Orchid Teas – Business Plan

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Orchid Teas – Business Plan

Godwin Onaghinor

Strayer University

BUS 599

Prof. Andrea Banta and Prof. Lee Viar

June 11, 2019

Executive Summary

Concept

Orchid Teas Company intends to start the production and sale of Orchid Tea, which is a beverage drink that is made using organic raw materials that have been thoroughly researched upon and refined to give a refreshing as well as healthy drink to the consumers. The company plans to focus on the production of four main product lines, which include

The main mission of Orchid Teas is to develop a beverage drink that meets the desire of different health conditions and less harmful to any user in any state of health. Orchid Tea is poised to give a refreshing feeling to the users apart from satisfaction, as well as improving their health.

  • Raspberry, cranberry, strawberry and Kiwi teas.
  • Traditional, green and lemon teas
  • Mint pomegranate and Lipton tea

Customer Needs

Today, consumers in all forms of food beverages as well as other products are more concerned about the health benefits that they are able to get from consumption of sold products. It is due to this concern that the food and beverage industries are shifting towards the manufacture of products that have a large heath contribution to the consumers. In order to meet the customer needs Orchid Teas is focused on the production of organic non-alcoholic and nom-carbonated drinks for its consumers.

Risks

The idea that the world is moving towards products that improve their health is a widely known fact. In this regard, all companies are in the race to improve their products through inclusion of health benefits in the ingredients. Beverage companies are today focusing their efforts in identifying ways in which they can develop their products using less toxic products, with the inclusion of products that are less harmful. These companies may pose competition to dandelion coffee.

Despite the risks and the threats in the market, Orchid Teas aims at setting high standards of the services delivered and well as producing high quality products in a bid to minimize in the completion that might be in the market. In compliance with the law, we intent to evaluate more before establishment of the company, the main requirements, in a bid to establish the likely changes that might be made in the future.

Management structure

The management structure is made up of a team of well-nurtured individuals in the field of beverage production and human resource management. This group of leaders are the ones tasked will the role of setting Orchid teas ‘ ball rolling and making sure the mandate of the company is reached. The management team will be made of a company CEO, and deputized by one other CEO. Under the two CEOs, there will be two managers, the overall manager and the human resource manager. The over manager will report directly to the CEO while the resource manager will be in charge of the recruitment of the workforce and ensuring that the quality of employees joining the company’s workforce have the needed qualification in the production of beverages. There will be a project manager to ensure there is continuous production. Two assistants who will make the management of the various product lines easier will deputize the project manager. The organization will also form committees whenever need arises, in a bid to help in the running of smaller projects that the company will be undertaking in the course of meeting its main objectives. The members of these committees will be chosen on the basis of the knowledge and expertise among the workers.

Market Need

The focus today for beverage consumers is to have access to a beverage product that caters for their health needs. This major relies on the beverages without carbon elements as well as those made from non-chemical raw materials. Most companies in the market have focused on the production of non-alcoholic products but are still using carbon elements in the manufacture as well as the preservation of the beverages. This makes the market to have minimal supplies of non-alcoholic and non-carbonated drinks. The introduction of Orchid teas I the market will serve to meet the major needs of these customers.

Competitive advantage

The world is today moving towards less toxic products and those that add more value to their health, thus the increased use of herbal products. Orchid Teas is a natural product made from ingredients that are locally obtained. In this regard, the product stands a chance to attract many users from the fact that it is a herbal product that is scientifically proven to have beneficial values to their health. The product is therefore likely to have a larger market both locally and internationally, with proper marketing strategies. Orchid Tea is a non-alcoholic as well as non-carbonated beverage, which can be used by users in different health conditions. As highlighted earlier, many health risks are associated with the use of carbonated as well as alcoholic beverages. The use of Orchid Teas is thus a step in averting some of these health risks. This puts Orchid Teas at an advantage over other products in the same industry.

Business Plan

Orchid Teas is a non-alcoholic beverage that has been designed and produced after a series of researches, testing and analysis, in order to give the most refreshing and replenishing feeling to sport enthusiasts, before, during and after exhausting work-outs, game or exercise. It is especially unique in content from the fact that it is non-carbonated as well as not an energy drink. It is therefore fit for consumption by all ages. There are three broad categories of orchid teas; four categories that are flavored, three categories that are iced-Tea and three categories that are kiddy teas. The first category targets the older generation that have a dislike for drinking water and thus would prefer flavored tea. The second type targets sports men and women while the last category targets children whose parents want to avoid carbonated drinks for their children in the game leagues. The product lines are

  • Company Description

Significance

  • Raspberry, cranberry, strawberry and Kiwi teas.
  • Traditional, green and lemon teas
  • Mint pomegranate and Lipton tea

Orchid Tea stands out among other types of tea from the fact that people with different health conditions can consume it and from the fact that it is mild and contains no chemicals that could cause harm.

Mission statement

Our mission as Orchid Teas is to develop a beverage drink that meets the desire of different health conditions. That is less harmful to any user in any state of health. Orchid Tea is poised to give a refreshing feeling to the users apart from satisfaction, as well as improving their health.

We aim to involve a group of health experts in doing more research on the product in a bid to refine it and increase the health benefits as well as the refreshing effects that come with the use of the drink. Our aim is to serve our customer with a beverage drink that covers all their desires. We aim to incorporate high standards of services throughout the processing and distribution process in a bid to meet the standards promised to our customers.

Trends in non-alcoholic industry

The non-alcoholic beverage industry is made up of both the carbonated and the non-carbonated drinks. Orchid Teas focuses on non-carbonated beverages due to the advantages that are associated with them. There are a number of dangers that are associated with the use of carbonated beverages, this include the dangers of esophageal irritation, gastric reflux and irritable bowel syndrome (Wilson, Wilson & Temple, 2013). The main objective of Orchid Teas is to come up with a beverage drink that is inclined at improving the users’ health and minimizing damage. The beverage industry has recently been involved in the shift from alcoholic to non-alcoholic beverages in a bid to cut down on the consumption of alcohol. However, there is another further shift from to the use of non-alcoholic non-carbonated beverages in a bid to further increase the health benefits.

From the graph above, the projected consumption trend of the non-alcoholic beverages is seen to be higher than it is currently. This change in the trend is attributed to the fact that there has been an increase in the accessibility to non-alcoholic drinks as well as the reduction in the regulation of consumption. However, there is also a further shift to the consumption of non-alcoholic and non-carbonated drinks due to the increased health awareness among the world population (Benk, 2015). Users are today demanding for nutrition-oriented products, which have greatly promoted the use of non-carbonated non-alcoholic products.

Growth rate of non-carbonated beverage industries

Thanks to the current shift and inclination towards healthy products, the rate of growth of non-carbonated beverage companies is seen to increase annually. According to Better Business Bureau (BBB), the growth rate of non-carbonated beverages is said to be growing at 5.5 percent per year. This gives a great advantage to Orchid Teas since the products produced fall in this category and thus an illumination on the customer base (Ashurst, 2016).

Distribution channels

The main mode of distribution that would be adopted by Orchid Teas is through suppliers to the distributors who will take them to the retailers and consumers. Orchid Teas will also have a separate bottling facility next to the manufacturing company that will be in charge of bottling the various lines of products produced by Orchid Teas. From the bottling facility, the products will then be supplied to the distributors who will disseminate them to different retailers as well as consumers. The main reason behind the choice of this mode of distribution is to reduce cost of distribution as well as the time.

The mode of distribution will also consider the different product lines available at the plant. In this regard, specific distributors will be assigned to a specific product line. The analysis of the performance of the product of the market will be based on the analysis brought in by the distributors.

Strategic position

The location of Orchid will be based on the mode of distribution, in this connection, since the distribution of final products will follow a chain of manufacturer, supplier –distributor to consumer, the main factor in the positioning of the company will be based on the availability of raw materials. The company will be located in Sebastopol-Sonoma County, at the heart of the wine-producing landscape of the Northern California with its rich soil.

Possible risks

Whenever a new company is established in a place, there are several risks that come along the way. This is not exceptional for Orchid Teas. There are a number of risks that we as a company may anticipate. These include:

Changing rules and regulations

The laws of the land are dynamic where the old ones are constantly phased out and new ones introduced. Orchid Teas being a food industry, the laws guiding food industry are dynamic from the fact that there is direct involvement with human life. In this regard, there might be risks that might come with regulations on the types of chemicals to use in the production process, acquisition of permit to operate in the food industry, all of which might limit the normal and smooth operation of the company.

Another risk could be human factor risks

This is mainly on the type of employees to work in the company. There is need for highly qualified workers in a bid to meet the standards promised to our customers. There is however uncertainty in the availability of workers with the expected qualities.

The market risk

This being a product that has not gained popularity among users, there is high uncertainty on whether or not the product will get a ready market regionally as well as eventually gaining international recognition in the global sports drinks.

SWOT analysis

In a bid for us to determine the viability of this venture, we carried out a SWOT analysis, to evaluate the strength, weaknesses, opportunities that might present themselves in the course of the production process.

Strengths of Orchid Teas

Suitability for all ages

As outlined earlier, Orchid Teas is made in three main broad categories, which make the product lines. In this regard, the product favors consumers of all ages and preferences.

Health benefits

Orchid Tea is a non-alcoholic as well as non-carbonated beverage, which can be used by users in different health conditions. As highlighted earlier, many health risks are associated with the use of carbonated as well as alcoholic beverages. The use of Orchid Teas is thus a step in averting some of these health risks.

Weaknesses

Initial cost

The initial cost of establishing Orchid Teas is likely to be high since there would be the need for setting up laboratories for the chemical testing of the various ingredients that would be used in the manufacture of the final product. This is in addition to the main factories that would be involved in the manufacture and final processing of the raw materials to a final product. The initial cost will also involve the establishment of the bottling facility, which further presses on the finances.

Opportunities

The world is today moving towards less toxic products and those that add more value to their health, thus the increased use of herbal products. Orchid Teas is a natural product made from ingredients that are locally obtained. In this regard, the product stands a chance to attract many users from the fact that it is an herbal product that is scientifically proven to have beneficial values to their health. The product is therefore likely to have a larger market both locally and internationally, with proper marketing strategies.

Threats

Presence of other competitors in the market

The idea that the world is moving towards products that improve their health is a widely known fact. In this regard, all companies are in the race to improve their products through inclusion of health benefits in the ingredients. Beverage companies are today focusing their efforts in identifying ways in which they can develop their products using less toxic products, with the inclusion of products that are less harmful. These companies may pose competition to dandelion coffee.

Despite the risks and the threats in the market, Orchid Teas aims at setting high standards of the services delivered and well as producing high quality products in a bid to minimize in the completion that might be in the market. In compliance with the law, we intent to evaluate more before establishment of the company, the main requirements, in a bid to establish the likely changes that might be made in the future.

In the operation of Orchid Teas Company, the marketing strategy is aimed at planning on the maximization of the strengths while minimizing on the weaknesses. These sections is also aimed at establishing the various areas the company has established a competitive edge against its competitors. In a bid to achieve this, the organization management in collaboration with the workers will assess the established as well as potential markets to have an understanding of the demographics involved and the set competitive structure. The following steps were taken in order to achieve this

  • Target Market

Being a non-alcoholic drink, Orchid teas is a beverage that has a large pool of potential customers. Since there are number of categories of the coffee, that is well as suited to different groups of people, the market for the beverage cuts across all ages. As earlier indicated, there are three broad categories of Orchid teas, which include the iced tea, flavored tea categories, and the kiddy teas. The main market for the flavored teas is made up the older generation of people that have a dislike for drinking water; the second target market is made of the middle-aged group of men and women in sports. The last category of teas attracts the market made of children.

In the area around, Sebastopol-Sonoma County, the largest market will be made up of the middle aged group since they have the highest population. This would then be followed by that of children and the least market will be followed by that of the older generation

Market competition

Orchid Teas is a non-alcoholic, non-carbonated beverage. Today with the increased concerns from human health, many companies have shifted to manufacture of then on alcoholic and n0n-carbonated beverages (Suhag, 2017). There is therefore a high competition for customers in the market.

Leading most valuable soft drink brands worldwide in 2018, based on brand value (in million U.S. dollars)

From the table above, a high number of companies manufacturing soft drinks characterizes the world today. This is therefore an indication of a high level of competition for any new company that comes with the same line of products.

There are also top ten companies manufacturing coffee as shown in the table below

The Top Coffee Companies Worldwide in 2015 by market share

 Nestle  Starbucks
 Jacobs Douse Egberts   HYPERLINK “https://www.adbrands.net/de/tchibo_de.htm” Tchibo
 Kraft Heinz  Lavazza
 JM Smucker  Strauss Group
 Keurig Green Mountain  3 Coracoes (Strauss/Sao Miguel)

This are companies that have already established market in the international forum and thus a new company coming up will have to face stiff competition for some time before stabilizing.

There are also great competitive types of tea around Sebastopol Ca. these include turmeric tea, spearmint tea among others (Yohannes & Matsuda, 2015). These ate herbal flavors of tea that are produced within the county and have already established a customer base as well as loyalty. Introduction of newer brands of tea will there have a form of competition in that, they company will have to struggle establish a customer base, and earn their loyalty and trust. However, with adequate and suitable marketing and branding as well establishing and maintaining quality, it will be possible for Orchid Teas to easily corner that market and swiftly earn the loyalty of customers.

Plan

Orchid Teas’ main objective is to come up with a beverage drink that meets the desire of different health conditions. That is less harmful to any user in any state of health. Orchid Tea is poised to give a refreshing feeling to the users apart from satisfaction, as well as improving their health. This kind of mission statement for a company raises the curiosity of the new users, who would want to experience the new product and have a first-hand touch with it. This would then be accompanied by production of quality tea to fulfill the mission statement. In this regard, those trying out in the name of curiosity would be attracted more and might opt for the new kind of tea in the market as opposed to the traditional ones they have had for years.

Orchid Teas also aims at involving a group of health experts in doing more research on the product in a bid to refine it and increase the health benefits as well as the refreshing effects that come with the use of the drink. With the intended level of service to be rendered to customer, of provision of a beverage drink that covers all their desires, it becomes easy to win the customers’ loyalty. Orchid Teas also aims at incorporating high standards of services throughout the processing and distribution process in a bid to meet the standards promised to our customers.

An orchid tea also aims to adopt a marketing strategy that is far reaching which will open up the market wider scopes of customers. The marketing strategy adopted by a company to a high level determines the customer base as well as the positioning of the product in the market. In this regard, Orchid tea aims at adopting the online marketing strategy that has a wide scope of potential customers both with the local and international markets (Jacobson, 2003).

The distribution strategy adopted will also ensure that that products are able to reach to all type of customers in the local area.

Marketing message

The main aim of Orchid teas is to reach customers in an attractive ways and convey the message in a most understandable and attractive way. Orchid Teas is both medicinal and offers large burst of energy for the users. In this case, the marketing message will majorly depict an idea of the company’s mission and objective. The following will be our slogan/Marketing message.

‘Want health? Take Orchid teas’

‘Want energy orchid covers you’

‘Health and energy, all in one pack? Look no further, refreshing Orchid tea covers you’

The above examples try to give a glimpse to the user of what to expect when they opt to consume orchid tea and thus raise their curiosity to experience the good feeling that is preached in the marketing message (Mackintosh, 2004).

Marketing vehicles

There are numerous marketing vehicles that could be used by a company in marketing. Orchid Teas aims at adopting the most efficient marketing vehicles that would enable it to tap in to the largest market. One of the vehicles that would be adopted is you tube. You tube is a social media platform that has a high number of users. In this regard, Orchid Teas will embark on creation of vlogs and a you tube channel where the created vlogs will be uploaded. The use of you tube vide blogs (vlogs) is an efficient way of marketing from the fact that the platform has a large number of users and the vlogs used could give a vivid idea of the product being marketed. The platform also has a feedback mechanism where the potential could ask questions and the manufacturer gives a timely response, eliminating any form of doubt. This also opens up the product to the outside market.

We will also use ads sites on the local media channels like televisions and newspapers. The aim of this strategy would be tapping into the local markets made up of those that might not in a position to access social media platforms.

Sample products will also be sent out to various vendors for tasting and creating awareness to the locals of the availability of a new brand of tea in the market that is different from the conventional tea that they are used to and thus the need to have a taste of it and feel the difference. This strategy would help in creation a large pool of customers in the local markets.

Operational plan

The main objective of this Orchid Teas is develop a beverage drink that meets the needs of customers of all natures, with minimal harm to the users and provide the desired refreshment in addition to the satisfaction and health improvement.

In order to achieve this, Orchid teas will employ the services of chemical analysts, to carry out research on the various raw materials used in the manufacturing process, assess the suitability as well as identify other ingredients that could be added to boost the taste and quality of the drink. The analysts will also oversee the production process and run tests on the final product to assess its suitability. This would be aimed at ensuring that the final products meets the desired standards of the market as well as the company’s promise to the consumers. To ascertain the quality of the products, the final products will also be taken through the national bureau of standards for tasting before releasing to the market. In order to meet the desired standards, the company aims at employing qualified workers with skills and knowledge in the analysis of chemical components and establishment of quality required in the manufacture of beverages (Manthorpe, Moriarty, Stevens, Hussein & Sharpe, 2014). After manufacture of the final product, Orchid will first be taken to the company’s bottling section after which it will be distributed through suppliers to the distributors who will take them to the retailers and consumers. The adoption of this mode of distribution on the fact that there would be a significant reduction in the cost of distribution.

Sources of funds

The main source of funding for the company will be from the stakeholders’ contribution and well as the use of creditors. The company will make sure that their products are favorable in the market and a proper auditing is done in a bid to attract an adequate number of creditors and external investors to the company to keep the company funded.

Research and development

Innovation is the key to a company’s development and staying atop other companies (Sütőová, 2018). In this connection will set a research committee that would be carrying out a number of researches on the new technology in the market that would result in the production of high quality beverages as well as increasing the production rate to match the demand in the market. The team will be charged with the role of innovating both the raw materials as well as the mechanization of the system to increase service delivery.

Technology plan

Technology is responsible for all the transformations that take place in any organization. Orchid teas is also focused on the employment of the latest technology in the running of the business in a bid to keep the business running in terms of quality and quantity as well timely delivery. The industrial sector is rapidly moving towards automation in its operation. In tandem with this trends, Orchid Teas has opted on the use of a number of software designs for running its operation. The operation process will be based on the programmable logic controllers (PLC), where production process will be void of human involvement directly. This will leave the monitoring process to those in the control room. This will cut down the cost of employing human labor to operate the production process. Additionally other technologies some of the technologies that would be employed include e-commerce websites through which the company will be put in a position to apply order-profiles, which will be used for setting the rules for active trading. Orchid Teas is also focused on the adoption of voice technology that has replaced the use of traditional handheld scanners will have an effect of increasing the speed of order picking and the total operation process. This will have an effect of reducing the cost as well as increasing on the accuracy of the operation system.

Management and organization

Orchid Teas’ management team will be made up of mainly members having a wide scope of experience in the food and beverage industry, over 20 years in the industry, in a bid to bring expertise and experience in the production process that would help maintain the desired quality of beverages as promised to the customers. The company will have one CEO and three manager reporting to him. The company will have a project manager reporting to the three managers. The project manager will be tasked with the overseeing the production process and ensuring that the various products meet the required standards, there are adequate products under each product line and the as well as managing the distribution process. The project manager will be run the production process assisted by two virtual assistants.

Ethics and Social responsibility

Orchid Teas aims at establishing and maintaining an admirable public image. This would be through its service delivery process as well as the consideration for the welfare of the community in which it is established. In this regard, the company will participate in a number of community-based programs that will be aimed at uplifting the living standards of the lowly in the society. The company will also make sure that its workers adhere to the norms of the community in the delivery of services, embracing and upholding integrity in all their involvements/. The company will also make sure that there is corporate social responsibility as a component of the organization; this would be through ensuring that there is a high level of employee as well as customer satisfaction. This is from the fact that employee are also part of the society and thus satisfying the employees will a long way in satisfying the needs of the customer and the community at large.

Management team will also embrace honesty, professionalism and active participation on ten running of the operation process to work as an example to the workers. Leadership with integrity will run from the top leadership, which make it easy to trickle down to the workers,

Environmental protection

Orchid Teas will also participate in the protection of the environment by recycling the main waste produced from the production process. The company will also set up special days when the workers and the company management in collaboration with the commun8ty will participate in the cleaning of the environment within which the organization exists.

Health issues

The main objective of Orchid Teas is to establish a beverage that would provide refreshments to the user as well as taking care of the health of the user. There will therefore be a thorough analysis of the various products used in the production process to see to it that they meet the health standards set by the national bureau of standards. Orchid teas will also be made from locally available organic products that have minimal harm to the health of the users.

Sources of Business Funds are from the followings

  • The Financials

Plan Assumption

  • (a) Melinda gates funding $40,000
  • (b) Personal loan from personal savings $100,000
  • (c) Loans from friends and family $260,000
  • (d) Loans from SBA $100,000
  • Total $500,000

Orchid Teas plan to consolidate nine product lines into three grouped product lines of

All product lines are expected to be operational at about 0.25% of machine capabilities. Meaning, the first 6 months to 1 year is expected to see business run at a less than full capacity while management determines sales, revenue, profits and to make projections for the next year in all areas of production.

  • (a) Iced Teas
  • (b) Flavored Teas
  • (c) Kiddy Teas

Break -Even point is the place where neither loss nor profit is made. Nevertheless, sufficient for business to stay operational. For Orchid Teas, the break-even is a monthly average that is estimated at $74,655 for the first 12 months of operation.

  • Break-Even Point

In the second year, these estimates are expected to decrease to $74,473. While in the third year, when all notes are expected to be fully paid off, the Break-even average estimates will be $74,625.

References

Ashurst, P. (2016). Chemistry and technology of soft drinks and fruit juices.

Benk, E. (2015). Requirements for fruit juice beverages, carbonated and non-carbonated soft drinks and other non-alcoholic beverages.

Jacobson, M. (2003). The Marketing Plan: How to Prepare and Implement It, 3rd ed.20034William M. Luther. The Marketing Plan: How to Prepare and Implement It, 3rd ed.. New York, NY : AMACOM 2001. 318 pp. (paperback) $19.95. Journal Of Consumer Marketing, 20(1), 73-75. doi: 10.1108/jcm.2003.20.1.73.4

Mackintosh, A. (2004). Marketing Strategy — Getting the message across. Journal Of Medical Marketing, 4(2), 102-104. doi: 10.1057/palgrave.jmm.5040150

Manthorpe, J., Moriarty, J., Stevens, M., Hussein, S., & Sharpe, E. (2014). The ‘Making’ of Social Workers: Findings from Interviews with Managers of Newly Qualified Social Workers. Practice, 26(2), 97-111. doi: 10.1080/09503153.2013.867941

Sütőová, A. (2018). Improving Information Flow for Decision Making on Product Quality in the

Automotive Industry. Quality Innovation Prosperity, 22(1), 73. doi: 10.12776/qip.v22i1.1082

Wilson, T., Wilson, T., & Temple, N. (2013). Beverage Impacts on Health and Nutrition.

Suhag, N. (2017). Functional Non-Alcoholic Beverages: Shifts in the Purchasing Patterns of Non-Alcoholic Beverages. SSRN Electronic Journal. doi: 10.2139/ssrn.2992428

Yohannes, M., & Matsuda, T. (2015). Demand Analysis of Non-Alcoholic Beverages in Japan. Journal Of Agricultural Science, 7(5). doi: 10.5539/jas.v7n5p143




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