve as an attractive and conducive environment

for students. Guerrilla marketing can be utilized through word of mouth by students,not only within the school but also outside of the school and this would inevitably

help Dessert Empire gain exposure.

Realistic

Ngee Ann polytechnic is one of the top tertiary institutions in Singapore. Setting up a

dessert caf in a prestigious school would help to create publicity and awareness of

the brand. It is expected that within a month from the opening of the caf, majority of

students, in and outside of Ngee Ann Polytechnic would have heard of the caf.


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Target

Targeted mon thly gross income from the Dessert Empire stal l in Ngee Ann

campus

In year 1, Dessert Empire aims to have gross revenue of $27,600 per month. In year

2, it aims to increase its gross revenue to $36,000 monthly. Lastly, in the last

forecasting year, the company plans to have the gross revenue of $44,400.

$12,000$18,000 $24,000

$9,600$10,800

$12,000

$6,000 $7,200 $8,400

Year 1 Year 2 Year 3

Shaved Ice Dessert

Milkshake

Pastries/Cakes


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Financial Plan

Production Cost (Per Pastry/Cake)

Direct Materials (Ingredients):

ButterEggsFlour

$0.50$0.30$0.40

Direct Labour: 10 minutesTotal Cost: $1.20

Production Cost (Per Milkshake)

Direct Materials (Ingredients):MilkCreamFruits

$0.20$0.20$0.40

Direct Labour:2 minutesTotal Cost: $0.80

Production Cost (Per dessert)

Direct Materials (Ingredients):SyrupJellies

$0.30$0.20

Direct Labour: 5 minutesTotal Cost: $0.60Selling Price

1 slice of pastry/cake1 cup of milkshake

1 bowl of dessert

$4.50 - $7.00$3.30 - $6.00

$1.50 - $2.50Profits

1 slice of pastry/cake1 cup of milkshake1 bowl of dessert

$3.30 - $5.80$2.50 - $5.20$0.90 - $1.90

Operational Cost (Annual)

Purchase of Materials $40,000Labour Cost $90,000Utilities $144,000Rental $24,000

Total Cost: $298,000Start-Up CostCapital $500,000

Renovation $80,000Purchase of Fixed Assets $122,000Operation Cost $298,000


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Forecast for 3 Years Plan

Value forPastries/Cakes Sold

Value forMilkshakeSold

Value forDessertSold

GrossRevenue

ProfitBeforeTax

Year 1 $144,000 $115,200 $72,000 $331,200 ($288,800)Year 2 $216,000 $129,600 $86,400 $432,000 $134,000Year 3 $288,000 $144,000 $100,800 $532,800 $234,800

Return of Investment

ROI = Net Profit before Tax / Owners Equity

Year 1: (0.576)Year 2: 0.268Year 3: 0.470


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Appendices

Appendix A

1. How frequent do you consume desserts weekly? ResponsePercent

ResponseTotal

Never 3% 1

1 - 3 times 7% 24 - 6 times 20% 6More than 6 times 70% 21

Total Respondents 30

2. Where would you want a dessert restaurant to be locatedat? ResponsePercent ResponseTotal

Bus interchanges 7% 2Neighborhood Plaza 3% 1

Shopping Malls 10% 3Tertiary School 80% 24


3. How favorable are you to the idea of a dessert restaurant? ResponsePercent

ResponseTotal

Very favorable 23% 7

Favorable 27% 8Neutral 33% 10

Unfavorable 10% 3Very Unfavorable 7% 2


4. How do you find the deserts currently offered in tertiaryschools In terms of Variety

ResponsePercent

ResponseTotal

Limited 63% 19

Neutral 23% 7

Wide 13% 4Total Respondents 30

5. How do you find the deserts currently offered in tertiaryschools In terms of Restaurant Ambience

ResponsePercent

ResponseTotal

Lacking 93% 28

Neutral 7% 2Comfortable 0% 0



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6. What is the maximum you would spend on a single visit toa dessert stall?

ResponsePercent

ResponseTotal

$2-$3 13% 4$4-$5 17% 5$5-$6 57% 17$7-$8 13% 4



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Appendix B


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Appendix C

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