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1.1.2 PESTEL
a) Political / Legal Environment
Legislations and regulations that should be adhered to and also tourism is a booming industry in
Sri Lanka due to all the development in the country after the end of the 30 year war. The political
stability of the country of the country also supports business practices. In terms of taxation a part
of the income earned from the business should be paid as income taxes which in return help with
the development of the country.
In terms of legality to start up the business it has to be a resisted under the company act and also
should register with the Civil Aviation Authority and obtain a certificate, also to run a travel
agency it is a requirement to have at least 2 qualified staff in the relevant industry.
b) Economic Environment
Tourism is much encouraged as it is a key factor in economic growth. The government is
expecting a huge return in the investment of the New Airport to be opened in Mattala.
The cost of living is in average level hence the people are able to spend on their travel needs
better than before. However the various taxes imposed will have a negative impact as the fares
and the levels of commission will defer accordingly and sometime it may not be so profitable.
c) Social Environment
The changes in the demographic environment and the various social concerns around the area as
there are people from mixed cultures as well as different age groups which have different travel
needs will have a impact in the demand for the services
It also depends on the customer base and there requirements as the service has to be customized
for each and every customer.
d) Technological
It is important that we adapt to the technological changes that happen as well as the updates of
the main operational systems i.e the global distribution systems used to make reservations.
The various methods used to communicate in a high tech manner. To enhance business practice
as well as to provide better services
e) Environmental
The weather conditions of our country and the rest of the world and also the natural disasters
effecting the flight operation will be a deciding factor for people to travel abroad hence if there is
bad weather or any indication of natural disaster like hurricane, tsunami ect there will be less
travels so there will be a negative impact to the business.

Task 2
2.1 Actions to overcome weaknesses
In the initial stage of business, the start-up is difficult but by overcoming the weaknesses we can
achieve a fast growth for the company.
The staff should be given appropriate trainings to understand the customers requirements and
also to use the global distribution systems used in the business.
In time to come as the business is growing the incentives given to staff can be increased as it is
understood that at initial stages the company is unable to provide such benefits also salary
increments will be a motivator to bring in as much business possible.
Attracting partners to the business will increase the financial stability with the capital the
partners will bring in, and also it will help in generating new ideas and help in the decision
making process as there would be more people to consult.
If more funds are required to run the business we can raise funds through financial institution by
applying for loans, getting grants from the government or getting interested parties to invest as
partners.
Getting recognition can be done by word of mouth by giving out a good service to customers
then it is spoken about. Also advertising on newspapers and radio, printing broachers mentioning
special promotions.
2.2 Maintaining an strengthening performance
Anticipate and exceed customer expectations
Challenge conviction by being brave, innovative, curious and ambitious
Provide excellent customer service as well as identify the customers requirements and cater
accordingly
Employee staff with positive attitudes/ Can do attitude
Adapt to the latest technological changes to keep up with the competitors
Have good business relationship with potential customers
Guarantee the quality and the experience that customer can depend on
Make sure customer receives value for money
Accept compliments and if any complaints make sure it will not be repeated In the future.
Adjusting according to the different types of people as they have mixed cultures and have
different ideas.
Engaging in fair business practices.





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3.1. Produce an assessment of existing business objectives
Objectives:

Become selected as the "Best Coffee shop in the area" by the local restaurant guide.
Maintain a 65% gross margin.
Consistently providing finest coffee items.
Caff Finix coffee shop is achieved the first objectives in now. Because their daily
customer is 500 perday. So the star coffee shop best coffee shop in Stratford area.
Consistently provide finest coffee items : CaffFinix
coffee shop used the high quality coffee beans to coffee and speed service to the
customer.

Caff Finix coffee shop has:
Provided a customer with quality product at a competitive price.
Provided the customer with a more convenient method for obtaining their desired
product.
Demonstrated how star coffee shop appreciates their loyalty and patronage by donating
money to their personal cause.
This provides evidence for assessment criteria 3.1

3.2. Revise business plans to incorporate appropriate changes.
The star coffee shop marketing strategy will be focused at getting new customers,
retaining the existing customers, getting customers to spend more and come back more often.
Establishing a loyal customer base is of a paramount importance since such customer core will
not only generate most of the sales but also will provide favorable referrals.
The star coffee shop position itself as unique coffee shop where its patrons can not only
enjoy a cup of perfectly brewed coffee but also spend their time in an ambient environment.
Comfortable sofas and chairs, dimmed light and quiet relaxing music will help the customers to
relax from the daily stresses and will differentiate the star coffee shop from incumbent
competitors.
The star coffee shop barristers will handle the sales transactions. To speed up the
customer service, at least two employees will be servicing clients--while one employee will be
preparing the customer's order, the other one will be taking care of the sales transaction. All sales
data logged on the computerized point-of-sale terminal will be later analyzed for marketing
purposes. In order to build up its client base, the star coffee shop will use banners and fliers,
utilize customer referrals and cross-promotions with other businesses in the community. At the
same time, customer retention programs will be used to make sure the customers are coming
back and spending more at the coffee bar.

This provides evidence for assessment criteria 3.2


3.3. Prepare an action plan to implement the changes

Market analysis
The Caff Finix coffee shop focused the two markets
People living in the local area
Someone travelling to or from work, out shopping .

Market segmentation
The Caff Finix coffee shop focused its marketing activities on reaching the University
students and faculty, people working in offices located close to the coffee bar and on
sophisticated teenagers. Our market research shows that these are the customer groups that are
most likely to buy gourmet coffee products. Since gourmet coffee consumption is universal
across different income categories and mostly depends on the level of higher education,
proximity to the Stratford campus will provide access to the targeted customer audience.

Target market segments strategy
The Caff Finix coffee shop provide to people who want to get their daily cup of great -
tasting coffee in relaxing atmosphere. Such customers vary in age, although our location close to
the Stratford college means that most our clientele will be college student & faculty. Our market
research shows that these are discerning customers that gravitate towards better tasting coffee.
Furthermore, a lot of college students consider coffee bars to be a convenient studying or
meeting location, where they can read or meet with peers without the necessity to pay cover
charges. For us, this will provide a unique possibility for building a loyal client base Market
needs General trend toward quality among U.K. consumers definitely plays an important role in
the recent growth in gourmet coffee. Additionally, such factors as desire for small indulgencies,
for something more exotic and unique, provide a good selling opportunity for coffee bars.


4.1. The impact of the proposed changes on the business and its personnel.
Businesses are affected by an external environment as much as they are affected by the
competitors. Global factors influencing business are legal, political, social, technological and
economic.

Social factors
These factors are related to changes in social structures. These factors provide insights
into behavior, tastes and lifestyles patterns of a population. Buying patterns are greatly
influenced by the changes in the structure of the population, and in consumer lifestyles. Age,
gender, etc all determine the buying patterns and understanding of such changes is critical for
developing strategies which are in line with the market situations. In a global environment it is
important that business strategies are designed keeping in mind the social and cultural
differences that vary from country to country. Consumer religion, language, lifestyle patterns are
all important information for successful business management.

Legal factors
These factors that influence business strategies are related to changes in government laws
and regulations. For a successful business operation it is important that the businesses consider
the legal issues involved in a particular situation and should have the capability to anticipate
ways in which changes in laws will affect the way they must behave. Laws keep changing over a
period of time. From the point of view of business it is important that they are aware of these
changes in the areas of consumer protection legislation, environment allergisation, health &
safety and employment law, etc.

Economic factors:
These factors involve changes in the global economy. A rise in living standards would
ultimately imply an increase in demand for products thereby, providing greater opportunities for
businesses to make profits. An economy witnesses fluctuations in economic activities. This
would imply that in case of a rise in economic activity the demand of the product will increase
and hence the price will increase. In case of reduction in demand the prices will go down.
Business strategies should be developed keeping in mind these fluctuations. Other economic
changes that affect business include changes in the interest rate, wage rates and the rate of
inflation. In case of low interest rates and increase in demand Businesses will be encouraged to
expand and take risks. Therefore, business strategies should have room for such fluctuations.

Political factors:
This refers to the changes in government and government policies. Political factors
greatly influence the operation of business. This has gained significant importance off late. For
example: companies operating in the European Union have to adopt directives and regulations
created by the EU. The political arena has a huge influence upon the regulation of businesses,
and the spending power of consumers and other businesses. Business must consider the stability
of the political environment, government's policy on the economy etc.

Technological factors:
These factors greatly influence business strategies as they provide opportunities for
businesses to adopt new innovations, and inventions. This helps the business to reduce costs and
develop new products. With the advent of modern communication technologies, technological
factors have gained great impetus in the business arena. . Huge volumes of information can be
securely shared by means of databases thereby enabling vast cost reductions, and improvements
in service. Organizations need to consider the latest relevant technological advancements for
their business and to stay competitive. Technology helps business to gain competitive advantage,
and is a major driver of globalization. While designing the business strategies firms must
consider if use of technology will allow the firm to manufacture products and services at a lower
cost. Firms can select new modes of distributions with the help of technology. It has become
easier for companies to communicate with their customer in any part of the world.

This provides evidence for assessment criteria 4.1

4.2. Plan how the changes will be managed in the business.

Employees:
People naturally do not like change, regardless of whether its positive or negative. The
feeling of fear, ambiguity, unknowns, loss of control and power, and the like result in people not
feeling naturally comfortable with making a change that could potentially put them in a better
situation. These feelings result in paralysis to act, and can often result in people acting
irrationally and not in the best interests of an organization. So, with any change initiative is the
absolute and mandatory requirement that the change initiators think through what the impact
may be to the employee population, who ultimately have to adapt to the new changes in order to
best serve the customer.

Business:
Competition (what are they doing?)
Customer behavior (needs, wants, and desires)
Industry outlook (local, national, global)
Demographics (the change populations, there density, etc.)
Economy (are we peaking, or moving negatively)
Political movements and/or interference
Social environment
Technological changes
General environmental changes

This provides evidence for assessment criteria 4.2

4.3. Monitor improvements in the performance of the business with time-scale.

Goals Period Review
One-Stop Tradition By the end of 2013 Coffee, Coffee machines, tea,
water, as well as perfect
ambiance and taste all from
one source
To be number one in local
area
by 2013 Company is trying to be
number one.
Service By 2013 We strive to treat our
customers respectfully as our
guests; we intend to offer our
guest services that is prompt,
efficient, friendly, and
relaxed.
Create a model that is
franchise ready.
By 2014 That will help to make a
chain in the business with
other
Increase clients in the loyalty
club
By 2014 Customers will be more close
with this company



References
Boddy, D. Management and Introduction. 3rd Edition
Cox, D. and Fardon, M. (2005). Management of Finance .Worcester: Osborne Books
Limited.
Kotler, P and Wong, V and Saunders, J and Armstrong, G.(2005).Principles of
Marketing.4thEuropean Edition
Kotler, P.(2003) Marketing Management . 11th edition
.Kotler, P.(2000) Marketing Management. The Millennium Edition


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PEST Analysis on restaurant?
P: Political environmental factors such as:

stability of the government, government type, economic policy of the government, trade policy
and events in surrounding countries.

E: Economical environmental factors:


Higher interest rates may deter investment because it costs more to borrow. This could be a
problem at the moment when we are trying to find people to invest in the project.
Inflation may provoke higher wage demands from employees and raise costs.
Increasing costs of material, storage or services used in the elaboration of the final product or
service may make it more expensive.
S: Social environmental factors:



Increasing Health Awareness.
Increasing change of eating habits towards healthier food.
Changing Attitude from Diet products to healthy products.
Increasing Working women. (Nobody cooking at home)
Increasing Media attention and incentives towards "healthy living" from governments and
organization.

T: Technological environmental Factors:

Technological Innovations attracts people attention. Modernist-Technological themed places
are getting more importance in consumer's mind.

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