Practise your commercial awareness for your next interview using PESTLE & SWOT.

[Maria d'Orey]

Hi everyone!

My name is Maria and I am a Product Lead at TCLA and future trainee. ☺️

With assessment centre season well underway and many of you wanting to start preparing for your training contract applications, @NatashaS98 , @Orla , @Erin and I have been thinking of ways to provide you with opportunities to practice your commercial awareness.

I wanted to start by giving you an opportunity to conduct a PESTLE & SWOT analysis. This is commonly used in group exercises or individual assessment centre activities, mainly because it allows recruiters to see your ability to think commercially and consider current news stories that may impact clients (both positively and negatively!). You can find a quick summary of what each acronym stands for in the PDF below.

Here is a scenario that you could be given in a law firm assessment centre:

You are an entrepreneur seeking to start your own independent coffee shop in London. Using PESTLE and SWOT, what are some factors that you would consider when building your business plan?

Make sure to share your ideas on this thread, and we’ll be sending everyone who participates an email with a summary of our team’s answer to this question by next Wednesday, the 8th of February.

------

Quick note:

Don’t worry if you find this hard, this is normal! There is also no such thing as a “perfect” answer here. The most important thing is to give this practice exercise a try!

Also, there is no need to use both PESTLE and SWOT or to consider every single factor of each - feel free to refer to as many points as you want! In fact, as you can see, both Strengths and Weaknesses refer to an internal assessment of the business, while Opportunities and Threats relate to external factors. Because we’ve given you little information about the business, it is normal if you can’t think of many strengths and weaknesses, so don’t worry about that!

Looking forward to seeing everyone’s thoughts! 🌟

 

[ztyh]

Hi everyone!

My name is Maria and I am a Product Lead at TCLA and future trainee. ☺️

With assessment centre season well underway and many of you wanting to start preparing for your training contract applications, @NatashaS98 , @Orla , @Erin and I have been thinking of ways to provide you with opportunities to practice your commercial awareness.

I wanted to start by giving you an opportunity to conduct a PESTLE & SWOT analysis. This is commonly used in group exercises or individual assessment centre activities, mainly because it allows recruiters to see your ability to think commercially and consider current news stories that may impact clients (both positively and negatively!). You can find a quick summary of what each acronym stands for in the PDF below.

Here is a scenario that you could be given in a law firm assessment centre:

You are an entrepreneur seeking to start your own independent coffee shop in London. Using PESTLE and SWOT, what are some factors that you would consider when building your business plan?

Make sure to share your ideas on this thread, and we’ll be sending everyone who participates an email with a summary of our team’s answer to this question by next Wednesday, the 8th of February.

------

Quick note:

Don’t worry if you find this hard, this is normal! There is also no such thing as a “perfect” answer here. The most important thing is to give this practice exercise a try!

Also, there is no need to use both PESTLE and SWOT or to consider every single factor of each - feel free to refer to as many points as you want! In fact, as you can see, both Strengths and Weaknesses refer to an internal assessment of the business, while Opportunities and Threats relate to external factors. Because we’ve given you little information about the business, it is normal if you can’t think of many strengths and weaknesses, so don’t worry about that!

Looking forward to seeing everyone’s thoughts! 🌟

P: where am I importing my beans from? will there be global supply chain issues as a result of geopolitical tensions? will I have problems receiving any supplies as a result of royal mail strikes?
E: how am I funding my business? if I am borrowing now, how will high interest rates affect my finances?
S: what are current consumers' spending patterns - how fast will I even out debt used to start my business?
T: can I use technology to increase the efficiency of my processes? eg taking payments, taking customers' orders
L: are there any food hygiene standards I need to comply with? is there compulsory allergen training? help in drafting employment contracts, in tenancy agreement for my shop
E: am I using CO2 neutral shipping methods? how can I minimise the use of plastics? are my beans sustainably sourced?

S: independent coffee shops have a decent consumer-base in London
W: plenty of independent coffee shops, how can I distinguish myself?
O: I could mix my own beans & sell them alongside selling coffee
T: difficult to compete with large chains eg Pret

 

[Nishath K]

P: Where am I importing coffee beans from? Are there any trade restrictions/future restrictions?
E: Where am I locating my shop? Who are my competitors in the local area? How are my competitors performing?
S: Who are my target market and what methods am I putting in place to attract them?
T: How am I making the business most efficient? What 3rd party software is being used in the industry? What cyber security measures (e.g. secure transactions) do I need/have in place?
L: Are the goods I am importing ethically sourced? What regulations in regard to employee training, health and safety, licensing and taxation do I need to meet?
E: What plans are being made to reduce the shop's emissions? (Recycling, no plastic cutlery)

S: Coffee shops are very profitable due to low materials costs and high margins.
W: Overly saturated with 'unique' coffee brands. Difficult to create a memorable branding campaign.
O: Can set apart through uncommon drinks - fusion foods through coffee
T: Need to anticipate coffee shortages in the far future due to environmental issues. Interest can be seasonal, so need to constantly change menu, hard to grow into multiple stores.

 

[SarahB3]

Hi everyone!

My name is Maria and I am a Product Lead at TCLA and future trainee. ☺️

With assessment centre season well underway and many of you wanting to start preparing for your training contract applications, @NatashaS98 , @Orla , @Erin and I have been thinking of ways to provide you with opportunities to practice your commercial awareness.

I wanted to start by giving you an opportunity to conduct a PESTLE & SWOT analysis. This is commonly used in group exercises or individual assessment centre activities, mainly because it allows recruiters to see your ability to think commercially and consider current news stories that may impact clients (both positively and negatively!). You can find a quick summary of what each acronym stands for in the PDF below.

Here is a scenario that you could be given in a law firm assessment centre:

You are an entrepreneur seeking to start your own independent coffee shop in London. Using PESTLE and SWOT, what are some factors that you would consider when building your business plan?

Make sure to share your ideas on this thread, and we’ll be sending everyone who participates an email with a summary of our team’s answer to this question by next Wednesday, the 8th of February.

------

Quick note:

Don’t worry if you find this hard, this is normal! There is also no such thing as a “perfect” answer here. The most important thing is to give this practice exercise a try!

Also, there is no need to use both PESTLE and SWOT or to consider every single factor of each - feel free to refer to as many points as you want! In fact, as you can see, both Strengths and Weaknesses refer to an internal assessment of the business, while Opportunities and Threats relate to external factors. Because we’ve given you little information about the business, it is normal if you can’t think of many strengths and weaknesses, so don’t worry about that!

Looking forward to seeing everyone’s thoughts! 🌟

Excited to take part in this, Thank you!

 

[EKH]

PESTLE
Political: Where will the beans be imported from? Will there be trade regulations that need to be taken into account? Considering strikes in the United Kingdom, will it be impacted by it? Will the current war conflict have an impact on which countries I can import from? From the political aspect, will one region/ continent be more beneficial to import from?

Economic: where will I be locating my coffee shop? How big should the shop be? How will the current threat of the inflation rate affect that? How will I be funding the shop? How will the current state of increasing energy/ gas impact?

Social: what are the strategies of my competitors? What is my target market and how can I expand it?

Technological: what software can I use for advertisement, while keeping costs down? Will I need to go online and provide delivery? How can I create the shop running efficiently?

Legal: are the foods being imported coming from an ethically approved supplier? The laws I will need to comply with in that country. The current laws in England, health inspections, labor laws, and staff safety? Are the products legal/ what inspections do they need to go through?

Environmental: sustainable cups, recycling? How can the shop be as sustainable as possible to attract a greater market? Which country for importation is less prone to natural disasters that can wipe out the crop? What is the most sustainable and environmentally friendly way of transport – transport by boat, ship?

SWOT
Strengths: A large majority of individuals in the UK drink coffee and tea, it is a profitable business if cost efficient and low maintenance. Can this become a local coffee shop that becomes a chain? Make it into a coffee shop that encourages individuals to make it their ‘go to spot’ to drink coffee/ tea, work, and socialize.

Weaknesses: it needs to be more unique and offer a different concept, as there are many coffee shops. Needs to be in a location that may be lacking a proper coffee shop.

Opportunities: due to covid, a majority are working remotely, and this could be an opportunity to make the coffee shop more work friendly and social to allow individuals to come to the shop. Can introduce a different special coffee a week or have a special event once a month to make it more unique but to make it more than the typical coffee shop.

Threats: chain coffee shops (Pret/ Nero). Need to be creative during the seasonal changes. Different political and economic changes can affect the spending of consumers and the shortage of beans.

 

[Alison C]

P: where are the beans coming from? The cups? The ingredients for cakes etc? Where are these countries on the Transparency Index? What are the import/export laws and are these likely to change? How stable are they politically? Who is the government and how do they feel about foreign investment/export? Are there any local issues such as cartels?
E: how will the political stability in these overseas territories (above) and the UK interact to affect the exchange rate? When does the tax year change in these countries? What is the climate like? What will my initial costs be? What will my monthly outgoings on basic overheads be? How many staff will I need? Where should I locate my coffee shop and who are my competitors? Bulk buying makes economic sense but is it practical, with use-by dates and storage to consider?
S: who are my target customers and how much are they likely to pay? For example, the student market will be mainly term time, not so much early morning trade, and often dietary requirements such as non-dairy milk and vegan snacks. They might want to sit in the café all day on their laptops, so am I OK with this? The professional market might, eg, work only Tues to Thurs nearby in their offices. How can I give back to the local community - eg with a loyalty scheme? By employing local people?
T: what will my HR system be? My financial package? How will I protect my own data and that of my customers? How can I innovate? How can I use tech to streamline my contracts etc? How can I use tech to streamline my offering? How can I use tech for supply chain tracking? Will it work in the territories I am working with?
L: what are the basic health and safety regs I need to adhere to? Is my building properly licensed? Who is the landlord? Do I need to consider IP for my branding? What about my products, are they exclusive? What do I need to do for disabled access? How can I protect my employees - and protect my business from them, both IP-wise and from poor working practices? Where do I stand on allergens in snacks? What can and can't I say in my adverts? What are the standards for, eg, organic products in the territories where my raw materials are located and do they match standards here? What insurance do I need? What should I be paying? What should my policies be? What do I need to do to protect myself and my company?
E: how can I be as green as possible? Tree planting and carbon neutrality? Locally sourced snacks? Can I use China mugs? How can my takeout cups be sustainable? Am I (and are my customers) prepared to pay more for organic coffee? What about, eg, the soap in the loos and recycled loo roll - is this practical and economical or not so important to me and my brand? How much is an acceptable amount to send to landfill? What about my snack packaging? What can I do with my leftover coffee grounds?

S: all day business, no major toxic substances or fancy chefs need to be involved. Lots of people like coffee. Lots of people need snacks.
W: far from original, and Starbucks takes some beating. As do the high-end range of other, established, coffee shops. Not cheap to set up (but not crazy expensive). Anything in hospitality/catering is difficult to make money on, unless it's made from cheap ingredients (eg Hummingbird cakes, Buns from Home). Staffing is a headache for a business like this
O: really original branding, potential for expansion, going with the current zeitgeist, lots of commercial properties are empty so there are landlords keen to rent, lots of people are looking for an office away from home or just somewhere local to go and to support. Could be aligned with a cause or similar.
T: supply chain issues. Health scares - especially re allergens. Competition. Over-saturation of the market. Another pandemic. Lack of reliable personnel. Economic uncertainty including cost of living crisis (so people cutting down on 'fun' stuff). Poor reviews online.

 

[NLaw18]

P: Are there any tax implications if I import the coffee beans from outside the UK?

Labour Laws in London – max. working hours, minimum wages I need to provide my employees, visa/ work permits/ insurance for the coffee shop employees

will there be global supply chain issues due to geopolitical instability?

E: How do I fund my business? If I take a loan to fund it, what interest rates would apply? What will my initial costs be and what will be my monthly expenses?

S: What kind of customers am I targeting? Could I look into offering the coffee-shop as a co-working space as well similar to we work style since a lot of companies are still using flexible working options

T: What software would I use to store customers data and record the payments?

L: Data protection laws that may apply since I am collecting customers data? Health & Safety Regulations to adhere by?

E: How would I dispose off any waste? Can I use biodegradable cups to serve coffee?


S: coffee shops are always in demand especially in London which has a huge population of working class adults/ college students

W: there are many existing competitors and there is nothing new about the concept of an independent coffee shop, how can I stand out?

O: Innovation in terms of coffee making techniques, converting the shop into a co-working space

T: competition from existing coffee shops since people tend to gravitate towards well known brands in the market like Café Nero, supply chain issues

 

[aspiringlawyerr]

PESTLE:

Political: What country am I going to source my coffee beans from? Does the UK Government impose any trade restrictions on that country, or would I need to complete any declaration forms? Have any pesticides been used in bean production, if so, do these violate any rules?
Am I planning on employing staff – what employment regulations would I need to follow in relation to workers under-18?

Economic: How am I going to fund my start-up costs (coffee machines, tables, chairs, cups etc)? If through a bank loan, what interest rate would I receive? Would anyone else be investing?
In relation to the coffee shop, am I going to lease or purchase the freehold? Do I have enough money to put down a mortgage deposit, how are high interest rates going to impact my negotiating power with a mortgage broker?
As a small business, would I receive any council tax relief or business rates relief? How will the square-footage of my coffee shop increase these costs? If in a commercial development, would I be responsible for any service fees?
Foreign exchange rates – due to poor value of sterling, how will this affect my costs if I am buying beans/coffee cups/equipment from overseas?

Social: How can I differentiate myself in such a well-established market? Already facing competition from chains (Starbucks/Costa/Pret) which attract customers through existing loyalty programmes. Moreover, there are hundreds of independent coffee shops in London – how can I meet their quality/tap into their target market? Would my business turn into something else at night?

Technology: What payment system will I be using? If collecting customer data, will this be stored electronically? How will I reduce the threat of cyber attacks?

Legal: How will I complete my tax returns? Who will check my lease or other legal agreements the business enters? What personal liabilities might I be taking on? How will I ensure I meet employment regulations? How will I display allergen or calorie information? (As a small business I may not need to display calorie info) How will I train my employees on handling allergens?

Environmental: Do I want my products to be organic? How am I going to reduce my impact on the environment – compostable takeaway cups and utensils? Using local products (milk etc, where possible)? Do I want to pay for a renewable-energy electricity provider?

SWOT:
Strengths: Entering a high-margin market, coffee shops normally have a high customer footfall. I may be a skilled barista or able to create latte art which could be a USP in comparison to other chains. Likely to be able to source higher-quality coffee beans than chains which purchase in bulk. As my own business, I can be more flexible with my policies. For example, could create flexible working places with charging points for students or professionals. Opportunity to turn run 2 income streams, e.g. could sell books alongside coffee or turn the shop into something else at night - event space for corporates etc. (both ideas have additional costs though).

Weaknesses: There are hundreds of independent coffee shops in London so my business would be entering a highly competitive and well-established market. Difficult to be memorable. Difficult to attract new customers. Could be employing dozens of employees on different shifts working part-time, making staffing retention difficult.

Opportunities: Increasingly, customers are looking to independent coffee shops as their caffeine levels are more consistent across drinks – unlike chains which have highly varying caffeine levels (recent BBC news study). Social media allows for growth of businesses quickly, e.g. if coffee shop goes viral on TikTok as a good place to study.

Threats: Many of my customers (professionals on their way to work) have established routines and therefore loyalty to existing coffee shops. Chains have loyalty programmes (e.g. Starbucks reward card – giving free syrups or alternative milks) so difficult to tap into their customer base. High cost of living – customers cutting down on unnecessary spending. Supply chain issues.

 

[aspiringlawyerr]

Thank you for running this @Maria d'Orey!

 

[AK001]

PESTLE

Political

• Where am I importing the beans from? Is the country known for exporting quality coffee beans?
• As the beans are imported, are there any trade restrictions such as tariffs or import bans?
• Will strikes impact the

Economic

• Where will I set up the shop in London?
• What is the price of commercial property leases in that area of London?
• What are my main competitors? How many coffee shops are there?
• Who will I need to seek a loan from and how much will I need to borrow? How will fluctuating increasing interest rates impact this and future debt obligations?
• Where will I source my equipment and furnishings from (e.g. coffee machines, kettles, fridges, storage units, furniture etc)? How much will I need? Would it be more cost-effective to purchase this from a retailer or from a wholesale supplier?

Social

• What is the main demographic of customers who I am targeting?
• What kind of area is that part of London? Is it in the City/business area, a residential area or an area popular with tourists?
• What is the spending pattern of this customer demographic? Are there other complimentary products I can cross-sell (e.g. pastries, cakes, sandwiches etc.)?
• Are there any consumer concerns about where the coffee beans are sourced from?
• What are the publicity strategies leveraged by my competitors?

Technology

• What platforms (social media and on the internet) can I use to enhance my business’s publicity and public engagement.
• What payment platform will be used – how secure is it? Are there any major cyber-security considerations which need to be made?

Legal

• Sorting out a lease agreement
• Are there any legal restrictions in the form of trade measures restricting my ability to import coffee beans and any other foreign-sourced ingredients etc.
• What are the various legal and compliances measures I have to follow (e.g. filling out the necessary permits, charges etc., employment regulations, health and safety standards etc)
• Are there any specific business regulations which apply to the particular part of London where I plan to establish my coffee shop?
• Can the business access any government support schemes (e.g. business grants, energy support scheme) and if so what is the legal process?

Environmental

• Key issue will be factoring what consumer expectations are – since it is a small independent coffee shop, consumers might have an expectation that the beans are produced and sourced in a manner which is both ethical and sustainable.
• What kind of packaging and materials will I use in my shop – are these sustainably (e.g. paper v plastic cups, reusable mugs etc.)?

SWOT

Strengths

• As small independent coffee shop, one of its biggest USPs is that it offers an alternative to est. coffee shops chains like Pret, Starbucks, Café Nero, Costa etc. – if the shop can source beans from a certain country/region, it can offer an unique alternate.
• London is a highly populated area – always demand for independent coffee shops.
• Business itself could be an extremely profitable one as the operating costs are relatively low compared to building a chain or another food/drink business.

Weakness

• Existing market of independent coffee shops in London is very saturated; barriers of entry are high in that building a reputation and customer base v quickly will be difficult.
• Clearly being able to distinguish itself from other small competitors – could make branding and publicity difficult.

Opportunities

• With London still having decent availability of commercial leases to rent post-COVID, the business should have a good selection of choice and location – ensures that we have an opportunity set up in a busy area or near the City/other business districts.
• Impact of WFH post-COVID; lots of workers no longer exclusive spend the working week at their offices. Shop could be a sort of internet café offering people who want to work online an ambient atmosphere.
• Alternatively, if the leasehold has a small allotment, the shop could be a eco-coffee shop which offers customers a relaxed, natural environment to work in.

Threats

• Biggest challenge is the cost of living crisis – energy and utility bills have been very high; government has announced that it will scale back its energy support scheme for businesses so operating costs will be high. Furthermore, consumers look to cut their spending, it could impact demand and sales of shop coffee, when consumers may choose to have it at home (even more so with the fact that UK is heading for a recession).
• Stiff level of competition alongside costs of entry means that the business is at a disadvantage compared to more est. chains or independents.

 

[Lulu95049]

P – Where are coffee beans sourced from? Is the source sustainable and will not be cut off in the near future – eg. Russian gas being cut off. Is the supply chain secure and robust against geopolitical issues? What if there are future COVID-related lockdowns and people are forced to work from home again? How will I pay off any loans if I cannot open the café?

E – High inflation in UK, meaning that products such as coffee beans and cups will be expensive, although can just counteract this by putting prices up. This may make for a more competitive market, so will have to focus on what ‘added value’ we can provide to customers, such as friendly customer service. High interest rates meaning that debt financing will be expensive. Could ask a friend/family if they want to take on a joint venture and invest in the company in exchange for equity.

S – social media is a trend so could advertise using social media primarily. Large market for high-quality, take-away coffee. People also like to do work in coffee shops, so could provide a suitable environment for that. Kind of a shared workspace/coffee shop hybrid?

T – Could use automated ordering systems/apps to allow customers to order, will also cut down on cost of staffing.

L – How will I deal with employment and supplier contracts? What if a HR issue arises? How will I comply with food safety regulations? Do I need to consider IP for my branding? How do I ensure I am not infringing others’ IP? If using an app, how do I protect customers data and comply with GDPR?

E – important to be ‘eco-friendly’ as this is important among a modern customer base. Could use ethically sourced coffee and biodegradable packaging. This may also attract more customers who want to choose a more ethical option in a saturated market.

 

[MixxB]

Hi everyone!

My name is Maria and I am a Product Lead at TCLA and future trainee. ☺️

With assessment centre season well underway and many of you wanting to start preparing for your training contract applications, @NatashaS98 , @Orla , @Erin and I have been thinking of ways to provide you with opportunities to practice your commercial awareness.

I wanted to start by giving you an opportunity to conduct a PESTLE & SWOT analysis. This is commonly used in group exercises or individual assessment centre activities, mainly because it allows recruiters to see your ability to think commercially and consider current news stories that may impact clients (both positively and negatively!). You can find a quick summary of what each acronym stands for in the PDF below.

Here is a scenario that you could be given in a law firm assessment centre:

You are an entrepreneur seeking to start your own independent coffee shop in London. Using PESTLE and SWOT, what are some factors that you would consider when building your business plan?

Make sure to share your ideas on this thread, and we’ll be sending everyone who participates an email with a summary of our team’s answer to this question by next Wednesday, the 8th of February.

------

Quick note:

Don’t worry if you find this hard, this is normal! There is also no such thing as a “perfect” answer here. The most important thing is to give this practice exercise a try!

Also, there is no need to use both PESTLE and SWOT or to consider every single factor of each - feel free to refer to as many points as you want! In fact, as you can see, both Strengths and Weaknesses refer to an internal assessment of the business, while Opportunities and Threats relate to external factors. Because we’ve given you little information about the business, it is normal if you can’t think of many strengths and weaknesses, so don’t worry about that!

Looking forward to seeing everyone’s thoughts! 🌟

Hi everyone!

My name is Maria and I am a Product Lead at TCLA and future trainee. ☺️

With assessment centre season well underway and many of you wanting to start preparing for your training contract applications, @NatashaS98 , @Orla , @Erin and I have been thinking of ways to provide you with opportunities to practice your commercial awareness.

I wanted to start by giving you an opportunity to conduct a PESTLE & SWOT analysis. This is commonly used in group exercises or individual assessment centre activities, mainly because it allows recruiters to see your ability to think commercially and consider current news stories that may impact clients (both positively and negatively!). You can find a quick summary of what each acronym stands for in the PDF below.

Here is a scenario that you could be given in a law firm assessment centre:

You are an entrepreneur seeking to start your own independent coffee shop in London. Using PESTLE and SWOT, what are some factors that you would consider when building your business plan?

Make sure to share your ideas on this thread, and we’ll be sending everyone who participates an email with a summary of our team’s answer to this question by next Wednesday, the 8th of February.

------

Quick note:

Don’t worry if you find this hard, this is normal! There is also no such thing as a “perfect” answer here. The most important thing is to give this practice exercise a try!

Also, there is no need to use both PESTLE and SWOT or to consider every single factor of each - feel free to refer to as many points as you want! In fact, as you can see, both Strengths and Weaknesses refer to an internal assessment of the business, while Opportunities and Threats relate to external factors. Because we’ve given you little information about the business, it is normal if you can’t think of many strengths and weaknesses, so don’t worry about that!

Looking forward to seeing everyone’s thought

Hi everyone!

My name is Maria and I am a Product Lead at TCLA and future trainee. ☺️

With assessment centre season well underway and many of you wanting to start preparing for your training contract applications, @NatashaS98 , @Orla , @Erin and I have been thinking of ways to provide you with opportunities to practice your commercial awareness.

I wanted to start by giving you an opportunity to conduct a PESTLE & SWOT analysis. This is commonly used in group exercises or individual assessment centre activities, mainly because it allows recruiters to see your ability to think commercially and consider current news stories that may impact clients (both positively and negatively!). You can find a quick summary of what each acronym stands for in the PDF below.

Here is a scenario that you could be given in a law firm assessment centre:

You are an entrepreneur seeking to start your own independent coffee shop in London. Using PESTLE and SWOT, what are some factors that you would consider when building your business plan?

Make sure to share your ideas on this thread, and we’ll be sending everyone who participates an email with a summary of our team’s answer to this question by next Wednesday, the 8th of February.

------

Quick note:

Don’t worry if you find this hard, this is normal! There is also no such thing as a “perfect” answer here. The most important thing is to give this practice exercise a try!

Also, there is no need to use both PESTLE and SWOT or to consider every single factor of each - feel free to refer to as many points as you want! In fact, as you can see, both Strengths and Weaknesses refer to an internal assessment of the business, while Opportunities and Threats relate to external factors. Because we’ve given you little information about the business, it is normal if you can’t think of many strengths and weaknesses, so don’t worry about that!

Looking forward to seeing everyone’s thoughts! 🌟

P:
1) Where am I going to source my coffee beans?
2) Will I be able to advertise this coffee as being 'fair trade' or 'sustainable'- this could determine the price I'm selling the coffee!

E:
1) What is the general disposable income of individuals in this area- might affect footfall into the shop, if there is low footfall, might not justify the overheads of renting in London
3) What is the average revenue and profit of similar businesses in the area?

S:
1) What is the general area's attitude toward purchasing coffee as opposed to other commodities?
2) What are the local's attitudes towards gentrification and how might this affect local's willingness to buy from my shop?
3) What kinds of people live in the area and is my product marketable to them (maybe if there's many students, prices would need to be lower, might benefit from emphasising the sustainability of the product in order to justify the price to a demographic with less purchasing power. If its high-income area, what are the locals wanting from a coffee shop--something instagram-able? Something of higher quality which would increase overheads. If its on-route to a station, emphasis on making coffee's in a quick and easy manner)
4) Will I be able to employ people?

T:
1) Cashless and contact payments only?
2) What kind of coffee machines are most appropriate to the main task (really tasty vs quick and easy)
3) How can I use technology to set up a membership scheme?
4) How can I use technology to set up an on-demand service for customer ease?

L:
1) What kind of lease or license am I going to need?
2) Is the premises suitable for commercial sales?
3) Are there any pre-existing claims to the property?
4) Who will facilitate the conveyance/licensing?
5) What kind of licence will I need to sell coffee?
6) What kind of permission do I need to have people eat-in?
7) What kind of plumbing and electrical problems does this area have?

E:
1) What is the environmental cost of importing my coffee beans and how can I offset this cost?
2) How will my business contribute to local pollution and how will local pollution deter customers from dining in?


S:
1) Coffee is a common commodity
2) Independent business are marketable through virtue of their independence

W:
1) Coffee market may be saturated--what is my unique USP?
2) Importing coffee beans may be costly!
3) As a new business, I may not be able to justify increasing costs until later!
4) What other services can I provide given that there might be a lull in footfall during working hours?

O:
1) How can I use 'independent business' to my advantage?
2) How can I collaborate with other independent business in my area to mutually promote our services?
3) Being independent provides me with the chance to be a personable business, could I use this to give back to my community increasing my popularity and value within the area?

T:
1) How will my business do if another store opens a coffee service?
2) Is increasing rent costs likely?
3) Will I be able to compete with my competitors?

 

[jmcnlmc]

PESTLE analysis:

1. Political: Import regulations and taxes. Brexit and border control issues perhaps.
2. Economic: reduced consumer spending given the cost of living crisis; coffee may be seen as a bit of a luxury. Competition from other coffee shops. Access to funding/credit in challenging economic times. Business rates and tax are currently high. High energy bills.
3. Social: demographic trends, consider where in London the shop is to be located. Residual impact of COVID-19, many employees are still WFH and foot traffic may be reduced.
4. Technological: innovations in coffee production, delivery, and marketing.
5. Legal: local licensing requirements, health and safety regulations, and copyright laws.
6. Environmental: sustainability initiatives, waste management, and the impact of climate change on coffee production.

SWOT analysis:

1. Strengths: unique selling points, experience and knowledge of the coffee industry, and a strong brand identity.
2. Weaknesses: limited resources, lack of experience in running a business, and limited market share.
3. Opportunities: market growth, partnerships and collaborations, and emerging trends in the coffee industry.
4. Threats: competition from established brands, economic downturns, changes in consumer preferences and reduced footfall with employees working from home. Rising Energy bills

 

[TN]

P: Are there any trade restrictions (at the moment or likely to be) imposed on the importation of coffee beans on countries from where I source the beans?
The political climate in such countries is stable or unstable so that it won't disrupt the supply chain of my coffee beans?
Any issues surrounding labour/workforce of my suppliers?

E: What is the current interest rate, as this relates to my cost of borrowing - how much should I borrow, and if so, should my loan be on fixed rate or variable rate? What is the current inflation rate - whether my targeted consumers have disposable income for my coffee? Where and how am I going to rent the property for my shop, at what rate? What is the current value of sterling, as this will impact on my import/raw materials costs?

S: What design/vibe of my coffee shop would align with the current trend? Ethically sourced coffee? Organic coffee? What marketing strategies or social media channels to adopt to target the key audience?

T: What sort of coffee making machine to be used? An app to order coffee? Payment system?

L: What would be my business structure (e.g joint venture,...)? How would I hire new staffs that would comply with employment law? What does my business need to do to comply with safety standards and food regulations? How would my lease agreement look like? Do I need IP right protection for my branding? If the business is going to collect customer data, how is my data privacy policy going to look like?

E: Any business practices to be incorporated to reduce the carbon footprint of my business? Recyclable cups? Renewable energy source? Ethically sourced coffee beans?...

 

[Josephine June]

1. Strength - what is unique about your coffee from other coffee entrepreneurs. 2. Weakness - what can your business do to become better such as to relocate to new place, coffee bean, branding etc.
3. Opportunities - what opportunities can the business explore that can increase its profit for example since people are health conscious about what they consume now. You can think of a new ways to enjoy a good and healthy coffee.
4. Threats. Economic issues, competition from similar businesses, energy crisis

 

[CLD]

Political considerations - What are my supply chains going to be and will any of this be affected by geopolitical issues, sanctions, strikes etc. Are any of the ingredients or equipment I need going to be specifically affected by these issues and if so do I have a back up supply chain.
Economical considerations - deciding how to price products, how will I be finding this business, do I have money saved up, will this be a joint venture, do I need a loan from the bank - and if so what are the interest rates and will I be able to keep up with these payments in light of increasing interest rates. Gas and electricity prices average for the venue chosen, can I get any grants from the government as a new small business? Am I buying or renting premises, Inflation - are coffee shops taking a hit currently?
Social considerations - Hoe am I going to brand my company and what will make customers choose my brand over others - what is my USP. What time should the shop be open - research busiest times for coffee shops. Do I want to provide seating, should I offer deals?
Technological considerations - what will my payment methods be, cash, card possibility of crypto in the future, order at the desk, or on an app, or self service (like McDonalds)? Advertising of the shop and products, online, word of mouth, leaflets - go through advantages and disadvantages of these.
Legal considerations - Health and Safety regulations, allergy and calorie information now requirements, how do I want to employ people on a contract, agency, and what financial packages will I be providing. How will I manage 'tips'. Annual leave policies.
Environmental considerations - there is a big societal focus on being environmentally friendly now so positioning yourself in the market as environmentally conscious is important, recycling products,, reusable cups, giving back to the community, information on this for customers.

Strengths - a popular industry with a lot of demand. Fairly easy to deliver a good service.
Weaknesses - finding a USP.
Opportunities - potential to expand and grow like the big chains as there is demand. You can grow a loyal customer base in this industry so the potential is there.
Threats - a lot of competition and a difficult market to enter now the UK is in a recession.

 

[Lian Lian]

S: Since this is an independent coffee shop, I would be able to make my own decisions regarding the products and the brand of the shop.

W: Looking for a location in London can be challenging as rent is high.

O: The opportunity to curate my shop’s own personal brand and use social media as a platform to promote the shop

T: Competition from other coffee shops and cafes nearby.



P: (I’m not sure, sorry)

E: How do I raise enough funds to have sufficient capital to open the store?

S: How can we attract customers?

T: How can I use social media to promote to target audiences?

L: make sure all employment contracts and rental contracts are in order?

E: How do I make my coffee shop environmental friendly? Perhaps I could source my coffee beans ethically, use recyclable straws and cups, or encourage patrons to bring their own cups for a discount.

 

[anavrazdan]

PESTLE

• political
  • tax benefits for small/hospitality businesses
  • particular zones etc may be eligible

• economic
  • declining disposable income (rising living costs primarily caused by high energy prices and increasing rate of inflation)
  • may impact short to medium term future of the business - less customers by volume / frequency of visits

• social
  • coffee is a popular product
  • prevalent cultural trends should influence the product offering (primary and complementary), target market (ensure appropriate to location) and the design & branding

• technological
  • digital kiosks should be considered to reduce service times
    • note: the effectiveness of this measure requires at least medium levels of patronage and may compromise consumer experience
  • mobile phone application - integrate loyalty programme, pre-orders, similar functions to kiosks
  • product recommendations by AI programs
    • note: personalisation would require data collection - this is often a pain point for consumers, so should not implement unless/until it’s a near-seamless interaction (eg by phone app)

• legal
  • food - health and safety
  • rules on refunds etc comply with consumer protection regulations
  • suppliers are not in violation legal ESG standards

• environmental
  • suppliers - resources are sustainably farmed and processed/manufactured
  • also suppliers would ideally act responsibly in line with high ESG standards (consider labour exploitation/wages, child labour etc)

SWOT

• strengths
  • should focus on: strong location (anchor in immediate vicinity, medium to high traffic); optimising customer experience through product offering and quality levels according to intended/actual customers (depending on the stage of development); loyalty programmes
  • less important, but beneficial: integrate digital kiosks/mobile apps to reduce service times (thereby improving customer satisfaction); a drive thru would serve the same purpose in an even more effective way, but feasibility and prudence depends on physical restraints, car traffic in the area and lease terms

• weaknesses
  • should absolutely avoid: low-traffic areas; competitors in vicinity; bad lease (terms on cost allocation, enjoyment)
  • suppliers - ensure reliability (avoid political instability etc) and explore alternatives; ensure appropriate risk allocation in contract (though bargaining power to achieve this is limited by the low-volume nature of supply orders, given the business is a single coffee shop)

• opportunities
  • Focus on getting the factors in the Strengths section right and hope for the best.
  • zero hour contracts and other flexible working arrangements are likely to be more acceptable to workers given current macroeconomic conditions - adoption would enable the business to minimise fixed costs
    • nevertheless, there are various ethical considerations underpinning the decision to deploy such employment/human resourcing strategies

• threats
  • cost-of-living crisis - diminished potential revenue (number of customers and visit frequency)
  • ESG standards may change - may have to to comply with more than the current minimum legal standards (though this is highly speculative and there is no immediately advisable timeframe within which developments would occur)
  • large chains implementing recommendations etc via AI programs with access to massive amounts of consumer data - could enable better customer experience (again, speculative)

 

[Casual]

SWOT

Strengths

• London is a highly populated area, so there is always demand for independent coffee shops.
• As a small, independent coffee shop, one of its biggest benefits is that it offers an alternative to well-known coffee shop chains like Pret, Starbucks, Café Nero, and Costa. If the shop can source beans from a certain country or region, it can offer a unique option.
• The business itself could be very profitable, since the operating costs are relatively low compared to building a chain or another food or drink business.

Weakness

• It will be hard for a new shop to make itself stand out from the other small businesses.
• The market of independent coffee shops in London is already very full; it is hard to start a new shop and build a name and customers quickly.

Opportunities

• Since many people are now working from home, the shop could be a sort of internet café where people who want to work online can find an enjoyable atmosphere.
• the business should have lots of choice and be able to find a spot in a busy area or close to the City/other business districts.
• Or, if the leasehold has a small outdoor space, the shop could be an eco-coffee shop where customers can relax and work in a natural environment.

Threats

• there is a decrease in consumer spending, which could mean lower sales of shop coffee, especially as the UK is headed for a recession.
• energy and utility bills can be really expensive; the government has said they will reduce their subsidies for energy bills, so running costs will be high.
• There is a lot of competition and it's still expensive to get started, so the business is at a disadvantage compared to bigger, more established chains or independent stores.

PESTLE

Political

• Where am I importing the beans from? Is the country renowned for exporting quality coffee beans? Are there any trade restrictions, such as tariffs or import bans, that could affect the import of the beans? Could strikes have an impact on the delivery of the beans?

Economic

• How many other coffee shops are there in the same area?
• How much does it cost to rent a shop in London?
• Who can I borrow money from and how much do I need? Will changing interest rates affect my debt payments?
• Where can I get the equipment and furniture I need (e.g. coffee machines, kettles, fridges, storage units, furniture)? How much will I need? Is it better to buy from a shop or a wholesaler?

Social

• Where is the area I'm targeting in London?
• Who are the customers I'm targeting?
• How do they usually spend money?
• Can I sell other products with my coffee?
• Are people worried about where my coffee beans come from?
• What do my competitors do for publicity?

Technology

• What payment platform will I use? How secure is it? Are there any big cyber security concerns that need to be taken into account?
• What social media and internet platforms can I use to increase my business's visibility and public engagement?

Legal

• Are there any laws that make it hard to get coffee beans and other ingredients from other countries?
• Working out a lease deal
• Can I get help from the government (like grants or energy support) and how do I do it?
• What laws and rules do I need to follow (like getting permits, fees, employment rules, safety rules, etc.)?
• Are there any special rules for the area in London where I want to open my coffee shop?

Environmental

• customers may expect the beans to be sourced and produced in a responsible and eco-friendly way.
• What kind of packaging and materials should I use in my shop - are these eco-friendly (like paper instead of plastic cups, reusable mugs etc)?

 

[ajeya]

Hi everyone!

My name is Maria and I am a Product Lead at TCLA and future trainee. ☺️

With assessment centre season well underway and many of you wanting to start preparing for your training contract applications, @NatashaS98 , @Orla , @Erin and I have been thinking of ways to provide you with opportunities to practice your commercial awareness.

I wanted to start by giving you an opportunity to conduct a PESTLE & SWOT analysis. This is commonly used in group exercises or individual assessment centre activities, mainly because it allows recruiters to see your ability to think commercially and consider current news stories that may impact clients (both positively and negatively!). You can find a quick summary of what each acronym stands for in the PDF below.

Here is a scenario that you could be given in a law firm assessment centre:

You are an entrepreneur seeking to start your own independent coffee shop in London. Using PESTLE and SWOT, what are some factors that you would consider when building your business plan?

Make sure to share your ideas on this thread, and we’ll be sending everyone who participates an email with a summary of our team’s answer to this question by next Wednesday, the 8th of February.

------

Quick note:

Don’t worry if you find this hard, this is normal! There is also no such thing as a “perfect” answer here. The most important thing is to give this practice exercise a try!

Also, there is no need to use both PESTLE and SWOT or to consider every single factor of each - feel free to refer to as many points as you want! In fact, as you can see, both Strengths and Weaknesses refer to an internal assessment of the business, while Opportunities and Threats relate to external factors. Because we’ve given you little information about the business, it is normal if you can’t think of many strengths and weaknesses, so don’t worry about that!

Looking forward to seeing everyone’s thoughts! 🌟

PESTLE

P: Are there any small business subsidies or tax breaks being offered by the govt.? Are there any conflicts or sanctions occurring in the country I import my beans from that will interfere with bringing them over?
E: Will I need to fundraise (find investors or get a loan) to help start this up? What are the current interest rates, if they are high, would it make sense to wait until they are lower? Where will I set up shop for this business? Are mortgage rates particularly high for commercial properties? Would it make more financial sense to rent a place?
S: Who are my target group? E.g., if I set up in a business district of London will I be catering to busy professionals? How do I make my products more appealing to this group? Are there any initiatives I could introduce like order online or reserve a place in queues to avoid long waiting times for them? How do I make my business attractive to a diverse range of people? Can I cater to various religious / cultural holidays? How do I make any food / pastries I offer attractive to different faiths / cultures?
T: Can I enable online orders? Can I incorporate tech to reserve places in queues? How can I ensure all machinery will be worth it? How can I use social media to expand brand? Find influencers who will promote?
L: How do I ensure all proper planning permissions / registrations are completed when I set up shop? How will I ensure my products satisfy consumer health guidelines? Is my shop / all machinery and furniture in my shop child-proof and safe to use?
E: How can I minimise carbon footprint when importing food / coffee beans? Can I choose suppliers who use sustainable machinery to grow beans? Can I use companies that use EV trucks to deliver beans? What ingredients can I source locally?

SWOT
S: High demand for aesthetic coffee shops that offer homebrew, alternative options. Chance to create own recipes / coffee blends that are different to established ones.
W: Bit of a saturated market for start up coffee shops, how can we stand out? Will have to compete with big brands like COSTA who have been slowly taking over the market and squeezing out smaller shops.
O: can use social media to stand out from the crowd and push the home-grown, start up feel. This will be a refreshing alternative to big, branded coffee shops. Can offer meals too like brunch or pastries to offer more variety.
T: high interest rates will make make mortgages and start up business loans more expensive. Ukraine War means higher than ever energy and utility bills.