Introduction
MOYON is a brand name for a new business being introduced to the tea industry. MOYON is the first tea house located next to the Thames and will be within prime locations for tourists and locals in Central London. MOYON tea house will offer a wide variety of teas, snacks, and branded accessories. It aims to be a modern take on a classic activity of tea drinking, appealing to younger demographics with its approach and values.
MOYON will embrace both the social elements of tea drinking as well as the holistic health benefits of the product itself. Therefore, its unique selling point is offering healthy, sustainably sourced teas in a charming experience. The goal is to expand the brand into a franchise. MOYON is meant to represent the disruption of the industry, a healthy alternative to coffee, and a modern social experience to the well-loved UK tradition.
The hot beverage industry has been dominated by coffee giants such as Starbucks and Costa Coffee over the last decade. However, the UK remains a rich market for tea, being one of the largest importers of tea and statistics demonstrate that tea is consumed at rates almost twice as much as coffee. Ironically, these coffee giants also offer a variety of teas alongside the many tea rooms and other locations that can offer a cup of tea anywhere in the UK. The market is oversaturated, but there is an inherent gap as there is no dedicated tea-focused franchise, nor has any café or brand undertaken to embrace tea’s multiple health benefits in the public.
Industry analysis shows that it will be tough to break in and there are also concerns due to the COVID-19 pandemic. However, there is optimism given that the café sector is on the rebound, alongside a renewed interest in tea, especially among younger demographics that MOYON is attempting to capture with its health-first and social interaction messaging.
The business strategy and objectives for MOYON identify the brand as a unique opportunity to disrupt the market and provide greater access to high quality and healthy teas and related products. The strategy and model is relatively simple, attempting to achieve maximum exposure through aggressive marketing and loyal customer service. Marketing drives the narrative while operations at the teahouse demonstrate the high quality of product and service that MOYON claims. If effective, the combination will allow for rapid growth and profitability which can ultimately resolve most of the issues both in the industry and within that the company will experience. Marketing and the marketing mix are the key elements for MOYON’s success.
Financial analysis demonstrates that to start-up MOYON as a company and teahouse requires high upfront costs as typical within this industry. It maintains relatively similar operational and capital expenditures. However, both are justified when developing the concept from the ground-up. Projections of sales and sustainability analysis indicate that MOYON will be able to reach profitability within 6-12 months, even under conservative estimates for businesses of this type. Risk analysis has shown that there are strong risks, ranging from the COVID-19 restrictions to sourcing of ingredients to ineffectiveness of the business model. However, mitigation measures are possible with appropriate planning and some alternative scenarios were played out. Overall, MOYON is highly entrepreneurial endeavour seeking to fill a gap in the market with a passionate idea and market-disrupting
Current Situation
Entrepreneurial Opportunity
Coffee consumption has taken over the world in recent years with brands such as Starbucks dominating the market with not only its selection of hot beverages but also its atmospheric coffee shops where people can meet or work. However, one market that remains untapped to the full extent in the UK is tea. Approximately 100 million cups of tea are consumed daily in the UK, far exceeding the 70 million cups of coffee, which is almost 36 billion cups per year. The UK has the largest per capita tea consumption in the world after the Republic of Ireland (UK Tea and Infusions Association, 2021). Furthermore, the UK is the fourth largest importer of tea in the world, with imports of around 271 million British pounds in 2020 (Conway, 2021). Tea has historically been and remains a key part of British culture and lifestyle.
Despite tea being served in virtually any food or beverage location in the UK, including Starbucks, there is no single brand or franchise that is recognized for its tea or synonymous with public perception. It can be argued that tea is much more simplistic than coffee, with the majority of Brits drinking black tea, which requires nothing more than a tea bag, hot water, and some milk (common in British tea consumption).
However, the cultural element surrounding tea indicates that there is a potential to create a brand that focuses on both the wide variety of teas available (herbal, fruit, etc.) as well as the practice of tea drinking that has become a point of tradition, socialization, and relaxation for many (Greenwood, 2016). Taking inspiration from Starbucks and other brands, there is ample opportunity to develop a business and brand which incorporates quality products with the tea-loving contemporary lifestyle, appealing to modern values that are relevant to young people, such as sustainability, health and wellness, and others.
Despite tea being served everywhere, the presence of a business that embodies tea and promotes various elements of cultural, social, and spiritual tea drinking is potentially filling a gap. It can be a vital part in enhancing the culture of tea drinking in the UK and worldwide, making the widely popular drink and activity an experience. There is no key demographic for this as tea is appealing to all in the UK, but young people may particularly benefit from the experience factor similar to that of the stereotypical “coffee shop vibe” that is seen with Starbucks. However, tea drinking has always been associated with tradition and some level of spirituality and wellness, an atmosphere that can be competently capitalized on to create a space that is both modern and embraces these concepts. Therefore, customers that are not just seeking a quick cup of tea, but those wanting to try new kinds of beverages, have a relaxing time and socialize will benefit most from this experience.
Business Description
The business will consist of opening a tea house in the vicinity of central London and the river Thames, a popular tourist and high foot traffic location. The company will be branded under the name of MOYON, to become the ‘Starbucks of tea’ and opening franchises throughout London and the UK if the model is successful. MOYON will focus on serving a wide variety of teas, ranging from traditional to more unique herbal and fruit teas. Furthermore, in line with English tradition, customers will be offered their choice of milk for the tea (regular, soy, almond, etc) as well as a basic offering of some key desserts and pastries that are popular in the UK.
Other products, such as coffee, will be available in their basic forms, but tea will be the priority for the tea shop. MOYON tea houses will have specially developed designs of the internal space with a minimalist approach but also elements that incorporate the tradition of tea drinking as well as origins of the tea. Tea will also be sold separately in branded products for home consumption as well.
The overall concept of MOYON tea houses is meant to be a location where tradition meets modernity. Certain UK traditions will be kept such as offering milk with tea, but the modern concept of offering almond or soy milk for vegetarians will be embraced. As part of marketing, MOYON will also embrace the holistic utility of tea as not just a beverage but something that can be beneficial for health. In the modern trends of wellness, meditation, and holistic approaches to health, tea can play a vital role.
Tea has the benefit of offering caffeine without the intense pressure on the cardiovascular system that coffee has, tea also has antioxidants and other useful elements. Research has linked benefits of tea to weight management, heart health, diabetes, reduced inflammation, and supported immune function (Gordon, 2020).
Therefore, unlike competitors which take a highly commercial or artisan approach to beverages, MOYON will focus on the benefits of tea. While black tea is traditional in the UK, there are numerous other varieties, such as green tea, white tea, herbal tea (with multiple types of herbs), and traditional Chinese oolong tea (Penn Medicine, 2019). The atmosphere that can be created in MOYON tea houses, with fragrance and the opportunity to try new types of teas that would not be convention in other locations. The unique selling point would be a variety of choices for tea lovers and a space that embraces tea-drinking as a holistic and social activity.
MOYON will take lessons from Starbucks, which in its early days saw success partially due to the in-store space it created with meticulously planned layout and amenities. The company has since then transitioned to a more grab-and-go model and more retail locations with pick-up only, accelerated by the COVID-19 pandemic and what it calls a digital future (Bhattacharyya, 2019). However, as mentioned, tea-drinking is a social and peaceful activity, it is not meant to be a rapid on-the-go type of beverage. Most UK tea lovers prefer to sit down and have a cup of tea while reading, thinking, or socializing with family and friends.
MOYON will attempt to create the “coffee shop” atmosphere with its own twist. There will be tables available both inside and outside at the store front for both companies of people and individuals. Wi-Fi will be available as well as a small library of books on tea for individual visitors. The layout will aim to ensure effectiveness of the ordering process while also contributing to a relaxed feel to encourage socialising. For its physical space, MOYON will attempt to maintain a ‘historic’ vibe but modernist design and look as well as emphasize the holistic and ‘spiritual’ aspects (fragrance, dried tea leaves in decorations) of tea drinking.
Mission statement: MOYON tea houses will provide an inclusive and immersive experience of tea drinking while offering a wide variety of high-quality tea products to represent the established traditions and drive forward the culture of tea in the modern day.
Vision: MOYON seeks to become a franchise and experience that is synonymous with tea and social tea-drinking in the UK, a trusted brand surrounding one of the most popular activities in the country.
Values:
- MOYON will offer an extensive selection of high-quality teas and seek to enhance the tea culture and experience in its shops.
- MOYON will source tea and products from sustainable sources following all legal and ethical guidelines.
- MOYON will respect the traditions of tea-drinking customs in the UK.
- MOYON will value its customers and their desires regardless of background, beliefs, or demographic.
- MOYON will promote the health benefits of tea and its role in mental and physical wellness.
External Environment Context
PESTEL
Needs Analysis
In the UK, tea is served virtually anywhere, ranging from cafes to bars and pubs. There are also dedicated tea rooms where tea and light meals are served in a subdued atmosphere. Tea rooms are located in restaurants and hotels. Therefore, Commonwealth and European countries typically do not have the tea houses that are commonplace in Asian countries such as China, Japan, and Nepal, used as a traditional place to socialize and enjoy varieties of tea. There is a gap for this in the UK market, bringing a modern version of teahouses that is based on local cultural norms. While it may not be a vital consumer need, there is an evident gap in modern teahouses in the UK which may be highly popular and liked among the public.
Market Analysis
MOYON is operating in two distinct sectors of the market, the first being cafes and coffee shops, under which its tea house will be categorized, while the second is tea sales. Prior to the pandemic, UK café sector had reached a record 10.1 billion British pounds and 20 years of sustained growth. However, in 2021, the market size had been reduced to approximately 4 billion British pounds. It is expected that the branded café market will recover to pre-pandemic level within three years, especially as restrictions are lifted (World Coffee Portal, 2021). There is a negative mood regarding trading restrictions, with only 15% being positive about it, affecting imports of key ingredients and produce. Furthermore, with the pandemic, more than 85% of shops in the industry have shifted services to meet new customer routines such as drive-through and delivery, but the in-store experience is expected to remain relevant, particularly for unique and less commercialized locations.
From an initial perspective, the market may be downwards, and the industry is not opportune to entry right now, primarily because of the pandemic and the increasing cost of sourcing ingredients in light of Brexit. However, there are also benefits such as likely decreased overhead costs such as rent and labor. Currently, it may be a strategic moment to enter the market. Experts suggest that the café market will rebound to pre-pandemic levels by 2024 despite uncertainty (Jha, 2021). The UK is gradually lifting restrictions and business owners in the café and food industry are optimistic about rise in business and in-store business (Kirka and Lawless, 2021).
Furthermore, according to industry insiders, there is an increasing demand for tea and its varieties as global tea culture is seeing growth in recent years. There is a rise of so called “tea sommeliers,” which is predicted to have an influence in the rise of teahouses in the UK. Tea is a hot beverage is seeing renewed interest every few years due to its cultural and health benefits, and global trends in its consumption increase, often at the expense of coffee consumption which due to Starbucks has become associated with high-calorie unhealthy trends (Eversham, 2015).
A large UK consumer survey in 2020 found that 43% surveyed choose tea as their hot drink of choice, up from 39% in 2019, that number goes up to over 50% in millennials. The classic ‘builders’ tea’ remains popular across, while millennials aged 16-34 tend to explore specialty variants such as herbal, fruit, and spice teas in addition to the traditional choices (Sweney, 2020). Therefore, this is indicative of strong demand from consumers, particularly in the context of products that promote health and well-being. A business oriented at exploring these aspects of cultural tea drinking has the potential for success.
Data collection was done via a broad web search of the industry, competitors, economics, and market needs to be associated with the business concept proposed. Keywords were entered in the Google search engine based on the specific information that had to be found. Official websites, reliable data sources, and reputable business journals or news were used for the market research. The majority of data was qualitative, describing the industry, the process, and competitors. This type of data is important to develop the business concept in order to have a comprehensive explanation and ensure that it can be developed into a solid business. However, quantitative data was used was necessary, much of which is cited in this business plan including industry analytics, competitor analysis, and financial data necessary. The quantitative data helped to identify that there is an opportunity in the market.
Competitor Analysis
The main competitors to MOYON are coffee chains such as Starbucks and Costa Coffee. Starbucks is an American international chain known for its high quality and extensive take on coffee products. It has just over 1000 locations in the UK and annual revenue of £361.7m (Starbucks, 2020). Costa Coffee is a British coffeehouse chain and a subsidiary of the Coca-Cola Company. The chain has approximately 2422 stores in the UK with annual revenue of 1.34 billion British pounds in the country (Lock, 2021).
Both chains serve several types of hot and iced tea. Surprisingly, the range of teas offered by both of these coffee chains is extensive, ranging from the traditional Earl Grey and English Breakfast to mint and herbal blend teas (Starbucks, n.d.; Costa Coffee). Research has not been able to identify what portion of sales for these companies stems from tea or their market share in the tea industry.
Other potential competitors are small tea rooms and tea houses in London which have their own unique aesthetic and also serve as a popular tourist and local attractions. Some of these are more luxury-oriented, located at high-end hotels, restaurants or clubs including the Diamond Jubilee Tea Salon at Fortnum & Mason and the Scoff & Banter Tea Rooms. These offer the tea sommelier experience at the highest levels with various sweet and savory options. Meanwhile, others such as Yumchaa or The Basement Tea Room offer a more down-to-earth experience in the tasting of tea, one being a modern take on a classic tearoom, while the other embraces an ‘antique’ feel. These also offer a wide variety and combination of teas, allowing customers to choose and experiment of tastes both to taste in the tearoom and to purchase to take home (Visit London Official Visitor Guide, n.d.).
Competitive Advantage and Unique Selling Point
MOYON tea seeks to fill in the market gap between the franchise coffeehouses and the highly unique teahouses. In other words, it seeks to be a modern teahouse for the everyday consumer. There are consumers that are likely reluctant to try teas from the coffee chains but do not wish to visit the dedicated tearooms. With MOYON, there will be a space of having a wide variety of tea choices, but based on a franchising, ‘fast food’ model of quick high-quality service. Furthermore, none of the competitors are embracing the wellness and health aspect of tea drinking and products, leaving an opportunity for MOYON to adopt this marketing message. MOYON will offer as many possibilities as possible for healthy teas and snacks for both consumptions within the teahouse and for sale to take home. In summary, MOYON’s unique selling point can be summed up as quality, healthy tea choices for the everyday consumer and lovers of tea.
Strategies and Plans
Strategic Objectives and Goals
The following are 5 primary strategic objectives identified for MOYON:
- MOYON will be the leading teahouse chain in the UK, challenging the dominant hold of coffeehouses in the hot beverage market.
- MOYON will become the primary brand for health-oriented and social tea drinking accessible to all consumers.
- MOYON will achieve a 15% market share penetration in the teahouses, café, and coffee houses industry.
- MOYON will always serve high-quality, sustainability sourced, and healthy product in its teas and other offerings.
- MOYON will be publicly recognized and associated with good, healthy tea in the eyes of the public as a result of its marketing efforts.
These are the strategic objectives envisioned for MOYON. In combination with the company’s mission and values, these serve as guidelines for long-term goals and achievements. They should guide the strategic planning process and decision-making within the company as it attempts to convert organizational strategy into concrete and measurable performance indicators (Jackson, n.d.).
Business Strategy
An ideal future for MOYON is to become a country-wide and even an international chain for tea similar to that of Starbucks for coffee. To achieve this, the company will need to pursue aggressive expansion with a highly developed brand identity and marketing. The company needs to develop a model for tea and tea drinking that can be easily copied for ease of franchising. This process requires meticulous planning and organization, with a developed and established means of operations ranging from which types of teas are sourced, making the tea, and marketing and signage (Young Entrepreneur Council, 2012).
However, to reach widespread recognition, MOYON first needs to establish itself locally, in the tea capital of the world, London. MOYON should be more than a small teahouse that tourists may want to visit, or some people stop along the way. Of course, those are welcome as the company seeks to be accessible, but MOYON should immediately associate in people’s minds with high-quality, healthy, social tea drinking. It combines classic tradition with modernism, it embraces the health benefits and wellness of tea as a better alternative to coffee.
It is a simple narrative but one that has to be driven, via effective marketing as well as everything in the store ranging from interior design to menus and how staff recommend products. MOYON is customer-centric, but it is also attempting to push against the coffee corporations and the unhealthy drinks offered elsewhere. Instead, it makes tea ‘cool’ and modern, full of the health benefits while being a nice social activity for both summer and winter months.
Therefore, the primary business strategy for MOYON will consist of a combination of maintaining a wide variety of teas to differentiate from competitors with a high quality of service as well as a targeted and deliberate marketing campaign from the early days to determine and drive its brand image. This is on par on recent trends in many industries, with brand marketing become the main focus over specific product marketing. Brands are powerful as they encompass associations, emotions, values, mission, and the product recognition itself (Marketing Evolution, 2021)
Business Model
The business model that MOYON will be following is relatively simple, aiming at for profit sales from consumers. MOYON will source the ingredients and create products such as tea, which the consumers will buy at an accessible price but enough for MOYON to make some profit on most sales. Individual sales will be the primary source of income for the company. Consumers will be attracted through marketing, social media, word-of-mouth and location advertising. Through high quality of products and service as well as its atmosphere, MOYON will hope to retain customer loyalty so that they will keep returning and bringing others, increasing sales. It is a traditional model typical for this type of business, with the emphasis lying on the ability of MOYON to execute the delivery of the product and the experience to the consumer (Ward, 2021).
Operations Plan
MOYON will be established as an independent company and teahouse in Central London. Its key objective is to provide beverage and food products to consumers, with the specialization being various types of tea. MOYON will source its tea and ingredients from mass distributors and wholesalers. Virtually all tea is imported into the UK from around the world. MOYON will contract a tea wholesaler such as Important Ltd or Premier Foods to deliver shipments of tea to the teahouse on a regular basis. They commonly work with local farmers or companies at the source of the tea and ensure that the shipments and logistics of import go smoothly. These companies are packers, so they ship tea and other foods or ingredients in appropriate containers with the quality needed on agreed-upon dates. Co-packers are critical in the food and beverage industry as they are able to take care of many sourcing, packaging, labeling, and logistics needs (Square, 2021).
MOYON may use several suppliers, such as a specific tea wholesaler and then a dedicated one for milk and similar products, and another one for non-reusable materials (i.e. napkins, cups). The supply chain is planned ahead and can be adjusted later based on demand, but the goal is to keep a healthy inventory in the teahouse but avoid spoilage of products that may be susceptible to it. All products should be stored appropriately as well, so milk will have to be in coolers while tea leaves should be kept dry until use.
The teahouse staff will consist of the executive manager, a shift manager, a part-time custodian, and 2-3 ‘baristas’ in charge of making the tea and other responsibilities. Each day, the teahouse will prepare for service, it will have basic types of teas on hand for quick distribution. Customers will be able to purchase other beverages such as milk, water, sodas, and light refreshments. Upon taking the order and receiving payment, the staff will proceed to making the order, including brewing the tea purchased based on the demands of the consumer or following the standard procedure as trained. The consumer will be then handed the ready product. Managers will ensure that everything is flowing smoothly, oversee elements such as inventory and payroll, maintain staffing, and ensure the quality of service.
Marketing Plan
The marketing approach for MOYON will pursue an aggressive social and popular media advertising campaign targeted particularly at the demographic aged 16-35 which are considered both a highly promising population for this product and tend to spend their income at similar locations. The marketing campaign will pursue the health and wellness message of tea, portraying MOYON as the location where one can be both a ‘sommelier of tea’ and a regular person enjoying a cup of tea, but receive the high quality of products, service, and experience. Marketing will be focused primarily on social media because it is both an effective means of reaching the target demographic and to pop up as a promising location based on various listings for tourists and locals. A social media presence is vital for a modern business which MOYON seeks to be, it is meant to establish an image and perception around a brand (Voorveld, 2019).
Taking into account the marketing mix, the marketing plan should aim at MOYON’s strengths which are a modern, stylistic, wellness-value innovative approach to traditional tea drinking. Emphasizing this in a visual medium and highlighting the atmosphere of inclusion, health, accessibility, and simplicity in a holistic manner. It is difficult to develop advertisements that truly capture the essence of a business, but it is best for MOYON to invest heavily in an advertisement campaign of high-quality, one matching its competitors rather than a superficial attempt at capturing customer attention and market.
Financial Analysis
Operating Costs
Operating costs in a business are expenses that are incurred in the day-to-day process of running its operations. In this type of business, there are also differences in operating costs, some being fixed and remaining the same month-to-month (i.e. leases, insurance), while others are variable, changing in accordance to output (cost of ingredients may change because they both change in price based on the season for example, and the amount spent differs based on demand), and much more difficult to predict (Pendrill, n.d.). The above table describes some of the basic operating costs that MOYON teahouse may occur in its operations. These are just the basic standard, with the amounts based on city or industry averages.
Capital Spending
Capital expenditure are considered long-term investments and assets that companies purchase, with the intention of to be used for longer than one year of operations (Drury, 2021). In the case of the start-up teahouse business, some of this capital spending is also initial costs to begin the business. However, these costs, such as furniture and equipment, or even less tangible assets such as signage or branding, are long-term benefits and services for the improvement and continuation of the business, making them capital expenditures.
Funding Requirement
Based on the combined total of capital spending and operating costs, the funding requirements to open the MOYON teahouse will cost approximately £275,000 at minimum, with the expectation that some additional costs may incur raising the funding requirements to £300,000. That is on par with expert estimates on opening a café or similar point of business in London if everything is built and created from scratch (Coffee Central, 2019). The funding requirement will cover all initial start-up and capital costs along with at least the first year of operations. All of the £135,000 in capital spending along with at least 25% of the overhead operating costs will be required for funding prior to any cash flow or profits coming in. These expenses will be immediate as the business type requires assets to operate. The funding needs to last through an operating year with the objective for the business to become self-sufficient within 6 months of runway time. The business is capital intensive so it will maintain a rapid burn rate of capital funding making it critical to achieve profit quickly (Peterson, Jaret and Schneck, n.d.).
Sales Projections
Since MOYON is a teahouse/café, its main sales stem from customers making purchases. This industry commonly deals with very small margins on products and relies on multiple sales to generate income and profit, unlike other industries where firms may be able to immediately begin fulfilling large contracts. Many factors influence sales such as shop location, atmosphere, income levels, and foot traffic (Reynolds, n.d.). Cafes and restaurants that are not already part of a franchise or have some sort of public persona opening them, typically have slow starts, and it takes time and patients to build up sales. The business will grow gradually as marketing expands, word-of-mouth advertising and consumer awareness rise, and the teahouse will adapt to the needs of its consumers (Lightspeed, 2021).
The projection for the first month is based on a conservative estimate. On average, at a popular teahouse/café, the consumer is expected to spend £3-5. Provided conservative estimated foot traffic of approximately 55 persons per day, which equals to an average of £200 per day, and should lead to £5,000-6,000 per month. From there the sales projections are gradually raised. It is not uncommon for a regular business of this nature to have foot traffic of approximately 200 people per day (Coffee Shop Startups, n.d.). Therefore, it is hopeful that once MOYON achieves some market saturation and effective advertising, it should be able to reach that point and beyond resulting in monthly sales of £16,000-18,000 per month.
Profitability and Sustainability Analysis
As mentioned earlier, it is critical that the restaurant achieve profitability by the 6–12-month period. With operating costs at £140,000 per annum, the monthly costs stand at approximately £12,000 per month. Based on sales forecasts, MOYON teahouse will be breaking even at 6 months and achieving profitability by 12 months’ time. This is a reasonable assumption given the breakdown of sales and finances. Within the first months, the teahouse will be in the negative financially, but it will be able to recoup costs with time after the initial 12 months of operations. Therefore, the business will be profitable and can sustain itself financially, based even on the most conservative estimates.
Risk Analysis
SWOT Analysis
The SWOT analysis demonstrates that there is a mix of both positive and negative aspects for MOYON as a business. It offers a unique approach to tea and tea drinking as a café, filling key market gaps and taking advantages of the product which can make it a potentially recognized brand in the teahouse sector with ample opportunity for growth and expansion. However, its weaknesses and threats are all based in the fact that MOYON would be a new entry to the market. It faces the same threats that most companies entering a market that is dominated and saturated by competitors. Furthermore, as a small company initially, MOYON will be reliant on other vendors as it will not have its own supply chains like multinational organizations such as Costa Coffee and Starbucks do.
Based on the SWOT analysis, the recommendation for MOYON is to pursue a strategy of rapid growth and aggressive marketing. It has to take advantage of its opportunities of a good market position currently on the rebound, an appealing brand and image, and its take on tea drinking as a product and service. Without a confident entry into the market that will attract consumers, MOYON will be pushed out by competitors or simply become a small teahouse, which is not the long-term goal. It is difficult to address the weaknesses and threats of the company until more funding is procured. Most of the threats and weaknesses will be addressed once the company has a stronger foothold in the market and begins to expand its brand.
Specific Risks and Mitigation
- Disrupted supplies of ingredients and varieties of teas – the risk of this happening on a massive scale is low. Potentially few ingredients may be limited to some extent. This can be mitigated by attempting to search for local and easily accessible alternatives. For example, if almond milk is suddenly in shortage, there is a soymilk alternative for health-oriented vegan consumers that can be procured locally. Long-term contracts and strong partnerships with suppliers and vendors with planning for contingencies can prevent this (Industry Star, 2017).
- COVID-19 restrictions limiting indoor capacity – the company can temporarily open as many outside tables as possible for visitors. Furthermore, a “walk-through” pop-up stand can be opened in the busy downtown district, where customers can place an order and it will be brought out to them from the store. The menu will be more limited but still offer the most demanded consumer items to the best extent possible. Unfortunately, this is a risk that all in the industry are experiencing, and adaptation is necessary (Norris, Taylor Jr and Taylor, 2021).
- Unable to secure funding or insufficient cash flow for full operations – finances are a major concern for the café and restaurant business as margins are typically small while overhead costs can pile up. To mitigate the risk, strong financial planning is recommended, with forecasting to be based on the worst projections. Each scenario differs as financial difficulties may be a temporary occurrence, and mitigation strategies may range from taking out a short-term loan to making changes to strategic and operational plans.
Alternative Scenarios
Scenario planning is an effective means for the business to plan for the future and attempt to be prepared for changes and contingencies that may influence its operations.
- Brexit-related tensions and international logistics backup result in the inaccessibility of many forms of tea and other ingredients that are not easily accessible in the UK. As a tea-focused business that will pride itself on the variety of choices and certain healthy selections, this would be highly impactful. In this case, MOYON may have to adopt strategic alternatives for its products or services. It may use the teas and ingredients it has to create unique offerings for the market, or it may expand potentially into new categories of products beyond tea, or otherwise, it may put a greater focus on customer experience.
- There is a scenario where launching the business and pursuing the marketing campaign with a focus on the accessible, social, and wellness aspects of tea drinking is not successful, and the teahouse is seeing little to modest foot traffic and public interest. In this scenario, the strategic plan and objectives for MOYON inherently fail. Based on this, it is recommended that MOYON reconsider its strengths and pivot with a newly developed strategy. This may range from changing its marketing to even changing its positioning in the market. However, a change in strategy should be undertaken sooner than later if it becomes evident that the current approach is not working.
Conclusion
This business plan introduces the concept of MOYON tea house, opening in a prime and historic location next to the river Thames and London’s finest sports. MOYON is meant to be the ‘Starbucks of tea’ – with the strategic objective of becoming a chain of stores that will challenge coffee’s stronghold on the hot beverage industry. Given the popularity of tea in UK culture among all demographics and a special resurgence of tea as a healthy and delicious alternative to other hot beverages, it is an opportune time to enter the market which is on the rebound after the COVID-19 pandemic.
MOYON seeks to position itself as a health-oriented but also everyday, accessible teahouse with a wide variety of tea assortments alongside milk, snacks, and other offerings the majority of which are healthy and sustainable sources. MOYON will strongly rely on a marketing and brand image to drive forward its narrative as the leading brand of tea service in the UK, hoping to establish control of a sizeable portion of the market.
In conclusion, MOYON is a bold entry into this challenging industry. It takes a product that can be found virtually everywhere in the UK and seeks to present its own unique take on it, disrupting the heavily contested industry controlled by coffee giants, who also serve varieties of teas alongside their main products. MOYON seeks to revolutionize the ever-popular tea market in the UK by becoming the first mass chain of teahouses. By all accounts, it is a risk-full undertaking. However, as this analysis has demonstrated, there is a place in the market for it and it has the potential both strategically and financially to be successful.
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