UNIVERSITY OF CENTRAL PUNJAB

FALL 2020
FALL 2020
Course Title:
Course Code:

Assignment No.
Name of Course Instructor: Ma’am Ayesha Asif

Section: c Program: BSAF Date: 19th January 2021

Submission Date: 19th January
Maximum Marks:
2021
Program Objective: Course Objective: Course Learning Objective:

Assignment Topic & Details:

Business Proposal

Group Members:

Muneeb Ayaz (l1f19bsaf0112)

Rehman Ashiq (l1f19bsaf0106)

Usman Dawood (l1f19bsaf0105)
Hasnain Ahmed Farooqi (l1f19bsaf0091)
Abdullah Butt (l1f19bsaf0121)
Mazen Munir (l1f19bsaf0103)
COFFEEMATIC

Quick and Safe sips

 Table of Contents

1- Executive Summary
2- The Problem Statement
3- The Proposed Solution
4- Qualifications
5- The Timeline
6- Pricing, Billing and Legal
7- Terms and Conditions
8- The Acceptance
Executive Summary
Coffeematic breaks away from the old, traditional hot drink purchases and takes on a

new, innovative, and most importantly quick approach. Coffeematic is a convenient hot drink

dispenser that utilizes a standard reusable travel mug with a primary focus on quick service and

paying methods by means of a barcode. The service provides a self-serve cubicle that offers a

dispenser providing hot water and black tea with a focus on coffee. In addition, to create

customer loyalty Coffeematic will provide complementary cream/milk and sugar incorporated

into the dispenser. This will allow customers to allocate the exact amount of additives to their

beverage, increasing customization to better satisfy customer wants.

Coffeematic utilizes a barcode system to execute the quickest customer experience. This

barcode is imprinted onto the side of the mug. Therefore, for every purchase the customer makes,

it identifies the customer and directly associates their barcode to their prepaid account online. In

order to make a purchase, the mug is placed on the machine, the barcode is scanned and once the

consumer is identified, the customer can indicate the size and beverage desired. Furthermore, the

appropriate amount is taken off their prepaid account depending on size and beverage chosen. In

terms of sizes, Coffeematic offer two options: half a cup and a full cup, which are designated by

two separate buttons on the machine. For example, on top of the coffee dispenser head there will

be two buttons to determine which size is desired.

The Problem Statement
Most of the coffee machines that exist are not eco-friendly and hygienic, which results in

increased disposable waste and spread of bacteria in the surrounding areas. In this time of corona

virus spread and otherwise, it is important to introduce eco-friendly coffee machine with

minimum human contact and quick service delivery.

The Proposed Solution

Coffeematic dispensers would be placed in hot spots around the campus to avoid waiting

in a long line for a hot beverage which is just not reasonable when there is limited time to get to

class. The following are the three main objectives at Coffeematic:

1. Time-efficiency: Coffeematic pride itself with its quick services and fast paying methods

that utilizes the barcode system to make this ideal plausible. Waiting in line is eliminated

by Coffeematic’ self-serve approach and its scan of a barcode. Rather than waiting in line

to order and continuing to wait for the actual beverage to be prepared, instant paying and

serving methods are utilized including a scan of the barcode to pay and the push of a

button to indicate the desired size and beverage. This system would eliminate time factors

such as the need for verbally ordering drinks, calculating totals, physical exchange of

money and making change or entering pin codes for debit and credit, and waiting for the

beverage to be prepared.

2. Social Values: Coffeematic encourage the use of reusable travel mugs to reduce waste

and promote eco-friendly habits of its consumers. The intention is to help eliminate the

routine of wasteful paper cups by promoting eco-friendly mugs. As well, Coffeematic

will join forces with fair trader of coffee beans for all its beverages, which is itself a

distinction among coffee providers.

 3. Cost-efficiency: The Coffeematic system eliminates many costs associated with

traditional coffee sales. Utilizing a self-serve approach eliminates the need for

maintaining full-time employees, training and recordkeeping. It also reduces electricity

costs drastically due to the compact, smaller area needed to provide service. Furthermore,

it eliminates the need to sustain and rent a larger sales area as well as employee parking

and related costs. Coffeematic also evades costs by utilizing a reusable mug and avoiding

the cost of supplying paper cups with each individual purchase. The goal of cost

efficiency also leads to price affordability because as cost decreases, the business gains

power to make price changes to compete with competitors. Furthermore, as cost

decreases switching cost increases for buyers as its prices are more attractive to the

customers.

The targeted market for the initial release of Coffeematic dispenser would be university

students and faculty on campus (UCP). Essentially Coffeematic’ service would be appealing to

consumers who are pressed for time and in need of an affordable hot beverage.

Coffeematic has great competitive advantage regardless of the fact that it would

seemingly be competing directly with the leading coffee providers in the universities. Firstly, it

has an advantage over the competition in the quick service and paying method category.

Coffeematic’ quick flowing system of Scan, Push and Go is immediate service that is relatively

impossible to surpass in speed with the verbal ordering approach of its competitors. Another

competitive advantage is the eco-friendly mug that will entice the customers to come back for

more coffee is the cost of purchasing the mug. Furthermore, the mug will spark interest for a

wider audience outside of just university students, with a target at environmental activists.
Customer Values: Introducing Coffeematic around the UCP campus will ensure students the

quick and convenient access to a drink that will help them through exhausting time periods. In

addition, many University students are pinched for time between classes, meeting deadlines and

preparing for exams and therefore quick service is very important. Furthermore, the trend of

increasing attention and values being paid into social causes such as free trade are being met by

Coffeematic as it focuses on supplying from free-traded coffee beans.

Customer Preferences: As many consumers are becoming more health consciences about what

they are consuming, it is important to serve both their caffeine needs in a healthy alternative way.

Therefore, by only offering black coffee, it will make customers rethink how much sugar or

cream/milk they are putting into their coffee. Not only does this prevent them from being

tempted by mix tea and coffee but also make them aware of how bad these can actually be.

Qualifications
Bargaining power of Suppliers:

The main suppliers for Coffeematic will be wholesale coffee beans supplier and

wholesale mug supplier. The suppliers are large in number; therefore, Coffeematic will have

many advantages. This includes the fact that the bargaining power of suppliers will be

significantly low because it is almost impossible for them to collaborate with each other over

competing prices and limiting the supply quota. Large number of firms in one sector also creates

a price ceiling, hence the opportunity for Coffeematic to obtain a low cost for supply of coffee

beans and mugs. On the other hand, most of the supply firms are small scale; hence there is

almost no possibility of forward integration in by the coffee bean or mug suppliers. Furthermore,

switching between suppliers is also very easy due to low switching cost. This will also help

Coffeematic to find the best priced supplier for the best quality coffee beans in the market. Since
suppliers have low bargaining power, it would be even more beneficial if Coffeematic to sign a

contract with a supplier, further reducing the cost of coffee beans and securing the supplies at a

constant or predictable price for a certain period of time.

Bargaining Power of Buyers:

The bargaining power of customers is strong in this case. This is because of the fact that

there are lots beverage substitutes in the market with regards to the population of students on

campus. The cost for customer to switch from one seller to another is insignificant. Therefore,

customers need to be willing and passionate to buy Coffeematic drinks. For this to happen, the

customers need to understand the difference of Coffeematic drinks and other substitute drinks

and how it can benefit them in terms of pricing, health safety and quick service.

The aim will be to gain the maximum customer loyalty from students and make a brand

name to get a competitive advantage over the competitors. Therefore, pricing for Coffeematic

drinks will be essential to increase the switching cost for buyers. Moreover, informative and

persuasive advertisement will be the key to do this.

Rivalry among Existing Firms:

Before entering a market, the rivalry among existing firms should be considered. This is

the key to sustain in the market. Currently there is no competitor that offers same service in the

campus. There is canteen service which can be considered as a competitor as they offer tea and

coffee at affordable price. They have set up shop in a distinct location. However, they are not

providing safe, hygienic and high-quality product. There are a few off campus coffee shops, but

they do not affect the consumers that Coffeematic is targeting because the business’s focus is on

providing quick service.

The Timeline
In order to turn this amazing idea into reality, following are the major steps to establish this

technology in any institute:

1. Make a data bae of all the potential buyers and accordingly create the respective bar

codes.

2. Make the necessary hardware (cups etc.) and print the electronic codes onto it.

3. Install the machines on the most accessible locations

4. Make the necessary arrangements for timely inspection and maintenance of machines

Pricing, Billing and Legal

Financials
Expected Start-up costs

Machines estimate for 1 Rs. 500,000

1000 Mugs for 1000 1st year students Rs. 500,000 (500X1000)

200 Mugs for Reserve/ to Sell Rs. 100,000

Printer Ink & Sticker Paper Rs. 100, 000

1+ Months’ Worth of Consumables Rs. 150,000

Miscellaneous (Electricity, Water, etc) Rs. 100,000

Total estimated Cost for Start Up Rs. 1450000

Our Suppliers
Coffee:
Rs. 8/kg and free shipping (25kg bags)
Black tea:
Rs. 4/kg and free shipping (27.5kg bags)
Terms And Conditions:

Food Safety Regulations: With increase health concerns and existing food safety regulations it

will be important to ensure each station meets every aspect of the food safety laws. This will also

be important, as customers will repel from unsanitary stations, ultimately diminishing the

potential market. Therefore, it will be crucial to have daily cleaning routines that are completed

by the founders of Coffeematic to successfully meet all food and safety regulations. As stations

meet required food safety regulations, consumers will trust the overall quality Coffeematic

service and essentially create customer loyalty.

Affordable pricing: With inconsistent economic patterns, increasing and decreasing interest

rates can dramatically affect consumers and their spending habits. A prepaid system is difficult

for consumers to invest in as it requires upfront payment oppose to credit payments.

Furthermore, in today’s economy it makes it very difficult for customers to allocate money in

advance, especially students who have many debts to pay of. To ensure Coffeematic is an

affordable service for students on budget, low prices will be implemented.

Alliance with groups: Making alliance with student union and various clubs around the campus

will create a solid base for Coffeematic market. Furthermore, there are currently no existing

companies out in the market that are implementing self-serve coffee machines on campus, except

canteen services. However, their business concept different and is based on cash payment with

no self-service. Therefore, Coffeematic’ idea of barcoded mugs is the primary setback for other

imitators.