Entrepreneurship

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MKT3014 ENTREPRENEURSHIP

Topic:

Individual Assignment - Feasibility Study

Classical Music Café

Prepared by:

Rachel Teh En Lin (14019822)

Date of submission:

22th April 2016

Lecturer:

Dr. Choy Tuck Yun

Table of Content

 Title                                                                                               Page No.

1. Introduction                                    -------------------------------------------------------- 3
2. Product/service feasibility analysis        -------------------------------------------------------- 3

1. Product/Service desirability         ----------------------------------------------------- 3~4
2. Product/Service demand        -------------------------------------------------------- 4

1. Industry/Target market feasibility        -------------------------------------------------------- 4

1.  Industry attractiveness        -------------------------------------------------------- 4
2. Target/Market attractiveness        ----------------------------------------------------- 4~5

1. Organizational feasibility                -------------------------------------------------------- 5

1. Management Prowess                -------------------------------------------------------- 5
2. Resource Sufficiency                ----------------------------------------------------- 6~7

1. Financial feasibility                        ---------------------------------------------------------7

1.  Economics of the business        ---------------------------------------------------- 7~11
2. Financial Performance of similar businesses        -------------------------------- 11~12
3. Overall financial attractiveness of the proposed venture  ----------------------- 13

1. Conclusion        ---------------------------------------------------------------------------------- 13

References        ----------------------------------------------------------------------------- 14~15

1. Introduction

This feasibility report will assess the overall appeal of the proposed Classical Music Café. The café will sell western food and beverage, environment of the café will be surrounded by classical music played on spot by professional musicians. The store will be located at Bukit Bintang.

Four key sub-analyses are presented in the following sections. Overall, the result of this feasibility analysis is favourable.

1.  Product/service feasibility analysis

The overall appeal of Classical Music Café is discussed in two sub-sections.

1. Product/Service desirability

A concept test showed that Classical Music Café is viable because the food and beverage will set at an affordable price. Unlike it competitor, Greyhound’s Café, where customer stated it is overpriced (Jocelyn, 2016). [pic 2]

Compared to its competitor, VCR Café (closed at 11pm daily) (Burpple, 2016), Classical Music Café will have longer operating hours from 10am to 12am on weekdays. During weekends, it will close at 1am. Customers nowadays demand for longer operating hours (Ramaswamy & Ozcan 2014).

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Lastly, classical music will be played live in the café. This is the special features of this café. None of it competitors have do this before. Musicians will take shift to play live classical music.

1. Product/Service demand

A buying intention survey is being conducted around Bukit Bintang and it shows a high demand towards this concept café. For people who enjoy listening to music, 70% of them would visit the café. Customers are also very concern about the price. A reasonable price is demanded by customers.

Gumshoe research is done where the team manage to visit Lepaq Lepaq Café located at Bukit Bintang. The team had the opportunity to talk to the owner and he showed favour about this new concept. He assure that this is a workable idea that can be bring out to the market.

1. Industry/Target market feasibility

The overall appeal of the café industry and the target market of Classical Music Café is discussed in the next two sub-sections.

1.  Industry attractiveness

The coffee shop industry is a fragmented industry and a near-perfect competitive market because there are many rivals, many customers, low costs of entry and exit (Hill & Jones 2011). It is a growing industry and in the early life cycle because recent years, the trend of café hopping is rising in Malaysia (Cafeculture.com, 2013). It is believed to have a high operating margin as the industry Average Sales per Transaction is 12.95 (US$), which is second only to pizza’s industry. Hence, this shows that the industry has less financial risk (Agr.gc.ca, 2015).

1. Target/Market attractiveness

The main target market for Classical Music Café are young adults around Bukit Bintang as the purchasing power among them is constantly growing. Consumers who visit cafés are mostly from medium to high income groups. These groups of consumers are less price-conscious and have sophisticated tastes (Euromonitor International, 2015). Besides that, this café will also focus on people who enjoy music and has a taste for classical music.

The secondary target market will be workers who work nearby Bukit Bintang (such as Jalan Raja Chulan and Jalan Imbi). The workers or bosses may have meetings at the café, as café would provide them a more relax setting (Hong 2013).