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New Business Adventure And Target Assessment Answer


An identifying business opportunity has become a key success factor for the modern marketers today, as it helps to analyse the degree of improvements the business is going to experience through the new venture. Before entering into the new business venture, a precise evaluation of the target market needs to be conducted by the entrepreneurs to attain knowledge regarding the competitors and the validity of the present experiment as well. This scenario becomes more crucial in the beverage industry as the number of competitors is rising significantly in the global market (DingBang, 2012).
Considering the fact, the current study attempts to open a coffee shop in the Singaporean market and its business opportunity as well. This study also provides the logical justification for choosing beverage industry along with its validity in the Singaporean market, considering the case study of a fast food organisation ABC Coffee Limited (Ltd). ABC Coffee Limited has planned to expand its current business venture in the Singaporean Coffee industry. Considering the fact, a range of competitor analysis of the ABC Coffee Limited fast food industry would also be made in the current study ending with the reflection note of the overall study.

Opportunity and justification of the new business venture:

The Singaporean Coffee market is primarily dominated by Nestle, which accounts for more than 42% of the retail value share (, 2016). Supporting to this fact, Sutherland (2007) stated that the Coffee business profitability in increasing by 7-10% regarding the retail sales volume. Thus, the Singaporean Coffee market could introduce new business opportunities to the ABC Coffee Ltd. At the same time, it could also create greater competitiveness of the current firm as well (Pawle and Delfaud, 2014). However, the fresh ground Coffee pods and a variety of Kopi items could likely to benefit from an increasing customer base, as this product is considered more appealing to the customers from the older generation. Steger and Ionescu-Somers (2008)also added that due to the beach location, the international visitor rate in the region is frequently increasing. The customer footfall in the beachside restaurants grew by 17%. Additionally, the regular disposable income has influenced the tourists to increase the expenditure margin by another 8% in the present business location (Taleghani et al. 2013) This scenario indicates that the Changi Beachside location could facilitate the current business venture regarding experiencing greater footfall. The affirmative response of the existing population regarding the Coffee and beverage item could benefit the firm by increasing revenue, margin of averaging 10 % for each business year (, 2016). Thus, it could be inferred that the ABC Coffee Limited could achieve a sustainable business positioning for its new business venture.

Porter’s Five Forces:

Competitive rivalry
The firm ABC Coffee Ltd would face a strong force of competitive rivalry in the market of Singapore. For an example Sutherland (2007) stated that a large number of firms like Strabucks, Costa Coffee would be the main competitors of the ABC Coffee Ltd.
Bargaining power of buyers
The company would experience the strong force of bargaining power of buyers while operating in the seaside of Sinagpore. The substitute availability of the products and the lower switching cost would be the most significant forces affecting the business of the ABC Coffee Ltd.
Bargaining power of suppliers
The firm would face the weak force or bargaining power of the high variety of suppliers (DingBang, 2012). The large overall supply would affect the operation of the single suppliers of the firm. Thus, the firm would need to adopt a strategic initiative to diversify its supply chain process.
Threat of substitutes
The firm, ABC Coffee Ltd would experience the strong force of the threat of the substitutes. In the opinion of Taleghani et al. (2013), the Five Forces analysis model affects to the impact of the substitute goods and services offered by the coffees shop. The availability of the adequate substitutes would restrict the customers to shift towards the rival coffee shop.
Threat of new entrants
As the firm, ABC Coffee Ltd is the new entrants in the market of the beverage industry, moderate cost of doing business and moderate supply chain cost would help the brand to enhance the market share (Venkatesh, 2015). On the other hand, the other new entrants with the high cost of brand development would become a threat of new entry firm to the ABC Coffee Ltd.

Evaluating the target market:

At the initial stage of the new venture, ABC Coffee Limited could start the store operation nearby Changi Beach, in the eastern region of Singapore. Also, the firm could primarily focus on the cappuccino, espresso, café latte, cold ‘smoothies’ and Cold Coffee. Along with the smoked chicken, burgers and waivers also need to be introduced to catch the attention of all age groups as well (Chen, 2007). The store location could also generate added advantage regarding attracting a large pool of customers (Bahar and Aysel, 2015). The professionals and a large pool of student group, can be attracted towards the firm, due to product innovativeness and the store location as well.
In brief the target audience of the Coffee shop ABC Coffee Limited could be as follows:

Kids and teenagers:

Customers aged between 13-17 years could bring 2-5% sales of the firm. Steamed milk and whipped cream topped Coffee drinks could also become popular among the teenagers and the kids. Fridell (2007) also stated that kids go with the parents to have fun in the Coffee shop. Thus, the food quality needs to be managed considering the health choices of the parents.

Complimentary products:

The complementary food items such as the sandwich, burgers, smoked chicken, etc. could be offered as additional items to attract more customers towards the brand. Offering the corresponding item could be feasible for the brand as the brand has prior experience related to the fast food service industry.

Adults and young adults:

The current firm’s primary target market could be the men and women aged between 25-45 yrs. Considering the fact, Etienne (2006) stated that this group of people accounts for more than 52% of the Singaporean Coffee business. Focusing on these target segments could help the firm growing the strength of its target audience at a rate of 3% per year (, 2016).

Conversely, Jones (2010) indicated that the fierce market competition in the Singaporean beverage market might resist the firm attaining large customer base towards the enterprise. Thus, greater investment in the research and unique product offering could reduce the chances of gaining moderate customer bases in the initial phase of the business. Considering the fact, the brand could introduce traditional food items, which can bring the majority of the customers to the brand. Within the first two-quarters, the firm could target to earn revenue of 45,000 SGD. Krishna et al. (2014) also added that decent return on investment could be experienced by offering unique product offerings in competitive pricing offerings. Thus, through the potential brand planning and targeting the adult and young generation customers, the brand could experience more than 30% profitability in the Singaporean Coffee market (, 2016). Once the business manages its individual identity, a diversified product range could be introduced to maintain the brand popularity among the competitors (Davis et al. 2012).

Secondary research for analysing the competitors and the validity of the venture:

Starbucks and the Nestle are the prime competitors of the ABC Coffee Ltd. Starbucks Coffee Singapore is a wholly owned subsidiary of the Starbucks Coffee since 2004. The first Starbucks store was opened in December 1996 (, 2016). According to the opinion of Iqbal (2012), Singapore is the third international country where the firm has introduced its sensitive customers to enhance the experience of Starbucks. It has been observed that the firm has managed to contribute 4% of the market share to the Singapore economy. In the opinion of Lim (2016), the quality of both the beverages and the complementary food items are the major advantage of the brand. However, Venkatesh (2015) argued that the brand fails to tap the middle-income group due its premium price range. Hence, it could be derived that diversified product offerings and the attractive store ambience could help the firm, ABC Coffee Ltd. to draw the attention of the customers.

Adding to this, the other rival group, Nestle, which had obtained almost 42% retail value share in the coffee market of Singapore (, 2016). The firm has started its Singaporean operation in 1912 and has built its success largely in the coffee market of Singapore (, 2016). The affordable price range of the products is the major advantage of this company. As per the opinion of Taleghani et al. (2013), the unlimited complementary food items are the prime strength of Nestle. Therefore, the firm ABC Coffee Ltd. would need to focus on the standard food quality and the affordable price range for attaining the customer’s attention. In this present scenario, Sutherland (2007) mentioned that offerings of complementary beverage items would be helpful for the management of ABC Coffee Ltd. to grab the attention of the customers. As per the opinion of Pawle and Delfaud (2014), the range of Cappuccino and the other beverage has to be started from S$6 per product and the Espresso could be started from S$7. Therefore, it could be inferred that diversified product offering with an affordable product range and the lucrative store ambience could help the brand to increase the customer attention.

Supply Chain Management

It is the proven fact that the beverage industry is highly dependent on the supply chain management system. Therefore, the ABC Coffee Ltd. would encounter the risk of supply chain management process if could not appoint potential suppliers. As per the opinion of Davis et al. (2012), the loss of a single reliant supplier could lead the firm to experience a huge loss of the income. Thus, it could directly affect the consistency of the business. In this present context, DingBang (2012) stated that selection of more suppliers and maintain a healthy relationship with the suppliers could help to mitigate the distribution and supply loss. As a consequence, if one fails to deliver the required ingredients, the product could be expected from the other suppliers.

High Capital Investment

As the firm is going to penetrate in the new target market, a high capital investment would be a high risk while developing the set up at the area Changi Beach in Singapore. It has been speculated that there is the presence of several leading competitors with the same domain so that, the high capital investment would not be convenient for ABC Coffee Ltd. while entering into the coffee market of Singapore. On the other hand, Fridell (2007) mentioned that the products withdrawn from the market would require covering by its selling costs. Thus, it would require to include a strong settlement for reminiscence the cost that has been experienced by the other coffee companies. The high capital investment would experience a loss of funds to the entrepreneur of the ABC Coffee Ltd.

Market Stability

Considering the opinion of Jones (2010), as the coffee shop would be located in the beach area so that the coffee shop would attain the maximum percentages of the visitors. As a consequence, the management of the ABC Coffee Ltd. would need to keep a focus on the health factors of the customers. The health obscurities of the customers could affect the market stability factor of the firm. The comprehensive market research on the coffee industry reflects that high price of the products could reduce the market popularity of the newly developed coffee shop as there are several rivals like Costa Coffee (Kolk, 2012). The organised service lines could be helpful to increase the customer’s footfalls in the coffee shop. Hence, the introduction of a healthier menu and effective workers could help to enlarge the sustainability of the coffee shop in the target market.


The current reflection describes that ABC Coffee Ltd. is going to penetrate with its new venture of coffee products in the market of Singapore. After analysing the current research, I perceived that a clear evaluation of the target market requires being conducted by the entrepreneurs. It has been observed that the market evaluation and the validity of the present venture are equally important while developing a new business set up in the new market. The study is also helpful to understand the logical justification for selecting the beverage industry in the market of Singapore. During the study, I understood that the entrepreneur of the organisation needs to take severe steps while expanding the business with a new venture like ABC Coffee Limited, which is going to enhance its business operation to the coffee beverage from fast food items. In the portion of the opportunity in the target market, the firm has encountered the leading organisation like Starbucks, Nestle as its main competitors. I have realised that the coffee business profitability in the market of Singapore is continuously increasing. In the addition, I have realised that The Changi Beach Area in the Singapore would be a premium place for starting the new business venture for ABC Coffee Ltd. I perceived that the fresh ingredients, lucrative store ambience and the diversified food product items could be helpful for attaining the maximum customer footfalls in the seaside area.

Furthermore, the study has helped me to understand the affirmative response of the existing customers regarding the Coffee and beverage item that would benefit the coffee shop to increase the revenue margin. The evaluation of the target market segment reflects that the brand would get different types of customers starting with kids, teenagers to young adults and the business personnel. In the addition, the seaside location of Changi Beach in Singapore helps the firm to compete with the leading rivals. During the research, I came to know that affordable price and lucrative store ambience would be fruitful for ABC Coffee Ltd. to draw the attention of the customers. After that, while analysing the issues of the firm at the time of development, it could be measured that Supply Chain Management, High Capital Investment and the Market Stability would be the reason of the risk issues for the firm, ABC Coffee Ltd. while developing the new set up of a coffee shop in Singapore.

On the other hand, the strategic initiatives like a potential group of suppliers, innovative product offerings and the low investment would help the brand to overcome the issues. At the initial phase, this kind of activities would help the brand to attain an optimum level of popularity in the market of Singapore comparing with the leading coffee firms. Finally, the analysis of the current share of the existing players like Nestle, Starbucks and Costa Coffee has helped me to acknowledge the initial requirement of the brand to organise the new business venture. Moreover, during the research I perceived that offering diversified products and online customer service could be considered effective enough for the ABC Coffee Ltd. to achieve an outstanding brand positioning and sustainable marketplace in the Singaporean coffee market 

Conclusion and recommendation:

The overall study indicates that the overall brand positioning of the ABC Coffee Limited could attain a potential market position by offering everyday coffee items such as Kopi and Espresso. Altogether S$20,000 capital could be invested to experience a revenue balance within the competitive market segment. The innovative product offerings could be the unique selling proposition of the favourite brand as well. However, at the initial phase, lack of adequate funding could also resist the name from investing a large sum in its marketing activity. Thus, the name popularity might be affected.
On the other hand, offering healthy food and average product pricing could also help the brand, attracting all age and income group customers towards the brand. At the same time the market share of existing players such as Nestle, Starbucks, Costa Coffee, could also generate questionable business sustainability of the current firm. Thus, offering product variety and online customer service could be considered sufficient enough for the favourite brand to attain a remarkable brand positioning in the Singaporean coffee market. Hence, the firm could experience higher business sustainability in the Singaporean Coffee Market.


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