Introduction
This project is about a coffee shop in Qatar, Doha called Lobby Café. With a budget of 250,000QAR, the cafe is expected to be top-notch. The objectives of this poster are to illustrate the importance of the microeconomics and macroeconomics factors in my project, which is a Startup Café.
Market structure
A perfect competition market involves a big number of consumers and retailers in the market., In this case, it is monopolistic competition. Products available in the nearby cafes are homogenous as to what Lobby café will be making. The Hilton Hotel is a good location and has a great ambiance. Many different cafés around Doha will make the business a perfect competition. The products sold in the café will be similar to the others around; thus, prices don’t have to be capped (Gitman et al., 2018).
Stakeholders Analysis
Stakeholders include anyone who has an interest in lobby café. These include shareholders, investors, board members, managers, and the government. The job of shareholders is to provide funds (Man-Kit, 2012). Café Lobby has investors who will have board seats and power of management decisions and appointments. The Board members and Executive management who have the highest influence and highest contribution will always be satisfied and get accurate information in time with minimum contact.
Microeconomic factors
Products Offered
Major products sold by Lobby Cafe include cold drinks, hot drinks, and food. The beverages include items like coffee, espresso drinks, juice, and tea. The food menu includes pastries, desserts, sandwiches, and sweets. Products that are in high demand by customers will be produced more to increase profits. The products offered are multicultural to attract more customers from different backgrounds.
Labour
All things held constant; as salaries increase, the business demands less labour. Lobby Cafe is open 24 hours a day and each employee earns QAR 2,000/mo. The business highly depends on casual employees, who have few skills.
Productivity Decisions
Productivity involves the output of a product per time used. Given the available technology, productivity is a function of the relationship between input and output. For example, say 1 cup of coffee is produced in 15 minutes. If the production cannot be faster without dropping another output, the business is at maximum efficiency, where productivity is supposed to remain.
Supply
The Lobby Café controls the supply decisions.
When a client agrees to pay more for the products offered by the cafe, the supply of the product also increases to match up the demand.
Clients
Primarily, the target clientele for Lobby Cafe is tourists, middle and high-income earners, and all genders. All ages groups are also served. Lobby Cafe has coffee and espresso-making machines, grinders, and other accessories. State-of-the-art technology in the shop helps with quality differentiated products which help with shorter waiting times for clients and access to various new flavors.
Demand
The greater the demand for a product at the cafe, the more of that product will be produced. This is done to maximize profits while also ensuring customer satisfaction.
Competition
The business has competition from other coffee shops around Doha. Competitive prices, excellent customer service, and tidiness will be the primary focus of the business
Economic Growth Rates
Economic growth is measured by Gross National Product (GNP), sales rate, and Gross Domestic Product (GDP). A more robust economy directly reflects an increased demand, therefore, increased production. The business has to take advantage of the higher demand and clients’ willingness to buy more goods. Business owners are recommended to get more employees when the economy is vibrant because they need to keep up with the customers when they have the chance (Loy, 2021).
International Trade
This macroeconomic factor affects businesses that sell and ship products worldwide. With a decrease in free trade agreements, a business chance for growth also decreases. Therefore, this factor affects both big and small businesses.
Interest Rate
A country’s health is greatly affected by the value of the currency. Interest rates depict the return received by investing money within a country’s financial system.
The higher the currency’s value, the higher the interest rates and vice versa. These rates are determined by the central bank and the supply and demand of money. This factor is significant to stakeholders of Lobby Café. A change in interest rates will affect a business’s loans for growth and machinery. This only affects a company if they take out a loan; high-interest rates mean the owners have to pay more.
Unemployment
When the unemployment rate rises, the business will find a lot of candidates to be employed. The upside of unemployment is lower consumption of the products. This will affect the sales and thus, Lobby Café’s profits.
Inflation
This occurs when prices of goods have gone up due to an increase in the supply of money within an economy. When prices for services and goods go up, the country’s capability to purchase the items decreases at the same rate. Thus, the business has to charge more (Levi, 2014).
Deflation
During this season, the customers have more purchasing power. This causes the customers to purchase more products.
Elasticity
The elasticity of Demand measures the responsiveness of goods and services when prices go up or down (Wells, 2015).
Conclusion
Microeconomics focal points are specific aspects such as employees, and businesses while Macroeconomics focuses on the economy as a whole. All factors mentioned above have a significant impact on the overall outcome of the business purpose. Both factors of economics show the business’s challenges and strengths and how to prepare adequately for the future. Although there is competition between the coffee shops in the industry for new clients, the industry is saturated, stable, and settled to provide all competitors with significant margins.
References
Gitman, L., McDaniel (Jr.)., Shah, A., Reece, M., Koffel, L., Talsma, B., and Hyatt, J., 2018. Introduction to Business. OpenStax College.
Loy, B., 2021. How Microeconomic Principles Affect Business Decisions. Web.
Levi, M., 2014. The macroeconomic environment of business. World Scientific Publishing Co. Pte. Ltd.
Man-Kit, B., 2012. What Good Are Shareholders?. CFA Digest, 42(4), pp.47-48.