D e F I N I N G P o T e N T I A L S

ROTTERDAM BUSINESS S CHOOL
DEFINING POTENTIALS OF OPENING A

MATCHA GREEN TEA HOUSE
THESIS
PREPARED BY
SAMIER JANMAHOMED
0870992
FINANCE & ACCOUNTING
JULY 3, 2013
Thesis
Rotterdam Business School
2013
CONTENTS
Executive summary .....................................................................................................5
1.0 Introduction ..........................................................................................................6
2.0 Theoretical framework ..........................................................................................8
2.1 Company profile ...........................................................................................................8
Legal form .............................................................................................................................................. 8
Company structure ................................................................................................................................ 9
Company operations............................................................................................................................ 10
2.2 Strategic analysis/plan ................................................................................................ 10

Strategy formulation ............................................................................................................................ 11
Strategic plan ....................................................................................................................................... 12
2.3 Marketing plan ........................................................................................................... 13

Marketing mix ...................................................................................................................................... 14
2.4 Financial plan ............................................................................................................. 15

2.5 Summary .................................................................................................................... 16
2.6 Answer to theoretical research questions .................................................................... 17
3.0 Methodology ...................................................................................................... 18

3.1 Research method ........................................................................................................ 18
3.2 Data collection method ............................................................................................... 18
3.3 Data analysis procedure .............................................................................................. 18
3.4 reliability and validaty ................................................................................................ 19
4.0 Findings/Empirical framework ............................................................................. 19

4.1 Company profile .................................................................................................. 20
Mission, vision, & objectives................................................................................................................ 20
Legal form ............................................................................................................................................ 21
Operations ........................................................................................................................................... 21
Company structure .............................................................................................................................. 22
4.2 Environmental analysis ....................................................................................... 23

4.2.1 PESTEL analysis ........................................................................................................ 23
Political factors .................................................................................................................................... 24
Economic factors ................................................................................................................................. 24
Social/demographic factors ................................................................................................................. 26
Technological factors ........................................................................................................................... 28
Environmental factors ......................................................................................................................... 28
Legal factors ......................................................................................................................................... 29
4.2.2 Industry analysis ...................................................................................................... 29

The threat of new entrants .................................................................................................................. 30
The threat of substitute products and services ................................................................................... 30
The bargaining power of customers/buyers ........................................................................................ 30
The bargaining power of suppliers ...................................................................................................... 30
The intensity of competitive rivalry ..................................................................................................... 30

Industry life cycle ................................................................................................................................. 30
4.2.3 Market analysis ....................................................................................................... 31

The tea and coffee market in the Netherlands .................................................................................... 31
4.3 Competitive environment .................................................................................... 40

4.3.1Competitor analysis .................................................................................................. 40
Sarah Lee & Coffee Company .............................................................................................................. 40
Starbucks ............................................................................................................................................. 41
Kaldi ..................................................................................................................................................... 42
4.4 Research on viability ........................................................................................... 42

4.4.1 Strategic factor analysis summary ............................................................................ 42
Internal factor analysis summary (IFAS) .............................................................................................. 43
External factor analysis summary (EFAS) ............................................................................................. 44
Strategic factor analysis summary (SFAS) ............................................................................................ 45
SFAS conclusion ................................................................................................................................... 46
4.4.2 Strategic plan........................................................................................................... 47

Market positioning .............................................................................................................................. 47
Competitive advantage ........................................................................................................................ 47
Brand strategy ..................................................................................................................................... 48
Porters generic strategies ................................................................................................................... 48
4.4.3 Marketing plan ........................................................................................................ 49

Segmentation....................................................................................................................................... 49
Marketing mix ...................................................................................................................................... 49
............................................................................................................................................................. 52
4.4.4 Financial plan........................................................................................................... 55

Statement of financial needs ............................................................................................................... 55
Sources of Funding .............................................................................................................................. 56
Sales projections .................................................................................................................................. 56
Income statement................................................................................................................................ 57
Cash budget ......................................................................................................................................... 57
Balance sheet ....................................................................................................................................... 58
4.5 Summary .................................................................................................................... 58

4.6 Answer to empirical research questions ...................................................................... 60
5.0 Discussion ........................................................................................................... 62

6.0 Conclusion & recommendation ............................................................................ 63
Bibliography ............................................................................................................. 65
Appendix .................................................................................................................. 67
Financial appendices ........................................................................................................ 67
Research proposal ............................................................................................................ 76
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LIST OF ILLUSTRATION S
Figure 1: Three levels of a product ________________________________________________________
Figure 2: Organizational structure of one restaurant __________________________________________
Figure 3: Organizational structure of multiple restaurants _____________________________________
Figure 4: Macroeconomic indicators Netherlands ____________________________________________
Figure 5: General social data of the Netherlands _____________________________________________
Figure 6: Age structure Netherlands 2013 __________________________________________________
Figure 7: Netherlands population density ___________________________________________________
Figure 8: Consumption of beverages in 2012 ________________________________________________
Figure 9: European coffee consumption per capita in 2010 _____________________________________
Figure 10: Historical tea consumption in the Netherlands ______________________________________
Figure 11: Market share types of tea in 2012 ________________________________________________
Figure 12: Historical coffee consumption in the Netherlands ___________________________________
Figure 13: Types of coffee purchased in 2012 ________________________________________________
Figure 14: Coffee corners in the Netherlands according to BHC _________________________________
Figure 15: Porters Generic Strategies ______________________________________________________
Figure 16: Roasted green tea beverages ____________________________________________________
Figure 19: Red bean beverages ___________________________________________________________
Figure 17: Green tea beverages___________________________________________________________
Figure 18: Coffee & juice beverages _______________________________________________________
Figure 20: Ice cream sweets _____________________________________________________________
Figure 21: Parfaits sweets _______________________________________________________________
Figure 22: Crepes ______________________________________________________________________
Figure 23: Pricing Strategies Matrix _______________________________________________________
Figure 24: Nieuwe Haagse Passage _______________________________________________________
Figure 25: Map Den Haag _______________________________________________________________
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E X E C U T I V E S U M M A RY
My name is Samier Janmahomed, and as part of my graduation, I am writing a master thesis. I have
always been interested in business and finance. During high school, I decided to pursue my career
into business, and proceeded to study International Business and Management Studies (IBMS), at
The Hague University. From this course I learned all aspects of international business ranging from
marketing to human resources, logistics, finance, and accounting. In the third year a decision had to
be made to specialize in either marketing or finance. I chose finance, and after graduating, continued
to pursue my masters degree in finance and accounting. This is where I am now.
For the future, my goal is to start my own company, as I want to be independent and making my
own decisions. I also want my thesis to be useful to me, something which I could use in the future.
As an aspiring entrepreneur, I am constantly looking for opportunities to start a business. When I
visited Singapore, I came across a nice tea bar, selling food and beverages made with green tea. As I
enjoyed the experience, I noticed that this type of tea/coffee bar is still absent in the Netherlands.
This made me seriously consider the possibility to open a green tea/coffee bar in this country, which
is the topic of my thesis.
The objective of this thesis is To make recommendations of the potential of a green tea startup, by
making an analysis of the current internal and external environment, using strategic- analysis and
planning, and financial planning theories.
The focus here is the viability of opening this company in the Netherlands. To do this, I will analyze
the companys internal and external environment. The internal analysis is related to the company
itself, whereas the external analysis is about the country, industry, and competitors.
Taking note of the objective of this thesis, the central research question of this thesis is:
What is the viability of opening a successful green tea bar company in the Netherlands in 2014?
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Annas green tea

1 . 0 I N T R OD U C T I O N
The company I would like to establish is called Annas green tea, or (AGT). AGT is a modern
Japanese style tea bar, which offers food and beverages based on Matcha green tea.
Matcha is a fine powder green tea that originates from Japan. The tea has been used for hundreds of
years in Japanese tea ceremonies, but now has become more popular and used for drinking as tea or
as an ingredient for all types of foods.
Coffee and tea is deeply rooted into Dutch culture and history. Centuries ago, Dutch merchants
brought coffee and tea with them from exotic regions. Through the years, coffee and tea have
become an important part in the daily lives of the Dutch people. As society is changing, so is the
demand for certain types of products and services. Dutch society is becoming more Americanized,
and slowly becoming a to-go country. Changes in society bring new opportunities, which are
currently happening in the coffee and tea branch. Starbucks-like formulas are opening up
everywhere, and gaining much popularity. In Asia however, there is much more of a tea culture.
Looking at the tea market, green tea is slowly gaining popularity among tea consumers. Consumers
are starting to realize the health benefits of this type of tea, and as many people are looking to adopt
a healthy lifestyle, Annas green tea wants to capitalize on this by mainly providing beverages with
green tea as its main ingredient. Using green tea and Japanese culture as its competitive advantage,
AGT wants to know if there is potential for such a formula in the Netherlands.
The structure of this thesis is as following:
2.0 Theoretical framework: Is the theoretical part of this research. It includes literature and theories
needed to answer the theoretical research questions. The sub chapters of the theoretical framework
include:
2.1: Company profile: Provides theories on a companys legal form, the organizational
structure, and operations.
2.2: Strategic analysis/plan: Provides theories on how to analyze the business and its
environment, and how to develop a strategy.
2.3: Marketing plan: Contains marketing theories needed to create a successful marketing
strategy.
2.4: Financial plan: Provides theories on the financial statements that are needed in this
financial plan. Includes the statement of financial needs, and the pro forma statements.
3.0 Methodology: Includes all the elements of the research process. These elements are:
3.1: Research method: Here I explain the method of research I will use for this thesis and the
reasoning why I chose that specific research method.
3.2: Data collection method: Explains which method(s) of data collection will be used in this
thesis.
3.3: Data analysis procedure: Explains which data analysis method will be used in this thesis.
3.4: Reliability and validity: Describes the reliability and validity of the information gathered.
4.0 Findings/Empirical framework: Includes all the findings of the research carried out which is
based on the framework derived from the theory. In this case, the findings are grouped in three main
elements: The company profile, the competitive environment, and the research on viability.
4.1: Company profile: Basic information about the companys legal form, the organizational
structure, and operations.
4.2: Environmental analysis: External analysis which includes the PEST analysis, industry
analysis, and market analysis.
4.3: Competitive environment: Includes a competitor analysis of the companys three main
competitors.
4.4: Research on viability: Consists of the strategic factor analysis summary, strategic plan,
marketing plan, and a financial plan, to look at the viability of the company.
5.0 Discussion: Includes a discussion of the findings related to the actual problem.
6.0 Conclusions/Recommendations: Based on the outcome of all previous sections, a conclusion
will be made. Finally recommendations will be given about the viability of this company startup.
The research questions of this thesis are as following:
Central research question
Theoretical research questions
1. What are the various external factors of strategic management that affect a company?
2. What strategic management methods are needed to determine a companys internal strengths and
weaknesses?
3. What are the essential elements of a company profile?
4. What financial planning tools are needed to assess the financial viability of a company?
Empirical research questions
1. What is the companys current organizational structure?
2. What are the latest and historical consumption trends of the tea and coffee industry?
3. What factors caused the success of the tea/coffee bar branch in the Netherlands?
4. How is the current Dutch economic and political situation?
5. Who are AGTs biggest competitors, and what are their strengths and weaknesses currently?
6. What is AGTs competitive advantage, and what strategy will it implement in the future?
7. What is AGTs financial projection of the coming of 2014-2016?
8. Based on the companys internal-, and external analysis, and its chosen strategy, what
recommendations can be made about the companys future?
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2 . 0 T H E O R E T I C A L F R A M E WOR K
The theoretical framework discusses the theory needed to answer the research questions. The
framework consists out of four parts. These parts are the essential elements needed for this research.
Chapter 2.1 Company profile discusses theories about basic information of the company itself. These
are the different types of legal forms, theories about the importance and creating of an organizational
structure, and finally theory about company operations. After the company profile, the strategic
analysis/plan will be discussed in chapter 2.2. This chapter is about the analysis of the external
environment and the formulation of a suitable strategy based on the analysis. After that, the
marketing plan will be discussed in chapter 2.3. This chapter is comprised of the necessary tools and
theories needed to create a marketing plan. Finally in chapter 2.4 the financial plan will be discussed.
This chapter shows the essential elements of a financial plan.
Each of these elements will be discussed using relevant literature, which will then come back in the
empirical framework of this thesis.
2.1 COMPANY PROFILE
The company profile contains fundamental information regarding the organization. This includes
legal form, company structure, and operations.
LEGAL FORM
In preparing to conduct business activities in the Netherlands, a company is presented with several
choices of how to go about it as well as the legal requirements to be complied with. From a legal and
tax point of view, the first priority is deciding on which legal form to use to house the proposed
Dutch-based activities.1
The legal framework in the Netherlands is quite open and liberal compared to other countries in the
European Union, which makes it easier for foreigners to conduct business. There are no special
requirements or restrictions, which makes business here attractive.
The basic legal forms in the Netherlands are:
Sole proprietorship: A sole trader is a one-man owned company. The one person who owns the
company is personally liable for business obligations.
Partnership: A partnership is a co-owned company by two or more partners. These partners are then
liable for business obligations.
General Partnership (VOF): A VOF is a business which is operated by more than one person. This is
done suing partnership agreements, which determine each partners contribution in the company,
liability, and entitlement. All partners are jointly, but also personally liable for business obligations.
Limited Partnership (CV): A CV is a limited partnership which is operated by more than one person,
but with this legal form, there are certain types of partners. There are active and silent partners. The
silent partner is usually the person who backs the sole proprietor financially. Therefore, the silent
Ibpus (2012). Netherlands Business Law Handbook: Strategic Information and Laws. United States:
International Business Publications. p 154.
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partner is only liable for the investment he or she made in the company. The active partner is then
allowed to make decisions based on day to day activities. With this kind of partnership, the active
partner is personally liable for business obligations. Furthermore there are some differences in tax.
The active partner is considered a sole proprietorship and thus has to pay income tax on its share of
profits, which is not the case for the silent partner.
Private Limited Liability Company (BV): A BV is a private limited liability company, which is
considered a legal entity on itself, meaning that the owners are not personally liable for business
obligations, which limits the owners risk. The paid in capital required to start a BV in the
Netherlands is 18000. It is important to know that shareholders are only liable for their own cash
invested in the company. When a shareholder owns more than five percent of shares, he or she
becomes a substantial interest and thus has becomes liable for taxes on capital gains or dividends
paid.
Public Limited Liability Corporation (NV): An NV is a corporation and owned by shareholders
whereby shares are publicly traded on the stock market. An NV can only be created when it has at
least 45000 paid in capital.
Besides these legal forms, there are several other legal forms such as a Foundation (Stichting), an
Association (Vereniging), Cooperation (Cooperatie), and a Freelancer (ZZP). These legal forms are
not really applicable for this thesis, so will not be explained thoroughly.
COMPANY STRUCTURE
The company structure, better known as organizational structure of a company defines the scope of
acceptable behavior within an organization, its lines of authority and accountability, and to some
extent the organizations relationship with its external environment2. On a deeper level,
organizational structure describes responsibilities and tasks of jobs. These can vary depending on the
size of a company. An organizational structure of a large corporation is much more complex
compared to that of a small business. Yet it is also important for small businesses to implement an
efficient organizational structure because this will help making the business to reach its maximum
potential in terms of productivity, efficiency, flexibility, and motivation. One must recognize that this
might be a difficult task if the company is not operating yet. Often, the structure is created when a
business already has been established.
As this thesis is about a small business, the following factors should be taken into consideration
when creating an organizational structure.
Relative strengths and weaknesses of various organizational forms.

Legal advantages and disadvantages of organizational structure options.
Advantages and drawbacks of departmentalization options.
Likely growth patterns of the company.
Reporting relationships that are currently in place.
Inc.com. (2013). Organizational Structure. Available:
http://www.inc.com/encyclopedia/organizational-structure.html. Last accessed 25th June 2013.
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Reporting and authority relationships that you hope will be implemented in the
future.
Optimum ratios of supervisors/managers to subordinates.
Suitable level of autonomy/empowerment to be granted to employees at various
levels of the organization.
Structures that will produce greatest worker satisfaction.
Structures that will produce optimum operational efficiency.3
COMPANY OPERATIONS
Company operations are what a company does to create value. To be more specific, what a company
does with its assets to create value. These assets owned by the company can be both tangible and/or
intangible assets.
Virender, S. states: business operations encompass three fundamental management imperatives that
collectively aim to maximize the value harvested from business assets, also known as "sweating the
assets".
These are:
1: Generate recurring income
2: Increase the value of the business assets
3: secure the income and value of the business
Note that these three imperatives are mutually dependent on each other.4
2.2 STRATEGIC ANALYSIS/PLAN
Strategic analysis and planning is part of strategic management, which can be identified as the art
and science of formulating, implementing, and evaluating cross-functional decisions that enable an
organization to achieve its objectives.
The term strategic management is used synonymously with strategic planning.
The purpose of strategic management is to exploit and create new and different
opportunities for tomorrow while long-range planning tries to optimize for tomorrow the
trends of today.5
What are the benefits of strategic management? The main benefit of strategic management is to help
organizations to formulate better strategies. This is done by using a systematic approach to strategic
decisions. It is very important that everything is communicated well, because through
Hillstrom, K (2002). Encyclopedia of Small Business. United States: Gale group

Poonia, S (2010). Production and Operations Management. Delhi: Gennext Publication. p32.
5 David, R (2012). Strategic Management Notes. 12th ed. South Carolina: Prentice Hall. p14 - 15.
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communication, you are able to achieve the commitment to change and implement a strategy, which
will have great benefit to the company.
There are three stages of strategic management. These are: Strategy formulation, strategy
implementation, and lastly, strategy evaluation.
Strategy formulation: Includes basic goal setting information. What is the companys vision and
mission? What are the companys (long term) objectives? It is also about identifying the companys
strength, weaknesses, opportunities, and threats. Based on this information, a strategy, or multiple
strategies are created, while looking not only internally, but also at the external environment.
Eventually one strategy has to be chosen to implement.
Strategy implementation: In order for a strategy to be implemented successfully, it is required that
the firms short term objectives are aligned in such a way that the formulated strategy can be
executed. Besides short-term objectives, other important elements are the companys policies. If a
company has policies that are not in line with the formulated strategy, it will be impossible for the
company to implement the strategy successfully. Also, it is important that the company adopts a
company culture that promotes goals and objectives needed to implement its formulated strategy.
Motivated employees are also important for this, because usually people are against change. If
company employees are open for change, implementation of a (new) strategy will go much smoother.
Besides the elements just mentioned, there are many other elements such as, the correct way of
allocating resources, the right marketing strategy, the right organizational structure, and the utilization
of information systems.
Strategy evaluation: Strategy evaluation is the last stage, whereby measurements are conducted to
see how the company is performing. This is done by reviewing the internal and external factors of
the formulated strategy. When measurements have been conducted and evaluated, corrective action
should be taken.
It is important to realize that because for this thesis, the company is a startup, it will not be possible
to implement, and evaluate the business. Therefore only the strategy will be formulated.
STRATEGY FORMULATION
Vision, mission, and objective statements

(David, R. 2012), describes the vision, mission, and objective as following:
1. Vision statements answer the question: What do we want to become?

2. Mission statements are enduring statements of purpose that distinguish one business
from other similar firms. A mission statement identifies the scope of a firms operations
in product and market terms. It addresses the basic question that faces all strategists:
What is our business? It should include the values and priorities of an organization.
3. Objectives can be identified as specific results that an organization seeks to achieve in
pursuing its basic mission. Objectives are long term, which means more than one year.
They state direction, aid in evaluation, create synergy, reveal priorities, focus
coordination, and provide a basis for effective planning, organizing, motivating and
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controlling activities. Lastly, objectives should be challenging, measurable, consistent,

reasonable, and clear.6
Strategic analysis
Part of the strategy formulation entails to analyze the internal and external environment. To be more
specific: The internal strengths and weaknesses of the company, and the external opportunities and
threats.
Internal strengths and weaknesses: These are the controllable elements of a company that are
either performed positively or negatively. The identification of a companys strengths and weaknesses
are a necessity and can be determined by comparing its performance with the industry, or by
comparing it to itself. When comparing to itself performance is measured by comparing by the goals
the company has set for itself combined with what is important to the company (weights).
External opportunities and threats: external opportunities and threats are the external factors that
could affect the company in either a negative or positive way. These factors are: Political, economic,
social, technological, environmental, legal, and cultural factors. In contrast to the internal strengths
and weaknesses, this is not controllable by the company. Therefore, strategic management is about
creating a suitable strategy that reaps advantage of the external opportunities while at the same time
reduces the threats the company may face.
There are several tools to determine a companys internal strengths and weaknesses and its external
opportunities and threats. First of all, the Dutch market will be analyzed. After that, the PESTEL
analysis will be conducted to analyze the external environment. I will also analyze the industry using
Porters five forces, to determine the industrys profitability and attractiveness. Also, the strategic
factor analysis summary model will be used to analyze the internal and external environment using
weights and ratings to see where the company stands.
A competitor analysis will be made as well, to see how the competition stands in the Netherlands. To
do this, I will select three of the main competitors, and use the SWOT analysis, and Porters generic
strategies.
STRATEGIC PLAN
After this, the strategic plan can be formulated. The strategic plan is composed of a comprehensive
business strategy where I focus merely on the business. This can only be done when all the necessary
information is collected. Key terms in the strategic plan are: Market positioning, competitive
advantage and the companys brand strategy
Market positioning: Market positioning is described as how you want your customers to perceive
your product or service in relation to their perception of your competitors and what marketing
strategies you should adopt to reach this perceptual goal. In other words, what message about your
product or service is your company trying to put across? And how will you do that? A market
position will happen whether or not you are proactive, reactive or passive about the on-going process
of developing and sustaining a market position. However, you can positively influence these
perceptions by developing and implementing deliberate market positioning strategies.
David, R (2012). Strategic Management Notes. 12th ed. South Carolina: Prentice Hall. p17 - 18.
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When developing a market position you need to select the most persuasive, meaningful and unique
points of difference that will allow you to compete for the largest number of potential customers.
Developing a positioning strategy depends largely on how competitors position themselves. Some
companies develop a 'me too' strategy and position themselves close to their competitors so
prospects can make a direct comparison when they purchase. Other companies develop marketing
strategies which position them well away from their competitors. Offering a benefit which is superior
depends on the marketing mix strategy the company adopts. Your pricing strategy must reflect the
benefit offered and your promotion strategy must clearly communicate this benefit. 7
In short, it is all about what you as a company wants customers to think about the company.
Competitive advantage: A competitive advantage can be defined as something the company does
exceptionally well, that sets itself apart from its competitors. A company cannot survive in the longterm if it does not have a sustainable competitive advantage. To sustain a competitive advantage, a
company has to be able to change and adapt quickly to changes in the external environment.
Brand strategy: Why is building a brand strategy so important? It is all about creating a perception.
When a company has a strong brand, it has certain values it portrays to the outside world. People will
then identify themselves with these values, which creates brand loyalty. Thus brands are able to
influence customers.
A good definition about what brand strategy is about:
In building brand value perception is more important than reality (Duncan and Moriarty. 1998),
and as brands only exist in the minds of customers then the management of brands is all about the
management of perceptions. The power of a brand to influence perceptions can transform the
experience of using the product. In a double-blind trial, patients taking a branded analgesic perceived
it to be more effective in treating pain than a chemically identical unbranded analgesic (Branthwaite
and Cooper, 1981). In order to manage brands strategically we need to understand how perceptions
are organized, how they influence behavior and how a brand can compete in the battle of
mindspace (Corstjens and Corstjens, 1995).8
2.3 MARKETING PLAN
Marketing is an essential element to the success of any type of business. Marketing is the tool by
which companies are able to create value for its customers. This is done by catering to the needs of
the customer. So companies must differentiate themselves by the customer benefit their products or
services provide. As companies have created value for their customers, they now want to capitalize
on this. To remain successful, companies must find u sustainable way of keeping its practice of
creating value for their customers and capitalizing on the value created. A marketing strategy is
exactly this. Finding sustainable ways to create value and capitalize on this in the long-run.
In order to create a successful marketing strategy, it is essential that the target market is identified.
Everything revolves around the customer. This process is known as segmentation. Markets can be
segmented in several ways. These are demography, geography and lifestyle.
Boldhorizon. (2013). Market Positioning. Available: http://www.boldhorizon.co.nz/marketpositioning.php. Last accessed 26th June 2013.
8 Elliot, R (2007). Strategic Brand Management. New York: Oxford University Press. p4.
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When the target customer is identified, it is then possible for the company to figure out their
needs. And based on that, the marketing strategy can be formulated.
There are several tools that can help to create a marketing plan/strategy. This thesis will make use of
the marketing mix to create a marketing strategy.
MARKETING MIX
There are many topics related to marketing. Think about pricing, branding, distribution channels,
advertising, and packaging to name a few. This can all be categorized into the four ps. These are
product, price, place, and promotion.
Product: The product of a company is the good that satisfies customer needs. This can be a physical
(core) product, but also a service, depending on the type of company. However the product is more
than that, as can be seen in the figure below
Augmented
product
Actual
product
Core
product
Figure 1: Three levels of a product

To explain the figure above, lets use a car as an example.
The core product is the car itself and the transportation benefit. The actual product is the style of the
car, the quality level, features of the car, and branding. The Augmented product is about the
intangible benefits. Think about after sales service and warranty.
Price: The price is what a customer is paying for the companys products (or services). Pricing is
essential for a companys success as it needs to cover its cost, and of course the price determines
what profit the company will make. However it is much more than that. The price determines the
demand of the product. Depending on what product you offer, and the price elasticity of that
product. Price elasticity means, how much demand will change to a change in price. Price elasticity
for medicine is very low, but for food its higher, as there are many substitute products. Finally, the
last important element in pricing is the perceived value the customer has. Pricing is the most
important factor that influences the value of products and the company itself. There are various
pricing strategies that one can adopt in order to create a certain image, but also capture more market
share.
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Place: The place of a product is firstly, about the location of the business. The location has to be
chosen strategically, depending on what type of business you have. For a restaurant business, you
want to find a place where your target group can easily access your restaurant. Besides physical
location, it is also about distribution channels (if you sell products). For this there are many
distribution strategies that can be used.
Promotion: Promotion is all about the communication between the company and its target group.
Think about advertising, events, packaging etc. Silk, A. author of What is marketing?9 describes a
useful tool to create an effective promotion strategy using the six Ms model.
1. Market: To whom is the communication to be addressed?
2. Mission: What is the objective of the communication?
3. Message: What are the specific points to be communicated?
4. Media: Which vehicles will be used to convey the message?
5. Money: How much will be spent in the effort?
6. Measurement: How will the impact be assessed after the campaign?
Silk also describes the usefulness of advertising in media. First of all it is very effective when you
want to create awareness of a new product. The reason for this is that it is easy to reach many
potential customers using media. It is also useful to describe features of a product. When looking at
advertisements on television, you see plenty commercials where features are mentioned.
Furthermore, advertising in media is effective to distinguish the product from competitors. Why is
your product better? Why should you buy our product? Lastly, one of the most important reasons is
that it is very useful to improve the companys brand image. Companies that are perceived as a
premium brand often use models and give the impressions of success in their advertisements.
2.4 FINANCIAL PLAN
The last part of the business plan is the financial plan. The financial plan is everything of the business
plan translated into quantities. Everything stated in the strategic and marketing plan is used in the
financial plan, and therefore this can only be done once the strategic and marketing plan has been
finished.
Financial statements are used portray finances that occurred in the past, present, and future. Because
this is a startup company, I am not able to showcase past performance.
The statements that will be used in the financial plan are the following as described by Linda Pinson,
author of Anatomy of a Business Plan10:
Statement of financial needs: This statement shows how much funding is needed to start the
company. It also shows how the money needed will be spent.
Silk, A (2006). What is Marketing. United States: Harvard Business School Publishing Corporation.
Linda, P (2008). Anatomy of a Business Plan. 7th ed. Tustin: Out of Your Mind... and Into the Market
place. p83.
9
10
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Pro forma Statements: The pro forma statements include a cash budget statement, a three year
income statement, and a balance sheet.
1. Cash budget: The cash budget is a financial document that projects what your business
plan means in terms of dollars. A cash flow statement is the same as a budget. It is a pro
forma (or projected) statement used for internal planning and estimates how much money
will flow into and out of a business during a designated period of time, usually the coming
tax year. Your profit at the end of the year will depend on the proper balance between cash
inflow and outflow. 11
2. Income statement: A pro forma income statement shows the projections of the coming
year(s). This is done by using the total revenue and expenses of the first year as a base, and
depending on the economic outlook, future projections will be made.
3. Balance sheet: The pro forma balance sheet shows the projections of the companys assets,
liabilities, and equity at the end of the first fiscal year. It is a snapshot of a company at a
certain point in time.
2.5 SUMMARY
The theoretical framework outlines the body of this thesis, which the empirical framework will be
built on. In order to measure a companys viability, information about the internal and external
environment of the company is required.
The basic legal forms are examined. A sole proprietorship is a business operation owned and
managed by an individual. Establishing this form of business is simple, but one must be aware that
the owner is personally liable for business obligations. Partnerships are operated by more than one
person. There are different types of partnerships where owners can be fully or partially liable for
business obligations. Then there limited liability companies where the company is a private entity on
its own, and therefore owners are not fully liable for business obligations.
Company structures and operations are examined. The company structure of a company defines the
lines of authority within a company. It describes responsibilities and the tasks of jobs. Organizational
structures vary based on the type of business and the size of the company. A suitable organizational
structure is of utmost importance in order for the company to reach its maximum potential when it
comes to productivity, efficiency, flexibility, and motivation. Company operations are in essence what
it does to create value. Three imperatives that achieve this goal are the generation of recurring
income, the increase of value of business assets, and securing the income and value of the business.
Strategic analysis and planning tools are presented. Strategic analysis and planning are part of
strategic management with the goal to help companies to formulate better strategies by using a
systematic approach to strategic decisions. The three stages of strategic management are the strategy
formulation, implementation, and finally evaluation. When the strategic analysis has been completed,
the strategic plan can be formulated. This consists out of a detailed company strategy focusing on the
businesses itself. Essential elements in the strategic plan are market positioning, the competitive
advantage of the company, and finally the companys brand strategy.
Marketing planning tools are presented. Marketing is an essential element to the success of any type
of business. It is a tool by which companies are able to create value for its customers. In order to
Pinson, L (2008). Anatomy of a Business Plan. 7th ed. Tustin: Out of Your Mind... and Into the
Market place. p84.
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create a successful marketing strategy, it is essential that the target market is identified. After that, it is
possible to create a suitable marketing strategy. The most widely used tool for this is the marketing
mix. Marketing consists of many topics such as pricing, branding, distribution channels, and
advertising to name a few. This can all be categorized into the four ps or marketing mix. These
categories are product, price, place, and promotion.
Financial planning statements are introduced. The financial plan is everything of the business plan
translated into quantities. When making financial projections, certain statements need to be used. The
statement of financial needs shows how much funding is needed to start a company. The cash budget
is a detailed plan of future cash flows and is composed of four elements: cash receipts, cash
disbursements, net change in cash for the period, and the ending cash balance. The income statement
is an overview of revenue(s), expenses, and profit. Finally the balance sheet is an overview of the
company at a certain point in time which shows the value of the company.
2.6 ANSWER TO THEORETICAL RESEARCH QUESTIONS
This section of the thesis will briefly answer the theoretical research questions. The answers are
summarized answers of the information found in the theoretical framework.
Various external factors that affect Annas green tea are political, economic, social, technological,
environmental, legal, and cultural factors. These factors are outside determinants and cannot be
controlled by the company. Therefore, strategic management is about creating a suitable strategy that
reaps advantage of the external opportunities while at the same time reduces the threats the company
may face.
2. What strategic management methods are needed to determine a companys internal
strengths and weaknesses?
Strategic management methods needed to determine Annas green teas internal strengths and
weaknesses include the SWOT analysis. This tool is the most basic form of listing strengths
weaknesses opportunities, and threats. As it is too basic to use for this instance, we are using the
Strategic Factor Analysis. It is a much more professional way of analyzing the companys strengths
weaknesses opportunities, and threats by using weights and focusing on an internal analysis, external
analysis, and finally a combined summary.
The essential elements of a company profile are firstly the company form. There are many forms
each with their own advantages and disadvantages. Based on the company form you can build on
other things related to the company. Secondly it is essential to know the company operations. Only if
you know what the company does to make money, can you make analyses about certain things.
Finally it is essential to know the organizational (company) structure of the company, as it gives a
clear view of how the company is built.
The financial planning tools needed to assess the financial viability of a company are the statement of
financial needs, the cash budget, the income statement, and lastly the balance sheet. The statement of
financial needs is meant to give an overview of the amount of money needed to establish the
company and make it operational. The cash budget is an overview of the timing of incoming and
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outgoing cash. This is important because you might not have enough cash at certain periods of time
and might not be able to meet the required financial obligations. The income statement shows the
profit/loss of the company by subtracting all expenses from the earned revenue. Lastly the balance
sheet shows the value of the company at a certain point in time. These statements combined give a
clear picture of the financial viability of a company.
3 . 0 M E T H OD OL OG Y
Research methodology is a way to systematically solve the research problem. It is necessary for a
researcher to know not only the research methods/techniques, but also the methodology, the logic
behind the techniques. It basically provides the methods of the research process, giving the reader a
better picture of this thesis, and the reasoning behind the methodology choices. This chapter consists
out of four parts: 3.1: Research method, which is about the research method(s) I will use for this
thesis. 3.2 Data collection method shows what methods I will use to collect the data. There are
various ways to collect data, and based on the research method, the right data collection method
needs to be used. Then chapter 3.3 Data analysis procedure is about how the acquired data will be
analyzed. This is especially important for primary data. Finally chapter 3.4 discusses the reliability and
validity of the data and sources that are being used in this thesis. It is of utmost important that
sources are reliable, because it can make or break a research.
3.1 RESEARCH METHOD
First of all, the decision has to be made on whether to use qualitative or quantitative data. For my
project I will use mixed research. This means that I will use both qualitative and quantitative data in
my research. As my thesis is based on both exploratory and explanatory research objectives, the
mixed research is the best option. I will have to use quantitative data when analyzing the tea and
coffee market of the Netherlands. However my thesis is also about finding trends and new
developments in this industry, which is qualitative. I would say that 70% of the thesis is qualitative,
while 30% is quantitative.
3.2 DATA COLLECTION METHOD
The primary method used for data collection is secondary research. I will use credible sources that
have done their research to complement my research with. I understand that the data needs to be
reliable, suitable, and adequate. Because I need to research the market it is hard to use primary data,
because it takes a lot of time, and other companies might be far more specialized in certain fields, and
thus using their information might be more credible to use. The secondary data is derived using desk
research. Most of the information will be from the internet. Besides secondary research, I will also
use interviews for data collection. I have found a recent interview by another investigator of the tea
and coffee branch, which I might use as it is beneficial for my research.
3.3 DATA ANALYSIS PROCEDURE
There are special methods for the analysis of data, however in my case, this is not really needed.
Because Im using mostly qualitative data, I dont need to analyze specific data from questionnaires
or other data collection methods. The only quantitative data used is historical data about the
consumption of tea and coffee. As for the financial part of the research, it is based on projections. So
again, this is not relevant for me.
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3.4 RELIABILITY AND VALIDATY
It is always a question if the collected data is actually reliable and valid. To make sure that it is, I am
using recognized sources for my secondary data collection. Data about the industry, demographics,
and other figures about the Netherlands, is found from CBS, Centraal Bureau Statistiek. This is a
100% credible source as its from the Dutch government. Other data about the tea and coffee branch
are from credible consulting companies.
To make sure that the data is valid, I check the date of the data collected and information found. If
data is older than 2010, I will not use it. As I need to analyze the companys current internal and
external environment, I will make sure that all the data I collect is recent.
4 . 0 F I N D I N G S / E M P I R I C A L F R A M E WO R K
This chapter is the empirical framework of this thesis. It consists out of four sub chapters that are
listed in such a way to make sense and to provide better understanding. These chapters are:
4.1: Company profile: This is the basic company information, which is needed to continue with the
external analysis. This includes:
Mission, vision & objectives: The mission, vision and objectives of the company are the
essence of the company. It answers the question of why the company is established and
what the company would like to achieve.
Legal form: Shows the type of legal form of the company, and the advantages versus the
disadvantages of the legal form chosen.
Company structure: Shows an overview of the organizational structure of Annas green tea.
Company operations: Describes what main activities the company is engaging in.
4.2: Environmental analysis: This chapter analyzes the external environment of the company which
consists of the PESTEL analysis, industry analysis, and a market analysis. It is about the outside
forces that affect the company.
PESTEL analysis: A business framework which helps understanding the MacroEnvironment of the company. It helps to analyze the environment of the Netherlands.
Industry analysis: Analysis of the tea/coffee (bar) industry by using the Porters Five Forces
framework to assess the industrys competitiveness and attractiveness.
Market analysis: Analysis of the tea and coffee market in the Netherlands. It also includes an
extensive analysis of the tea and coffee bar branch.
4.3: Competitive environment: The competitive environment is an analysis of the companys main
competitors. It provides information about these companies and lists strengths and weaknesses,
which helps to formulate a strategy.
Competitor analysis: Analysis about Annas green tea main competitors in the Netherlands.
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4.4: Research on viability: With the information of the previous chapters, this chapter is about the
strategy formulation. Here, the best strategy is formulated, and research is done about the viability
of the company. It consists of the SFAS analysis, strategic plan, marketing plan, and a financial plan.
SFAS: Evaluation tool to evaluate the company. It identifies the companys strengths
weaknesses, opportunities, and threats. The strengths and weaknesses are the internal
factors, while the opportunities and threats are external factors. By giving ratings, one can
determine the position the company is in.
Strategic plan: Formulation of the companys strategy. This is done by using market
positioning, competitive advantage, and brand strategy theories.
Marketing plan: Presents the companys marketing strategy by using segmentation to define
the companys target group, and the (marketing mix) four Ps: Product, Price, Place,
promotion.
Financial plan: The quantitative part of the research on viability. Consists of the statement of
financial needs, cash budget, income statement, and a balance sheet.
4 . 1 C OM PA N Y P R OF I L E
This is the first part of the empirical framework. The company profile provides information about
the company itself. Basic company information is needed to paint a picture of the company and its
operations. This chapter starts with the mission, vision, and objectives of the company, continues
with the legal form, then the company operations will be described, and finally the organizational
structure of the company will be given. This chapter refers back to chapter 2.1 of the theoretical
framework.
MISSION, VISION, & OBJECTIVES
Mission
To make and serve the best Japanese green tea beverages and food, in modern Japanese-style stores.
Vision
To enhance peoples lives with Japanese tea culture in a modern way
Objectives
To create a modern place for people to gather and socialize inspired by Japanese culture
To allow people to enjoy Japanese green tea beverages and food everywhere
To provide the best Japanese style dining experience
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LEGAL FORM
The companys legal entity is a private limited liability company, or in Dutch: Besloten
Vennootschap, (B.V). The main reason why I choose for the private limited company is that it has
the most limited liability for the owners, as a BV is a legal entity in itself. This used to mean a capital
investment of 18000 euros is required, but has recently been changed. There is no capital investment
needed anymore.
Advantages of a private limited liability company include:
Fast establishment of the company
No private liability, which gives investors more incentive to invest in the company.
A private limited company is a legal entity, which means it operates on its own.
It is easy to protect private equity
Profit is only charged with tax up to 25 percent
Only one shareholder and director is needed
Minimum share capital is a mere one eurocent
A private limited company reflects a reliable image
(Partial) sale of the company is easily established
Of course every advantage also has its disadvantages. These include:
Starting capital of eighteen thousand euros is required. (This is not necessary anymore)
Startup-costs and formalities are higher compared to other entities
To sell shares a notary is required
There is no starters- and entrepreneurs deduction
Higher accounting costs than a sole proprietorship or a partnership
Looking at the advantages vs. disadvantages, I believe the private limited liability company is the best
option with the biggest reason that liability is limited.
OPERATIONS
The companys main operation is quite simple. Its a new tea-coffee bar startup that sells beverages
and food based on (Matcha) green tea. Therefore the companys main operation is running (a)
restaurant(s). In the future, the company might increase operations by licensing, so that the company
can grow through franchising. So operations include:
1. Operation of restaurant(s)
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The restaurant(s) sell food and beverages based on (Matcha) green tea. Beverages include Regular
green tea lattes, roasted green tea lattes, red bean lattes, coffee, and juices. Food includes parfaits,
ice cream, and crepes.
2. Licensing
In the future, the company will license its brand. However this can only be done when the brand is
popular enough and has a large amount of brand loyalty. The company will then receive income from
royalties.
3. Franchising
Franchising is also something for the future. If the companys restaurant(s) become successful, it
might want to look to expand, and franchising is a good method to do this, whereby the companys
business model is sold to the franchisee.
As the company is a startup, we will focus on the operation of restaurants for now, as this is the first
step in order to continue with franchising and licensing.
COMPANY STRUCTURE
The structure of the company can be portrayed in many ways. First the structure of one restaurant
will be shown. However when the company expands and opens multiple restaurants, the
organizational structure will be changed, which will be shown as well.
Organizational structure of one restaurant
Figure 2: Organizational structure of one restaurant
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Organizational structure of multiple restaurants
Figure 3: Organizational structure of multiple restaurants
4 . 2 E N V I RO N M E N TA L A N A LY S I S
The second part of the empirical framework is about the environmental or external analysis of the
company. It starts very broad, with the PESTEL analysis, and then the analysis will be narrowed
down to the industry analysis. The industry analysis is done using Porters five forces. Finally the
analysis will be narrowed down even further, by analyzing the market. Altogether this will provide the
necessary information about the external environment of the company. The environmental analysis
and the tools used in this part of the thesis refer back to chapter 2.2 of the theoretical framework.
4.2.1 PESTEL ANALYSIS
The PESTEL analysis is a framework used to analyze the Macro-Environment of the place where the
company is operating in, in this case the Netherlands. The importance of analyzing the MacroEnvironment is that it will help understanding the external environment, which will help the
company making better decisions regarding factors such as government stability, tax policies, entry
mode regulations, credit accessibility and many more external factors.
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POLITICAL FACTORS
The current government in the Netherlands with Prime Minister Mark Rutte, is a pro-European
government. The Netherlands at the moment is rated AAA, which is not the case for many other EU
countries anymore. The current government has adopted a policy of strict fiscal discipline, whereby
with many budget cuts. Because of the economic crisis, the Netherlands is at risk to lose the AAA
rating.
Over the next few years, sixteen billion euros of budget cuts will take place, together with structural
reforms. One of these reforms is a reduction in tax breaks on home loans.
Polls at the moment show much discontent about the current government, mainly due to the
economic situation. People complain about high unemployment, the ongoing economic crisis and
weak economy, and the possibility of pension cuts.
What to expect:
The government will remain committed to the disciplined fiscal policies in budget cuts to overcome
the economic crisis. The government will aim to bring the budget deficit down to 2.6% of the GDP.
The suggested budget cuts will be implemented, and finally if the economic situation stays bad, and if
public discontent keeps rising, strikes can be expected.12
ECONOMIC FACTORS
Lets first have a look at the major macro-economic indicators. The figure below shows these
indicators of the Netherlands. Looking at these indicators, the economic situation in 2012 is bad. The
biggest reason for this is the economic crisis. As Germany and other countries are starting to show
signs of recovery, the Dutch economic situation remains bad.
2010
2011
2012
GDP growth (%)
1.63
0.99
-0.96
Inflation (yearly average) (%)
1.28
2.35
2.45
Budget balance (% GDP)
-5.6
-5.1
-4.5
Current account balance (% GDP)
7.9
10.1
10
Public debt (% GDP)
63.1
65.5
71.2
Figure 4: Macroeconomic indicators Netherlands

Source: World Bank
Reuters. (2012). Political risks to watch in the Netherlands. Available:

http://www.reuters.com/article/2012/12/03/dutch-risks-idUSL5E8LUH7Y20121203. Last
accessed 26th July 2013.
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Coface, a credit insurance company has made an analysis about the country risk of the Netherlands
that I will state below.
Strengths:
Port operations (Rotterdam, leading European port)
Diversified exports (refined oil, natural gas, automotive, electrical equipment, IT equipment)
External accounts in surplus
Unemployment relatively low by international standards
Public debt under control
Weaknesses:
Very open economy, dependent on European economic conditions
Banking sector shaken by the crisis
Substantial household debt
Ageing population, threatening the solvency of pension funds
Risk assessment:
Severely weakened domestic demand: Hit by fiscal austerity, a slowdown in world trade
and depressed private consumption, the country did not escape the recession in 2012. The
economic gloom is expected to continue in 2013. Internal demand will remain depressed due
to the weakness of real household income, rising unemployment, the worsening property
market, continued fiscal consolidation and under-utilization of production capacity.
Moreover, sales abroad will remain constrained due to weakening demand from the euro
zone. The contribution of foreign trade to growth is, however, expected to remain slightly
positive because of slower import growth.
Highly exposed to the external environment: Although the economic fundamentals
remain sound (external accounts in surplus, public debt still contained), the country was
considerably shaken by the financial crisis in 2008-2009, given its financial and commercial
openness. Burdened by the cost of the American mortgage crisis, several banks had to be
rescued by the government. As regards trade, the country has a satisfactory level of
competitiveness and has gained market share in Europe. It remains, however, very sensitive
to the international economic situation, given the economys high degree of openness.
Households over-indebted, banks and businesses bruised by the worsening of the
economic situation: Property prices continued to fall and many property owners are seeing
the value of their assets fall below that of their mortgages. This is particularly damaging in
the Netherlands, where household debt has reached record levels (128% of GDP at the end
of September 2012) due to the mortgage debt boom, itself favored by tax deductions. The
banking sector is facing a fall in its profits and a surge in non-performing loans because of
the housing market deterioration and the recession. Finally, businesses, whose financial
situation was rather sound in the past, are also seeing their profits sink. Bankruptcies grew by
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21% in 2012, with construction and trade leading the way. At the same time, payment
incidents recorded by Coface substantially increased.13
Looking at the risk assessment by Coface, the economic situation in the Netherlands is alarmingly
bad. First of all domestic demand has weakened severely. Prime Minister Rutte keeps saying to spend
money; however people are saving at the time of crisis. Fiscal policies are very strict, and
unemployment has not been this high since a very long time. Purchasing power of the Dutch people
is decreasing as well. As the Netherlands is a very open economy and dependent on the external
environment, it will only start to improve economically when other countries in the EU will too. I do
have to mention that the data by Coface is based on 2012, and that now in 2013 bankruptcy started
to decline again and prices of houses are starting to go up a little, so there is still a little bit of hope.
All in all, under these circumstances comparing the economic situation to other EU countries, the
Netherlands does not have to complain. It still has the AAA credit rating, and the government has
everything under control.
SOCIAL/DEMOGRAPHIC FACTORS
General Social Data of the Netherlands

Population
16.7 million
Population growth rate
0.452%
Median age
41.5 years
Life expectancy at birth
Total: 80.91 Male: 78.84 Female: 83.08
Nationality
Dutch
Urban population
83% of total population
Languages
Dutch, Frisian
Major cities
Amsterdam, Rotterdam & Den Haag
Figure 5: General social data of the Netherlands14
The small country of the Netherlands, with 16.7 million inhabitants, is the fourth most densely
populated country across the globe. Dutch society is very much structured and most things are
planned in detail. From work life to private life, everything needs to be planned to the smallest detail,
as changes are not welcomed. The society in general is very open and tolerant. The Dutch religion is
based on Calvinism, however most people do not attend church anymore. Even so, Calvinism still
has big influence on Dutch beliefs and values. Dutch people are known to be greedy, however its
just that they do not like to waste things. There are no real extremes in Dutch society. In general they
dont have extreme luxurious lifestyles. Dutch people frequently go on vacations abroad, which they
do to relax and forget work for a while. The Dutch society is egalitarian. Status is obtained through
study and work and every person is equal.15
Demographics:
Coface. (2013). Netherlands Synethesis. Available: http://www.coface.com/Economic-Studies-andCountry-Risks/Netherlands. Last accessed 23rd July 2013.
14 Index Mundi. (2012). Netherlands Demographics Profile 2013. Available:
http://www.indexmundi.com/netherlands/demographics_profile.html. Last accessed 28th July 2013.
15 Breukel, E. (2012). Dutch society and working culture. Available:
http://www.expatica.com/nl/essentials_moving_to/country_facts/The-Netherlands-at-aglance.html. Last accessed 24th July 2013.
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Figure 6: Age structure Netherlands 2013

Source: CBS
Looking at the age structure of the Netherlands society is getting older. Elderly people have different
needs, and as this companys target group is mainly young people, it is important to be aware of that.
Continuing on, our operations will be in three provinces, which are Zuid-Holland, Noord-Holland,
and Utrecht. These three provinces combined have a population of 7.5 million people. Also the
population density in these provinces is quite high (as can be seen from the figure below), which
makes these places an excellent location for the new business venture.
Figure 7: Netherlands population density
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TECHNOLOGICAL FACTORS
Innovation in the Netherlands is part of the Dutch economy and people. The Dutch government is
constantly looking to strengthen its power of innovation for the welfare of future generations to
come. The Industrial sectors, together with the government have plenty of innovation programs.
Some of the innovation programs are: 1: Chemistry/Polymers, 2: Food & Nutrition Delta, 3: High
Tech Automotive Systems Innovation Program, 4: Life Sciences and Health, 5: Logistics and Supply
Chain, 6: Maritime Innovation Program, 7: High Tech Systems (Point-One Innovation Program),
and 8: Service Innovation & ICT.
The Netherlands is a great business hub with its attractive location, and great infrastructure to access
the whole of Europe. The country has a perfect energy infrastructure, fresh water transportation and
gas infrastructure, and telecommunication network. So, business in the Netherlands is excellent.
Looking at the Dutch tea and coffee industry, it continues to innovate especially when it comes to
the sustainability of tea and coffee. The Dutch tea and coffee industry takes pride in providing coffee
and tea that is environmental friendly and sustainable. In fact 40% of all coffee in Dutch
supermarkets are sustainable and the goal is to change this to 75% by 2015.
The Dutch tea sector plays an active role in the sustainability of its products, trade relations, and
production processes. This is evident as the availability of sustainable tea in the Dutch market is
growing. Besides this, the so called The Sustainable Trade Initiative (IDH) Tea Program, has been
created by the KNVKT. In this project, The Dutch and British tea industry work together with many
organizations to help provide training and certify farmers of tea plantations in Africa and Asia. The
common goal is to provide 22% of the worldwide tea export sustainably in 2013.16
When it comes to the coffee industry, innovations in the production process of coffee are something
plays an important role. The industry continually tries to optimize its production processes, with the
goal to lessen harm on the environment and to make the production process much more energy
efficient. The industry aims to decrease energy consumption by 20% in 2020 compared to 2005.17
ENVIRONMENTAL FACTORS
In order to do business in the Netherlands, one must comply with certain environmental rules and
regulations. These rules and regulations are based on the Environmental Management Act. The
Environmental Management Act provides legislation about the environment. It states certain
requirements on environmental quality, licensing, general rules, and enforcement. It also provides
information about rules on levies, contributions, and compensation.18
The Dutch government is very much involved in environmental management. Some important
topics related to the environment are:
KNVKT. (2013). Oorsprong. Available:
http://www.knvkt.nl/werkvelden/duurzaamheid/duurzame-ontwikkeling-in-detheeketen/oorsprong. Last accessed July 24th 20132.
17 KNVKT. (2013). Productie. Available: http://www.knvkt.nl/werkvelden/duurzaamheid/duurzameontwikkeling-in-de-koffieketen/productie. Last accessed July 24th 2013.
18 Europa. (2009). nvironmental rules - Netherlands. Available:
http://europa.eu/youreurope/business/doing-business-responsibly/keeping-to-environmentalrules/netherlands/index_en.htm. Last accessed 24th July 2013.
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Spatial planning: Local Dutch districts have created plans on how to shape their province
and districts. There is a Spatial Planning Act, which regulates these plans.
Waste management: The Dutch government wants to minimize waste as much as possible.
To do this the government promotes recycling.
Chemicals: Businesses should comply with the EU REACH laws and regulation when
working with chemicals. REACH is a European act that tries to protect people and the
environment from dangerous chemicals.
Noise: There are certain regulations when it comes to noise to stop noise as much as
possible. The rules and regulations about noise can be found in the Dutch Noise Act.
LEGAL FACTORS
Laws and regulations

As this company is in the food business, there are strict rules and regulations because it can
potentially harm the health of people. The General Food Law forms the basis of food law and food
safety in Europe. This acts sets out requirements for the entire food chain from farm to consumer.
There is a wide range of national and European rules in the food industry. Also, legislation is
constantly subject to change due to new scientific or technological knowledge.
In recent years, more legislation comes from European level and implemented on a national level. In
the Netherlands, legislation is found in the Warenwet (Commodities Act). The Commodities Act
states that a product cannot harm the health and safety of consumers.
Regulation through the European Union is great, because it promoted the free movement of goods
as all EU countries have to comply with these rules and regulations.
Enforcement
The Dutch Food and Commodities Authority, part of the Ministry of Economic Affairs, is a
government body that oversees food safety and compliance of rules and regulations. It operates
within the entire production chain, from raw material to finished product. Recently, they
implemented a new enforcement tool, called horizontal supervision. This enforcement strategy is
based on voluntary compliance of laws and regulations by companies, institutions, and consumers. In
this context, agreements are made with businesses so that these companies are left with more
responsibility.
The Dutch Food and Commodities Authority is committed to safe and healthy food and pays much
attention to the laws and regulations that are important for the tea and coffee industry. This requires
knowledge and understanding of legislation and food safety by the company themselves.
4.2.2 INDUSTRY ANALYSIS
Now that we have analyzed the Macro-Environment of the Netherlands, it is time to focus on the
Micro-Environment. To analyze the Micro-Environment, the Porter's Five Forces framework will be
used. It is a method to assess the industry's competitiveness and attractiveness. The company I want
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Thesis
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to establish is primarily focused on tea; however the competitors focus primarily on coffee.
Furthermore, the drinks that AGT offers are very similar to coffee, and therefore it is necessary to
analyze both the tea and coffee industry. This will become clear in the market analysis. Therefore the
industry is the tea & coffee industry.
THE THREAT OF NEW ENTRANTS
Coffee- and tea bars is the branch of this new starting company. To open a restaurant or a
tea/coffee bar is relatively cheap and everyone could open such stores, which makes the threats of
new entrants high. Opening a company in this industry does not require specialized skills or
expensive technology and machines, which makes it easy for new companies to enter this market.
Also, the products the company will offer can easily be imitated by other companies. The food
industry has always been very competitive, which is also the case in this branch. There are a few
market leaders, but besides that there are plenty of good running small tea and coffee shops.
THE THREAT OF SUBSTITUTE PRODUCTS AND SERVICES
The threat of substitute products and services is high. The products offered by this company are
mainly beverages (and food) based on green tea. There are unlimited similar types of drinks and food
such as energy drink, juices, teas and coffee that can be found in any other caf, pub, restaurant,
snack bar, and fast food chain. Even though this company also provides coffee, the main substitute
product is coffee too. As the main product is based around green tea, coffee is seen as the substitute
and as mentioned, coffee can be found anywhere. Furthermore people can make their own drinks at
home as they have their own machines to make tea or coffee. Therefore it is really important for us
to create something special with our drinks, so that people remember it, and to create a powerful
brand image.
THE BARGAINING POWER OF CUSTOMERS/BUYERS
The bargaining power of customers is very high. Because of the unlimited choices and supply of
beverages and stores people can go to, customers call the shots. As mentioned earlier in the
interview, the tea and coffee industry is based around what the customer wants. Consumers are very
knowledgeable about what they want, and expect good quality.
THE BARGAINING POWER OF SUPPLIERS
As most of the products in the companys assortment are made with green tea, we are somewhat
dependent on suppliers. However the supply of green tea is large, and can be found anywhere. If
prices of green tea from suppliers in the Netherlands are high, we could just buy them internationally.
Therefore the bargaining power of suppliers is low.
THE INTENSITY OF COMPETITIVE RIVALRY
The intensity of competitive rivalry is quite high. The three biggest players in the coffee bar branch
are DE Koffie & Coffee Company, Starbucks, and Kaldi. The first coffee bar was opened by the
coffee company in 1996. Sarah Lee, the owner of DE Koffie, recently took over the coffee company,
which makes the market leader with 30% market share and 60 stores. Kaldi opened their first store in
2000, and own 38 stores. Finally Starbucks opened in 2007 with currently 19 stores. These companies
are all well established and rivalry will be very high among these companies.
INDUSTRY LIFE CYCLE
30
The product Life Cycle is used to analyze which

marketing strategy is best used on a specific product.
Each product that is introduced on the market
undergoes four different stages that are described in
the product life cycle. The speed at which each
product goes through these phases depends on the
type of product and the demand, ranging from weeks,
to many decades. Food products such as bread have
stayed on the maturity phase for centuries, whereas
other products never get beyond the introduction
phase.
The four product life cycle phases:
Market Introduction phase: Introduction of a new product, usually high entry-costs due to
research and development needed to introduce the product. Low sales-volume due to lack of
demand
Growth phase: Sales volume increases immensely. During this phase, there will be more
competition and competitors will start introducing their own version of the product. Most
profit comes from this phase of the cycle.
Maturity phase: As most consumers purchased the product competition becomes fiercer.
During this phase, sales-volume is peaking and competitors try everything to get the last
consumers to purchase their product.
Saturation and Decline phase: In the fourth and the last stage, sales-volumes are declining
as there will rarely be any new purchases. Most competitors start withdrawing due to the
continuing decline of profits.
The industry life cycle of the tea/coffee bar branch is currently between the introduction and growth
stage in the Netherlands. Bars, cafs, and other shops have been in the Netherlands for a long time,
however the coffee/tea bar like Starbucks is relatively new in this country. The first tea/coffee bar
has been here in 1996, and since then, the amount of these types of stores has been growing, and is
expected to grow even more in the near future. The Dutch society is still transitioning to in
becoming an on-the go society like the United States, and when that happens, there will still be
growth in this market.
4.2.3 MARKET ANALYSIS
THE TEA AND COFFEE MARKET IN THE NETHERLANDS
The new business revolves mainly around the sales of beverages, in particular tea and coffee
beverages. Therefore, I am looking into the trends and developments of the tea and coffee market in
the Netherlands, because this market fits our business best.
Coffee and tea are deeply rooted into Dutch culture and history. Centuries ago, Dutch merchants
brought coffee and tea with them from exotic regions. Through the years, coffee and tea have been
very beloved beverages in the Netherlands, and have an important place in the daily lives of Dutch
people.
31
Thesis
2013
In 2012, the average Dutch consumer drank 150 liters of coffee and 90 liters of tea. Those are
amply 3 cups of coffee and 2 cups of tea per capita per day. Coffee and tea are (together with water)
the most consumed beverages in the Netherlands (See the figure below).19
Consumption of beverages in 2012

Alcohol Juice
(10%) (8%) Milk
(7%)
Water (21%)
Coffee (27%)
Soda
(10%)
Tea (15%)
Figure 8: Consumption of beverages in 2012

With 27% of the daily liquid consumption per day, coffee is the most consumed beverage in the
Netherlands. Tea and coffee combines counts for almost half of all consumed liquids per day, which
is very significant. After the Scandinavians, Swiss, and Austrians, the Dutch consume the most coffee
in the world as can be seen in the figure below. Note that Italy is not in the chart because figures of
2010 are not known. In 2009 this was 5.8 kilograms per capita, which is less compared to the
Netherlands.
KNVT. (2013). Trends en ontwikkelingen in koffie- en theeconsumptie . Available:

http://www.knvkt.nl/media-center/nieuws/item/258-trends-en-ontwikkelingen-in-nederlandsekoffie-en-theeconsumptie. Last accessed 16th July 2013.
19
32
European coffeeconsumption per capita in 2010

12
Kilograms
10
8
6
4
2
0
Figure 9: European coffee consumption per capita in 201020

(Information about the Dutch coffee and tea market has been derived from De Koningklijke
Nederlandse Vereniging voor Koffie en Thee (KNVT), which is the spokesman for tea and coffee
companies in the Netherlands. With 55 member companies, it represents 98% of the coffee- and tea
branch. The following information about tea and coffee market comes from this source.)
Tea market
Tea is one of the most consumed beverages in the Netherlands, as mentioned before. This part of
the market analysis will zoom into the tea market in the Netherlands to get a better picture of the
consumption of tea.
First of all, tea consumption in the Netherlands comprises of 15% of all beverages in 2012. Per
capita, this is 2 cups per day, 90 liters of tea per year, and 722 grams of tea consumed on a yearly
basis.21
Let us look into the historical data of tea consumption in the Netherlands.
European Coffee Federation. (2012). European Coffee Report 2010/11. Available:

http://kaffeinfo.dk/wp-content/uploads/2012/04/European-Coffee-Report-2010-11.pdf. Last
accessed 23rd Junly 2013.
21 KNVT. (2013). Thee - Consumptie in Beeld 2012 . Available: http://www.knvkt.nl/mediacenter/nieuws/item/257. Last accessed July 16th 2013.
20
33
Thesis
2013
Historical tea consumption in the Netherlands

13
Million Kilograms
12.5
12
11.5
11
10.5
10
2005
2006
2007
2008
2009
2010
2011
2012
Figure 10: Historical tea consumption in the Netherlands

From 2005 to 2012, tea consumption has been between 12 and 13 million kilograms. IN 2005 and
2006, consumption has been 13.1 million kilograms, which then fluctuated in the years of 2007
through 2010. What we see now is that the tea consumption in the last two years has been stabilized
to 12.1 million kilograms. Even though the last two years have been the lowest amount of
consumption, tea still accounts for 15% of total beverage consumption.
In the coming future, I expect that tea consumption will be more or less the same as in 2011 and 12,
as it seems consumption has been stabilized. I dont expect a sudden increase or decrease of
consumption. Having checked historical tea prices as a commodity per kilo, changes in tea prices do
not affect Dutch tea consumption, as changes in prices have not been very significant.
It is important to realize that the above figure is based on the consumption of Camellia sinensis tea.
As this company is based on green tea, it might be interesting to see what types of tea are being
consumed. Traditionally, black tea has always been the most popular and most consumed type of tea,
however this is changing. Since the last few years, green tea is gradually becoming more and more
popular, and consumers are seeing the benefits of consuming green tea. The figure below shows the
market share of different types of tea.
34
Market share types of tea in 2012

Green tea
11%
Variation tea
18%
Black tea
54%
Herbal blends
17%
Figure 11: Market share types of tea in 2012

As expected, black tea is the most popular type of tea with a market share of 54%. Across the globe,
black tea is the most popular type of tea, and this is the case in the Netherlands as well. After that,
variation tea takes second place with 18%. Variation tea includes tea with different types of tastes. It
usually is black tea with fruit variations, and is meant for people who like variety. Then there are
herbal blends. These types of tea are blends with carefully selected spices, herbs, fruits and other
natural ingredients. Finally we have green tea with the least market share, namely 11%. This might
look bad for us however that is not the case. Green tea has only gained popularity since the last few
years, and market share is growing every year. In fact, the market share of black tea has been
decreasing in contrast to green tea and herbals blends, which showed increases in market share.
Between 2004 and 2010, the market share of black tea has dropped from 66% to 54%, and in 1999
this was 77%. The market share of green tea has actually increased. From 2004 to 2010 the market
share of green tea has increased from 3% to 8%. In 1999 this was just 0.3%. I believe that in the
coming few years the market share of green tea will continue to increase because of the health
benefits of this type of tea, and the market share of black tea will continue to drop.
Nowadays, many people are trying to live a healthy lifestyle and use green tea instead of coffee or
other types of tea, because it is proven that green tea is great for oral health, bone health, weight loss,
cancer, and reduction of heart attacks. Research published by Harvard actually shows that people
who drink one cup of green tea on a daily basis, have 44% lower risk of heart attack.22
Harvard Health Publications. (2004). Benefit of drinking green tea: The proof is in -- drinking tea is healthy,
says Harvard Womens Health Watch. Available:
http://www.health.harvard.edu/press_releases/benefit_of_drinking_green_tea. Last accessed 18th
June 2013.
22
35
Thesis
2013
Coffee market
Coffee is the most consumed liquid in the Netherlands, with 27% of all consumed beverages per day.
As mentioned before, coffee is engrained into the Dutch culture, and this will stay the same. Let us
dive into the market and see what we can find about coffee consumption in the Netherlands.
First off, some interesting facts based on coffee consumption in 2012. On average, Dutch people
drink 3.2 cups of coffee per day, which is quite a lot. Translated into liters of coffee, this is around
148 liters of coffee per year. On a yearly basis, the average Dutch consumer uses 7.1 kilograms of
coffee per year.
Let us have a look into the historical consumption of coffee in the Netherlands.
Historical coffee consumption in the

Netherlands
122
120
Million Kilograms
118
116
114
112
110
108
106
104
2005
2006
2007
2008
2009
2010
2011
2012
Figure 12: Historical coffee consumption in the Netherlands

Looking at the figure above, we see an upward trend of coffee consumption since 2005 until 2010
from 110 million kilograms to 120 million kilograms. In the last two years it has stabilized to 119
million kilograms, which was also the case in the tea market. In the future I expect the coffee
consumption to stay the same, however I do expect that there will be changed in the types of coffee
consumed.
Before I go into detail about future expectations of types of coffee consumed, lets first look into the
market share of types of coffee consumed. With types of coffee I do not mean the types of coffee
beans, but the type of coffee as in filter coffee, coffee beans, coffee pads/capsules, or instant coffee.
The figure below shows how much of these different types of coffee have been purchased in 2012.
36
Types of coffee sold in 2012

Instant coffee
7%
Coffee
pads/capsule
30%
Filter coffee
55%
Coffee beans
8%
Figure 13: Types of coffee purchased in 2012

Looking at the chart above, filter coffee is being consumed the most. The reason for this is that filter
coffee is the most basic form of coffee, which is simply brewed. After that, there are the coffee
pads/capsules. This has been gaining more popularity since the last few years because of the coffee
quality, but also convenience. People have these machines and you only have to use a small pad or
capsule with all kinds of tastes, which people seem to like. The last two least purchased types of
coffee are coffee beans and instant coffee. Instant coffee is not being consumes as much because the
taste is very watery and as Dutch people love good coffee, they will not settle for instant coffee.
Coffee beans are used by companies for the most part. Think about restaurants and tea-coffee bars.
They use expensive machines to provide the best coffee. Individuals who do use coffee beans are real
coffee lovers and choose quality over convenience.
Of all coffee consumed, 71% of coffee is being enjoyed at home, and 29% drink their coffee outside.
Another point worth mentioning is that Dutch people find it important that their coffee is produced
in a social responsible way, and are willing to pay extra money for coffee that has been produced in a
socially responsible way. Furthermore there are many certificates for this, Max Havelaar being the
most widely accepted certificate. In fact, 40% of the coffee in the Netherlands is certified, which
means that it meets all the requirements of the Max Havelaar (or other) certificates. Compared to 8%
worldwide, this is a very good thing. In the ten biggest supermarket chains in the Netherlands 33%
of the sold coffee is sustainable. The KNVKTs intention is to increase this amount to 75% by 2015,
which would make the Netherlands the leader when it comes to the sales of sustainable coffee.
As mentioned before, for the past few years, consumption figures show that the coffee consumption
in the Netherlands is stabilized. However there are some remarkable trends that are worth
mentioning. Within the coffee consumption, it is apparent that since the last few years there has been
an increase in the sales of coffee beans compared to ground coffee. Also there are changes in
preferences of preparation methods of coffee. As people want good quality coffee, and is convenient
in preparation, figures show that the popularity of single serve preparation methods with coffee pads
and capsules is rapidly increasing. According to figures of the KNVT from 2000 2010, the market
37
Thesis
2013
share of single serve packaging has increased from 0% to 35%. This is mainly due to the arrival of
the Senseo, which opened the market of single serve packaging. According to the MarketResponse
coffee monitor 2009, 63% of the Dutch population (in 2009) owns a Senseo or a similar coffee pad
or capsule machine. So in the future I expect the market share of single serve packaging to continue
to increase.
The tea- and coffeebar branch

Now that I showed the tea and coffee market of The Netherlands in general, I would like to look
into something more close to the startup business I would like to start. The company is a tea and
coffee bar which is based on green tea. It can be compared to Starbucks. This part of the market
analysis will look into the tea and coffee bars in the Netherlands.
Tea and coffee bars are relatively new in the Netherlands, and concrete figures about these bars are
not easy to find. According to the Catering industrial board, there were around 1430 coffee corners
in 2011. The term coffee corner includes tea bars, coffee bars, but also coffee shops that sell soft
drugs.23 Compared to 2009, Van Spronsen & Partners consultancy, noted a decrease in coffee
corners of 1.5%.
According to Intraval, a bureau for social-scientific research and consultancy, the Netherlands
counted approximately 670 soft drugs selling coffee shops, which means that at this moment, the
Netherlands has around 760 tea and coffee bars.
It can be unclear what exactly a tea- coffee bar entails. As I mentioned before, this company is a teacoffee bar similar to that of Starbucks. However there are also specialized coffee and tea stores that
fall into this branch.
The following figure shows the amount of coffee corners in the Netherlands in 2009 and 2011, by
Province. Note that these figures also include the soft drugs selling coffee shops.
Coffee corners in the Netherlands according to BHC
2009
2011
Groningen
51
52
Friesland
60
60
Drenthe
31
27
Overijssel
75
80
Flevoland
19
21
Gelderland
135
135
Hendriks, C. (2013). De Koffie- en theebar in beeld. Available:

http://www.spronsen.com/downloads/de_koffie-_en_theebar_in_beeld_2012.pdf. Last accessed
25th July 2013.
23
38
Utrecht
75
81
Noord-Holland
416
412
Zuid-Holland
370
348
Zeeland
31
32
Noord-Brabant
115
116
Limburg
65
68
1443
1432
Total
Figure 14: Coffee corners in the Netherlands according to BHC

We see that the Randstad (Noord- and Zuid-Holland) have the most coffee corners. This is also
where this company will start operating in. Most big cities are in the Randstad, and there are many
people on-the-go, thus tea and coffee bars will have most potential in these areas.
Interviews
Van Spronsen & Partners conducted interviews with two men who know everything about the coffee
branch and the coffee corners which I would like to show one interview as it shares valuable
information about new developments in the coffee industry and the tea/coffee bar branch.
Interview Jeroen Veldkamp CoffeeLab
Jeroen Veldkamp is the owner of CoffeeLab, an independent coffee platform that inspired, shares
knowledge, presents and motivates. Jeroen has plenty of experience in the coffee branch, working for
Douwe Egberts, the market leader of coffee in the Netherlands, and has two titels, namely Dutch
barista champion, and director of Specialty Coffee Association of Europe.
Q: How did you see changes in the coffee market in recent years?
A: The most important change is the role of the consumer. The consumer is getting more aware of
the quality of coffee and chooses products more consciously. In the past consumers used to follow
the suppliers in new developments, but the roles are now reversed.
Q: What does this mean for the Market?
A: Within this industry, there are chances that the consumer is more knowledgeable than the shop
owners. There are better home opportunities in coffee making and ways coffee is offered, plus the
quality has improved quite a lot in recent years. Compared to the coffee industry, the Dutch
consumer is faster in terms of new developments and knowledge about coffee.
Q: Are we going to drink more coffee outdoors?
A: Yes that is what I expect. The possibilities of drinking coffee outdoors will increase. We
obviously have a real coffee culture in which we make time for coffee, and take a moment to rest.
However we are Americanizing and adopting an on-the-go culture. People are getting busies and we
39
Thesis
2013
are looking for speed. In short, we are becoming a to-go culture. Consumers are becoming more
demanding and are not satisfied with the coffee offered at work, so they go outdoors for their own
coffee.
Q: What are your expectations of the coming five years?
A: I expect a bright future. If everyone keeps doing what theyre doing, there will be a place for
everyone. As I mentioned before, consumers will continue to determine new developments.
Suppliers will have to listen to the consumers. Consumers will no longer be tricked, and would like to
pay for quality. So quality will improve even more. The number of coffee bars will continue to
increase in the future, making it hard for (grand) cafes. To stay a player in the market, this group will
have to realize the importance of good coffee, and will go into the direction of a coffee bar.
Conclusion:
To summarize, consumers have become more knowledgeable about coffee (and tea). They know
what they want and they expect good quality products too. Therefore quality will continue to increase
to meet the needs of these consumers. As the Dutch culture is becoming Americanized, it will adopt
the on-the-go culture, meaning that they will start going outdoors for coffee (and tea), and expect
speed and quality. Coffee/Tea bars will start to show up more and if everything goes the way it is
going now, everyone will have a place in this branch.
This interview shows good signs that a tea/coffee bar will be loved by Dutch consumers.
4 . 3 C O M P E T I T I V E E N V I RO N M E N T
The competitive environment is the third part of the empirical framework which is all about the
companys competitors. It is important to know the competitive environment because the companys
strategy will be based on the competitors as well. If all competitors use a certain type of strategy, it
might not be wise to use the same strategy as them. The competitive environment relates back to the
strategic analysis part in chapter 2.2 of the theoretical framework.
4.3.1COMPETITOR ANALYSIS
In this part of the thesis will show an analysis of three main competitors of our company in the
tea/coffee bar branch. In the tea and coffee market part of the thesis I already introduced the
competitors already, but now I will analyze these companies on a deeper level.
The three biggest coffee/tea bars in the Netherlands are:
SARAH LEE & COFFEE COMPANY
In December 2011 it was announced that Sarah Lee (Mother Company of

Douwe Egberts) took over the Coffee Company that has over 30 coffee bars
already. Because of this, Sarah Lee (With its Douwe Egberts Koffie Cafes)
became the biggest coffee/tea chain in the Netherlands with approximately
60 stores which gives them a market share of 30% in this branch. The stores
are primarily located in large cities, and in new locations such as campuses,
and hospitals. Jointly, these stores receive around 7 million customers annually. The acquisition
shows Sarah Lee to have confidence in the outdoors coffee/tea market in the Netherlands. The
initial establishment of Coffee Company happened in 1996 in Amsterdam, and before the sale to
Sarah Lee, the Coffee Company was the largest coffee chain of the country.
40
Strengths
First-mover advantage: The Coffee Company was the first to start this type of coffee/tea
store in the Netherlands
Great image: Together with DE cafes, the company has created a great image. Especially DE
cafes, because Douwe Egberts is the most popular coffee brand in the country
Relatively cheap: Compared to Starbucks, the coffee they offer is much cheaper.
Own coffee roasting plant: Coffee Company has its own coffee roasting plant in Kenya
Weaknesses
No unique selling point: The company has no USP that makes it stand out from other
companies in the Netherlands
Bad atmosphere and service: In contrast to Starbucks, the atmosphere in coffee companies is
bad. According to reviews online, people complain about the bad atmosphere in the store
and the service leaves much to be wished for.
STARBUCKS
After the first opening of Starbucks in the Netherlands in 2007, the

American company now has 19 stores in the Randstad, where for them are
found at Schiphol Airport in Amsterdam. The other stores can be found in
other large cities, mainly in stations.
Strengths
Biggest coffee chain in the world: Starbucks has most stores in the
world and operates in many countries.
Best brand image: Starbucks has created a very power brand image that is recognized
worldwide making people very loyal to the brand
Starbucks experience: Starbucks promotes the company as experiencing the Starbucks
experience
Strong financial situation: Starbucks has a strong financial situation, making it easy to expand
in the Netherlands.
Weaknesses
High prices: The prices of Starbucks drinks are really high. Even though many people are
willing to buy their coffee at premium prices, there are also people who find this a deal
breaker, and choose to drink their coffee elsewhere.
Difficulty penetrating Dutch market: Even though Starbucks has 19 stores already, it seems
like they are quite hesitant penetrating the Dutch market compared to other countries like
41
Thesis
2013
the UK, where they have more than 600 stores. The reason for this can be the authentic
Dutch coffee culture, where people prefer to drink their coffee in traditional coffee shops.
KALDI
Kaldi has about 38 stores across 30 cities in the Netherlands. The first branch was
opened in 2000. Kaldis focus is much more on the sales of coffee and tea, crockery and
equipment, but also provides seating. Furthermore there also is Kaldi Mobile where
coffee is sold from a Piaggio scooter that has been transformed into an espresso bar.
Strengths
Diversification: Kaldi is much more different than Starbucks and the Coffee
Company. The store is much more focused on the sales of coffee and tea, and
they also sell coffee making machines. When
entering a Kaldi store, it looks more like a store
than a caf.
Kaldi Mobile: Kaldi provides catering services using
a mobile espresso bar.
Online sales: Kaldi sells their own range of coffee
and tea products that can be bought online.
Furthermore they are the official dealer of Philips
Saeco and ECM Manufacture espresso machines.
Weaknesses
Coffee/Tea specialist: Kaldi looks more like a specialist store with an opportunity to drink
coffee. The companys main goal is the sale of its product, and the store is made in such a
way that whilst drinking your tea or coffee, you are tempted to buy its products
Bad atmosphere: Kaldi looks like (and is) a store selling products, which really isnt enjoyable
for people looking to drink coffee outdoors.
4 . 4 R E S E A RC H O N V I A B I L I T Y
The last part of the empirical framework is the research on viability. This part is all about strategy
formulation and looking at the viability of this startup company. First there is the Strategic Factor
Analysis Summary, which shows the strengths, weaknesses, opportunities, and threats of the
company in a very detailed manner. After that the strategy formulation can be found. Then there is
the marketing plan, and finally the financial plan to look at the financial viability of the company.
4.4.1 STRATEGIC FACTOR ANALYSIS SUMMARY
After having analyzed both the Macro- and Micro-Environment, it is time to focus on the business
itself. The tool that I will use for this is the Strategic Factor Analysis. It is a method used to analyze,
42
and evaluate a company by identifying its internal and external factors, while each factor will be given
weights and ratings. This analysis is comprised of three parts, the Internal Factor Analysis Summary
(IFAS), which shows the company's internal strengths and weaknesses, the External Factor Analysis
Summary (EFAS), which shows the company's external opportunities and threats, and finally a
combined Strategic Factor Analysis Summary (SFAS), which shows a combined overview of both the
internal and external factors. The SFAS relates back to chapter 2.2 Strategic analysis/plan of the
theoretical framework.
INTERNAL FACTOR ANALYSIS SUMMARY (IFAS)
The IFAS is the first part of the total analysis, which looks at the internal factors of the company, the
strengths and weaknesses. Each factor is given a weight from 0 (not important), to 1 (most
important). Combined, all factors should have a weight of 1 (100%). After the weights have been set
ratings must be given. The ratings reflect how good or bad the company scores, 1 being low, and 5
being high. Then the weights will be multiplied with the ratings given, which will then result into the
weighted score. The higher the total rating, the better the company stands. So a rating of one would
mean that the company is in a very poor position, whereas a rating of five means the company's
position is very well. In this case, the rating is about the company's internal position; however the
same method applies to the EFAS, and SFAS. All weights and ratings are based on my own
impression of each factors importance, and the effect it has on the company.
Internal Factors Analysis Summary Table
Internal Factors
Weight
Rating
Weighted Score
STRENGTHS
0.80
Comments
Unique Matcha green

tea concept
0.20
Outstanding service
and unique atmosphere
0.15
0.75
The company will focus on

exceptional service, and creating a
unique modern Japanese style
atmosphere that isnt found
anywhere else.
Strong management
0.15
0.45
The company owner has a lot of

experience in the fast food and
restaurant business to help reach
the companys full potential
Limited funds available
0.15
Relatively high prices
0.10
WEAKNESS
0.30
0.30
43
This company is the only

tea/coffee bar that offers green
tea food and beverages in the
Netherlands
The company has limited funds

and needs to rely on outside
investors or loans
Products offered by this company
will be offered for premium prices
Thesis
2013
which may put people off

Low reach of customers
0.15
0.45
Because we start with one store,

we have limited reach to
customers compared to our
competitors
Advertisement
Dependent
0.05
0.15
To gain fast recognition, the

company needs to advertise a lot,
so that people know of our
existence.
Too focused
0.05
0.15
As our products are mainly based

on Matcha green tea, it might be
too focused.
TOTAL
3.35
EXTERNAL FACTOR ANALYSIS SUMMARY (EFAS)
The EFAS focuses on the external factors of the company, the opportunities and threats. When it
comes to the weights, ratings, and weighted score, the same method applies which has been used in
the IFAS.
External Factors Analysis Summary Table
External Factors
Weight
Rating
Weighted
Score
Comments
Huge coffee/tea market

in the Netherlands
0.15
Opportunities
0.75
Health conscious
society
0.15
0.75
Nowadays society is getting more

health conscious and consume healthy
food
Internationally minded
society
0.05
0.15
Dutch people arent afraid to try new

foods and drinks.
Expansion of operations
0.10
0.10
As the society is transitioning to an onthe-go culture, there is still room for

expansion and growth
Diversification of
product offering
0.05
0.10
More types of beverages and food could

help attract more customers
Threats
44
Most Dutch people drink coffee and

tea.
Substitute goods
0.20
0.40
There are many alternatives customers

could go to
Competitive Established
Market
0.20
0.60
The market for tea/coffee bars already

exists and is long established before our
startup.
State of the economy
0.05
0.15
The current state of the economy is

weak which can negatively affect our
business
Increased prices of dairy

products
0.05
0.05
As most of the drinks is based on milk,

increased prices could affect the
companys cost
TOTAL
1.00
3.05
STRATEGIC FACTOR ANALYSIS SUMMARY (SFAS)
The SFAS is a summary which includes both the internal and external factors which have been
analyzed before in the IFAS and EFAS. A selection of the most important internal and external
factors will be chosen to come up with a final rating for the company as a whole. The SFAS gives a
great overview of the position of the company looking at its strengths, weaknesses, opportunities,
and threats. The difference between the IFAS/EFAS and the SFAS is that "Duration" is added. The
Duration shows the time each factor holds.
(Strength)
Mediu
m
Long
Short
Strategic Factors
Strategic Factors Analysis Summary Table

Duration
Weight Rating Weighted
Score
0.10
0.40
This company is the only

tea/coffee bar that offers green
X tea food and beverages in the
Netherlands
0.15
0.75
The company will focus on

exceptional
service,
and
X creating a unique modern
Japanese style atmosphere.
0.10
0.20
The company has limited funds

and needs to rely on outside
investors or loans
Unique Matcha green

tea concept
(Strength)
Outstanding service and
unique atmosphere
(Weakness)
Limited funds available
(Weakness)
Comments
X
0.10
0.30
Relatively high prices
45
Products offered by this

company will be offered for
X premium prices which may put
Thesis
2013
people off
(Opportunity)
0.15
0.75
Huge coffee/tea market

in the Netherlands
(Opportunity)
X
0.10
0.40
Nowadays society is getting

more health conscious and
X consume healthy food
0.15
0.30
The market for tea/coffee bars

already exists and is long
X established before our startup.
0.15
0.30
There are many alternatives

customers could go to
Health conscious
society
(Threat)
Competitive Established
Market
(Threat)
Substitute goods
TOTAL
Most Dutch people drink coffee

and tea.
X
1.00
3.40
SFAS CONCLUSION
Looking at the Strategic Factor Analysis Summary, the main strength of our business venture is our
unique concept. Instead of starting a regular coffee/tea bar, we diversify by opening a business that is
based on green tea. This is the companys competitive advantage and will stay this way until other
companies imitate our concept. The second strength is the outstanding service and atmosphere the
company will offer. In Japan, politeness is very important and customers are seen as gods. This will
be reflected in our company as well. In combination with the beautiful Japanese style atmosphere,
the company will be able to attract and keep customers.
However there are also weaknesses. First of all, we have limited funds to our disposal. This limits us
in what we can, and cannot do. The company will need to apply for a loan, which begs the question
if we even get the loan at the first place. Secondly, the products we will offer are at relatively high
prices. We want to portray our business as a premium store, but this may scare people away. To fight
this we will have promotional events, and discount coupons to let people familiarize with our
company and products we offer.
There are also some opportunities. The Dutch coffee and tea market is huge. This means that there is
a lot of potential to grow. We realize that there are many competitors, however if done correctly, we
have opportunities to grow and capture market share. The second opportunity is the fact that people
are becoming health conscious. Matcha Green tea has a lot of great benefits to the health of people,
and marketing our products correctly, this could potentially attract more customers.
There are many dangers threatening the business too, one ranked high among them is the fact there
is already a competitive market established. Starbucks, Coffee Company, and other coffee bar chains
46
have been in the Dutch market for a long time, and captured most of the market share. This makes it
difficult for us to penetrate the market unless we really offer something different thats not already
there. Lastly, we have to realize that there are many substitutes in this branch. There are unlimited
cafes and other stores that sell beverages, so in order to survive in this market, we need to keep
customers by our unique green tea based food and beverages, combined with outstanding service. A
rating of 3.40 is reasonable, and the future of this business can be profitable.
4.4.2 STRATEGIC PLAN
Now that the internal- and external analysis has been finished, we can now proceed to the
formulation of the strategic plan. We know everything about the industry, competitors, and the
company itself. Using all of this information gathered so far, we can make the best decision on
choosing the most appropriate strategy. To do this, I will start with the market positioning, and then
continuing on with the competitive advantage theory and finally the brand strategy. The strategic
plan relates back to chapter 2.2 of the theoretical framework, under the strategic formulation part of
the chapter.
MARKET POSITIONING
Market positioning is about the positioning of the company in the market. "The market" is very
broad, so in order to be successful as a company, it should know how it wants to position itself. It
answers the question of how the company wants to be perceived by their target group. It is very
important to carry out a certain image which shows the company's uniqueness, in order to distinct
itself from the competitors, and of course to leave the right impression in the minds of the segments
which are being targeted.
Core impressions of the company: Status Symbol / Hip / Healthy
Secondary impressions: Quality / Taste / Innovative
Other impressions : Packaging / Safety
COMPETITIVE ADVANTAGE
Before choosing the right strategy, it is important to identify the companys competitive
advantage. A competitive advantage is needed if we want to stay ahead of our competitors.
In order for Anna's green tea to be successful it needs to be sustainable not only in the short- but
also in the long run. To ensure sustainability, the company needs a certain advantage, something it
does better compared to its competitors. This is called the "competitive advantage". Michael Porter
describes in his theory, that competitive advantage can be achieved by three factors: Competitive
advantage by lower prices for the same product (cost leadership), competitive advantage through a
better or more attractive product (differentiation), or competitive advantage by focusing on a certain
niche market (focus). Only with one of these advantages will the company be able to stay successful
in the long-run. The competitive advantage of our company is the Differentiation Advantage.
Using Matcha green tea as our basis, in combination with Japanese style and culture, we are setting
the company apart from our competition, and this will certainly be noticed.
47
Thesis
2013
BRAND STRATEGY
As the company wants to portray a certain image with certain qualities and attributes, an important
tool to use is the company's brand strategy. Each brand portrays certain values, and it is up to the
company to make sure these values are in line with the company's goal(s). This is done by
researching, defining, and building the brand. In order to reflect the values mentioned above the
company will represent this using certain elements
Logo: The Companys signature logo represents something modern and
Japanese. Anna in comes from the Japanese name Hana, which means flower,
but to make it more accessible to the Dutch people, it became Anna. The flower
is based on Kiku-no-hana (Chrysanthemum) which was used as an emblem by
the Japanese royal family. So it is kind of a status symbol.
Physical location: The physical location of the company must radiate hip and high quality.
To do this, the atmosphere must look trendy of furniture must be of high quality.
Packaging: Drinks that are sold must have good looking packaging. People taking away
drinks send a message to outside people, and that message must be trendy, hip, healthy, and
high status.
Website: A good looking website will help radiating the image we want for our customers
and the outside world.
PORTERS GENERIC STRATEGIES
Porter describes 4 common strategies that are used by companies to achieve their competitive
advantage. Now that we know our market positioning, competitive advantage, and brand strategy, we
can choose the best generic strategy.
Cost leadership
Differentiation
Generic
strategies
Cost focus
Differentiation focus
Figure 15: Porters Generic Strategies

I believe the best strategy is Differentiation. There are many coffee/tea bars out there, mainly
focusing on coffee. We do something else. Most of our products offered are made with Matcha
green tea, which is totally different than our competitors. By differentiating, I believe this company
can be successful.
48
4.4.3 MARKETING PLAN
This part of the thesis is about the marketing plan of the startup company. The marketing plan
consists of segmentation, to identify our (potential) customers, and the marketing mix. The
marketing mix consists out of four main elements used to create a marketing strategy. The marketing
plan relates back to chapter 2.3 of the theoretical framework explaining theories about segmentation
and the marketing mix.
SEGMENTATION
The tea and coffee market in the Netherlands is huge. There are many types of consumers with
different needs and wants. Some care about price only, while others care about quality, and are
willing to pay premium prices. People have different tastes too. Then there are different ranges of age
as well, and to cater to all these people in the coffee and tea market is impossible. Therefore it is
important to divide this market into groups that our company decides it wants to attract.
First off, I use geographic segmentation. The company will operate primarily in 3 provinces: ZuidHolland, Noord-Holland, and Utrecht. I mentioned this before. In these three provinces alone the
number of inhabitants is more than 7.5 million. Furthermore, the target group of the company is
internationally minded people, modern people, students, and hip people, to name a few. And these
people are mostly found in urban areas. This brings us to the next point.
As we first segmented by geographic location, we now use psychographic segmentation. The basis of
this type of segmentation is the lifestyle of individuals. Think about the individuals attitude, interest,
values etc. The people we target are:
Students: We want to position ourselves as a place where students can hang out, study, and
meet with their friends.
Hip modern people: As we are portraying our company as premium, we like to make the
company a status symbol. These people are likely to have professional careers and care about
status. We like to portray our company as a cool place to be
Internationally minded people: Because, our company is based on Japanese tea culture,
we like to attract people who like to try new and exotic things. These people are usually to be
found in urban areas.
Health conscious people: Because green tea has many benefits to the health of people, we
want to promote this, in order to attract health conscious people.
Lastly, we also segment the market by age group. The main target groups are young adults, and
adults. Young adults can be classified between the ages of 17 to 25, and adults from the ages of 26 to
45.
MARKETING MIX
The marketing mix is the most important tool to create a marketing plan and consists of the four Ps:
Product, Price, Place, and Promotion. Using these elements, I will be able to create a marketing plan
that fits our generic strategy, and will help to create the right image we want to achieve.
49
Thesis
2013
Product
Matcha green tea
Matcha is Japanese green tea grounded into powder. It is made from the leaves of the tea plant
Camellia sinensis. What makes Matcha so special is the origin and
production of this green tea. The different ways in which green tea
leafs are treated, determine the tea quality.
More than 800 years ago, Matcha was manufactured by Buddhist
monks as a meditation drink. Nowadays Matcha is the finest and
rarest teas in Japan. The tea can be used in any type of food or
beverage to create a green tea taste, which is what this company
does.
Products
Beverages:
Figure 17: Roasted green tea beverages
Figure 18: Green tea beverages
Figure 16: Red bean beverages
Figure 19: Coffee & juice beverages
50
Sweets
Figure 21: Parfaits sweets
Figure 20: Ice cream sweets
Crepes
Figure 22: Crepes
51
Thesis
2013
Price
Premium Pricing Strategy
When determining the price of a company's product(s), the first thing that comes in mind are the
expenses. Looking at the expenses, the company sets a profit margin it wants to achieve and based
on that, the price is determined. However there comes much more into play when it comes to pricing
strategies. As mentioned before, Anna's green tea wants to portray an image of high status. To do
this, a high prices need to be set for its products because products that are high in price are often
linked with high quality and vice versa. Therefore, the best pricing strategy for Anna's green tea to
pursue would be the "Premium Pricing Strategy"
Thomas Nagle describes the price/quality effect in his book about consumer psychology. It refers to
the price-quality relationship as the perceptions consumers have about products that are relatively
high in price are an indication of good quality. So, the effect of this is that consumers will be less
sensitive to the price of the product. Figure 23: Pricing Strategies Matrix shows the pricing strategies
Low
Penetration
Skimming
Premium
Price
Economy
High
Low Quality High
Place
The place of the business is very important as this is the place where the target customers need to be
attracted. Based on the previous analysis of segmentation, we can now list places where the type of
people we look for, most likely are situated.
52
Some of the possible locations are:

Amsterdam, De Dam. As Amsterdam is the capital of the country, there are many people
especially tourists that potentially could visit our store.
Rotterdam, Koopgoot. The Koopgoot is a place with many shops in the city center. Many of
our potential customers can be found.
Den Haag, Grote Markt. There are many people who go shopping in de Grote Markt.
Besides that, the place is renovating, and from 2014 it will look very nice.
Out of these three options, Den Haag is chosen. The reason for this is that the main competitors are
not found in this area. In Den Haag, Starbucks only has one store in the Central Station. Besides that
I have found a perfect location that fits our company image, and will attract the customers we want.
Nieuwe Haagse Passage
The city center of Den Haag is being renewed, which gives us the opportunity to capitalize on a new
project that is being built at the moment. The project is called: Nieuwe Haagse Passage. The building
connects three important streets, attracting many customers. The building itself looks incredibly nice
and modern, built by the architect Tschumi. The building will have many international retailers,
hotels, and catering facilities.
Figure 24: Nieuwe Haagse Passage
53
Thesis
2013
As can be seen, the building looks very modern, and is in the heart of the city, which is very
accessible. Looking at the map, below, the Nieuwe Haagse Passage, together with 3 other areas
form a unique mix of atmosphere, greatness, and international allure that is part of the urban
transformation. Right below the building, there is public transportation available as well.
Figure 25: Map Den Haag
Promotion
The last part of the four p's is promotion. Promotion consists of all activities that are meant to
communicate with the market in order to increase sales. Promotion can be carried out in numerous
ways. Think for instance about radio, television, magazines, trade shows, direct mail, but also very
important if not the most important, the internet and mobile internet specifically.
Our main form of promotion will be using (mobile) internet. Some of the activities we will do to
promote the business are:
Creating an attractive website: The most important part of promotion is a good website in
my eyes. A website can be seen as an extension of a store, and therefore it should be
attractive to carry out the message we want to portray.
Making use of social media: Nowadays, social media is used very much, and the company
should make use of this. A twitter and Facebook page will be very helpful, as special
promotions and information can be reached to the target audience very quickly and easily.
Creating a mobile application: As most people use smartphones or tablets, the company will
create an application, with coupons and other special promotions. This way people will be
more willing to visit our store.
54
Handing out flyers: Handing out flyers is always a good thing to reach people. It is easy to
hand out flyers to people walking nearby the store, and it is inexpensive.
These promotional methods combined will be enough to promote the business.
4.4.4 FINANCIAL PLAN
The last part of the empirical framework is the financial plan. This section is the quantitative part of
everything I have stated before, and is an integral part of this thesis, and needed to know the validity
of opening this company. The financial plan consists out of the summary of financial needs, which is
a list of the minimum financial requirements to open this business. Then the pro forma statements
will be created. These are the cash flow statement, income statement, and the balance sheet. Finally a
break-even analysis will be made to look at when costs equal revenue. This chapter relates back to
chapter 2.4 of the theoretical framework, where the theory about the financial plan is explained.
STATEMENT OF FINANCIAL NEEDS
The statement of financial needs is a list of all the investments needed to start the company. It gives a
clear view of what is needed. This is the first step of the financial plan, because using this will be the
guideline to start making projections later on. The figure below shows the statement of financial
needs of Annas green tea.
Statement of Financial Needs

Current Assets
Prepaid rent
Rent deposit
Stock food and drinks
VAT prefinancing
4,000
8,000
4,700
31,208
Total
47,908
Fixed Assets
Renovation
Inventory
Machines
Car
Computer / cash register system
41,322
24,793
33,058
23,150
1,799
Total
124,122
Working Capital
Cash
Bank
250
1,500
Total
1,750
Start-up Costs
Personell uniforms
Accessories
Permits
Insurance
Accountant
Promotion
Tablewear, glass
Bank charges
474
1,580
744
63
1,488
2,479
4,446
42
Total
Total Investment
11,316
185,096
55
Thesis
2013
Assumptions: The above figures are the assumed total investments needed to open the store. Also,
all machines and the car are purchased. Often companies lease machines and vehicles, but I decided
to buy it. Furthermore, in preparing the statement, I excluded VAT amounts.
As can be seen from the statement above, 185096 will be needed to start the company and make it
operational. Most of the costs are the fixed costs, where the initial renovation and machines are high
in costs. Secondly, current assets are quite a big amount due to VAT pre financing. Lastly, startup
costs are much the lowest expense, of course initial tableware is needed which costs a lot. For more
detailed information about each expense, please refer to the appendix.
SOURCES OF FUNDING
Sources of Funding
Owner's Equity
Commercial Loan
Total
Amount
43.22%
56.78%
100.00%
Totals
80,000
105,096
185,096
Months
60
60
Loan Rate Monthly Payments

8.00%
8.00%
2,130.97
2,130.97
Assumptions: 80000 will be paid by the owner. The remaining amount needed for the initial
investment is financed by a commercial loan with a loan rate of 8 percent to be repaid in 60 months.
Nearly 57 percent of the companys initial investment is financed by a commercial loan. Monthly
payments which include interest plus the amount that needs to be repaid, amounts to circa 2131.
More information about the sources of funding and the amortization schedule can be found in the
appendix.
SALES PROJECTIONS
Sales Projections
Products
Beverages
Parfaits
Crepes
Ice cream
% change
Sales
COGS
Gross Profit
Percentage Price/unit Cost/unit Total customers

55%
4.50
0.62
Per day
160
25%
6.00
1.30
Per week 1120
10%
4.50
0.90 Per month 4800
10%
4.75
1.05
Per year
58400
2014
0%
286,160
50,282
235,878
2015
2016
2017
2018
15%
15%
15%
15%
Total
329,084 378,447 435,214 500,496
57,825 66,498 76,473 87,944
271,259 311,948 358,740 412,551
Assumptions: 160 customers are expected on a daily basis. Furthermore the store will be open 7
days a week. I assume Beverages will be sold the most with parfaits having the second most sales.
I expect Annas green tea, to attract 160 customers per day. The reason for this is the very attractive
position of the store, where many people will be walking by. People will be able to takeaway drinks
quickly and therefore it is possible to attract the amount of customers stated. I expect sales to
56
increase each year due to the popularity of the company and the brand. Therefore, in 2018 expected
sales volume will exceed 500000. A more detailed sales projection can be found in the appendix
INCOME STATEMENT
Anna's Green Tea

Projected Income Statement - Yearly
2014
286,160
50,282
235,878
229,125
6,753
7,764
-1,012
1,351
-2,362
Total Sales
Total Cost of Sales
Gross Profit
Total Operating Expenses
Earnings Before Interest and Taxes
Interest Expense
Earnings Before Taxes
Taxes
Net Profit
2015
329,084
57,825
271,259
231,883
39,376
6,286
33,090
7,875
25,215
2016
378,447
66,498
311,948
234,917
77,031
4,685
72,345
15,406
56,939
Assumptions: All shares belong to me, the owner and no dividends will be paid out in these years.
The remaining amount of money will go to the retained earnings.
Looking at the income statement, the company will make a net loss of 2362. The main reason for
this is that the company is new, and needs more customers in order to make a profit. I dont want to
increase prices, because too high prices will chase away customers. In the second year, and the years
thereafter, net profit is gradually expected to increase.
CASH BUDGET
Anna's Green Tea

Cash Budget - Monthly (In Thousands)
Pre-Start 1
2
3
4
5
6
7
Month:
Receipts
Total Receipts
Payments
Total Payments
Cashflow Surplus/Deficit (-)
Opening Cash Balance
Closing Cash Balance
12
Totals
185.1
15.0 18.0 25.0 25.0 30.0 20.0 20.0 30.0 30.0 22.0 22.0 29.1
471.3
183.3
19.8 22.7 24.2 23.5 22.7 24.2 23.5 22.7 24.2 23.5 22.7 26.0
463.0
1.8
1.8
3.5
-4.8
3.5
-1.3
-4.7
-1.3
-6.0
0.8
-6.0
-5.2
1.5
-5.2
-3.7
7.3
-3.7
3.6
-4.2
3.6
-0.6
-3.5
-0.6
-4.1
7.3
-4.1
3.2
5.8
3.2
9.0
10
-1.5
9.0
7.5
11
-0.7
7.5
6.8
Assumptions: First two months will have the least sales due to the unpopularity. Furthermore I
assume seasonality does not play a role because AGT offers both hot and cold food and beverages.
57
3.2
6.8
10.0
8.3
Thesis
2013
The cash budget shows the monthly cash flows of the company for the first year. What we see is
that during the first six months, closing cash balances are negative. This is changing in the last six
months. The negative cash balances arent significantly high, and see no problems to pay monthly
bills. A more detailed cash budget can be found in the appendix.
BALANCE SHEET
Pro Forma Balance Sheet

Anna's Green Tea
Beginning
2014
2015
2016
Assets
Current Assets
Total Current Assets
51,995
31,825
40,117
133,101
133,101
133,101
Total Assets
185,096
164,926
173,218
Liabilities and Owner's Equity

Liabilities
Total Liabilities
105,096
87,289
68,003
80,000
77,638
105,215
185,096
164,926
173,218
Fixed Assets
Total Fixed Assets
Owner's Equity
Total Owner's Equity
Total Liabilities and Owner's Equity
Assumptions: No new machines will be bought in the beginning five years. Furthermore is
depreciation excluded from the balance sheet because it is a non-cash item and therefore does not
represent Annas green teas actual earnings potential.
As can be seen total fixed assets stays the same due to no new purchases of any fixed assets. Total
liabilities decrease on a yearly basis because each year, the commercial loan to be repaid becomes
lower. A more detailed balance sheet can be found in the appendix.
4.5 SUMMARY
The empirical framework of this thesis uses the body of the theoretical framework and presents the
findings. These findings will be summarized to give a quick view of what the empirical framework is
all about.
Annas green teas mission is to serve the best Japanese green tea beverages and food, in modern
Japanese-style stores. With its vision to enhance peoples lives with Japanese tea culture in a modern
way, it looks to create a modern place for people to gather and enjoy green tea beverages. The
company entity is a private limited partnership, the main reason for this choice being that this type of
legal form has the most limited liability for its owners. Annas green teas main operation(s) include
selling food and beverages based on Matcha green tea, thus running a bar/caf is the companys
58
primary operation. If the company will be successful it might look into other sources of income such
as licensing and franchising. The organizational structure of the company consists of four hierarchies.
At the top of the company we have the restaurant manager, then the assistant manager, shift
supervisor, and finally the barista. When more stores will be opened, the structure will slightly
change, as a district manager, regional manager, and a director will be included.
The political situation in the Netherlands at the moment is strict. With its policy of strict fiscal
discipline, the government is looking to save much money in the coming years, which is the result of
the bad economic situation in the country. The Netherlands has yet to show signs of economic
prosperity, as it still doesnt know how to climb out of the recession. Looking at the
social/demographic factors, the country with its 16.7 million inhabitants is the fourth most densely
populated country across the globe. The overall trend of the Dutch age structure is the rapid aging of
the society. The country is technologically advanced, and as its part of the European Union, there are
strict regulations when it comes to food.
The tea/coffee bar industry is quite open. It is relatively cheap and easy to start a tea/coffee bar
which makes the threat of new entrants high. Besides that, there are many substitute products as the
branch is the food industry. Customers have high bargaining power as there are unlimited choices for
them to go to. Suppliers have little bargaining power as we are dependent on green tea, but this is
very minimal because there are plenty of suppliers. Finally, competitive rivalry intensity is high. On
the whole, Annas green tea will face tough competition, and is very much dependent on what the
customers want.
The Dutch tea and coffee industry look promising. Coffee and tea are one of the most consumed
beverages and when zooming into the consumption of tea, the amount of green tea consumed has
been gradually increasing since the last decade. The Dutch society is becoming more Americanized,
meaning people are constantly on the-go which brings new opportunities, especially in the coffee/tea
bar branch. If this will be the case in the next coming years, everyone will have a place in this branch.
Annas green tea has three main competitors. These are Sarah Lee & Coffee Company, Starbucks,
and Kaldi. Coffee company was the first coffee bar chain in the Netherlands, but later merged with
Sarah Lee. They have approximately 60 stores in the Netherlands, giving them 30 percent market
share. Starbucks on the other hand opened its first store in 2007, mainly at stations. Starbucks has a
very strong brand giving them a huge advantage in this industry. Finally there is Kaldi. Kaldi tries to
diversify itself by focusing not only on the sales of coffee and tea, but much more than that. Their
stores look more like a shop than a caf. It is a coffee/tea specialist store.
Looking at the company itself, the main strength of Annas green tea is its unique concept.
Furthermore, is the company looking to stand out by providing outstanding service. In contrast, the
weaknesses of this company are the limited funds it has at its disposal. Companies like Starbucks
have much more funds which will make it hard for this company to compete. Secondly, the prices
offered for these products are relatively high, bearing the question if people are willing to these prices
for our products. As mentioned earlier, the Dutch coffee and tea market is huge, so there are still
plenty of opportunities.
The companys overall strategy is to create a brand image that portrays the company as a status
symbol, hip, and healthy. This will be achieved by outstanding quality, taste, and innovation. The
competitive advantage of Annas green tea lies in its differentiation advantage. Using Matcha green
tea as the basis, in combination with Japanese style and culture, the company tried to set itself apart
from the competition. The main target group(s) are students, hip and modern people, internationally
minded people, and health conscious people. We feel that these people are most likely to try new
things and will be intrigued by this new concept. Located at The Hagues central hub, it will attract
59
Thesis
2013
many customers. Annas green tea must promote itself as well. This is best done by using social
media.
Finally looking at the financial statements of the company, it is still a question if the company can be
successful. The company is expected to make a loss during the first year, which will change into
profits the years thereafter. However, for this to stay a success, many customers are required to buy
from the store on a daily basis, and due to the huge amount of costs this is troubling.
Looking at the viability of the company, there arent any big red flags telling us to disqualify this
company. There are many challenges, but there are still opportunities out there. This will be further
discussed in chapter 5.
4.6 ANSWER TO EMPIRICAL RESEARCH QUESTIONS
This part of the thesis will look to answer the empirical research questions provided earlier.
The organizational structure of the company consists of four hierarchies. At the top of the company
we have the restaurant manager, then the assistant manager, shift supervisor, and finally the barista.
When more stores will be opened, the structure will slightly change, as a district manager, regional
manager, and a director will be included. This is only if there are many stores. The regional manager
is in charge of overseeing stores and making sure they all perform well. The director makes sure the
company on a whole is heading into the right direction.
First of all, on average in 2012 the average Dutch consumers drank 150 liters of coffee and 90 liters
of tea. Those are amply 3 cups of coffee and 2 cups of tea per capita per day. Coffee and tea are
(together with water) the most consumed beverages in the Netherlands. With 27% of the daily liquid
consumption per day, coffee is the most consumed beverage in the Netherlands
The tea market from 2005 to 2012, consumption has been between 12 and 13 million kilograms. In
2005 and 2006, consumption has been 13.1 million kilograms, which then fluctuated in the years of
2007 through 2010. What we see now is that the tea consumption in the last two years has been
stabilized to 12.1 million kilograms. Looking at the coffee market we see an upward trend of coffee
consumption since 2005 until 2010 from 110 million kilograms to 120 million kilograms. In the last
two years it has stabilized to 119 million kilograms, which was also the case in the tea market.
There are multiple factors that caused the success of the tea/coffee bar branch in the Netherlands.
First of all, coffee is the most consumed liquid in the Netherlands and the Dutch culture is a real
coffee culture. People drink coffee in the morning and also at work. This means there is a big market
for coffee in this country. This in combination with the transformation of Dutch society causes the
success of this branch. Dutch society is becoming more Americanized and on the-go, which creates
the demand of such tea/coffee bars.
60
The political situation in the Netherlands at the moment is strict. With its policy of strict fiscal
discipline, the government is looking to save much money in the coming years, which is the result of
the bad economic situation in the country. The Netherlands has yet to show signs of economic
prosperity, as it still doesnt know how to climb out of the recession.
5. Who are AGTs biggest competitors, and what are their strengths and weaknesses
currently?
The biggest competitors of Annas green tea are Sarah Lee/Coffee Company, Starbucks, and Kaldi.
Sarah Lee/Coffee Companys biggest strength is its first mover advantage. It was the first company
that opened such a store in the Netherlands giving them a first mover advantage. The companys
weakness is the fact that they do not have a unique selling point. It does not stand out from other
companies and besides that the service is bad too.
Starbuckss greatest strength is its amazing brand image. Because of this powerful brand image the
company is able to make their customers extremely loyal to their brand. The companys biggest
weakness is the high prices. Because of this, many people avoid Starbucks and prefer to go
somewhere else to drink their coffee.
Kaldis strength lies in its diversification strategy. It is more of a coffee and tea specialist store with
the opportunity to drink coffee. Its weakness is the same as the strength. Because the store is a
specialist store, the atmosphere is not what you expect of a coffee/tea bar.
The companys overall strategy is to create a brand image that portrays the company as a status
symbol, hip, and healthy. This will be achieved by outstanding quality, taste, and innovation. The
competitive advantage of Annas green tea lies in its differentiation advantage. Using Matcha green
tea as the basis, in combination with Japanese style and culture, the company tried to set itself apart
from the competition.
Anna's Green Tea

2014
286,160
50,282
235,878
229,125
6,753
7,764
-1,012
1,351
-2,362
Total Sales
Total Cost of Sales
Gross Profit
Interest Expense
Taxes
Net Profit
61
2015
329,084
57,825
271,259
231,883
39,376
6,286
33,090
7,875
25,215
2016
378,447
66,498
311,948
234,917
77,031
4,685
72,345
15,406
56,939
Thesis
2013
The figure above shows a simplified income statement. As can be seen, it is projected that the
company will start off with a loss in the first year, but this is expected to change in the years
thereafter. By using a yearly growth rate of 15 percent, the company is expected to make a net profit
in 2015 that will continue to increase on a yearly basis.
After having analyzed the companys internal and external environment in combination with its
chosen strategy, there are two things the company must do. Firstly, Annas green tea has to look into
its cost structure. Total operating expenses are too high and needs to be trimmed. This can be done
by finding a different location that is cheaper. Furthermore the company should try starting off
smaller, with less employees because with the current economic situation and the fact that Matcha is
quite unknown in the Netherlands it is still a question whether the projected amount of customers
will come to the store. Secondly, it is very important that Annas green tea starts an effective
advertising campaign. As mentioned, Matcha is still unknown in this country, so first let people know
what it is and let them try it. Let people talk about it. When the general public starts to know more
about Matcha and this store, then the future will look promising for this company. A more detailed
recommendation is found in chapter 6.0
5.0 DISCUSSION
This chapter of the thesis relates the findings back to the problem definition by outlining the
implications of the findings to the problem definition. It discusses how the findings can be used to
answer the main research question(s).
Looking back at the problem statement, I stated my desire to start a green tea/coffee bar company.
The focus of this thesis was to look at the viability of opening such a store in the Netherlands. This
should be done by looking at the internal- and external environment. Internal analysis is related to
the company itself, whereas the external analysis is about the country, industry, and competitors.
Based on this the problem statement was:
To what extend can a green tea bar startup be successful, and how viable is the idea of green tea
products?
Based on the findings, I can say that a green tea company can be successful, to a certain degree. First
of all, Dutch culture is a coffee culture. Even though tea is in the top three of most consumed
beverages, coffee will always be the most consumed.
Secondly, Matcha green tea is a niche product. Green tea is not consumed as much as black tea, and
even though consumption is gradually increasing every year, it is still a small amount. One could
argue that there is not enough demand for this to be successful.
These are the pitfalls of opening a green tea store. Having listed the pitfalls, there is still some
potential. I believe that opening such a store can be successful to a limited degree, as it will not be
possible to make these types of store mainstream like Starbucks for example, but there will always be
people interested in Matcha green tea and its products.
62
We know that green tea is being consumed more every year. We also know that there is demand for
healthy drinks in the Netherlands. The challenge lies in making people aware of Matcha green tea and
its health benefits. Matcha is very new at the moment, and people might be hesitant to try Matcha.
If Annas green tea is successful in conveying what its all about, making people interested in the new
thing, I believe the company will be successful.
6 . 0 C O N C L U S I O N & R E C OM M E N DA T I O N
Throughout this thesis, theories and findings about the internal and external environment of Annas
green tea has been described, analyzed, and held against actual facts and trends regarding the coffee
and tea (bar) branch in the Netherlands.
Primarily, it has been established that the Dutch tea and coffee market is promising. Findings showed
that the Dutch tea and coffee consumption is very large. Furthermore society is expected to change
in favor of the tea and coffee bars where consumers are much more on the-go creating demand of
these types of stores.
It has also been established that the market is saturated. There are many competitors offering tea and
coffee, and substitutes can be found everywhere. Furthermore there are established competitors who
have already been able to capture most of the market and as threats of new entrants is high,
companies could easily copy Annas green teas concept.
The internal analysis shows the many challenges this company would face. The biggest challenge is
the financial situation of the company. Offering high priced products for something that is unknown
to the Dutch market, in combination with the ongoing economic recession is a big hurdle the
company must try to jump.
For these reasons this thesis will conclude that the viability of opening a green tea/coffee bar in the
Netherlands is limited. Annas green tea startup can be successful but as mentioned in the previous
chapter 5.0, there are some limitations that one needs to be aware of.
1. The Dutch market has many opportunities when it comes to tea. Traditional black tea
consumption is declining, while green tea consumption is increasing.
2. Demand of green tea products might be too little. As mentioned in the financial part of the
thesis, every day 160 people are expected to come to the store. If this does not happen, the
company will be in financial trouble.
3. Dutch culture is becoming more Americanized and on the-go. However, this is still a slow
process and the Dutch market might not be ready for something new like this at this
moment
This does not mean that Annas green tea will fail, in fact I still believe the company can be
successful, if some changes will be made, and if the company will focus on a couple of things. I
recommend Annas green tea to:
1. Start smaller and in a different location. The location in the center of the city is very
expensive, and is usually meant for successful companies. As this company is a startup, it is
63
Thesis
2013
unlikely that it will attract 160 customers on a daily basis, and because of that the company
might be in financial trouble. Therefore, a different and cheaper location should be chosen
and start with two employees instead of five which will result in a significant decrease of
costs. No longer will that many customers be needed for the company to survive. Also,
instead of buying machines, it might be better to lease machines. This will help to reduce
costs as well.
2. Start an extensive but cheap advertising campaign. Most people have no clue about Matcha
green tea and might be hesitant to try something new. Therefore it is very important to
inform people about the product, familiarize them with the taste, and educate them about
the numerous health benefits of the product. Providing samples outdoors might be a good
idea for that.
If Annas green tea will be able to convey the message about Matcha green tea, while changing
location and reducing costs, I believe the company will have potential and can be a successful
company in the Netherlands.
64
B I B L I OG R A P H Y
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Harvard Health Publications. (2004). Benefit of drinking green tea: The proof is in -- drinking tea is healthy,
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66
APPENDIX
FINANCIAL APPENDICES
Statement of Financial Needs

Current Assets
Prepaid rent
Rent deposit
Stock food and drinks
VAT prefinancing
4,000
8,000
4,700
31,208
Total
47,908
Fixed Assets
Renovation
Inventory
Machines
Car
Computer / cash register system
41,322
24,793
33,058
23,150
1,799
Total
124,122
Working Capital
Cash
Bank
250
1,500
Total
1,750
Start-up Costs
Personell uniforms
Accessories
Permits
Insurance
Accountant
Promotion
Tablewear, glass
Bank charges
474
1,580
744
63
1,488
2,479
4,446
42
Total
Total Investment
11,316
185,096
Explanation statement of financial needs

Prepaid rent
The amount of prepaid rent is 4000 excl. VAT. Per year the total rent amounts to 4000 * 12 =
48000. The monthly rent incl. VAT amounts 4000 + 21% = 4840. (VAT = 840)
Rent deposit
The rent will be prepaid for two months in advance, so 2 * 4000 = 8000. This is excl. VAT. The
rent deposit incl. VAT is 8000 + 21% = 9680. (VAT = 1680).
67
Thesis
2013
Stock food & drinks

Because the company is just opening, we need extra stock of food and drinks needed. Therefore we
expect total food and drinks costs to be 5000 incl. VAT. This is mostly the green tea, roasted green
tea, and red bean powder. Besides that we also need ice cream and milk, but buy those on a weekly
basis due to the shelf life. Green tea powder is 185 / kilo. Hojicha (roasted green tea) powder is
150 / kilo, and red bean powder is 85 / kilo.
VAT prefinancing
All VAT amounts are summed up.
Rent
Rent deposit
Renovation
Inventory
Machines
Car
Cash register system
Stock food & drinks
Uniforms
Accessories
Permits
Accountant
Table ware & glasses
Promotion
Total VAT
840
1680
8678
5207
6942
4862
378
300
100
420
34
312
934
521
31208
Renovation
To make the store ready to run, things need to be changed. Think about the placement of toilets,
cables, etc. I expect the costs of this renovation will be 50000 incl. VAT. Exclusive VAT this will be
50000 / 121% (*100%) = 41322. (VAT = 8678). The amount is based on expected elements of
renovation that must be done, plus the extra man-hours to complete the renovation. Furthermore,
this renovation will have a useful life of ten years, which means that per year 41322 / 10 = 4132
will be depreciated.
Inventory
Inventories are the tables, chairs, closets and lamps. The inventory costs are 30000 incl. VAT.
Exclusive VAT this will be 30000 / 121% (*100%) = 24793. (VAT = 5207). Also inventory
needs to be depreciated. The useful life is 7 years, which means every year 24793 / 7 = 3542 needs
to be depreciated.
Machines
Categorized under machines are: Vitrine, refrigerator, freezer, oven, stove, dishwasher, workbenches,
tools, and a coffee machine. The total machine costs are 40000 incl. VAT. Exclusive VAT this is
40000 / 121% (*100%) = 33058. (VAT = 6942). Also machines needs to be depreciated. The
useful life of these machines are 5 years, therefore yearly depreciation is 33058 / 5 = 6612.
68
Car
The Mercedes Benz Vito 110 CDI costs 28012 incl. VAT. Exclusive VAT the car costs 28012 /
121% (*100%) = 23150. (VAT = 4862). The car will have a scrap value of 20% of the total
amount, so 23150 / 100 (*20%) = 4630. The car has a useful life of 5 years, so the yearly
depreciation is 23150 - 4630 = 18520 / 5 = 3704
Computer / cash register
The cash register system costs 2177 inclusive VAT. Exclusive VAT the amount is 2177 / 121%
(*100%) = 1799. (VAT = 378). The cash register system has a useful life of 5 years, so each year
the depreciable amount is 1799 / 5 = 360
Personnel uniforms
Uniforms are 574 incl. VAT. Exclusive VAT the amount is 574 / 121% (*100) = 474. (VAT =
100). Uniforms are provided for 5 employees costing 57.40 (incl. VAT) per uniform. Each
employee gets 2 uniforms.
Accessories
Total costs of accessories are 2000 incl. VAT. Exclusive VAT this is 2000 / 121% (*100%) =
1580. (VAT = 420).
Permits
In order to open this company we need a permit costing 279 incl. VAT. Exclusive VAT this is 279
/ 121% (*100%) = 245. (VAT = 34).
Insurance
When opening a store, one needs certain types of insurance such as fire, theft, etc. This insurance
costs 63 a month, and must be prepaid.
Accountant
If the owner of the company keeps track of its administration on its own, an accountant costs 1800
inclusive VAT. Exclusive VAT this amount is 1800 / 121% (*100%) = 1488. (VAT = 312).
Table ware and glasses
In total, table ware and glasses cost 5380 inclusive VAT. Exclusive VAT this is 5380 / 121%
(*100%) = 4446. (VAT = 934).
Promotion
Promotion costs are 3000 inclusive VAT. This includes a website, and flyers. Exclusive VAT the
amount is 3000 / 121% (*100%) = 2479. (VAT = 521).
Bank charges
69
Thesis
2013
Per month, bank charges of 3.50 must be paid for the bank account of this company
Sources of Funding
Owner's Equity
Commercial Loan
Total
Amount
43.22%
56.78%
100.00%
Totals
80,000
105,096
185,096
Months
Loan Rate
60
60
Monthly Payments
8.00%
8.00%
2,130.97
2,130.97
To fund this company, I will use own funding, in combination with a loan. As can be seen from the
statement of financial needs, 185096 is needed to set up the company. 80000 will be paid from my
own pockets, which are savings of the past 20 years. The remaining 185096 will be funded by
obtaining a loan from the bank. The loan rate is 8 percent, and the full amount will be paid back in
60 months (five years). Each month 2130.97 must be paid which includes principal payment and
interest expense. For more information about the commercial loan, you can find the amortization
schedule which shows the payment of the loan in much more detail.
Salaries
Salaries and Related Expenses
Assumptions Wage Base Quarterly
Percent Change
Salaries and Wages
Salaries
Wages
Total Salaries and Wages
Payroll Taxes and Benefits
Social Security (Tax)
Employee Insurance (ZVW)
Other Employee Benefit Programs
Total Payroll Taxes and Benefits
2014
2015
2016
2017
2018
0.00%
0.00%
0.00%
0.00%
0.00%
1,500 4,500 18,000 18,000 18,000 18,000 18,000
22,500
36.90%
0.47%
8.00%
90,000 90,000
90,000
90,000
90,000
1,500 8,303 33,210 33,210 33,210 33,210 33,210
106
423
423
423
423
423
1,800 7,200 7,200 7,200 7,200 7,200
10,208 40,833 40,833 40,833 40,833 40,833
Total Salaries and Related Expenses
32,708
130,833
130,833
130,833
130,833
The salaries of each employee are based on a fix amount of 1500 per month. There are five
employees so on a yearly basis each employee is paid 18000 and in total 90000. Of course on top
of that, taxes and benefits should be paid for as well. These taxes and benefits consist of the social
security tax, employee insurance (ZVW), and other employee benefit programs such as
vakantiegeld. So in total on a yearly basis for all five employees 130833 needs to be paid.
70
130,833
Sales Projections
Products
Beverages
Parfaits
Crepes
Ice cream
% change
Sales
Beverages
Parfaits
Crepes
Ice cream
Total
COGS
Beverages
Parfaits
Crepes
Ice cream
Total
Gross Profit
Beverages
Parfaits
Crepes
Ice cream
Total
Percentage Price/unit Cost/unit Total customers

55%
4.50
0.62
Per day
160
25%
6.00
1.30
Per week 1120
10%
4.50
0.90 Per month 4800
10%
4.75
1.05
Per year
58400
2014
0%
144,540
87,600
26,280
27,740
286,160
19,914
18,980
5,256
6,132
50,282
124,626
68,620
21,024
21,608
235,878
2015
15%
2016
15%
2017
15%
2018
15%
166,221 191,154 219,827 252,801

100,740 115,851 133,229 153,213
30,222
34,755
39,969
45,964
31,901
36,686
42,189
48,517
329,084 378,447 435,214 500,496
22,902
21,827
6,044
7,052
57,825
26,337
30,287
34,830
25,101
28,866
33,196
6,951
7,994
9,193
8,110
9,326
10,725
66,498 76,473 87,944
143,319 164,817 189,540 217,971

78,913
90,750 104,362 120,017
24,178
27,804
31,975
36,771
24,849
28,577
32,863
37,793
271,259 311,948 358,740 412,551
I expect Annas green tea, to attract 160 customers per day. The reason for this is the very attractive
position of the store, where many people will be walking by. People will be able to takeaway drinks
quickly and therefore it is possible to attract the amount of customers stated. I expect beverages to
be most popular, so 55% of sales will be beverages. Then the second best in sales are the parfaits,
and finally ice cream and crepes. After the first year, sales are expected to grow 15% annually.
71
Year One (2014)

Interest
Principal
Loan Balance
Year Two (2015)
Interest
Principal
Loan Balance
Year Three (2016)
Interest
Principal
Loan Balance
Year Four (2017)
Interest
Principal
Loan Balance
Year Five (2018)
Interest
Principal
Loan Balance
Amortization Schedule
453.35
442.17
430.91 419.58 408.17 396.68 385.12 373.48 361.77 349.97 338.10 326.14
1,677.61 1,688.80 1,700.06 1,711.39 1,722.80 1,734.29 1,745.85 1,757.49 1,769.20 1,781.00 1,792.87 1,804.82
66,325.42 64,636.62 62,936.56 61,225.17 59,502.37 57,768.09 56,022.24 54,264.75 52,495.55 50,714.55 48,921.68 47,116.86
581.92
571.60
561.20 550.74 540.20 529.60 518.92 508.17 497.35 486.46 475.50 464.46
1,549.04 1,559.37 1,569.77 1,580.23 1,590.77 1,601.37 1,612.05 1,622.80 1,633.61 1,644.50 1,655.47 1,666.50
85,739.48 84,180.11 82,610.34 81,030.11 79,439.34 77,837.97 76,225.92 74,603.12 72,969.51 71,325.01 69,669.54 68,003.03
2,951.90
22,619.72
420,165.01
4,685.44
20,886.17
681,929.88
6,286.13
19,285.49
923,633.48
January
February
March
April
May
June
July
August September October November December
Totals
700.64
691.10
681.51 671.84 662.11 652.32 642.46 632.54 622.55 612.50 602.37 592.18
7,764.14
1,430.33 1,439.86 1,449.46 1,459.13 1,468.85 1,478.65 1,488.50 1,498.43 1,508.42 1,518.47 1,528.60 1,538.79 17,807.48
103,665.67 102,225.81 100,776.35 99,317.22 97,848.37 96,369.72 94,881.22 93,382.79 91,874.38 90,355.90 88,827.31 87,288.52 1,146,813.26
314.11
302.00
289.81 277.53 265.18 252.74 240.22 227.61 214.92 202.15 189.29 176.35
1,816.86 1,828.97 1,841.16 1,853.44 1,865.79 1,878.23 1,890.75 1,903.36 1,916.05 1,928.82 1,941.68 1,954.62
45,300.00 43,471.04 41,629.87 39,776.44 37,910.65 36,032.42 34,141.67 32,238.31 30,322.26 28,393.44 26,451.77 24,497.14
163.31
150.20
136.99 123.70 110.32
96.85
83.28
69.63
55.89
42.06
28.13
14.11
1,074.47
1,967.65 1,980.77 1,993.98 2,007.27 2,020.65 2,034.12 2,047.68 2,061.33 2,075.08 2,088.91 2,102.84 2,116.86 24,497.14
22,529.49 20,548.72 18,554.74 16,547.47 14,526.82 12,492.70 10,445.01 8,383.68 6,308.60 4,219.69 2,116.86
( 0.00) 136,673.78
72
2013
Thesis
Amortization Schedule
Anna's Green Tea

2014
2015
2016
2017
2018
144,540
87,600
26,280
27,740
286,160
166,221
100,740
30,222
31,901
329,084
191,154
115,851
34,755
36,686
378,447
219,827
133,229
39,969
42,189
435,214
252,801
153,213
45,964
48,517
500,496
19,914
18,980
5,256
6,132
50,282
235,878
22,902
21,827
6,044
7,052
57,825
271,259
26,337
25,101
6,951
8,110
66,498
311,948
30,287
28,866
7,994
9,326
76,473
358,740
34,830
33,196
9,193
10,725
87,944
412,551
90000
48,000
500
18,350
1,488
245
516
42
499
6,000
6,180
720
693
40,833
156
5,000
500
3,000
6,403
229,125
6,753
7,764
-1,012
1,351
-2,362
90000
48,000
550
18,350
1,488
245
516
42
499
6,600
6,798
720
693
40,833
156
5,500
550
3,300
7,043
231,883
39,376
6,286
33,090
7,875
25,215
90000
48,000
605
18,350
1,488
245
516
42
499
7,260
7,478
720
693
40,833
156
6,050
605
3,630
7,748
234,917
77,031
4,685
72,345
15,406
56,939
90000
48,000
666
18,350
1,488
245
516
42
499
7,986
8,226
720
693
40,833
156
6,655
666
3,993
8,522
238,255
120,485
2,952
117,533
24,097
93,436
90000
48,000
732
18,350
1,488
245
516
42
499
8,785
9,048
720
693
40,833
156
7,321
732
4,392
9,375
241,926
170,625
1,074
169,551
34,125
135,426
Sales
Beverages
Parfaits
Crepes
Ice cream
Total Sales
Cost of Sales
Beverages
Parfaits
Crepes
Ice cream
Total Cost of Sales
Gross Profit
Operating Expenses
Payroll
Rent
Advertising
Depreciation
Accounting
Business Licenses & Permits
Pin Machine
Bank Fees
Music & Entertainment
Repairs & Maintenance
Utility
Communication
Insurance
Payroll Taxes & Employee Benefits
Trash Removal
Table ware/Uniforms/Cleaning Supplies/Decor
Office Supplies
Facility
Transportation
Interest Expense
Taxes
Net Profit
The income statement speaks for itself. Numbers are taken from the other statements such as the
sales projections, salaries, and expenses from the cash budget. This compiled is the income
statement.
73
Thesis
Month:
Pre-Start
Receipts
Cash sales
Collections from credit sales
New equity inflow
Loans received
Other
Total Receipts
15000
18000
Anna's Green Tea

Cash Budget - Monthly
3
4
5
6
25000
25000
30000
20000
2013
10
11
20015
30000
30000
22000
22015
12 Totals
29130
80,000
105,096
185,096
15,000
18,000
25,000
25,000
30,000
20,000
20,015
30,000
30,000
22,000
22,015
29,130
Payments
Cash purchases
4,700
300
4,000
4,000
4,000
4,000
4,000
4,000
4,000
4,000
4,000
4,000
5,282
Payments to creditors
Salaries and wages
7,500
7,500
7,500
7,500
7,500
7,500
7,500
7,500
7,500
7,500
7,500
7,500
Employee benefits
635
635
635
635
635
635
635
635
635
635
635
635
Payroll taxes
2,768
2,768
2,768
2,768
2,768
2,768
2,768
2,768
2,768
2,768
2,768
2,768
Rent
4,000
4,000
4,000
4,000
4,000
4,000
4,000
4,000
4,000
4,000
4,000
4,000
4,000
Rent Deposit
8,000
Utiltities
1,545
1,545
1,545
1,545
Repairs and maintenance
500
500
500
500
500
500
500
500
500
500
500
500
Renovations
41322
Music and entertainment
499
Insurance
63
63
63
63
63
63
63
63
63
63
63
63
Travel
959
254
254
959
254
254
959
254
254
959
254
789
Telephone
60
60
60
60
60
60
60
60
60
60
60
60
Office supplies
42
42
42
42
42
42
42
42
42
42
42
42
Advertising
2,479
125
125
125
125
Professional fees
1,488
Permits
245
Bank charges
42
Pin machine
43
43
43
43
43
43
43
43
43
43
43
43
Trash removal
13
13
13
13
13
13
13
13
13
13
13
13
Facility
250
250
250
250
250
250
250
250
250
250
250
250
Interest expense
701
691
682
672
662
652
642
633
623
612
602
592
Loan repayments
1,430
1,440
1,449
1,459
1,469
1,479
1,489
1,498
1,508
1,518
1,529
1,539
Tax payments
31,208
Capital purchases
82,800
Table ware/Uniforms/Accessories 6,500
417
417
417
417
417
417
417
417
417
417
417
417
Total Payments
183,346 19,805 22,675 24,220 23,505 22,675 24,220 23,505 22,675 24,220 23,505 22,675 25,974
Cashflow Surplus/Deficit (-)
1,750
Opening Cash Balance
1,750
Closing Cash Balance
3,500
(4,805) (4,675)
3,500
780
1,495
7,325
(1,305) (5,980) (5,200) (3,705)
(1,305) (5,980) (5,200) (3,705)
3,620
(4,220) (3,490)
3,620
7,325
(600) (4,090)
(600) (4,090)
3,235
5,780
(1,505)
(660)
3,156
3,235
9,014
7,509
6,849
9,014
7,509
6,849
10,005
This cash budget shows how much money comes in and out of the company. This is very important
especially when the company needs a fair amount of working capital. Especially the first few months
the closing cash balances of AGT are negative. During the last five months this becomes positive.
74
286160
0.00
80,000
105,096
0
471,256
50,282
0.00
90,000.00
7,623
33,210
52,000
8,000
6,180
6,000
41,322
499
756
6,403
720
500
2,979
1,488
245
42
516
156
3,000
7,764
17,807
31,208
82,800
11,500
463,001
8,255
The first year of a company is always very unstable, but as sales is expected to increase during the
second year, closing cash balances will also increase.
Pro Forma Balance Sheet

Anna's Green Tea
Beginning
2014
2015
2016
1,750
4,700
45,545
51,995
10,005
7,483
14,337
31,825
20,093
5,687
14,337
40,117
31,293
33,058
23,150
1,799
41,322
2,479
133,101
31,293
33,058
23,150
1,799
41,322
2,479
133,101
31,293
33,058
23,150
1,799
41,322
2,479
133,101
Total Assets
185,096
164,926
173,218
Liabilities and Owner's Equity

Liabilities
Accounts Payable
Loan payable
Total Liabilities
105,096
105,096
87,289
87,289
68,003
68,003
Owner's Equity
Paid-in Capital
Retained Earnings
Total Owner's Equity
80,000
0
80,000
Total Liabilities and Owner's Equity
185,096
Assets
Current Assets
Cash
Stock
Prepaid expenses
Total Current Assets
Fixed Assets
Inventory
Machines
Car
Computer equipment
Renovations
Website
Total Fixed Assets
80,000
80,000
(2,362) 25,215
77,638 105,215
164,926
173,218
The balance sheet uses other statements previously made to show the value of a company at a certain
point in time. Fixed assets are expected to stay the same due to no new purchases during the first
couple of years. Total liabilities are gradually decreasing because of the steady payments of the
commercial loan. As the company is expected to make a net profit during from 2016, the value of the
company also starts to change in a positive way.
75
Thesis
2013
RESEARCH PROPOSAL
I N T ROD U C T I ON
Coffee and tea is deeply rooter into Dutch culture and history. Centuries ago, Dutch merchants
brought coffee and tea with them from exotic regions. Through the years, coffee and tea have
become an important part in the daily lives of the Dutch people. As society is changing, so is the
demand for certain types of products and services. Dutch society is becoming more Americanized,
and slowly becoming a to-go country. Changes in society bring new opportunities, which are
currently happening in the coffee and tea branch. Starbucks-like formulas are opening up
everywhere, and gaining much popularity. In Asia however, there is much more of a tea culture. It
would be interesting to see if instead of a typical coffee bar, an Asian style tea/coffee (with emphasis
on tea) bar could be successful in the Netherlands. That is the topic of this thesis proposal.
The structure of this proposal is as following:
1. Context
2. Research objective
3. Problem statement
4. Research questions
5. Research framework
6. Literature review
7. Methodology
8. Timeline
9. Bibliography
In deciding the structure of this proposal, my aim was to order the chapters in a chronological order,
so that everything is aligned properly and makes sense.
76
1 . C ON T E X T
As an aspiring entrepreneur, I am constantly looking for opportunities to start a business. When I

visited Singapore, I came across a nice tea bar, selling food and beverages made with green tea. As I
enjoyed the experience, I noticed that this type of tea/coffee bar is still absent in the Netherlands.
This made me seriously consider the possibility to open a tea/coffee bar in this country. The
company I would like to establish is called Annas green tea, or (AGT). AGT is a modern Japanese
style tea bar, which offers food and beverages based on Matcha green tea.
The Dutch tea and coffee market is incredibly large, as these beverages account for 42% of the daily
liquid consumption per capita in the Netherlands. There are continuous new developments
happening in this market.1 The latest developments in this market are the coffee/tea bars. Unlike
traditional cafes, these bars are marketed to the modern adults of todays society. Since 1996, a few of
these chains have been established. These chains all focus on mainly coffee, which is their core
product.
Looking at the tea market, green tea is slowly gaining popularity among tea consumers. Consumers
are starting to realize the health benefits of this type of tea, and as many people are looking to adopt
a healthy lifestyle, Annas green tea wants to capitalize on this by mainly providing beverages with
green tea as its main ingredient. Using green tea and Japanese culture as its competitive advantage,
AGT wants to know if there is potential for such a formula in the Netherlands.
This paper focuses on the research and analysis of the companys internal and external environment,
and existing effective strategic management and planning theories to provide the best strategy for this
company, and recommendations about the potential for this startup company.
2 . R E S E A R C H OB J E C T I V E
The research objective of this research project is:

To make recommendations of the potential of a green tea bar startup, by making an analysis of the
current internal and external environment, using strategic- analysis and planning, and financial
planning theories.
3 . P R OB L E M S TA T E M E N T
In chapter 1 I discussed the desire to start a green tea/coffee bar company. The focus here is the
viability of starting this company in the Netherlands. To do this, one must analyze the companys
internal and external environment. Internal analysis is related to the company itself, whereas the
external analysis is about the country, industry, and competitors.

1
77
Thesis
2013
This is the field of strategic management, strategic planning, and also financial planning. Keeping this
in mind, the problem statement of this project is:
To what extend can a green tea bar startup be successful, and how viable is the idea of green tea
products?
4 . R E S E A R C H QU E S T I O N S
4.1 CENTRAL RESEARCH QUESTION
4.2 THEORETICAL RESEARCH QUESTIONS
2. What strategic management methods are needed to determine a companys internal strengths and
weaknesses?
4.3 EMPIRICAL RESEARCH QUESTIONS

5. Who are AGTs biggest competitors, and what are their strengths and weaknesses currently?
5 . R E S E A R C H F R A M E WOR K
Figure 1: Research framework viability green tea bar
78
The research framework can be formulated as follows: (a) an analysis of a companys internal and
external environment (b) used to determine the position of AGT (c). An evaluation the position of
AGT results in (d), which is used to make final recommendations (e).
6. LITERATURE REVIEW
6.1 EXTERNAL FACTORS OF STRATEGIC MANAGEMENT
PESTEL ANALYSIS
The PESTEL analysis refers to political, economic, social, technological, environmental, and legal
factors. PESTEL analysis can be used to help detect trends in the external environment that will
ultimately find their way into the competitive environment (Henry, 2008). It is a technique that
facilitates a wide scan of the context and actual or potential factors that would affect objectives if left
unmanaged (Webster, 2010).
SWOT ANALYSIS
A SWOT analysis is a technique for focusing an individuals or a groups attention on strengths,

weaknesses, opportunities, or threats. It is useful particularly because strengths and weaknesses
(which are actual facts now) can be the cause of potential future risks both opportunities and/or
threats. As a result SWOT analysis is useful not only for identifying context, but also for identifying
risks (Webster, 2010). Opportunities and threats relate to aspects within the external environment.
These should also be evaluated against the strengths and weaknesses identified, e.g. opportunities can
only be capitalized upon if there are sufficient and appropriate resources to meet the challenges
posed (Coles, 2009).
PORTERS FIVE FORCES FRAMEWORK
The five forces framework is undertaken from the perspective of an incumbent organization, i.e. an
organization already operating in the industry. The analysis is best used at the level of an
organizations strategic business unit (SBU). Although each organization in an industry is unique, the
forces within the industry which affect its performance, and hence its profitability, will be common
to all organizations in the industry (Henry, 2008). Porter argues that the stronger each of these forces
is, the more limited is the ability of established companies to raise prices and earn greater profits.
Within Porters framework, a strong competitive force can be regarded as a threat because it
depresses profits (Hill, 2010).
6.2 STRATEGIC MANAGEMENT METHODS TO DETERMINE INTERNAL STRENGTHS AND
WEAKNESSES
RESOURCE BASED VIEW
The resource based view emphasizes the internal capabilities of the organization in formulating
strategy to achieve a sustainable competitive advantage in its markets and industries (Henry, 2008).
The central idea of the resource based view, also called inside-out approach is that a different
endowment of idiosyncratic resources within firms leads to a strategic heterogeneity which displays
differences in the success of the firms due to sustainable competitive advantages (Blumberg, 2008).
79
Thesis
2013
COMPETENCIES
Whilst the existence of resources is important, resources per se do not confer any benefit on an
organization. It is the efficient configuration of resources that provides an organization with
competencies. A competence is the attributes that firms require in order to be able to compete in the
market place (Henry, 2008). In general a competence may be defined as a combination of human
beings who are organized and function in/under a certain culture using hard technology to do certain
tasks to produce the products/services of the firm (Drejer, 1996)
COMPETITIVE ADVANTAGE
Competitive advantage starts with the premise that a competitive strength can arise from many
sources and shows how all advantage can be connected to specific activities and the way that
activities relate to each other, to supplier activities, and to customer activities (Porter, 1985).
Competitive advantage is what separates you from the rest of the herd. Its what keeps your business
alive. IN short its the reason you are in business (Smith, 2006)
6.3 ESSENTIAL ELEMENTS OF THE COMPANY PROFILE
ORGANIZATIONAL EFFECTIVENESS
In strategic management and organizational theory, organizational effectiveness denotes the broadest
domain of business performance; Organizational effectiveness not only captures firm performance,
but also the plethora of internal performance outcomes normally associated with more efficient or
effective operations and other external measures that are broader than those simply associated with
economic valuation (Kortmann, 2011).
CORPORATE STRUCTURE
An organization structure is a framework that establishes the relationship between job positions as
well as establishes the channel of communication (Andrews, 2007). Chain operations have elaborate
structures. Large restaurants require more people to operate it. The amount of specializations also
increases and therefore, requires elaborate structure. Small restaurant operations properties may not
have such elaborate structures. The owner/Manager would have direct control of operations
(Andrews, 2007).
6.3 FINANCIAL PLANNING TOOLS
STATEMENT OF FINANCIAL NEEDS
When applying for a loan, lenders and investors will analyze the requirements of your business.
Distinguished you these are working capital, growth capital, and equity capital. Working capital needs
to be repaid through cash (liquidity) during the businesss next full operating cycle (Pinson, 2008).
Keeping this in mind one must know how much is needed to accomplish their goals.
PRO FORMA STATEMENTS
Pro forma statements show your projections for the future profitability of your business (Pinson,
2008). All financial plans must contain the cash flow statement, three-year income projection, and a
break even analysis (Pinson, 2008).
80
7 . M E T H OD OL OG Y
Research methodology is a way to systematically solve the research problem. It is necessary for a
researcher to know not only the research methods/techniques, but also the methodology, the logic
behind the techniques.
7.1 RESEARCH METHOD
First of all, the decision has to be made on whether to sue qualitative or quantitative data. For my
project I will use mixed research. This means that I will use both qualitative and quantitative data in
my research. As my thesis is based on both exploratory and explanatory research objectives, the
mixed research is the best option. I will have to use quantitative data when analyzing the tea and
coffee market of the Netherlands. However my thesis is also about finding trends and new
developments in this industry, which is qualitative. I would say that 70% of the thesis is qualitative,
while 30% is quantitative.
7.2 DATA COLLECTION METHOD
The primary method used for data collection is secondary research. I will use credible sources that
have done their research to complement my research with. I understand that the data needs to be
reliable, suitable, and adequate. Because I need to research the market it is hard to use primary data,
because it takes a lot of time, and other companies might be far more specialized in certain fields, and
thus using their information might be more credible to use. The secondary data is derived using desk
research. Most of the information will be from the internet. Besides secondary research, I will also
use interviews for data collection. I have found a recent interview by another investigator of the tea
and coffee branch, which I might use as it is beneficial for my research.
7.3 DATA ANALYSIS PROCEDURE
There are special methods for the analysis of data, however in my case, this is not really needed.
Because Im using mostly qualitative data, I dont need to analyze specific data from questionnaires
or other data collection methods. The only quantitative data used is historical data about the
consumption of tea and coffee. As for the financial part of the research, it is based on projections. So
again, this is not relevant for me.
7.4 RELIABILITY AND VALIDATY
It is always a question if the collected data is actually reliable and valid. To make sure that it is, I am
using recognized sources for my secondary data collection. Data about the industry, demographics,
and other figures about the Netherlands, is found from CBS, Centraal Bureau Statistiek. This is a
100% credible source as its from the Dutch government. Other data about the tea and coffee branch
are from credible consulting companies.
To make sure that the data is valid, I check the date of the data collected and information found. If
data is older than 2010, I will not use it. As I need to analyze the companys current internal and
external environment, I will make sure that all the data I collect is recent.
81
Thesis
2013
TIMELINE
Week
Activity
25
Thesis proposal
26
Introduction of thesis
27
Theoretical framework
28-31
Findings
32
Final draft
B I B L I OG R A P H Y
Andrews (2007). Food & beverage Management. Delhi: MC-Graw Hill. p22
Linda, P (2008). Anatomy of a Business Plan. 7th ed. California: Out of Your Mind... and Into the
Market place. p77
Henry, A (2008). Understanding Strategic Management. New York: Oxford University Press. p117-126
Coles, L (2008). Public Health Skills: A Practical Guide for nurses and public health practitioners. Victoria:
Blackwell Publishing. p143
Kortmann, S (2011). The Relationship between Organizational Structure and Organizational Ambidexterity.
Munster: Springer Gabler. p12-17
Porter, M (1985). Competitive Advantage: Creating and Sustaining Superior Performance. New York: The Free
Press. p26
Lumberg, C (2008). Competences and Innovation. Norderstedt: Books on Demand. p3.
Drejer, A (2002). Strategic Management and Core Competencies: Theory and Application. United States:
Greenwood Publishing Group. p66
Hill, C (2010). Strategic Management - Theory: An Integrated Approach. United States: Cengage Learning.
p43.
Kothari, C.R. (2004). Research Methodology Methods & Techniques. 2nd ed. Delhi: New Age International.
82

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ROTTERDAM BUSINESS S CHOOL

DEFINING POTENTIALS OF OPENING A

Rotterdam Business School

2.2 Strategic analysis/plan ................................................................................................ 10

2.3 Marketing plan ........................................................................................................... 13

2.4 Financial plan ............................................................................................................. 15

3.0 Methodology ...................................................................................................... 18

4.0 Findings/Empirical framework ............................................................................. 19

4.2 Environmental analysis ....................................................................................... 23

4.2.2 Industry analysis ...................................................................................................... 29

The intensity of competitive rivalry ..................................................................................................... 30

4.2.3 Market analysis ....................................................................................................... 31

4.3 Competitive environment .................................................................................... 40

4.4 Research on viability ........................................................................................... 42

4.4.2 Strategic plan........................................................................................................... 47

4.4.3 Marketing plan ........................................................................................................ 49

4.4.4 Financial plan........................................................................................................... 55

4.5 Summary .................................................................................................................... 58

5.0 Discussion ........................................................................................................... 62

Rotterdam Business School

Rotterdam Business School

Annas green tea

Rotterdam Business School

Relative strengths and weaknesses of various organizational forms.

Rotterdam Business School

Hillstrom, K (2002). Encyclopedia of Small Business. United States: Gale group

Vision, mission, and objective statements

1. Vision statements answer the question: What do we want to become?

Rotterdam Business School

controlling activities. Lastly, objectives should be challenging, measurable, consistent,

Rotterdam Business School

Figure 1: Three levels of a product

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Rotterdam Business School

3.4 RELIABILITY AND VALIDATY

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Rotterdam Business School

Organizational structure of one restaurant

Figure 2: Organizational structure of one restaurant

Organizational structure of multiple restaurants

Figure 3: Organizational structure of multiple restaurants

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GDP growth (%)

Inflation (yearly average) (%)

Budget balance (% GDP)

Current account balance (% GDP)

Public debt (% GDP)

Figure 4: Macroeconomic indicators Netherlands

Reuters. (2012). Political risks to watch in the Netherlands. Available:

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General Social Data of the Netherlands

Figure 6: Age structure Netherlands 2013

Figure 7: Netherlands population density

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Laws and regulations

4.2.2 INDUSTRY ANALYSIS

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The product Life Cycle is used to analyze which

THE TEA AND COFFEE MARKET IN THE NETHERLANDS

Rotterdam Business School

Consumption of beverages in 2012

Figure 8: Consumption of beverages in 2012

KNVT. (2013). Trends en ontwikkelingen in koffie- en theeconsumptie . Available: