Activity 1: PESTEL Analysis

PESTEL stands for (Political, Economic, Socio-Cultural, Technological, Environmental and Legal) forces
pertaining to your business. These forces allow you, as a business manager be exposed on what is
happening in the broader economic and business environment.

If you are about to build your own business, identify some of the external factors that you think might
significantly affect your planned business.

Proposed Business Name: J’s Book Café

This business - J's Book Café arose from my student experience. I've
been wondering if there is a cafe that is built in the style of a library.
Free books to read, tables and chairs to complete schoolwork, and
coffee to serve as a study partner. I want this to be a relaxing spot
with bookshelves inside the cafe where you can read them for free
while sipping your coffee or when you just want to finish your
schoolwork with a cup of coffee beside you. This caters primarily to
students and young people, which is why I chose to locate it near
university campuses.
Nature of your proposed Business: Hybrid
Possible Location: Near University Campuses
Your Analysis:

POLITICAL FACTORS:
City laws, such as curfew hours or other municipal legislation, may affect business hours and sales.
The coffee industry relies heavily on international trade to stay afloat. The trade agreements between the
manufacturing and consuming geographies are what enable this industry to thrive. If these sectors continue to
have problems, it will have a negative impact on the coffee industry and increase production costs which could
hurt my café - since the ultimate aim of this café is to make inexpensive coffee for students to enjoy during
their free time and as a study partner.
ECONOMIC FACTORS:
Inflation rates will have an effect on this business. Since students only have their own allowances, their
purchasing power would be reduced or restricted if inflation rates rise. One of the luxuries that a student may
consider is coffee and going to a cafe. Some students and their parents, on the other hand, have increasing
incomes. This means that every year, customers have more money to spend. Coffee consumption increases
as people become wealthier.

SOCIO-CULTURAL FACTORS:
Despite the trend of enjoying self-time with coffee, "going healthy" as a year's ultimate target is also a
trend in the twenty-first century. As a result, some people are encouraged to exercise, avoid unhealthy foods,
and reduce their coffee consumption because it includes caffeine. Health issues may be a factor affecting this
sector, but the campaign of farmers doing all the work for not compensated fairly is still making headlines every
day. This may have an effect on this business because farmers processing coffee beans may be discouraged
from continuing their work if fair payment is still unavailable.

TECHNOLOGICAL FACTORS:
At this point in time, technology is progressing rapidly. For your convenience, you can easily purchase
a coffee machine or maker. The number of people visiting the cafe will decrease as a result of this, which will
have an impact on the business. Furthermore, some people referred to books as "old fashioned." People who
want to read actual books are declining as stories or novels are both available and accessible via the internet.

ENVIRONMENTAL FACTORS:
Sustainable farming methods have helped the coffee industry tremendously. Over-irrigation of coffee-
growing lands has resulted in a number of hazardous situations, as well as environmental degradation in
general. As a result, the world is pushing for more environmentally sustainable farming practices, which will
inevitably increase consumer prices.

LEGAL FACTORS:
In the case of coffee, which falls under the category of food and drink, the legal consideration could be
adhering to food requirements and policies. How to run a cafe legally, how to handle equipment, how to keep
the working area clean, and all of the requirements for keeping all food and drink safe for the public.
Activity 2: SWOT ANALYSIS
SWOT Analysis stands for Strengths & Weaknesses (Internal), Opportunities and Threats (External). This
is used to evaluate and predict different factors that might affect business eventually. According to Bonnici
and Galea (2015), “The internal analysis identifies resources, capabilities, core competencies and
competitive advantages, using a functional approach to review finance, management, infrastructure,
procurement, production, distribution, marketing, reputational factors and innovation; while “external
analysis identifies market opportunities and threats by looking at the competitors' environment, the industry
environment and the general environment.”

Activity: Let us create your SWOT for the business you have chosen in each box provided and elaborate
below.

- Uniqueness
- Budget Friendly - Consumer’s interest in
- Numerous book to hanging out
choose - New in the competition
- Location - Low sales in no classes
- Ambiance
- Counted Employees
- Young Employees

- It is a trend
- So many cafés around as
- Can be advertised in
competitors
Social Media
- Cost of equipment in
- Young people life blood
making coffees.
is coffee.
STRENGTHS:

When it comes to the strength, I believe it is the uniqueness of the business concept. Many
students are in desperate need of a quiet place to work on assignments or read books while sipping coffee.
The place is ideal for students who need a break from their studies and are experiencing toxicity as a result of
their workload. Because of its target buyers, the coffees it offers are all reasonably priced. To create a library-
style café, a variety of books in various categories and genres are also available for free. Aside from that, cafes
do not need a large staff. Employees who are young and friendly to customers are also a strength of this
business

WEAKNESSES

Due to the fact that this concept is new to the competition, it may seek improvement on a daily
basis. Low sales at periods when classes are not available are a weakness, and sales can vary because
coffee orders are dictated by the customer's willingness to hang out in a cafe.

OPPORTUNITIES

Coffee dates and cafe hangouts are becoming increasingly popular among young people, who say
that coffee is their new life blood. This opens up doors for larger customers and could also attract other coffee
lovers. Since students and young people are constantly on social media. It's a chance to be included in their
articles or stories, and it might be a good way to promote the cafe.

THREATS

The biggest threat I see in this industry is funding the expense of coffee-making equipment. You
must be able to get good equipment in order to make good coffee. Competitors or businesses of a similar
nature are also a challenge, which is why we must improve our strengths in order to gain an advantage over
them.