Read the following case, then answer the questions below. Format of the paper must be followed as following.
1. Identify possible competitors of Internet Caf? business and briefly introduce those competitors' business-EX. PC BANG, Kinkos', Office Max, Staples, Local Coffee Shop.
2. Briefly introduce what kind work those competitors do.
3. Explain what similarities between Internet Caf? and those competitors have.
4. Provide SWOT Analysis.
5. Identify Substitute competitors to Internet Caf?- AOL, CompuServe, Yahoo, and other business that can be substituted.
6. Briefly Identify what kind offer they have.
7. Briefly explain what do they do.
8. Explain what similarities that have.
9. Provide SWOT Analysis.
Since our business doesn't exactly fit to current industry's portfolio, we considered traditional recreational industry's services and products as available products and services for our business. Also, since we are going to provide various drinks and snacks, office work, we included products and services that are provided by local coffee shop and Kinko's. The description of those products and services will be introduced in this section.
a. First, available services for this type of business are:
Latest Coin-operating games
Virtual reality games
(ex. Star craft)
Sports cafes with big screen televisions
Internet-access with high quality network and equipment
Access to printing and scanning machines
Access to various software such as photo shop, word, excel, and other
Software for office work
Quite and cozy environment to rest
Various drinks and snacks
Latest coin-operating games
, virtual reality games
, and sports cafes with big screen televisions are providing by various entertainment centers such as ESPN Zone, Disney Quest, Sega's Game
-works, and Dave & Busters. Since these major entertainment centers take over 70 percent of market share and variety of computer games
are the most popular among the game
lovers at the moment, thus, we considered importing these services might help us to attract customers (Industry Analysis).
Also, offering an access to the Internet services at an affordable price without bringing customers' own computer
for browsing will attract a lot of Internet users. In addition, offering office equipment and place to study will add core value of this business.
Along with the services, there will be various kinds of snacks and refreshments available for the clients. Comfortable and quite recreational areas will be designed to best suit the needs of those who would like to simply relax and check out some magazines or newspapers while having a cup of coffee or some other snack or beverage. There will be also a sale of magazines and books related to the field of computers
and computer games
b. The advantages and disadvantages of each product or service that we are considered have to be closely evaluated in order to better estimate the future demand.
Speaking of computer games
, it must be noted that one of the disadvantage of this service is the price per hour that the customers have to pay as an alternative to staying home and playing the same computer games
there using the Internet and paying much lesser fee. However, the advantage is that it will provide the gamers with a specially flavored environment with a game
room specially equipped to suit the needs of the computer game
Besides, our business will give the gamers an opportunity to compete with the game
players from another areas while the majority of other Internet cafe in the city do not such feature present in their curriculum. The advantage of providing such service to our customers as giving them an access to various office equipment is obvious-very often people need the above mentioned devices at the time when there is no opportunity to get an access to them.
Our business gives such people a unique opportunity to have a non-limited access to all the necessary equipment and there is no additional price for using it. The disadvantage of such service is that all the equipment needs to be properly maintained so there will be a need to hire additional employees for this task.
The advantage of selling all sorts of snacks and beverages to the customers is that our business will be looking more appealing and home-like for them. The disadvantage of such decision would be perhaps the additional costs incurred for the necessary equipment (vending machines, microwaves, etc.) plus there will such concern as obtaining additional licenses for selling food and refreshments.
Although it has some advantages such as it is easy to manage since customer directly put coins in the machine and at the time of malfunction of the machine, technician from amusement device will come over and fix it or replace the machine, adding Coin-operating amusement devices has some disadvantages. One of the disadvantages that we predicted is on differentiation. We are trying to build new type of recreational business, so accepting traditional amusement devices will reduce our business' image. Also, initial costs to acquire amusement devices are relatively higher than acquiring computer game
software and equipment, and upgrading process takes longer time than upgrading software for computer games
c. Out of all above discussed products and services, in the aspect efficiency and profitability, it had been decided that some of them appear to be more appealing. Thus, we decided to settle our services within office work place, Internet Service, and drinks and snack.
Perhaps there are three of them that have some genuine advantages and thus should be given a primary consideration. Number one, it is the computer games
with the possibility to play with the gamers from other areas. Second, it is the office equipment made available to our customers. Number three is providing the clients with snacks and beverages. These three choices are though of great importance if we wish to be successful in the market. Below goes the discussion of their advantages and disadvantages.
d. Giving the computer game
players an opportunity to compete against the gamers from the other areas is a strong advantage that most of the other Internet Cafes do not provide to their customers. One of ideas that could be implemented regarding this issue would be organized group competition in certain types of computer games
with monetary or some other prizes. One of the disadvantages of the following decision would be an additional cost incurred for providing a high-quality connection with other areas.
The advantage of giving our customers an opportunity to use copying-machines and fax-machines, programmed calculators and scanners is quite natural. Since very often time is money and if a person need to urgently use some of the above mentioned devices and cannot find an access to them immediately such situation can cause a great deal of frustration. Our business is aimed at creating an image of giving all the right things to our clients at the right time. All the necessary equipment is at their entire disposal twenty-four hours a day, whether they need it for studying or for working. The disadvantage of such services is a low net income as compared to the scale of investments, however, in our situation it is believed that the desired reputation and a goodwill appear to be vitally important factors in our business.
Providing our customers with snacks and beverages has many advantages. For example, for people who spend a lot of time playing computer games
or studying for many hours it is absolutely necessary to make several food breaks or at least fetch a glass of water. We have to make sure that our clients feel very comfortable at our premises and are fully satisfied with the level of service that we render to them, such business decision as providing with snacks and beverages contributes a lot to making our clients feel very much like at home. However, there will be trained employee must be reside at counter all the time, management should consider economical aspect since large amount of salary might incur.
3.2 Important features and descriptions
Since similar products and services are available all over the country, there are a lot of important features and descriptions of them that should be taken into account when starting this business.
a. For those people who need to download a significant amount of information using the Internet, some of the Internet cafes offer the opportunity to do so through really good connection and high speed of information transmission.
However, those services usually cost more than usual Internet usage for info seeking or just playing various games
. Another option available at some of the Internet cafes is courses in various computer
languages, software usage, etc., which are either taken online or provided by the highly-qualified specialist hired by the Internet cafe. Some pretty good opportunities are those gamers who are good enough in some particular game
to have crowds of people watching them play. Such gamers might be given some play time for free just in order to have an additional promotion for the club, since the more people come simply to watch the games
, the more of them would eventually become interested in playing themselves.
b. The availability of high speed connection is a good asset for any type of the Internet Cafe, the obvious advantage here is for the users, who can download the needed information much quicker than using the usual connection. However, there are actually two sides of the coin here. First of all, such a high-speed connection would definitely cost more money to the Internet cafe and would need more sophisticated equipment. Thus, more investment will be needed in order to provide customers with such a service. The faster customers download the info, the less time they will spend in the cafe, so the only way to outweigh the disadvantages of such a service would be to charge high prices for using it.
However, a lot of people are not going to be attracted by higher quality at much higher price, therefore this particular option is not good enough for the Internet cafe at issue. The availability of the online courses is a pretty good opportunity to develop a solid clientele base, however if the Internet cafe has to hire a specialist in order to assist those engaged in the courses, the profits from such an undertaking might become not worth even starting it. If there is no need for the specialist, then this option might be considered in order to attract more people. If the owners of the Internet cafe have the opportunity to either develop or obtain some exclusive courses, then it would really facilitate the creation of the cafe?s professional reputation and might draw some specialists attention to the courses at issue. Having a good gamer
perform at our Internet cafe is a somewhat shaky option, because no one actually knows whether people are going to be attracted to the club, or would rather avoid competing with someone much better than they are.
c. Those alternatives do have some significant impact on the present product/service selections of the Internet cafe. The idea of having a gamer
perform in the cafe is represented by the intention to conduct various tournaments in order to attract more people. Those tournaments will not only serve as the additional promotion activity, but will also ensure that more snacks and beverages are sold on the days when they take place, thus increasing the profits of the cafe.
Although the Internet cafe is not going to provide its clientele with the high-speed expensive connection or online courses, those options are definitely outweighed by the opportunity to use office equipment. Thus, cafe will have some clients which will not be present at some other Internet spots do not provide the necessary for the office work equipment.
d. As mentioned above, the advantages of the selections for the given Internet cafe will outweigh the disadvantages implied by not providing the clientele with some of the options available at other places. Providing people with the opportunity to play multi-player games
with some other people from different areas, and conducting various types of tournaments would work out better than providing people with an opportunity to have some online courses. One of the major reasons is that most of the high school students and smaller kids are going to be interested in the games
, not the courses, thus from the economic prospective it would be better. The availability of various office equipment is going to be more profitable than the high-speed connection in the long run, when all the fixed costs of the equipment are covered and the maintenance costs are substantially lower than the profits obtained from providing the clientele with such an equipment.
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