Part 1: Increase in the Medicare Patient Population
This research project aims to determine the relationship between the success of Amazon coffee in Thailand and the franchising business model used. It also aims to find out the differences of marketing composition factors and psychological factors which may affect the customer behavior patterns of Amazon coffee in PTT gas station in Bangkok as well as Suratthan. Yet further, the research project will look to highlight the benefits that entrepreneurs may stand to gain as a way of improving the marketing strategies to use. Thus the research is an all-round one focusing on the product, customers and entrepreneurs.
According to Black Canyon, the business strategy of franchising argues that a business stands to gain more if it strives to sell more, lower operation costs and maintain the quality of products and services (Black Canyon, 2014). Franchising essentially provides a business with certain advantages. For one, it enables a business to create a customer orientation as well determine a competitive advantage to employ. Therefore, a business would need to determine what the customer is looking for (Margo et al, 2013). Then, it will determine how and where the business is to be positioned. In this project, the aim to determine what the Thailand customers aged 20 years old and above are looking for. This hence follows logic the where café’s for Amazon Coffee are to be positioned.
In today’s coffee business, the specialty retail coffee industry is a unique one. This is because it draws many admirers of the product, the coffee takers (Black Canyon, 2014). In any normal circumstances, people focus on the things that have the greatest personal interests. Thus, all that matters for coffee fanatics is coffee. People in Thailand’s capital Bangkok and Suratthan spend their time in the evenings or in their travels sipping coffee at the coffee café’s available (Vanniya, 2014). Amazon coffee café’s are among those offering this coffee. Amazon coffee café’s operate as a franchise. Others available include Starbucks, Costa Coffee, and Black Canyon among others.
In recent times, Thai’s have been found to plunge more into becoming sophisticated coffee consumers. Before that, the majority of the coffee consumers in Thailand paid less to have a cup of coffee (Vanniya, 2014). At the same time, these consumers seemed comfortable with less choices of coffee. Thus, the choice they made was only for the three coffee brews available; that of black, hot and cold. Conversely, Thai’s have since improved on their coffee preferences and have put themselves on a global level of coffee drinking trends. This improvement in customer preference has necessitated the improvement of the coffee providers. Café owners have to comply with the global standards of coffee production as well as outdo the competition from rivals.
Following the above revelations, Amazon Coffee cafes have been trying to adopt new ways of establishing themselves in the market as the favorites. Franchising has been established as one of the strategies to stay up. Currently, Amazon has more than 36 locations across Thailand while more are scheduled for opening (The FranchiseMall, 2014). In a typical Amazon coffee café, an array of offers include smoothie choices, fresh juices, soups, wraps, salads as well as sandwiches ideal for breakfast. These are available everyday of the week. Amazon Café Franchisee’s aim to make high sales, reduce operation costs while maintaining the product and service quality.
Part II; Financial Business Plan
The concept of franchising has been found to succeed in cases where running own business can proof less profitable. Franchising enables business to be set-up in different locations. In so doing, many customers can be able to access the business from the different locations more easily. Besides, the cost of setting up a franchise is relatively subsidized since government authorization is required. Even further, matters to do with pricing are reached at by following the traditional model of the company. This means that prices are set in a uniform manner for the franchisee across the board.
Leveraging is also possible. This is because the outlets are open 24/7. This is good comparing with the fact that other retail food stores close in particular times such as nights (Sara et al, 2013). Their location in filling stations offers strategic points for travelers to buy the Amazon coffee. The design adopted by the franchisers ensured that space usually met the size within the PTT Plc petrol stations with green tone decorations. The effect of this was to create an image of a cool and relaxed atmosphere for the customers. This is also Amazon Coffee’s uniqueness and success (Minor, 2014)
As a franchise, the costs of operation are significantly reduced. For instance, the start-up costs are normally fixed and go a long way into covering the majority of initial operating equipment, renovations and signage. Of course the monthly operating costs for all business are there such as royalty fees, administrative costs, rent, staffing, products, supplies, utilities among others. All the same these costs are neutralized by the reduced fixed costs.
Continuous Improvement
Amazon Coffee franchisees often employ the Japanese principles of Kaizen. This philosophy is a management concept whose dedication is continuous improvement. The luminaries in the coffee industry have always said that there must be something new to be learnt about coffee. This is what Amazon Coffee has always considered. It is also a pledge that the Amazon coffee franchisers have made to their clients. There are gains associated with improvement of performance, quality of life or personal satisfaction. Amazon Coffee Franchisers believe that an improvement, however small it is, means success to the business. Thus the franchisers are actively involved in events and seminars aimed at improving performance.
Continuous improvement is also brought about by the fact that coffee consumption is taken differently. Thais nowadays drink coffee more often than the once-a-day treat idea which used to exist in the past. It is being drunk while driving, during leisure or while socializing. It is no longer just a stimulant but has become part and parcel of Thais lifestyle. Drinking coffee has become fashionable and for that matter, necessary. Thais have been found to love new things and are bored easily with same old brands. Therefore, in the more than 700 Amazon café outlets, improvement and introduction of new brands is a must. This is easily achieved through a franchise than if the business was individually owned.
High returns
Franchising as done by the Amazon Coffee has helped to minimize risk brought by growth. The Thai coffee market has been growing since the early 2000s to date. By adopting the franchise, there have been more financial returns and a reduced risk. By franchising, relatively less money is put into opening up the business with more locations. That is why has been easy to open up more than 700 outlets both in Bangkok and Suratthan areas. Consequently high royalties are earned from the sales in the various outlets. This is success.
Finally, the franchising strategy has enabled Amazon coffees to get the best talented people to who manage the outlets. Only the qualified and hard working people are considered for management of the locations. Generally, qualified personnel only but grow to manage the business well. Furthermore, franchising brings about easy obtaining of capital. Franchisees pay to get outlets in the chain. This means the number of locations can be increased without using much of own capital or even borrowing from investors or banks.
References
Andrew H. (2007). Fundamentals of Coffee Business. London: Sage Publications.
Black Canyon. (2014). ‘International franchise prospectus’. Black Canyon (Thailand) Co Ltd. [online]. Available from: http://www.blackcanyoncoffee.com/blackcanyonThailand/images/prospectus.pdf. [Accessed 20 November 2014].
Engage Eco Products (2013). PTT’s Café: Amazon ready to explore the retail jungle on its own. Available from http://engagenrc.com/2011/07.htm [Accessed 20 November 2014].
Margot H., Deike D. and Andrea G. (2013). Business-today:7-Eleven shows a brand can benefit from adapting to a local market. (Online). Available from: www.m.businesstoday.in.html [Accessed 20 November 2014].
