Report on Carrebean Internet Cafe Case

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REPORT ON CARRIBEAN INTERNET CAFÉ CASE
Assignment - 1

CASE SUMMARY
David grant is an MBA student hoping to open Caribbean Internet Cafe in his hometown Kingstons, Jamaica upon his graduation as he always wanted to be his own “boss”. Due to low accessibility and usage of internet in Jamaica, David thought of it as a good timing to pursue this business opportunity. He has gathered data on all the relevant costs: equipment, rent, labor, etc. He has also found a partner in the local telephone company, Jamaica Telecommunications Limited (JTL), where he previously worked. JTL has offered to provide equity and a long-term loan at favorable interest rates. He is now faced with the task of analyzing the gathered information and making a decision of whether he should proceed with the venture, and if so, if it would be a profitable business for him and JTL.

TABLE OF CONTENT
CASE SUMMARY1
INTRODUCTION2
PROBLEM DEFINITION3
CONCEPT FEASIBILITY STUDY3
TARGET MARKET4
LOCATION4
COMPETITION4
ECONOMIC FEASIBILITY4
CAPITAL AVAILABLE5
START UP COST5
FIXED MONTHLY COST5
PRICE COST MARGIN ESTIMATION5
TARGET CUSTOMER SEGMENT – 200006
REVENUE PER YEAR6
PROFITABILITY6
CONCLUSION6
RECOMMENDATIONS7

INTRODUCTION
The report deals with the study of a business proposal to open an internet café. The report studies the decision of David Grant who is an MBA student, to open Caribbean Internet Café in his home town Kingston, Jamaica. David while studying in London visited a number of cafes and was intrigued by the concept. While visiting his hometown Kingstons, Jamaica during summers he noticed that in spite of high awareness of the internet, there was low accessibility and usage of the same. Seeing a potential market of consumers, David decides to open a European concept based Café which will offer brewed coffee, imported wines, juices and baked products. He decides to have three areas in the café: a computer area with booths, a wine lounge with comfortable sofas, and a general café area with table and chairs. He envisioned providing the customers, a perfect vehicle to use internet and other service without making an expensive investment in computer hardware and in addition a social outlet where people can surf together , listen to music or simply relax and socialize. He gathers the required information for starting the café and makes notes.

PROBLEM DEFINITION
After gathering all the information David grant has to decide whether it will be a profitable and sustainable decision to open an Internet Café in Kingstons, Jamaica.

CONCEPT FEASIBILITY STUDY
In order to make a sound decision a feasibility study is carried out which will focus on analysing the target market, location , the competitors in the area and the three categories of costs: Start up costs required to be invested in the business, Fixed monthly costs that are to be bore as result of operations and variable costs, that result with every customer visit to the café. TARGET MARKET

It was assumed that main segment that can be targeted as the potential customers would be university students, who have computer knowledge and professionals with high disposable income as they would appreciate a venue where they could relax and socialize along with availing internet facilities. Total segment size was assumed to be around 20,000.

LOCATION
Location that was chosen for setting up the café was New Kingston as most of the banks, other financial institutions and corporate had their head offices in that area. Also this area consisted of hotels and shopping centre, which would mean more masses, would come to know about CIC. Along with these factors, one more important reason was that New Kingston was close to several affluent suburbs from which CIC could attract patrons.

COMPETITION
In Jamaica, internet accessibility and usage was low. There were many reasons, that accounted for low internet usage such as 1) High cost of computer...
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