Running head: FLAVORS OF NEPAL 1

Flavors of Nepal

Kushal Man Shrestha

AGM 701: Intro to Agribusiness Management

September 9, 2019

Sir Tilak Raj Chaulagai

Westcliff University
FLAVORS OF NEPAL 2

Abstract

This PA 1 assignment consists of the internal and external environmental analysis of a

business plan that I had developed a year back. The business plan will come into operation

within 3 years from now. In this assignment, I have given a brief background on the business

plan, its’ objectives, and the industry itself. Further, for the internal and external

environmental analysis, I have done a SWOT analysis and segmented the entire market of the

business. The main purpose of this is to know where the business has strengths on, where it

can work on, what opportunities it can grab and on which part of the business, will it face

threats on and how to take actions against.

Keywords: Coffee, flavors, Nepal, organic

FLAVORS OF NEPAL 3

Introduction

Flavors of Nepal:

Flavors of Nepal will be the operating firm that will plant, grow, and extract fresh and

organic coffee on our anticipated leased land of 20ropani which will be located in city of Palpa.

Palpa has the appropriate altitudinal range (800m-1600m) which is suitable for coffee

plantation and has the climate that supports coffee plantation; the market value of land there is

considerably low. The firm will have lands acquired for the installation of the factory and a

storage space.

The firm will take the advantage of the local and organic coffee and trade them all over

the nation in its initial stage as the business continues to operate there will be export activities

performed to various nations such as Japan, Brazil, India, China, America etc.

Objectives:

 Planting the coffee in beautifully hilly region facilitated on reducing the global

warming.

 Formulate to assist the National Economy through export, orientated sales and

consequent Foreign Currency earnings, by making one of the largest industries in

agriculture.

 Encouraging skilled manpower on coffee farming, creating employment and income

earning opportunities Villages & Smallholder farmers.

 Making coffee farm a model development as a pilot project in the country and give

training, implementing a program one household at least 100 coffee bushes in a village

area.

 Distributing the coffee plants to the indigenous people, making aware of value of coffee

farming and increasing of the income source for their living condition.
Business History:

Coffee is an important beverage throughout the world. Coffee drinking has become a

regular habit of people in many countries and it is also becoming increasingly popular among

the Nepalese community. Coffee plantation is still a new area in Nepal. Around 1938, a hermit

named coffee-1 Hira Giri bought some coffee seeds from Sindu Province of Myanmar and

planted them in Aapchour of Gulmi District for the first time in Nepal. Then it spread from one

farmer to another as peculiar ornamental plant for the next four decades. It was only in the

1980s that coffee was finally considered to be a cash crop in Gulmi District. It has been gaining

popularity as highland coffee in the international market and the area under cultivation is also

increasing.

Among various types of coffees, organic is one of them that is sold at a premium over

other common coffees as it has its own unique origin and flavor and is an environment-friendly

production (Vossen, 2005). There is a huge demand of organic coffee in the Western side of

Europe, North America, and Japan, that is exceeding the current supply. Every country has

their own policies and principles for the certification of organic coffee. A sustainable practice

will be carried as organic farming is an environment-friendly agriculture. For this, sustainable

agricultural goals will be set and quality standards will be established in order to sustain the

farm (Hill & MacRae, 1995) .

The firm being a new business is not associated with any ongoing companies or is a

part of any association, but soon we would like to join alliance with different association which

may help us deliver products of the highest quality. Though the fields and farmers are the locals

only and the methods used for cultivation is quite traditional, the use of the modern tools and

equipment is viewed to be of great help in improving the quality of the product even more.

Coffee beans needs to be extracted from its cherries which grows on the plants for that purpose

as well we will use modern machinery available in the international level market to speed things
up. There will also be hiring of professionals related to the field from the international level

which will ensure product quality.

SWOT Analysis:

In this rapidly growing and diversified business world with high scale competition,

organizations has struggled to survive in many occasions. Political and economic upheavals,

expanding the industry boundaries, engagements, competitive actions, and varies of

philosophies impose a multitude of problems that a firm must cope up with.

According to Helms and Nixon (2010), SWOT analysis is a tool used for planning

purpose. It is concerded with the analysis of the organization’s internal and external

environment which aimed to identify the internal strengths in order to take an advantage of its

external opportunities while avoiding the external threats and addressing the existing weakness

of the firm (Panagiotou, 2003). With the companies seeking for strategic plan and actions,

SWOT analysis has been used from various companies to companies across the world. It is

used for strategic positioning as well.

For Flavors of Nepal, following is the SWOT analysis:

1. Strength:

a. Environment Friendly

b. Chemical Free Coffee Beans

c. Advanced Technology imported from Foreign Countries

d. Strong Supply Chain Management

e. Strong Marketing Strategies

f. Superior Management Skills

g. Ample Amount of Investors

h. Farmer Friendly
 2. Weakness:

a. High Cost of Production

b. Longer Time for Production

c. Lack of Subsidies for Organic Coffee Production

d. Weak on R and D

e. Certification Issues

3. Opportunities:

a. Best Climatic Condition in most of the areas for Organic Coffee Farming

b. Available Human Resources

c. Good Demand for Organic Coffee Beans from Foreign Countries

d. Less Competition than other Crops

e. Growing Prospect of Agriculture

4. Threats:

a. Certification from Foreign Countries is a hassle

b. Entry of Foreign Competitors

c. Inflation of Raw Materials

d. Change in Government Policies

e. Rise in Taxation

Market Segmentation:

The state of demand heterogeneity such that the total market demand is disaggregated

into various clusters with different demands is known as market segmentation (Dickson &

Ginter, 1987). Every business organization has their own frame and characteristics of the

demand heterogeneity which is really unique that will act as a base for its’ marketing

strategy.
 For Flavors of Nepal, customers are segmented according to their behavior as the

purchase of organic coffee depends on user status and the usage rates (Gila, Gracia, &

Sanchez, 2000).

1. Local Venders:

The Nepalese market suggests that most of the parchment coffee beans are

purchased and consumed by the local Nepalese themselves. Thus, the parchment coffee

beans will be sold to Nepalese local vendors. In order to handle the quantity supplied to

these vendors, we will be using only 20% of the coffee plants to process for parchment.

2. Export (Foreign Countries):

In the foreign market, the most exported product of coffee is the green coffee beans.

The foreigners purchase the fresh coffee beans and roast as per their taste and preferences.

The green coffee beans exported will be jute packed. Most likely exporting countries are

Japan, India (since it is easily accessible), China, Germany, Netherland, South Africa,

Argentina, Australia, America, etc. The foreign export of green coffee beans holds the most

value among any of the coffee products. Thus, 50% of the coffee plants will be used to

produce green coffee beans only.

3. Café and Restaurant:

Roasted coffee beans are mostly used by the café and restaurants to make the coffee

drinks. Flavors of Nepal will be serving varieties of quality roasted coffee beans to the café

as per their requirements. Café Soma, Karma Coffee Bar, Café De Genre, Roadhouse Café,

Roots Eatery etc. are some of the potential targets for selling the roasted coffee beans. 20%

of the coffee plants will be roasted to sell.

4. Households:

The coffee plants are further processed and grinded to make instant coffee. These

instant coffees are sold in the supermarkets and then to the final consumers. The examples
 of market of instant coffees are Big Mart, KK Mart, Bhatbhateini etc. Since the instant

coffee market holds less value and profit margin is high due to high processing expenses,

only 10% of the coffee plants are processed to instant coffee, packed and sold in the market

Conclusion:

Flavors of Nepal is one of a kind of agribusiness plan that will be implied in the few

coming years to come. It will conducted on a large scale with several investors included in the

business. Organic coffee has a huge demand in the foreign countries as mentioned above.

Despite the major external threats of organic coffee in Nepal, Flavors of Nepal shall tackle all

of them and rise through proper inspection of policies and legalities and also a strong supply

chain back up. The firm not only focuses on the export, but also to the nation as well, becoming

a big brand that reaches out to every coffee lovers in Nepal.

FLAVORS OF NEPAL 9

References

Dickson, P. R., & Ginter, J. L. (1987). Market Segmentation, Product Differentiation, and

Marketing Strategy. Journal of Marketing, 51(2), 1-10.

doi:10.1177/002224298705100201

Gila, J. M., Gracia, A., & Sanchez, M. (2000). Market segmentation and willingness to pay

for organic products in Spain. International Food and Agribusiness Management

Review, 3, 207-226.

Helms, M. M., & Nixon, J. (2010). Exploring SWOT analysis – where are we now? Journal

of Strategy and Management, 3(3), 215-251. doi:10.1108/17554251011064837

Hill, S. B., & MacRae, R. J. (1995). Conceptual framework for the transition from

conventional to sustainable agriculture. Journal of Sustainable Agriculture, 7(1), 81-

87.

Panagiotou, G. (2003). Bringing SWOT into focus. Business Strategy Review, 14(2), 8-10.

Vossen, H. v. (2005). A critical analysis of the agronomic and economic sustainability of

organic coffee production. Expl Agric, 41, 449-473. doi:10.1017/S0014479705002863