Market Analysis
Camel Lounge is the first café to serve authentic Egyptian food and provide customers with exquisite Middle-Eastern experience, implying that it will have a larger market size, more opportunities to sell its products, and a higher potential for profitability even at a lower profit margin. Its relative market share for Egyptian food is large as it has not been saturated, but management should consider the fact that other fast food joints and hotels in the area may start fighting for the same sales by providing targeted products and experiences to customers, hence lowering market share and profit margins.
Camel Lounge has the capacity to achieve faster growth in its market share due to its low pricing strategy compared to other competitors, and also due to the fact that the Middle-Eastern population of Cape Breton University is quite large. New market opportunities are likely to present when the new language school at Glace Bay becomes fully operational. Overall, the growth prospects for Camel Lounge are high due to a growing market for Middle-Eastern cuisine in its operational base.
Factors Affecting Sales Levels
The sales levels for Camel Lounge will conceivably be affected by existing competition, customer demand for Egyptian food choices, seasonal effect of foreign students who tend to leave Cape Breton in the summer, low pricing strategy adopted by management, product value, and advertising efforts.
Market Opportunities
Camel Lounge aims to exploit the opportunities to serve customers with authentic Egyptian cuisine and cultural experiences as its main points of differentiation from existing competitors.
Competitive Analysis
There exists a high probability for potential entrants into the market to capitalize on the growing market for Middle-Eastern cuisine in the area. This implies that Camel Lounge must develop and execute strategies aimed at achieving customer satisfaction and repeat intentions.
In barriers to entry, the management of Carmel Lounge needs to understand that other established competitors such as McDonalds may take advantage of their economies of scale to penetrate the market and cut down the market size and profit margins. Additionally, government regulations in Canada are favorable to new entrants, implying that the market is open to competitors.
In substitutes, Carmel Lounge targets locals and international students/visitors with a high affinity for Egyptian cuisine, implying that it has differentiated its product and service offerings. However, there is a high probability for substitutes penetrating the market due to the fact that food items are highly substitutable.
Carmel Lounge employs a direct distribution channel for its products and services for consumption by customers, meaning that it may benefit in competitive efficiencies and earn more in profits as no payments are made to intermediaries.
The bargaining power of suppliers is relatively low owing to the fact that many of the raw materials used to make Egyptian cuisines are available locally and therefore may be sourced from many suppliers. However, the bargaining power of customers is relatively high due to the availability of alternatives and elevated capacity to use online resources to gain information about other products/services offered by competitors.
Key Success Factors
Within the next two years, Carmel Lounge aims to increase sales volumes by 50%, achieve customer satisfaction and repeat intentions of 80%, expand its market share by attracting new customers and opening up 2 other outlets, and minimize employee turnover to at least 5%.
Market Trends & Future
The growth prospects for Camel Lounge are high due to a growing market for Middle-Eastern cuisine in its operational base. However, future marketing trends for Camel Lounge will be impacted by shifts in customer needs and behavior, shifts in customers’ perception of value for money, trends in pricing drivers for the food industry, and change and evolution of the food industry in the area in terms of new entrants and competition.