Business Feasibility Research Report
A feasibility report is essential before commencing on a business project because it describes the market condition thus provides the business with a tactical approach. The UK economy offers a favorable environment for conducting business because of the positive attributes associated with the market. The country experienced both political and economic stability that is favorable for a new company. However, competition is some of the hindering factors that might scare away the investors. However, the returns from the market are promising, and thus it is recommendable setting up the Chinese Patisserie in the UK because of its unique nature and the possibility of high return.
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Table of Contents
A feasibly on establishing a business in the UK market can be done by evaluating the macro market by considering some aspects. The UK economy is among the best economies around the world that are characterized by a higher Gross Domestic Product (GDP) that is attributed to by some factors like the high number of businesses in the market (Martin, Pike, Tyler, & Gardiner, 2015). The UK economy is highly competitive as it comprises of a high number of firms that deal with the provisions of goods and services to the households. Research indicates that the UK market is the fifth largest in the world by gross domestic product. For example, in the year 2017, the country was able to attain a GDP of 2.622 trillion USD indicating a significant improvement from the previous years and in comparison, to other countries around the world. It represents a 1.8% annual GDP growth per year in the United Kingdom (Carney 2015). The increase implies that the market is performing well and businesses are booming from their activities.
Inflation rate refers to the country’s currency purchasing power. A higher inflation rate indicates the poor performance of the economy and the low purchasing power of the currency. On the other hand, a low inflation rate signifies the excellent performance of the economy. In this case, the inflation rate by the United Kingdom has been reducing over the recent years. For example, in the year 2017, the inflation rate was standing at 3.58%, and this decreased to 2.48% in the year 2018(Martin, Pike, Tyler, & Gardiner, 2015). It is a clear indication that the economy is getting better over the recent years and thus friendly for establishing a business. The currency is gaining more power and thus indicating a higher purchasing power parity in the market.
On the other hand, the UK retail consumption rate has risen to 4% in the recent. It as well indicates that there are higher consumption rates in the country. Hence, this implies that investing in such a market is likely to bring in more returns.
The Food and Beverage sector is increasingly growing over the years in the UK. The country is experiencing new businesses over the year that are investing in fast food. The industry seems to be very lucrative as many fast food joints were developed in the country especially in the concentrated regions. It is essential to look at the industry by evaluating its progress from the previous years. The United Kingdom (UK) is the most important nations around the world for growing cheap food items. The establishment of the inexpensive food industry of UK was created inside the central portion of the twentieth century. Amid the 1990s the competitive food industry began to develop quickly (Gregson, Crang, Fuller, & Holmes, 2015). The Hummingbird Bakery was the principal cheap food retail anchor began to proliferate amid the years, and in 1960 it created 280 stores and ear benefit of $56 million amid that time. In the long periods of 1974, it gains the 14% of the entire utilization of sustenance, and it expanded to 26.5% inside the long stretches of 1984. Inside the time of 2006, McDonald’s could create 30,000 stores in 121 nations. Pat research assessed that the idea of eating regimen could be isolated into logical and culture. Besides, the UK sustenance organizes the bliss and involvement in preparing yet the Westerners nourishment concentrated on nourishment, and the estimation of the item is institutionalized (Gregson, Crang, Fuller, & Holmes, 2015). Western inexpensive food ready to accomplish the 100% fulfillment of the clients because of the item quality, proficiency, neatness, hourly business framework, staff preparing, etc. It indicates that the food and beverage industry is growing in the UK as time elapses. Therefore, this is the best time to establish the Chinese Patisserie Business because the market is in existence and there are numerous customers.
PESTEL environment involves a portion of the variables that influence the business either positively or negatively (Fethi, &Katircioglu, 2015). Much of the time the operations of the company in the market are impacted by the state of the environment that is contributed by various elements. The rationale of the business is to make the benefit, and along these lines, it is vital to assess the PESTEL of a specific nation before considering setting up a shop in that locale. The accompanying is a portion of the variables that are influencing the matter of Emirates Airline company.
The political environment assumes an essential part of the business in the UK in various ways. It involves the strategies that the administration has put in a connection to business operation, the tax collection, and the dependability of legislative issues in a specific nation (Strangmueller, 2018). When we take a look at United Kingdom political circumstance, we can see this is a just express that enables its residents to perform business exercises at their particular prudence. For this situation, the nation has possessed the capacity to furnish the organizations with an upgrading environment to play out their activities. The lawmakers in the UK have rejected the government proposal from the European Union considering the impact that it would cause (Pan, Chen, & Zhan, 2018). The lawmakers are determined to ensure that the United Kingdom retains its position in the EU. It implies that the country is likely to continue to enjoy a peaceful environment for trade with other countries. Also, this will increase the political stability in the country that is necessary for conducting business.
As mentioned in the above text, the financial performance by the UK is at par compared to other countries, and this implies that establishing a business is likely to attract high returns. We do comprehend that the condition of the economy assumes an essential part in guaranteeing that the execution of an association is at the top. As a rule, financial specialists are baited in a specific market on account of the great economy. Weak economies will dependably frighten off financial specialists in that market since they fear for misfortunes (Graham, 2018). A decent economy is generally described with low swelling rates. Different variables to consider when taking a gander at an economy are development rate and financing costs. For this situation, unmistakably the UK has possessed the capacity to keep up a low swelling rate of 2.39% over the previous decades. It means the financial circumstance in the UK is better thus a decent one.
Furthermore, food and beverages have been described by great execution over the past period which has empowered them to keep up a higher quality regarding creation. For this situation, implementing a business idea will help exploit the present economy to make great from the business. In this way, we can suggest that the economic environment in the UK is good for business. Be that as it may, it could be of remarkable significance if the nation diminishes the rate of expansion and presenting more strategies that support the organizations in the market. It is probably going to ensure the Chinese Patisserie business will be a great accomplishment.
Social-cultural factors assume a critical part in business and might impact on the execution too. It involves the populace development, age contrasts, and vocation dispositions and some more. Populace influences the market in various ways. The food and beverage business has been operational over decades in the UK, and thus this implies that most individuals are used to this kind of products(Martin, Pike, Tyler, & Gardiner, 2015). It means the higher the populace in a nation the higher the interest for items. It has incredibly affected food and beverages since they have possessed the capacity to expand their offer throughout the years consequently a higher income. Income is extremely critical in business since it guarantees that the business operations are overhauled and extensions and more improvements were accomplished through this (Schwaab, Koopman, & Lucas, 2017). Then again, the age contrasts in the UK show that the middle ages are numerous who are the most potential clients. Then again, profession states of mind in the UK demonstrate that the general population is resolved with their vocations henceforth this is an assurance to them that they will dependably provide with work for a significantly long time (Scarborough, 2016). Labor is critical particularly to a food and beverage joint considering that they are managing the field of designing which is a more specific zone. Along these lines, this demonstrates how social factors are favoring Chinese Patisserie as far as execution in the market and thus it is worth investing.
Technology is among the essential factors in business. Technology development refers to advancements that the company usually makes to ensure that their technology is of high-quality standards and meets the market needs. In essence, the level of technology often determines the success of a company. It implies that high-quality technology is often associated with high-quality products which automatically leads to the creation of high demand for the product in the market. Technology has significantly affected the progressions that we are encountering in the realm of today. We can appreciate the benefits today due to the nearness of technology. Technology has offered first need in fast food companies considering that it manages specific issues in the preparation of the products. The UK has possessed the capacity to engage the organizations and businesses by giving them the vital technology to empower them to deliver better understudies to impacts in this organizations (Ramchandran, Pai, & Parihar, 2016). For this situation, fast food joints have possessed the capacity to enhance their level of technology making it simpler to think of various plans that suit the inclinations of clients in the market. Along these lines, it is clear from how the business has possessed the capacity to change their methods for creating products. It suggests technology has empowered the industry to apply their methodologies in the market henceforth giving them a high ground. Therefore, the technological environment is exceptionally favorable and has given the business a chance to perform well throughout the years. Thus, implementing the company will provide an opportunity to progress well considering that the business will have the chance to execute its activities in the best manner because of the enhanced technology.
The food and beverage industry can be equated to a competitive market environment that is characterized by a high number of firms and consumers. Each business strives to maintain its customers as they attract new ones as well. It is the current situation of the macro industry in the UK (Osmani & O’Reilly, 2009). It is for this reason that makes the market to be having minimum barriers to entry and exit. Any individual that wishes to establish a business has the right to do so provided he or she is compliant with the set regulations that have been put in place by the government. Building this business will require us to be compliant with the licensing board and meeting the set regulations. It implies that there are minimal barriers to entry hence making the idea to remain feasible in the UK market.
On the other hand, it is essential to look at the competitors that exist in the market. Competition is often considered as a threat to the business that can act as the most significant barrier for other companies entering the market. Besides, competition in the market usually leads to low profitability hence making it difficult for a business to sustain itself. Some competitors are operating in the UK market that will force the new company to employ better strategies (Jia, Wang, Mustafee, & Hao, 2016). The focused factors in the business sectors allude to the credits to which the business utilizes and relies upon as a method for displaying better execution. The competitive factors in the market are more often than not because of the high number of members in the market that expansion the dimension of rivalry compelling the organizations to utilize ways that will pull in more clients to their business. The Hummingbird Bakery Company has experienced different headways over the past periods. Improvements in the organization have been because of the progress on innovation and the progressions and patterns in the market (Gegg and Wells, 2017). The suggestion is that as different organizations are propelling, McDonald’s is likewise utilizing new systems that assist in keeping up their clients as they draw in new ones also.
There are various contending factors that the organization is utilizing in its joints the world over. In the first place, the organization presented oneself administration technique where the clients are required to line on the lines as they anticipate their requests. Without a doubt, the organization could profit by the method for quite a while thinking about what they have dependably been account a high number of offers serving their clients online as opposed to on tables. The methodology empowers quicker administrations, and along these lines, clients can be served in huge numbers (Hussain, Shamsudin, Hasim, Salem, Gadar, Ali, & Abdullah, 2017). Much of the time, particularly amid the ends of the week, there are typically long lines of people who hang tight to be served by the business. The level of competition, in this case, can be reduced by the firm’s strategy in the market. A firm’s infrastructure is critical in an organization because it enables the efficient undertaking of operations promptly. Also, support in a company is a great determinant of the output. The company is substantially investing in technology as one way that they can deliver quality to farmers in the market. Through various techniques that are incorporated by the company, it will be easier to develop new products that suit buyers in the Middlesex market.
Another contending factor that stays with the important in the market is the presentation of an assortment of items. Giving the clients a full scope of things in the market is among the key procedures that have kept most organizations in the task and recording better exhibitions in the business. Different contenders like Tesco organization could think about the inclinations of the clients and guarantees that they are furnished with the items that they most interest from the business (Ebel, Bretschneider, &Leimeister, 2016). The wide assortment pulls in clients to the business doing the company to record high turnover income all through. Furthermore, the organization has been adaptable in the market as they continue presenting a new mix of their items for both the potential and new clients visiting the business. New items in the market are dependably channels through which organizations can guarantee that there is a consistent stream of clients. The factor of new items in the market is the thing that recognizes a business from its rivals in the market. Clients will dependably lean toward where they are offered with an assortment at neighborly costs in respect to the value that is being provided by different substances in the market. The Hummingbird Bakery is engaged in providing its clients with focused prices that coordinate with the nature of their items. The value factor is extremely fundamental since it’s a determinant on whether the clients will almost certainly manage the cost of the things that are being offered or not. It suggests the firm could be a test to the business; however, this will be drawn closer through execution of counter methodologies.
This section can be concluding by evaluating the porters five forces that are mainly used to establish the level of competition in the market.
Buyer Power – The buyer power in the UK is higher because there exists a large population with a high consumption rate. It implies that businesses are experiencing high sales. Therefore, implementing the idea guarantees the enterprise to sell its products.
Threats of new entrants – Some firms are interested in entering the market, and thus this is a threat to the business once it will be established. It will act as new competitors and therefore will limit the business profits (Blyton and Morris, 2017).
The threat of Substitution – The risk of substitution exists in the market considering that most businesses that are entering the food and beverage industry are trying to distinguish their products to attract customers.
Supplier Power – There are a high number of suppliers that act as competitors, and thus this remains a threat to the business. There is a need to consider strategies that will help the industry create a broad customer base.
Competitive Rivalry- This implies that the level of competition in the market can be moderate and thus it is friendly for any business that wishes to establish its joint.
Have you tried Chinese pastries?
Did you like them or would you want to try them?
I often visit aChinese Bakery?
What kind of products would you like to find in a Chinese bakery?
If a Chinese Patisserie opened at Middlesex Street, would you go?
During what time of the day would you eat Chinese pastries?
How much would you spend for a pastry?
The above is a list of examples of the questions that were answered by the respondents in the research — the results of the study involving an evaluation of Patisserie products and their impact on the UK market. The respondents dully filled fifty questionnaires in the research. 48 out of 50 surveys were returned for analysis and discussion. It was a good rate for review because a higher percentage responded well to the questionnaire and interview that was conducted by the researcher. Statistical test using SPSS was carried out to come up with frequencies on the data analyzed. In turn, this enabled examination on the data and making of inferences and conclusions from the results. Some of the results for example in question 3 indicate that a majority, 30 out of 48 respondents strongly agreed on the statement, 15 out of 48 agreed with the statement, 1 out of 48 strongly disagreed, and 2 out of 48 disagreed with the report. Therefore, most individuals agree that the presence of Patisserie foods in the Chinese market was significantly impacting the Chinese economy.
The fear of entering the market is often common especially for new business in the market. It usually arises because of the nature of the market and the uncertainty that is generally common. Some factors raise the fear of starting the business. First, competition is one of the elements that makes it reluctant entering the industry. The logistics of the business could be another fear of starting the market considering the concept of experience. Inbound logistics refers to the processes that are usually used by the company to ensure that external inputs are received and well stored (Bellofiore, &Garibaldo, 2011). The entity needs to ensure that the inbound logistics are in place by creating value with the suppliers. It entails building an enhancing relationship with its suppliers. For example, the business should be particular that the suppliers are paid on time. It is what makes the products are as well delivered on time minimizing the delays that usually lead to inefficiency in terms of production.
Managing the operations of the business could be another fear as it requires experience and perfect knowledge about the market. It refers to the activities that the company engages in to ensure that the inputs are transformed to quality output that is sold to customers in the market. In this case, a business is expected that the employees are tasked with various processes on the raw materials (Simon, 2019). It extends to branding and packaging of the output before it is released out to the market. Research can be incorporated as an activity in the operations because it has a significant contribution in ensuring that the end product is of high quality. It entails the actions that take place outside the company to ensure that the products reach their targeted customers. Fast foods have put some retailers in the market that sell the products to the customers on their behalf.
A good example is an established company like McDonald’s. Also, the company has a team that deals with advertising of its products to customers (Driffield, Love, & Taylor, 2009). Advertising is critical in the market because it increases the popularity of the product in the market hence making the company gain new customers and retain the old ones as well. Sales and marketing are other challenging aspects that create fear of entering the industry. Marketing and sales of the company are conducted in some ways. First, as mentioned above marketing is attained through various means of advertising. It entails through television and other social media platforms in the market. The company intensifies on its marketing to ensure that it dominates the market and new entrants are discouraged from investing.
However, despite the fears of getting into the business, there are aspirations for the industry as well. As a single entity, the firm aspires to be the best joint around the Middlesex area and a leader in the market segment. It is a passion that has been motivated by my family members who believe in my potential running it (Tolfree, 2008). The principal success factors for the business include better quality and service, patience, and determination. The dream team members for the company include a manager, an expert in the food sector, and a marketer.
From the above analysis,some recommendations arise. First, it is important for the business to consider the risks that are prevalent before investing. Also, another suggestion is that there is a need to conduct further research about the market. Research is important because it will equip the business with the necessary knowledge and skills that are necessary for operation in the market.
One of the memorable aspects that I have learned from this assignment is that the research is a critical aspect in the market because it helps the business to assess the risks and challenges and thus, making it easier to make a wise and an informed decision.
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