Coffee production and history in Antigua Guatemala

Antigua Guatemala Coffee

Antigua Guatemala International (AGI) will be a manufacturer and exporter of Guatemalan coffee to Japan and the global. AGI will use a new system in the food and beverage industry to offer Antigua Guatemala coffee in a time-efficient and convenient way. AGI will provide vendors, retailers, and cafes with the ability to buy freshly brewed Antigua Guatemala coffee. It will be a high quality option to the institutional coffee and fast foods markets. It will give its patrons the finest cold and hot beverages, specializing in Antigua Guatemala coffee and other custom made drinks. Additionally, it will offer fresh-baked pastries, soft drinks and other confections. Seasonally, AGI will add frozen Antigua Guatemala coffee. It will compete with companies such as Wallenford Coffee Company and Blue Mountain Coffee, which have already established a presence in Japan. The business will focus on two major target markets:

Coffee shops and restaurants

The captive consumer: an individual in a restricted environment not allowed conveniently leaving and returning while looking for refreshments

Antigua Guatemala International will penetrate the captive and commuter markets deploying mobile cafes in the most accessible and logical locations within Japan. The mobile facilities will be designed to serve two-sided traffic. In addition, it will handle people who order cups of Antigua Guatemala coffee in less than the required time to visit the national or local chains. Besides providing an extensive menu of delicious items and a quality product to foster customer loyalty and publicity, the business intends to donate at least ten percent of its revenue to local charities determined by customer choices (Abrams, 2010).

Antigua Guatemala International financial picture appears promising. It is already operating a cash business in different cities, it will require less initial costs than many starts up do require. The start up process is labor-intensive; the business is aware that it requires a high level of talent. The greatest differentiation between this business and other players will be the financial investment in its employees. For the purpose of this business plan, the capital expenditures of equipment and facilities have been financed. The company will have minimal inventory at hand in order to take advantage of the price drops and keep the products fresh. Antigua Guatemala International projects the initial combination of long-term financing and investments of $450,000 to conduct it without the need for additional debt or equity investment, beyond the purchase of facilities and equipment (Blackwell, 2011). This means that the company will grow a bit slower than it might be possible. However, it will be a strong and financially sound growth driven by product demand and customer request.

Antigua Guatemala International intends to become a new version of Starbucks by acquiring thousands of millions of dollars via private offerings and an initial public offering. These would enable the company to open more facilities every day in the Northern, Western, and Midwest cities. The company runs a risk as competitors would emerge and create a foothold on the community before or in the process of establishing Antigua Guatemala International (Finch, 2013). This will cause a possibility for a drain on revenues and a dramatic increase in the advertising costs to maintain market share. With the knowledge of the risk and creating plans for them, the company has an edge required to make the business successful.

Mission

The mission is to fulfill the needs and wants of customers for delicious nutritious meals, high quality Antigua Guatemala coffee and excellent services.

Vision

The vision of the business is to be the supplier of preference in Japan and across the world

2. Nature of business

Antigua Guatemala International will be a manufacturer and supplier, specializing in Antigua Guatemala coffee. It will use a new system, which has never been seen in the food and beverage industry. This system will enable it supply Antigua Guatemala coffee in the most efficient way to Japan retailers.

3. Customer profile

Antigua Guatemala International Company will target tow major market: the everyday commuter and the captive consumer. These people always want a cup of Antigua Guatemala coffee or other custom-made drinks inconvenience. These customers range from students to working professionals. Families are also likely to visit the Antigua Guatemala International in pursuit of refreshments while socializing. The company caters for people of all ages and different incomes (Abrams, 2010).

4. Current market

A trend towards unique coffees has been developing for quite some time now. Specialty coffee like Gloria beans have always been there, but people started buying espresso machines for their offices and homes (Abrams, 2010). This led to the emergence of espresso bars; along came Antigua Guatemala International, which supplies these bars with a special brand of coffee. It is the quintessential bastion of the professional customer who has control over the taste and smell of the beverage he wants to drink. These consumers have helped push Antigua Guatemala International in global sales and have the desire for refreshing, especially freshly brewed Antigua Guatemala coffee. Recently, the introduction of beverage dispensers have spit out traditional cappuccinos in flavors like French vanilla and consumers are paying premium prices for standard beverages. The market is good for Antigua Guatemala coffee, which provides high quality, freshly brewed Antigua Guatemala coffee in a convenient environment. Its prices are also competitive to the national coffee manufactures and suppliers.

Drawing from the industry statistics, the consumption of Antigua Guatemala coffee is growing rapidly. The company anticipates opening more outlets and doubling revenues in the next five years. This is the Antigua Guatemala coffee consumer market. The business targets the consumer segment and metropolitan where coffee shops are concentrated. Over three million commuters drive to work every day in this market. From the statistics, an estimated 50% are drinkers of coffee (Blackwell, 2011). This gives Antigua Guatemala international a substantial daily target for its items. Looking at the statistics, the numbers are increasing every year.

5. Description of product or service

The Guatemala highlands produce several of the world's most distinctive and finest coffees. The mountain basin environment of the beautiful city Guatemala Antigua creates the most distinguished of the world coffees: Antigua Guatemala coffee. This coffee combines complex nuance (spice, smoke, flowers and sometimes chocolate), with acidity varying from austerely powerful to gently bright. The prominent soft Antigua Guatemala coffee is the Coban brand. It is admired for its deep, gentle rounded profile, and full body.

6. Marketing Strategy

The company will place its facilities in high visibility locations and areas that can be easily accessed by retailers. The outlets will be located close to shopping facilities and in the middle of major cities where each coffee shop can access. This will enable them catch a diverse range of customers including coffee shops and individual buyers of the product. Therefore, the Guatemalan coffee is very eye catching and unique that will be a branding attribute of its own (Abrams, 2010). The business will implement a low cost advertising campaign driven by radio. It will depend on establishing relationships with charities, schools, and corporations to offer substantial free publicity because of the community support initiatives. Whilst making charitable contributions to such institutions, the business will obtain word out to the partners, faculty, and students about AGI. Word of mouth has previously demonstrated to be the most useful advertising program that any business can use. Additionally, the media are expected to be extremely willing to promote the charitable components of AGI and offer the opportunity for further exposure every time the company writes a check to another institution.

Market trends

The Antigua Guatemala coffee market is projected to expand as young Japanese people prefer non-alcoholic drinks and wholesome entertainment. They also seek for healthier eating habits, which credits the company as it has a culture of ensuring minimal levels of calories and fats in its offerings.

Demographic and social changes

Coffee and intake of Antigua Guatemala coffee has changed dramatically over the past few years. Among the largest change in the sector includes the introduction of the system of single serve brewing for home use. Now, customers are able to customize most beverages including coffee by use of machines offering levels of flexibility and variety not experienced in the past. Besides, Japan and the entire global market offer a great market for the company.

Macro-economic analysis

This section will use Michael Porters five forces model to highlight macro factors influencing Antigua Guatemala coffee House.

Threat of substitute products: Other substitute beverages include fruit juice, soda, tea, and alcoholic drinks. In the confections, substitutes include doughnuts and muffins from other pastries. Places offering a chat, hang out, or even a relaxation include fast food places, teahouses, sidewalk cafes, pubs, bars, and ice cream parlors. Accordingly, due the large number of substitutes, the company is likely to face high threat, which appears to be increasing day by day.

Threat of new entrants: the company faces the more recent and ongoing threats of new entrants of companies such as Wallenford Coffee Company and Blue Mountain Coffee. In the Japanese market, the entry barrier is relatively moderate. Any well-funded and large company, where capital is not an issue might be potential entrants because they have a solid brand image in the business sector (Blackwell, 2011).

Rivalry: in this market segment, there are many big players. With the high number of small-scale coffee shops, big players must battle with small players across the market segments. With customers increasingly taking coffee home, it provides the convenience, which is the main factor for players. There is an intense competition in this industry, as companies must battle each other to increase their customer base.

Bargaining power of suppliers: there is a high bargaining power for suppliers. The developments in technological innovations like the automated coffee machines and espresso machines have made them bargain over the industry. These developments have made the suppliers more powerful.

Bargaining power of buyers: buyers do not have the bargaining power in the industry, considering Antigua Guatemala coffee House. The sheer scale of the company's business reduces the bargaining power of any individual or group of buyers. Competitors such as Wallenford Coffee Company and Blue Mountain Coffee claim to provide specialty coffee of substantial quality at minimal price; thus, buyers must not bargain for their needs (Blackwell, 2011).

PESTEL

Legal/political: high standards associated with production methods of coffee are extremely important in the sector. They are likely to acquire political prominence. There is pressure for companies to operate ethically, economically, socially, and environmentally reasonable. This has been depicted in the coffee industry through an increasing demand and growing market value for sustainable coffees like a fair trade coffee and certified coffee. All these guarantee a reasonable price to producers.

Economic: the effect of coffee on the area's economy will be much stronger. The increasing difficulty of producing Antigua Guatemala coffee has created vital sectoral linkages with the economy. Coffee has become the foundation of the economy, accounting for at least 65% of the area's exports (Blackwell, 2011). The economy of Japan has undergone growth periods, as well as challenges and increasing patterns towards overproduction of coffee. The development prospects and the economic performance of most regions are largely dependent on the commodity issue. With El Salvador and Honduras have been eliminated through the "Union Aduanera," or customs unification. A Free Trade Agreement (FTA) with Mexico was signed in 2000, and the FTA with the United States of America was ratified with more than 90% support from the Guatemalan Congress in 2005. Other agreements include a recently ratified FTA with Taiwan, and negotiations continue to open a commercial office in Japan. All these agreements will be of immense benefit to Antigua Guatemala International.

Social: the coffee industry must adapt to the changing consumer preferences and attitudes. In case they fail to do so, lifestyle and health issues might threaten Antigua Guatemala International. In the recent past, the hot drinks business declined by an estimated three percent. Consumers, particularly the youth, are increasingly becoming health conscious. This makes coffee less attractive as the vast number of alternatives like energy drinks have become competitors in the coffee industry. Recent research studies indicate that there is an increasing diversification of tea, with a pattern towards herbal and premium teas (Abrams, 2010). The coffee sector must respond to this attitude change through providing options like soymilk, herbal teas, and coffee lattes.

Technological: consumers are less adapted to purchase teas and coffee in supermarkets because of the wide variety of coffees available in coffee shops. Premium ingredients and high tech equipment are increasingly becoming accessible and are sued to produce varieties of cold and hot beverages sold in coffee shops. Consequently, consumers are becoming increasingly aware about the varieties of premium teas and specialized freshly brewed coffees such as Antigua Guatemala coffee. As such, their tastes are likewise changing to accompany them.

Environment: the environmental effect is positive. It is imperative that coffee processing and production should be considered to be satisfying the environmental needs to guarantee optimal physical sustainability. The economic environment must encourage reasonable and stable living standards for the communities involves with coffee. This ensures that sufficient care must be given to guarantee the maintenance of quality within the society.

Emerging opportunities for the company

This section will use the SWOT framework to identify emerging opportunities for Antigua Guatemala coffee House.

Strengths

1. Providing a rich exotic brand and creating a niche in the industry as a rich and high end brand

2. The environment in its coffee shops gives customers a feeling of style, sophistication, and knowledge.

3. The company has attracted leading cafes and retailers who are eager to communicate their suggestions about the product

These strengths enable the company to satisfy customers' needs in various ways. This is because they enable customers to experience an exotic and a rich blend of coffee, as well as a way of life. The business has focused on quality products so that customers can taste the different between the traditional, cheap coffee and the Antigua Guatemala coffee. In addition, the business provides customers with a feeling of style and sophistication when walking into the stores (Finch, 2013). In doing this, they will replicate an authentic style of a coffee shop to enable customers experience a different way of life when they visit their stores. The company will be successful with this because it will hire employees who are properly educated and willing to express the company culture.

These strengths will be useful in differentiating the firm from its rivals because it will develop a niche in the market as a unique coffee brand. It is different from the traditional coffee because the company focuses on quality of coffee and maintenance of freshness with their flavors. Other industry players like Wallenford Coffee Company and Blue Mountain Coffee (Blackwell, 2011) cannot match this characteristic of the store. In addition, the company will gain dedicated and loyal employees. This will transition into excellent customer service.

Weaknesses

1. Japanese customers believe that Antigua Guatemala coffee is a suitable product. This implies that people will be willing to find alternative means of consumption in case the price increases or availability decreases.

2. Although the company provides superb customer service because of its dedicated and loyal employees, they do this at a cost. It pays its employees more than other firms are doing. In addition, they offer benefits to part time and full time employees. This leads to high costs for the business.

These weaknesses are likely to prevent the business from fulfilling customer needs. In case of a price increase or an economic recession, people will be expected to spend conversely. This is because coffee is seen as a substitute product. Lack of consumer loyalty and consumers who choose to spend conversely might prefer cheap coffee to Antigua Guatemala coffee, that the company charges a premium price.

These weaknesses are likely to differentiate the business because other companies will not be hit as hard during an economic recession. Presumably, Antigua Guatemala International most significant competitors are low price businesses like Wallenford Coffee Company and Blue Mountain Coffee. While Antigua Guatemala International operates as a higher priced and high product, consumers will be expected to turn to the competitors given, they spend less conversely (Finch, 2013).

Opportunities

1. Technological advancements

2. Emerging international markets

The opportunities seek to serve and satisfy customers' needs. In fact, Antigua Guatemala International will fulfill the desires for their coffee and experience in different countries. Emerging global markets enable Antigua Guatemala International to expand even in the midst of economic recession. Additionally, advancements in technology enable the company to decrease waiting time and increase quality. Technology is quickly evolving: this makes things faster and better. Certainly, it is making its way towards the coffee industry (Blackwell, 2011).

Threats

1. Economic recession

2. Emergence of competitors

3. Rising costs of dairy and coffee products

These threats are linked to fulfilling the needs of consumers as they affect the price consumers are expected to pay for a cup of Antigua Guatemala coffee. In the face of global recession, un-loyal consumers of Antigua Guatemala coffee will look for substitute products. Substitutes like Wallenford Coffee Company and Blue Mountain Coffee are inexpensive. These competitors are flourishing as they emerge during this economic time when Antigua Guatemala International has trouble lowering prices since the prices of dairy products and coffee beans have been rising.

Marketing objectives

The business has three key marketing objectives:

I. To position the company as a convenient supplier of premium Antigua Guatemala Coffee

II. To attain approximately forty percent market share in the next 12 months

III. To attain sales of $600,000 for the initial year and $750 for the second year of operation (Finch, 2013)

Market positioning

Product

Antigua Guatemala International will position itself as a premium brand in the coffee sector. This will be achieved through the creation of a high standard, providing excellent service and introducing innovative products. Antigua Guatemala International knows how perishable coffee is, and fanatical about quality control. Therefore, it will carefully monitor each step of producing coffee. They will buy high quality beans from different places and roast them in their own plants before selling them through the company's stores. Antigua Guatemala International will use Total Quality Management (TQM) in which all people at the company will be constantly involved in improving the quality of the product (Blackwell, 2011). The use of non-fat milk will make a notable presence in the balance sheet of Antigua Guatemala international. In addition, they will provide seasonal offerings like cream and strawberry Antigua Guatemala coffee in the summer and Christmas. Gradually, food products such as pastries, sandwiches, cookies, and salads will make their way into the stores. Later, they will proceed to develop new items with other firms. This demonstrates how the company wants to maintain their high premium quality and high standard image.

Price

This refers to the amount of money paid by a buyer in exchange if a cup of Antigua Guatemala coffee. It indicates the quality of the product. Quality and price determine the value of the product. When launched, Antigua Guatemala international will be expensive and will position itself in accordance to this. They will try to deliver high value to customers. They will buy the highest quality beans, provide efficient and effective training to employees, and create a friendly business environment. All these justify the company's pricing and demonstrate how their price is supported by positioning.

Distribution

Distribution shows the links between the product and consumers. In the case of Antigua Guatemala International, maintaining a personal relation with customers is paramount. From a distribution perspective, Antigua Guatemala International will obtain an advantage as it intends to stick to its winning store location formula for the new stores. They will select highly open and visible locations as clusters (Finch, 2013). With the increasing demand, these clusters of stores will make the company able to maintain their competitive position. Similarly, they will take care of the service provided across all stores. The company aims to unlock the mystery and romance of Antigua Guatemala coffee in coffee bars and cafes. Therefore, it has invested heavily in employee training and utilizing innovative tactics to manage the human capital. As a result, it will differentiate itself in the market through constantly offering high quality services.

Promotion

These are marketing activities intended to stimulate the sales of a product or buyer action. Antigua Guatemala International will organize big community events before the actual opening of its stores. Artworks will be designed to boost every city's personality. It will be used on T-shirts, as well. They will similarly recruit local ambassadors to promote their brand. The business will attempt to establish a national dominance before other competitors appear.

Pricing strategies

Antigua Guatemala International is currently the leader of the Antigua Guatemala coffee market. This individual company controls more market share compared to its competitors. More than just a high-priced Antigua Guatemala coffee, it provides a combination of authority, quality, and relative value. The company will employ two approaches to price its products:

1. Price differentiation

Antigua Guatemala International will set its prices based on a simple idea: high value at a reasonable cost. When customers think of obtaining a good deal for their money, they will be expected to pay expensively. Here, quality is a critical element. Antigua Guatemala International will have to maintain strict quality controls in sourcing its coffee and its customer service to justify their costs (Blackwell, 2011).

2. Product Differentiation

Antigua Guatemala International will likewise spend a lot of energy and time differentiating itself from the competitors. This will be portrayed by the design of its coffee facilities, the types of products sold, and the music played in the facilities. Antigua Guatemala International will make sure it stays current on the latest technology by being the first to introduce the newest advancements to customers. For instance, it will be the first to introduce mobile payments in the industry.

7. Sales activities

Companies across all industries depend on products sold to keep their businesses alive. Therefore, the activities of the sales department are crucial to the success of any company. The four Ps of marketing are vital in discovering the activities of the sales department. While the four Ps are the elements of the marketing mix, within the sales function, they extremely come to life. Antigua Guatemala International does this through ensuring that its products are readily available in the market for consumers to buy (Abrams, 2010).

The sales department operates in teams, where each team looks at the needs of specific customers. Under each team, the team members are responsible for the particular product categories. In business, this role is referred to as account management. The success of the sales team in selling Antigua Guatemala coffee is grounded on careful management of some accounts. The goal is to assist the company to market the products and ensure sales figures meet the company's target, as well as sales department's targets, too. The sales team strives to help the company meet the increasingly demanding consumer needs in the intensely competitive market place.

Besides the account management activities, there are also a number of specialist activities within the sales team. Category planning seeks to ensure sales targets are attained through overseeing the promotional activities of each department. The sales team uses the information gathered from the marketing research to develop a sales rationale (Finch, 2013). This is the product and market knowledge that the sales team shares among themselves to market the product. The sales team offers expertise on point of the purchase activity. The sales team liaises with top managers, which enable them to negotiate deals with key contacts. This is more cost effective and time efficient. In addition, it encourages consistency throughout all individual stores because they tend to be coordinated by the top managers.

Available resources:

Internal resources

The top management and the sales team of the company will develop a strategy, which will aid achieve a competitive advantage. The strategy will focus on incorporating customers as part of the team to create value. According to this strategy, the adjustments required in the process of supply chain will be put in place with the help of collaborations with customers. To accomplish the company's vision, it will approach the leading firms in innovation and design (Blackwell, 2011). The company desires to change its organizational culture, which enables them to work together with customers to improve its supply chain process. At the start of this initiative, top managers will participate in workshops organized by leading design and innovation companies. The training is likely to result in superior utilization of innovative tools by the managers of the company.

This process is likewise expected to enhance the participation of customers. Further, the company will develop numerous opportunities for improvement in the supply chain with the aid of innovation and design firms. From the better collaborations between the company and its customers, Antigua Guatemala International will be better placed to improve its market position and sales. The company desires to take this initiative internationally and do the same in Japan under joint ventures.

External sales force

Antigua Guatemala International distribution function has two distinct operations; warehouse delivery and direct stores delivery. It has a strong distribution system with over three hundred depots and distribution centers across the world. Out of the three hundred, the company owns forty distribution centers while it has leased 130 distribution centers. Additionally, it own forty depots and has leased 150 worldwide (Abrams, 2010). Antigua Guatemala coffee House will adopt consumer awareness and a multi-category system. Most of its distribution in the country follows a warehouse delivery system. The company has three direct stores delivery system, which distributes the Antigua Guatemala coffee and other pastries.

In South America alone, Antigua Guatemala coffee House has established more than three hundred depots and distribution centers. Most of these depots and distribution centers aid in direct store delivery. It has an estimated fifteen distribution centers outside South America in ten different countries. The depots and distribution centers complete the following functions:

I. Trade promotions to various vendors

II. Sales promotions like customer incentives through contests and coupons

III. Advertisements to consumers via various medias

Sales budget

Sales tactics:

Corporate tasting events: Antigua Guatemala International will organize tasting events for vendors and individual customers based on a quarterly system. Every quarter, during the start of every new season, the company will adjust its menu to depict the changes in the flavors being served.

Drink Coupons: at corporate and school fundraising events, it will give away drink coupons as awards or door prizes. This will encourage people to visit cafes offering its products for their free drinks and bring friends to make a purchase.

Professional membership: because of the rising need to sell Antigua Guatemala coffee, the company will be an active participant in the local Chamber of Commerce and Specialty Beverage Association. The education and exposure that this company provides is outstanding at special events (Blackwell, 2011).

8. Intellectual property

9. Operations

Antigua Guatemala International has organized global business operations as it seeks to boost revenues outside its core market. Currently, the Special Coffee House has created two business units internationally. Now, the top management has decided to introduce a new structure composed of different divisions: the Americans, Asia Pacific, and China. A team of company veterans will oversee each division. This new structure is intended to reduce redundancies across the business. Antigua Guatemala International has approximately 12,000 outlets in Canada and U.S. And seven thousand throughout the rest of the world (Blackwell, 2011). It aims at boosting profits outside its core markets and claims that this new structure will be helpful in achieving this.

10. Human resources

The top management of the company includes Beatrice and Paul Elliot who have significant experience in the specialty coffee industry. Paul is a qualified chef. He has successfully managed various food chains locally and abroad. Beatrice has experience in front and back offices of the resort sector, which is a highly respected segment in the hospitality industry. Her managerial skills are exemplary. The maximum staff required is estimated at ten employees. Three of the employees will be employed on a part time basis. The main set of skills required is sales, food preparation, front counter, customer service, stock management, and control. The company will take its employees through an in-house training program before opening the facility. Wages and salaries in the initial year of operation are estimated at $200,000 and $250,000 in the second year (Abrams, 2010).