What we do
Café by the Side” is a small company the signs contracts with larger firms whose outlets usually have a long queue.
We provide a stylish yet comfortable waiting environment for their customers.
This includes music, nice chairs and delicious hot food and drinks
We will locate ourselves just outside shops at the entrance as part of the entrance into the shop, we provide an area of rest in shopping malls and long queue lines.
Market structure
•We are a Monopoly, meaning that we have complete control over the market, and can infulence the price of our services greatly unless other companies join.
•This is probably because this is a new and innovative idea
What is allocative efficiency?
•Allocative efficiency in monopolistic competition.
•Allocative efficiency is the level where the output is the highest and the cost is the lowest. The resources of the company are used to its optimum level
What is productive efficiency?
•Productive efficiency in a monopolistic competition.
•Production is when the company can produce the maximum amount of goods with the minimum cost. not
Our Competitors
Our competitors would be other companies that would choose to enter the market.
The barriers to entry are few, as anyone can enter this industry with the capital required.
An example is vending machines, that are supposed to be more efficient than us, but providing less service and customer relations.
How we stay in the game!
• When there are barriers to entry, it is difficult for firms to enter or leave the industry.
•We will make our brand famous by putting up advertisements even though there are no competitors yet.
• It is to secure brand loyalty and to make sure even after other competitors have come into the same industry, they will soon collapse as our company has a familiar brand name and customers who recognise us will most probably stay with our products as it is brand loyalty.
• We will have patents to stop other people from having the same business as us and after our patent expires, we will have a very famous name and will stay in the market as more people will know us rather than new companies which they might not trust.
Which types of economies of scale we reap from?
•We will have specialisation as there will be a particular person to be the cashier, another person to brew the coffee and different people for different jobs in the company. We will have coffee brewing machines to maximise profits as it will take a shorter time for the coffee to be brewed and in the long run, we will buy more coffee brewing machines to increase our productivity rate even more.because this is a new and innovative idea which has not been done before.
price discrimination
•Yes. We will practice price discrimination. This is to enable us to gain more profits. We will change the pricing to accommodate the current economy and also different prices depending upon how much our customers purchase
Done by: Ian Lee, Quan De, Yuan Kai
