Opportunity Analysis Project

The coffee business is an ever growing one. The fast-track life that we live today demands

sustenance through frequent pauses to cherish our achievements. A simple break is what most

people need. Coffee provides just that! From complimenting a hangout between friends to

corporate meetings, from a breakfast energizer to the energy drink we need to work; coffee

has become more of a tradition than a consumable. The number of consumers grows with

every person entering college or work. In fact, according to Forbes Middle East, cups of

coffee consumed per day in 2016 grew to 3.4 billion from 1.2 billion in 2012. (Bhasin 2018)

And that is just in the UAE. As of 9th October 2018, the number of branded coffee shops hit

9000 in UAE (Abbas 2018).

Considering the size and ever-growing coffee shop industry in UAE, it is evident that this is a

fruitful business. The question though is that how does one intend to compete in this fierce

competition? When starting a new business venture the usual approach is designing a product

or service that fills a gap in the market. Consequently, our brainstorming sessions began in

search of ideas that were aimed to fill a gap as well, such as developing new types of

Frappuccino’s or adding ingredients that change the texture of the coffee, but we realized that

we were making this more complex and harder to execute. We then moved to perform a gap

analysis of the current industry practices. Our analysis resulted in an obvious but ignored

observation; that being, coffee shops were meant to be shrines of peace and calm and

somehow, they had developed into these factories overflowing with people and noises thanks

to multinational chains such as Starbucks.

This conclusion took us straight to the answer: Simplicity Driven by Tradition! Our plan the

developed into offering coffee with an experience unlike other. Most of the coffee chains

have developed into a fast-paced western setting. Give your order, stand in line, get your
coffee and leave in a hurry. We will target customers by giving them a place to sit and chill

with their guests as if they were in the comfort of their homes.

The plan is to have each table separated from the others, have the seating on cushions and

short-legged tables rather than chairs and desks. Another setting is the sofa's following a

layout similar to that shown in the famous TV show Friends’ Central Perk.

The items that will be offered will be competitively priced. The menu will contain the usual

line of coffee and assortments. However, there will be offerings such as Pakistan's Matka

Chai, Turkey's Turk Kahvesi, Prague's Trednïk, Baklava and other ethnic assortments from

around the world. In essence, our innovation cum improvement to the coffee business is

widening our menu with ethnic flavors of coffee from cultures around the world in a

traditional Arabic setting. Instead of self-service our coffee shops will function of waiter-

based system where the waiters will pour the coffee at the customer’s table. This method of

serving the customer delicacies from around the world will give him the opportunity to take

in the flavors and aromas in a peaceful setting rather than standing in a long line waiting

impatiently to get his order and gargle it up in hurry due to the fear of being late.

The focus will be on marketing these delicacies as they are the true star that will complement

the coffee. Usually, business feasibilities are created through a heavy reliance on pricing

strategy, but the coffee shop industry is saturated one and customers are attracted and

maintained through service quality and the overall experience rather than the price. This is

exactly what we this idea aims to provide through a renewed and fresh perspective.

Limitations to this approach can be the ability to import skilled labor that can replicate the

traditional taste of these delicacies for our café. Moreover, attention to detail becomes a very

important factor as we are promising the customer an experience that draws inspiration from

the Arabic culture and there might be space restrictions depending on the size of the outlet.
Furthermore, all of this needs to be complemented with an excellent marketing strategy to

constantly engage customers and develop a growing customer base.

The primary outlets will be opened in Dubai, Sharjah and Abu Dhabi because these cities are

the business centers as well as luxury hubs that attract people who are hungry for a fresh

experience and new modes of luxury. This will also be good from a market perspective as

these cities have higher rates of restaurants consumption as compared to other cities.

Allowing us the ease to be able to find outlets with adequate space. We will work with

architecture and art students to come up with a design and develop the ambience this venture

needs to be in place. The benefit of using students is that they can be persuaded with loyalty

cards or free coffee as compensation. Constant marketing through social media, loyalty

cards, member cards and discounts done the right way will aid in moving towards the

creation of a brand. Keeping in the customer's news feed will keep the sales hot and growing

and allow for the development of a firm footing in the industry. The price of our products will

be market competitive so that the customers don’t hesitate before purchasing anything.

A venture like this needs significant investment and so the payback period will depend on the

sales made. Our research has lead us to believe that even though the coffee business needs a

high amount of initial investment, but the margins are large enough to cover the investment

within 2 years of time. The business model will be based on volume of sales, aided by the

sale of side products such as cold drinks, water bottles and chocolates that allow for good

retail margins. Moreover, the barriers to enter the market are the presence of international

brands and well-established local brands. They have a significant hold in the market making

it difficult for the newcomers to enter.

Since our venture is aimed at providing a luxury experience to the common man, growth

opportunities are high. By design we will be small sized café chain focused on luxury

experience segmented away from multinational chains but closer to domestic coffee houses.

References

Abbas, N. (2018). Number Of Branded Coffee Shops In Middle East Hits 9,000.

forbesmiddleeast.com. Retrieved from

https://archives.forbesmiddleeast.com/en/number-of-branded-coffee-shops-in-middle-

east-hits-9000/

Bhasin, M. (2018). U.A.E.’s Coffee Market Is Brewing Thanks To Robust Consumer

Demand. forbesmiddleeast.com. Retrieved from

https://archives.forbesmiddleeast.com/en/u-a-e-s-coffee-market-is-brewing-thanks-to-

robust-consumer-demand/.