Project Feasibility Study and Evaluation-OKey Coffee-Aj - Chaiyawat Thongintr [PDF]

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1203302 PROJECT FEASIBILITY STUDY AND EVALUATION

OKEY COFFEE

By MISS ORACHORN PHOLPHASUK ID 4931205207 TOURISM MANAGEMENT SCHOOL OF MANAGEMENT THIRD SEMESTER, 2009 MAE FAH LUANG UNIVERSITY

A Preface This Project is a part of 1203302 Project Feasibility Study and Evaluation Course in the third semester of 2009. In this project is studying the feasibility of premium coffee store business at Karon Beach in Phuket, which is include generally of premium coffee store business, management in premium coffee store business, competition analysis and marketing feasibility, the technical process in premium coffee store business and the financial feasibility of premium coffee business. This project makes everyone who interested to get knowledge and information about premium coffee store business before make decision to investment, including preoperational process and operation process of premium coffee store business, for the benefit to investment and profit of doing this premium coffee business. I expect that my project will provide benefit more and more interested person, more over, if they are any error in this project or whatever, my ground made an apology at this opportunity.

Miss Orachorn Pholphasuk

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Content Preface.............................................................................................................................A Content.............................................................................................................................B Chapter 1 Introduction ..................................................................................................1

1.1 Background and Significance of the project........................................................2 1.2 Project objectives ...............................................................................................11 1.3 Benefits of project..............................................................................................12 1.4 Operations methods ...........................................................................................12 1.5 Time frame of study...........................................................................................13 Chapter 2 Industry Profile............................................................................................15

2.1 Nature of Industry ..............................................................................................16 2.2. Situation of Industry .........................................................................................24 2.3 Product and Service ...........................................................................................59 2.3.1 Product ........................................................................................................59 2.3.2 Service.........................................................................................................62 2.4 Vision.................................................................................................................62 2.5 Mission...............................................................................................................63 2.6 Strategy ..............................................................................................................63 2.6.1 Corporate Level ......................................................................................... 63 2.6.2 Business Strategy ........................................................................................64 2.6.3 Functional Strategy .....................................................................................65 Chapter 3 Marketing Feasibility Study ......................................................................68

3.1 Marketing Analysis..............................................................................................69 3.1.1 General Environment Analysis ....................................................................69 3.1.2 Competition Analysis (3C Analysis) .........................................................110

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3.2 STP Analysis...................................................................................................147 3.2.1 Market Segmentation ................................................................................147 3.2.2 Target Analysis ..........................................................................................148 3.2.3 Position Analysis .......................................................................................149 3.3 Marketing Mix Strategy....................................................................................150 3.3.1 Product strategy ........................................................................................150 3.3.2 Price Strategy ............................................................................................153 3.3.3 Place Strategy............................................................................................154 3.3.4 Promotion Strategy ...................................................................................155 3.4 Sales Forecast/Profit Estimation ......................................................................157 3.5 Marketing Expenses (Sale Incentive) ..............................................................168 3.6 Conclusion in market feasibility ......................................................................171 Chapter 4 Technical Feasibility Study.......................................................................172

4.1 Production and Operation Analysis ..................................................................173 4.1.1 Product characteristics .............................................................................173 4.1.2 Service Process ........................................................................................229 4.1.3 Location ...................................................................................................230 4.1.4 Facility Layout .........................................................................................235 4.1.5 Machine/Tools/Equipment.......................................................................241 4.1.6 Logistics Management .............................................................................275 4.1.7 Facility Management ...............................................................................277 4.2 Cost of Investment ...........................................................................................282 4.2.1 Pre- Operating Cost..................................................................................282 4.3 Investment Cost ...............................................................................................284 4.3.1 Equipments & Tools ...............................................................................284 4.3.2 Depreciation.............................................................................................289 4.4 Operating Cost.................................................................................................295 4.5 Organization Expenses………........................................................................306

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Chapter 5 Financial Analysis .....................................................................................313

5.1 Income Statement.............................................................................................314 5.2 Balance Sheet...................................................................................................317 5.3 Statement of Cash Flow ..................................................................................320 Chapter 7 Summary ...................................................................................................323

7.1 Summary of project feasibility study................................................................324 Appendix......................................................................................................................325

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Chapter 1 Introduction

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This chapter explains about overall of project. There are background and significant, objective, benefit, activity and timework of our company. You can know that why we do this project from this chapter.

1.1 BACKGROUND AND SINIFICANCE OF THE PROJECT

Coffee originated in tropical Africa, from where it has since been introduced to most tropical countries throughout the world. Coffee was introduced to Southeast Asia and the West Indies in the 17th and 18th centuries. Nowadays coffee consumption market is more expand that we can observe the coffee products in the market which are coffee bean, ground coffee, instant coffee and instant coffee canned and there are many coffee drink manufactures in Thailand which are famous brand names, regular shops and instant coffee that sell in convenience shop or store regular shop and etc. Prices of fresh coffee are higher than instant coffee that sell with the feature of cans, bottles and plastics bag because the costs are expensive; it is 10 to more hundred baht and they are better tastes. Thai Coffee Consumption Trend in year 2009 was increased because it is good taste and high quality so the premium coffee shop is spread in Thailand widely because Thai people change their behavior. In each main regions of Thailand which are North, Central, Northern East and South, there are many coffee shops that provide for public so the customers have many choices for them. The famous coffee shops in Thailand are Starbucks, Black Canyon, Blue Mountain, Suzuki, Gloria fasdf Jean's Coffees, Au Bon Pain, Cffee World, Doitung, Wawee, Doi Chang and etcs. There are 2 type of market segmentation that foreign brand name is 60% and Thai brand name is 40%. The main consumers of premium are business man, tourists, officers and student that they have power to buy because they almost of them are middle class and they want to consume the taste and quality of coffee. They do not concern much with higher price.

(Source: http://www.coffeeresearch.org, 2010)

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Phuket Phuket (pronounced Pookhet) is Thailand’s largest island. It’s a province in itself and a major tourist destination. Phuket offers something for every visitor: verdant hillsides, luxurious golf courses, unique beaches, azure seas, world-class scuba diving and water sports, surprisingly cheap shopping, outstanding dining and a vibrant nightlife. As Phuket is Thailand’s richest province, the infrastructure is surprisingly good when compared to neighbouring provinces and countries. Lying off the northwest Andaman coast 700km south of Bangkok and 150 kilometres from the Malaysian border, Phuket is roughly the same size as Singapore. Many have remarked on the similarity Phuket has, when viewed on a map, to a pearl drop. For this reason, amongst others, the island has been dubbed "The Pearl of the South." It’s connected to the province of Phang Nga by two northern bridges. Most tourists arrive by air, but there are excellent road connections to Bangkok and surrounding provinces to Phuket that are well worth visiting. (Source: http://www.thephuket.com, 18 Apr 2010)

Getting to Phuket There are 4 major transportations as your choices - traveling from Bangkok to Phuket by bus, car, train and air.

By bus Intercity and public bus is one of the cheapest ways to take you to Phuket. Buses leave daily and directly to Phuket from Bangkok’s Southern Terminal Station. Both airconditioned and non air-conditioned buses are provided, and of course the price is different. The overnight buses are the most popular choice since they are comfortable. The approximate duration is 12-14 hours. For more information, call 0-2435-1199, 02435-1200, 0-2434-7192, 0-2434-5557-8 or visit www.transport.co.th. There are also buses leaving from Khaosarn Road, operated by some travel operators, and of course

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the price will be different, probably higher. Suggest you to find out when you are hanging around there.

By car Going to Phuket by car is probably the most fun trip when this allows you to stop at several beautiful places all the way along the trip and catch nice photos. Just drive along Petchkasem Road (Highway No. 4), you will pass through Nakhon Pathom, Ratchburi, Prachuab Kiri Khan, Chumporn, Ranong, Phang-nga, and cross Sarasin Bridge and here there is… downtown Phuket. The total distance is 862 kms, approximately 12 hours, but still several destinations to explore and enjoy. However, if you are afraid of losing the way, a map is also recommended.

By train Taking a train is also another cheapest way, but keep it in mind that there is in fact no direct train commuting down to Phuket. Take the train at main Hua Lamphong Train Station and get off at Surat Thani to take bus to Phuket. The overnight train is far more comfortable than overnight buses. But pre-booking is advised several days in advance. Check the train schedule with the State Railway of Thailand (Hua Lamphong Train Station) at 1690, 0-2223-7010, 0-220-4444, 0-222-4334 and 0-2621-8701.

By air Taking a flight down to Phuket is definitely the most convenient way when it only takes approximately one hour (unless the flight is delayed). There are several domestic flights operating daily and directly from Bangkok to Phuket at Phuket International Airport – both regular price (bit high) and low cost, also depending on seasons (low or high). We recommend you to compare the price between airlines for the best deal. Check out the list below with contact details: 1. Thai Airways 0-2628- 2000, www.thaiairways.com

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2. Bangkok Airways 0-2265-5678, 0-2265-5555, www.bangkokair.com 3. Phuket Air 0-2679-8999, www.phuketairlines.com 4. Thai Air Asia 0-2515-9999, www.airasia.com 5. One-Two-Go by Orient Thai, call 1126, www.onetwo-go.com 6. Nok Air, call 1318, www.nokair.com Phuket also offer direct flights to international destinations such as Kuala Lumpur, Hong Kong, Penang, Singapore, Sydney, etc. (Source: http://www.phuket-guide.com, 20 Apr 2010) Figure 1.1: Map of Phuket

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(Source: http://www.phuket.com, 19 Apr 2010)

Karon Beach It is the second largest of Phukets principal tourist beaches. Large resort complexes line the road back of the beach, but the strand itself, long and broad, has no development. Restaurants, bars, tour companies and other non-hotel businesses are at the north end, near the traffic circle, and at the south, on the little road connecting the back road with the beach road. The narrow road between Kata and Karon has a number of small businesses as well as the Dino Park Mini Golf facility. Karon is the most upscale of Phukets beaches. Regular daytime bus service to and from Phuket Town. Head north from Kata along the beach road and, two hundred metres on the left is the start of Karon Beach. This is a long three to four kilometre strand with undoubtedly the finest sand on Phuket. It positively squeaks beneath your feet on the walk from the road down to the water. Karon beach offers little in the way of shade except a few palms and rented parasols, so precaution against sunburn should be taken before spending extended time on it. There’s also quite a steep underwater cant dropping off into the ocean, so weaker swimmers are advised to either stay out of the water or head south to safer Kata Beach. The beach itself is a marvelous place for an invigorating morning or evening walk, and, with hundreds of small shops and eateries dotting the road between Karon and Kata, the beach road is also a well-frequented walking route. At the southern end of the beach you can snorkel around the rocks and gradually make your way around the headland. Further north, past the village of Karon, there is more good snorkeling. Karon Beach is the place to go if you desire an uninterrupted view of the ocean. It’s as though the world comes to an end and drops off into the azure waters of the Andaman. Then maybe it’s because, after years of development, there are still no fishing boats to obscure the view of the horizon.

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Thing to Do Different flavour from Kata. For a start, it’s more spread out. There’s a Buddhist temple overlooking the road leading down to the beach, several up market hotels only a few hundred metres from the sea, and a town centre that is friendly by day and downright cheeky by night. The beach road itself, following the curving banana-shaped coast is dotted with shops, eateries and a good selection of tailors. Karon is expanding, but with caution. Building projects are kept well away from the beach and the byword is ‘discretion’. Like Kata, there are many dive shops to choose from if you wish to explore the extraordinarily beautiful underwater world of the Andaman sea. By night, Karon’s bars compete for the visitor’s attention in various ways: Loud music, atmospheric beach bars, haute cuisine, expat haunts, they’re all there to draw you in if you feel like it. Some visitors opt for the stroll along the beach road to Kata and back. It’s certainly a fascinating vignette of Thai life. Like Kata, Karon nightlife lasts as long as you do.

Getting There Karon are, roughly speaking, forty-five kilometres away from the airport, depending on the route your driver chooses. This trip will take an hour and costs 500 baht by taxi. If you wish to take a taxi to Phuket Town, then clamber aboard a local bus at the fresh market. ( A Song Taeuw, so called because of the "two bench" arrangement used to seat passengers) The fare from Phuket will be 20 baht. Hiring a car from the airport is also possible and, once arrived, you may want to rent a motorcycle in Karon itself. There are many beautiful viewpoints above Karon that are only accessible to either the extremely fit or to people who have their own locomotion. (Source: KataKaron Hotel’s Business Association,19 Apr 2010)

8 Figure 1.2: Map of Karon Beach

(Source: http://www.phuket.com, 19 Apr 2010)

9 Table 1.1: Total Population of Phuket Total of Population

Male

Female

335,913

159,526

176,387

The total population of Phuket is 335,913 people in year 2009 which the male are 159,526 people and female are 176,387 people.

(Source: Department of Provincial Administration, 2009)

Figure 1.3: Number of Foreign Tourists between Year 2008 – 2009 in Phuket

1300000 1200000 1100000 1000000 900000 800000 700000 600000 500000 400000 300000 200000 100000 0

1217303

1190032

2008

2009

(Source: Phuket Provincial Governor's Office, 14 Marh 2010)

10 Figure 1.4: Top Ten Country of Foreign Tourists in Phuket 2009

Russia 6.79%, 57,338

Singapore 6 .61%, 49,770

Finland 6.47%, 48,699 Australia 19.52%, 146,962

Germany 7.62%, 57,338 Korea 14.78%, 111,255

China 7.63%, 57,454 England 8.06%, 6 0,690

Malaysia 8.09%, 60,867

Sweden 14.43%, 108,582

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(Source: Phuket Provincial Governor's Office, 14 Marh 2010) Why this project should launch in the area that calls “Pearl of Andaman Sea” or Phuket province because it is the very popular and famous place for tourist destination in Thailand which there are Thai and foreign tourists who come to visits this provice and the statistic graph show that the foreigners are more than Thai. From the pie chart, it show that the most tourists who come to visit Phuket are from other country which are Australia, Korea, Sweden, Malaysia, England and China and there are only few domestic travelers. The information of Phuket Provincial Governor's Office show the main income of population in Phuket is hotel and restaurant at 38.92 percents, Logistic and Transportation is 14.12 percents and Retailer is 10.54 percents so the one good point for this project is the tourists destination because there are high purchasing powers in the market and we can sell in the high price because the land value is very expensive. Our product is in the niche market because the premium coffee store businesses are in Karon beach because there are low competitors which are very few direct competitors and there are few non direct competitors such as sevens, regular shops and restaurants. In addition although the political situation of Thailand is not stability which are Red Shirts and Yellow Shirts but it is not effect to our business because Phuket Island has international direct flights to this island and Somboon Jirayus, president of Phuket Tourist Association, said on Sunday February 2010. Despite warnings by three major tourist-providing countries warning their nationals from traveling to Thailand due to the risk of civil unrest, tourism businesses in the southern resort of Phuket is booming with no hotel room cancellations. From these reasons, allowing I interested to study the possibility of Coffee store business in Phuket. 1.2 PROJECT OBJECTIVE 1. To study the situation of coffee store business 2. To analyze market in the business and financial risk feasibility 3. To learn the technical and management process in coffee store business 4. To Summary of the feasibility of coffee store business

12 1.3 BENEFITS OF PROJECT 1. The situation of coffee store business 2. The market in the business and financial risk feasibility 3. The technical and management process in coffee store business 4. The feasibility of coffee store business 1.4 OPERATIONS METHOD • To study the generally of coffee store business in Phuket • To study management in coffee store business as follows: - Background of coffee store business - Product and service in coffee store business - Vision and mission statement of coffee store business - Strategy of the company

• To study competition analysis and marketing feasibility as follows: - General internal and external environment - Marketing mix strategy of coffee store business - Demand of consumer in coffee store business - Sale forecast and profit estimation of coffee store business • To study the technical process in coffee store as follows: - Location - Operations and management analysis - Investment and Operation cost of coffee store business • To study the financial feasibility of coffee store business as follows: - Company’s investment cost, operation expense, and other expenses - Profit and loss statement, cash flow, and balance sheet in 5 years of coffee store business • To study and analysis risk of coffee store business in Phuket • To Summary the feasibility of coffee store business in Phuket

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1.5 TIME FRAME OF STUDY

Table: 1.2 Time frames, since 08 April 2010 – 12 May 2010

Operations

April

Methods 08 1. To study the general information of coffee store business in Phuket.

2. To study management in coffee store business.

3. To study competition analysis and marketing feasibility.

4. To study the technical process for coffee store business.

09

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

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Operation

May

Methods 25 26 27 28 29 30 01 02 03 04 05 06 07 08 09 10 11 12 5. To study the financial feasibility of

coffee

store business. 6. To study and analysis risk of coffee store business in Phuket. 7.

To

Summary the feasibility of

coffee

store business in Phuket.

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Chapter 2 Industry Profile

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This chapter explains about the history and industry’s situation of all coffee business in both Thailand and foreign market. As well as the detail of coffee business brand name which fatuous and general product of coffee business in Thailand. We show vision, mission, and strategy of company in this chapter.

2.1 NATURE OF INDUSTRY

Did you know coffee is the most consumed beverage in the world? How did coffee get this ranking? What country first figured out coffee was safe for consumption? When was the first drink of coffee prepared? Where did the first coffee shop come in being? There are many questions about the starting point of drinking coffee. It has been so long ago no one really knows all the facts. But, one thing is for sure, coffee is the most consumed beverage on the planet.

The Beginning of Coffee

It looks as if the first trace came out of Abyssinia and was also sporadically in the vicinity of the Red Sea around seven hundred AD. Along with these people, other Africans of the same period also have a history of using the coffee berry pulp for more than one occasion like rituals and even for health. Coffee began to get more attention when the Arabs began cultivating it in their peninsulas around eleven hundred AD. It is speculated that trade ships brought the coffee their way. The Arabs started making a drink that became quite popular called gahwa--- meaning to prevent sleep. Roasting and boiling the bean was how they made this drink. It became so popular among the Arabs that they made it their signature Arabian wine and it was used a lot during rituals. After the coffee bean was found to be a great wine and a medicine, someone discovered in Arabia that you could also make a different dark, delicious drink out of the beans, this happened somewhere around twelve hundred AD. After that it didn't take long and everyone in Arabia was drinking coffee. Everywhere these people traveled the

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coffee went with them. It made its way around to India, North Africa, the eastern Mediterranean, and was then cultivated to a great extent in Yemen around fourteen hundred AD. Other countries would have gladly welcomed these beans if only the Arabs had let them. The Arabs killed the seed-germ making sure no one else could grow the coffee if taken elsewhere. Heavily guarding their plants, Yemen is where the main source of coffee stayed for several hundred years. Even with their efforts, the beans were eventually smuggled out by pilgrims and travelers.

Coffee Shops Appear

Around 1475 the first coffee shop opens in Constantinople called Kiv Han two years after coffee was introduced to Turkey, in 1554 two coffee houses open there. People came pouring in to socialize, listen to music, play games and of course drink coffee. Some often called these places in Turkey the "school of the wise", because you could learn so much by just visiting the coffee house and listening to conversations. In the sixteen hundreds coffee enters Europe through the port of Venice. The Turkish warriors also brought the drink to Balkans, Spain, and North Africa. Not too much later the first coffee house opens in Italy. There were plenty of people also trying to ban coffee. Such as Khair Beg a governor of Mecca who was executed and Grand Vizir of the Ottoman Empire who successfully closed down many coffee houses in Turkey. Thankfully not everyone thought this way.

Coffee Tips Arrive

In the early sixteen hundreds coffee is presented to the New World by man named John Smith. Later in that century, the first coffee house opens in England. Coffee houses or "penny universities" charged a penny for admission and for a cup of coffee. The word "TIPS" (for service) has it's origin from an English coffee house.

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Early in the 17th century, Edward Lloyd's coffee house opens in England. The Dutch became the first to commercially transport coffee. The first Parisian caf頯pens in 1713 and King Louis XIV is presented with a lovely coffee tree. Sugar is first used as an addition to coffee in his court.

The America's Have Coffee

Coffee plants were introduced in the Americas for development. By close to the end of the seventeen hundreds, 1,920 million plants are grown on the island. Evidently the eighteen hundreds were spent trying to find better methods to make coffee.

The Coffee "Brew" in the 20th Century

New methods to help brewing coffee start popping up everywhere. The first commercial espresso machine is developed in Italy. Melitta Bentz makes a filter using blotting paper. Dr. Ernest Lily manufactures the first automatic espresso machine. The Nestle Company invents Nescafe instant coffee. Achilles Gaggia perfects the espresso machine. Hills Bros. begins packing roasted coffee in vacuum tins eventually ending local roasting shops and coffee mills. A Japanese-American chemist named Satori Kato from Chicago invents the first soluble "instant" coffee. German coffee importer Ludwig Roselius turns some ruined coffee beans over to researchers, who perfected the process of removing caffeine from the beans without destroying the flavor. He sells it under the name Sanka. Sanka is introduced in the United States in 1923. George Constant Washington an English chemist living in Guatemala, is interested in a powdery condensation forming on the spout of his silver coffee flask. After checking into it, he creates the first mass-produced instant coffee which is his brand name called Red E Coffee.

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Prohibition goes into effect in United States. Coffee sales suddenly increase. Brazil asked Nestle to help find a solution to their coffee surpluses so the Nestle Company comes up with freeze-dried coffee. Nestle also made Nescafe and introduced it to Switzerland.

Other Interesting Coffee Tidbits

Today the US imports 70 percent of the world's coffee crop. During W.W.II, American soldiers were issued instant Maxwell House coffee in their ration kits. In Italy, Achilles Gaggia perfects his espresso machine. The name Cappuccino comes from the resemblance of its color to the robes of the monks of the Capuchin order. One week before Woodstock, the Manson family murders coffee heiress Abigail Folger as she visits with her friend Sharon Tate in the home of filmmaker Roman Polanski.

Starbuck's Hits the Coffee World

Starbucks opens its first store in Seattle's Pike Place public market in 1971. This creates madness over fresh-roasted whole bean coffee. Coffee finally becomes the world's most popular beverage. More than 450 billion cups are sold each year by 1995. Coffee Is a Global Commodity The importance of coffee in the world economy cannot be overstated. It is one of the most valuable primary products in world trade, in many years second in value only to oil as a source of foreign exchange to developing countries. Its cultivation, processing, trading, transportation and marketing provide employment for millions of people worldwide. Coffee is crucial to the economies and politics of many developing countries; for many of the world's Least Developed Countries, exports of coffee account for a substantial part of their foreign exchange earnings in some cases over 80%. Coffee

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is a traded commodity on major futures and commodity exchanges, most importantly in London and New York. (Source: International Coffee Organization, 2010)

Coffee Today For North Americans, the world's largest consumers, Seattle is the new spiritual home of coffee. The wettest major city in the USA gave birth in the 1970s to a café or 'Latte' culture which swept the USA and has dramatically improved the general quality of the coffee Americans drink. Today, any public place in the USA will have one or more coffee carts, serving a variety of coffees, drinks and snacks. This new found 'coffee culture' has started to spread to the rest of the world. To those countries with great coffee traditions of their own, such as Italy, Germany, and Scandinavia, added new converts to the pleasures of good coffee. Today it is possible to find good coffee in every major city of the world, from London to Sydney to Tokyo; tomorrow the world will drink more and more importantly, better coffee.

The Current Coffee Trends Now in the 21st century we have many different styles, grinds, and flavors of coffee. We have really come a long way even with our coffee making machines. There's no sign of coffee consumption decreasing. Researchers are even finding many health benefits to drinking coffee. Drink and enjoy! (Source: International Coffee Organization, 2010) The market for coffee chain retailers is growing every year. Despite the economic downtown in recent year, coffee shop business has been a bright spot. While hundreds of business in many categories are facing poor sales negatives balance sheet and even bankruptcy, coffee chain continue to show strong growth.

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The coffee culture had been buried deeply in many people life, where coffee is a part of their life. Many of them need cups of coffee every morning to kick of their day. But nowadays coffee does not only served in the morning but all day until midnight where coffee needed as a boost of energy. People tend to walk in to the coffee shops for all kind of cause nowadays. Coffee shops provide comfortable and cozy environment and ambiance for the customers to sit back relax while sipping the hot coffee. Coffee shops are now popular for whether businessmen to socialize, friends to meet up, serving internet or event dating. Many of them prefer to consume on coffee and lighter meal such as sandwich at a reasonable price as compare with heavy meal and more expensive restaurant or alcoholic drinks in pub. Therefore there is huge potential market to be penetrated. The recent growth of the coffee shop industry has been phenomenal. Coffee is now the largest food imported into the USA. More and more eager customers are flocking to coffee shops, standing in line and paying premium prices. There really is gold in those beans if we understand the business. However, there is some "insider strategies" we'll need to implement if we want to cash in on this phenomenal growth business opportunity. If we like the idea of earning significant money while meeting people and being surrounded by great aromas and good coffee, this industry might be our ticket. Although the specialty coffee business looks easy, appearances can be deceiving. There are a few things first time operators MUST know (that their competitors are in no hurry to share with them). This information can be the difference between a "for lease" sign or a "we're hiring and expanding" sign in our coffee shops window 9 months from now. (Source: http://www. Coffeeshopprofits.com- Monday, 19 Apr 2010 )

Coffee in Thailand Coffee has actually been grown and cultivated in Thailand for hundreds of years, but the industry began to change in the 1960s. The reason for this is that Thailand was reported to import eight times more coffee than it was actually exporting. Thailand produces both Robusta and Arabica coffee beans, but 99% of the beans that are

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produced in Thailand are Robusta. Another popular coffee trend in Thailand is bottled coffee, which values at more than 4% of recent instant coffee sales in Thailand. As far as the Thai coffee culture goes, it has been slowly growing since 2006. Within many Thai coffee shops, you will be able to find iced Thai coffee, normally served in a paper cup. This is also something that you can find sold by vendors on the street, and it normally will be strongly brewed with sweet condensed milk. This is a beverage easy to take with you on the go, and if you visit Thailand, it is a staple of the culture.

Figure 2.1: Where coffee produce in Thailand At

present,

Thailand

produces

approximately:

(Source: The Nation, 7 Jan, 2010)

One interesting thing to keep in mind about coffee on the rise in Thailand is that Asian cultures are normally associated with tea drinking over the centuries. Since coffee is becoming popular internationally, there are also many new coffee shops popping up, including Starbucks, all over the globe. This is something directly affecting Asian cultures, especially with the global brand of Starbucks at hand. Many Asians prefer coffee from these commercial chains versus local vendors, especially since they are a newer commodity. Many people feel that the rise of the coffee culture in Thailand came from

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coffee habits being brought back from travels to Europe or America. This also brought new job opportunities to these countries with coffee cultivation and coffee franchises opening.

(Source: http://www.articledashboard.com, 20 Apr 2010)

A few years ago Thailand saw an explosion in coffee consumption; as a result world-class coffee is available almost on every corner in Thailand’s larger cities and chief tourist destinations. Obviously, the world’s big players are now here, but a number of local coffee shop chains have also emerged. Coffee is a significant cash crop for both producing- and consuming-countries. Thailand is the third largest producer in Asia (after Vietnam and Indonesia). Major production is Robusta coffee, of which are produced annually in the South. Sixty percent of the Robusta coffee is exported and the rest is mostly used in domestic production of instant (soluble) coffee. Arabica coffee is produced in the cooler highland areas of the Northern part. It is totally used in roasted and ground coffee for domestic market. Thailand is a coffee nation, ranked fourth (after Vietnam, Indonesia and India) in Asia in annual raw coffee production. (Source: http://www.discoverythailand.com, 20 Apr 2010)

Most of the coffee that you will find in Thailand is brewed, and the only "instant" coffee is normally sold cold in cans. Thai coffee is something delicious that you can easily make within your own home, and it is signified by the addition of sweet cream and spices. Again, it is normally served iced, and it can be mixed with ground cardamom, sweet condensed milk, and even sugar. Try this dark and sweet coffee that is traditional to Thailand, and see for yourself if you like it! There are 3 types of coffee products in Thailand Market: 1. Instant Coffee is produced for an easy way to make coffee cup at home that it is the most consumption because it is very convenience and save. 2. Instant Coffee Canned is Business which produced in can or bottle features. It is the most convenience and the customers concern in prices more quality.

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3.

Beans & Ground / Filter & Sachet business is very popular nowadays. The consumer is the middle class and high class which there are 20% of population of Thailand. Almost of consumers are people who have knowledge about quality and taste of coffees. For premium coffee consumers, the fresh coffee is very popular because they

concern in quality, taste of ground coffee and convenience and comfortable outlet. One of the most popular ways to enjoy coffee in Thailand is cold or iced. Another popular signature of coffee in Thailand is that it is made with chicory, cardamom, or even condensed milk. Coffee is brewed in Thailand in a tall pot with a coffee sock or coffee filter. You can also use the same method with a teapot, Turkish coffee maker, or French Press. The bottom line is that the coffee should result in a rich and flavorful brew that mixes well with sweet condensed milk.

2.2. SITUATION OF INDUSTRY

Industry Size The coffee industry includes 20,000 stores with combined revenue of $11 billion. Approximately 20 million people work in the coffee industry worldwide. The coffee industry is very concentrated at the top and fragmented at the bottom with the top 50 companies taking up to 70% of the sales. Starbucks lead the way with over 16,680 stores worldwide; and Caribou Coffee a distant second, with nearly 500 corporate owned stores and over 100 franchised outlets.

Competition The general coffee industry is well developed and very competitive. A coffee store operator will face competition not only from other coffee shops but also gas stations, quick service and fast food restaurants, convenience stores, donut shops and gourmet food stores. Franchises in the coffee shop industry allow the franchisee to take

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advantage of a recognized name, a tried and tested system and benefit from the efficiencies of the franchisor.

World Consumptions and Sales

It may come as a surprise to many to learn that the most popular beverage around the world is coffee. Every year coffee drinkers around the world drink and access in excess 400,000,000,000 cups. Coffee sales statistics provide vital information for the world economy. When it comes down to all the coffee that is harvested around the world, only 20% of the harvested beans are classed as being high quality or premium. There is no shortage of coffee growers as coffee consumption statistics show throughout the world as more than 45 countries commercially grow the crop. It certainly is a source of providing employment for many individuals throughout the world for example in Brazil over 5 million people work within the coffee industry and the majority of them are working at cultivating and harvesting of over 3 billion coffee plants. Out of all the various ways of being able to consume caffeine in the United States alone 75% of the caffeine consumed comes from coffee. As far back as 1763, Venice showed their appreciation of coffee by having over 200 coffee shops according to coffee sales statistics. Coffee consumption statistics show there is no shortage in Italy of places to find a good coffee brew as they currently have over 200,000 coffee bars and more opening every day. Everyone knows that champagne is the ultimate beverage to France but equal to this is espresso to Italy. Italy considers coffee and espresso one and the same. According to the USDA by the end of December 2008 the forecast was for 2008 and nine that there would probably be about 138.4 million bags of world coffee production. This may seem like a lot but it's down by 2.2 million bags compared to June 2008’s projection of 140.6 million bags For the last quarter of 2008 coffee sales statistics show the exports of coffee bags was down compared to the third quarter was a 1.36 decrease but compared with a year ago for the same quarter the

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exports were up by 4.9% US imports the last quarter of 2008 there was a decrease in imports by 6% for the United States and for pricing the average price per pound of roasting ground coffee went down by 10% by $.10 Naturally, coffee statistics vary greatly from country to country some being more avid consumers than others. It doesn’t matter which country sells the most or the least it’s important to the economy to know where the world market stands regarding this commodity when it provides such a source of livelihood and employment in every coffee growing country. (Source: http://www.coffeebeansroasting.com, Tuesday, 08 September 2009)

Fingure2.2: World Coffee Consumption Statistic in year 2008

Coffee is consumed the most in the US. And Japan is ranked in 3rd place in coffee consumption. Finland has the highest consumption rate per person followed by Norlway and North American countries.In terms of individual coffee consumption, Japan is ranked in 10th place. (Source: http://www.cfc21.com, 2008)

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Figure 2.3: World Coffee Consumption in year 2009

(Source: http://www.whatsforenglish.com, 2009)

American Coffee Consumption Even in the recent economic climates, the coffee industry has proved to be very resilient. This is seen in the National Coffee Association of U.S.A.’s 2009 National Coffee Drinking Trends market-research survey. While many business are noting a downturn in consumers, daily consumption of coffee beverages among consumers remained consistent in 2009 with 54% of the overall American adult population partaking. This information tells us that even through difficult economic times; people of all ages are still consuming coffee.

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Data from the Coffee Research Organization and the National Small Business Development Support Center Clearinghouse show that coffee is the most popular beverage in the world, with more than 400 billion cups consumed per day. Americans alone, consume 400 million cups of coffee per day making the United States the leading consumer of coffee in the world. That is translated into four and a half thousand cups of coffee per second. Below is a graph for the consumption of coffee in America for the years 2006, 2007 and 2008:

Figre 2.4: Coffee Consumption in America

Age

‘06

‘07

‘08

18 – 24

31%

37%

26%

25 – 39

47%

44%

47%

40 – 59

59%

61%

61%

60 +

73%

74%

71%

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Asian Consumption According to DataMonitor, coffee consumption in Asia is predicted to increase 31.59 % in the decade from 2003-2013, an average of 2.78% per year, outstripping tea, which rose 24.20% over the same time period or 2.19% a year. Of course, tea is still the preferred beverage with total consumption more than

three

times

that

of

coffee

(US$14,361.1 million for tea versus US$4,637.2 million for coffee) in 2008 Coffee consumption has not yet attained its saturation level. In the 70's, not even 50% of households consumed coffee, imbibing tea as their main beverage. Now, 60% of the Japanese households consume coffee; 40% consume tea. The potential for growth is still there. Japan has become a major consumer of coffee and it seems this is one healthy market for growth. While canned coffee first appeared on the shelves, originated by Ueshima Coffee Corp.; almost every country worldwide is introducing iced and canned coffees in the hopes that they may also enjoy Japan's success. I think that we are all well aware that for the American culture, coffee drinking is key. Many of the coffee drinking history and authenticity that we know today actually came from Europe, and just recently, Asia is actually catching on to all of the trends. Right now currently, Indonesia, China, and the Philippines are actually some of the biggest coffee drinkers in all of Asia. In China, for example, roughly 1/3 of all adults are drinking coffee in corner coffeehouses like Starbucks. The motivation behind the Asian coffee culture movement is similar to that of the US in that most individuals are looking to spend time drinking coffee as a social interaction with their groups of friends. It has been seen in the past that most Asian countries lean toward tea drinking versus coffee drinking, but Starbucks seems to be on the rise overseas and is drawing in more and more Asians who are turning toward the love of coffee. When you compare

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tastes and flavor profiles, Asians are actually drinking a lighter roast than their Western counterparts and liking a sweeter taste. Cappuccinos are seen being ordered at least a third of the time in Hong Kong, with a Mocha being the runner up in second place. As a third option, most coffee drinkers in Asia are drinking regular coffee. It seems that most Asian coffee drinkers are actually partial to corporate chains like Starbucks than the other local coffee houses that have sprung up. Two of the most popular brands in the Philippines to date are Starbucks and Seattle's Best, and some of this is speculated in the fact that many Asians see celebrities in the media drinking from Starbucks. I'm sure Starbucks is saying thank you! One of the main reasons that Asian coffee culture has sprung up so quickly is because many Asians were actually bringing back these ideas from visits to Europe and America. It is obvious that America and Europe both have extremely strong coffee cultures, and Asia is coming in a close second in having more and more coffee drinkers. Currently, there are still many Asians who are making instant coffee, though there are even more coffee houses and cafés that are beginning to open their doors for business all over the region. I am happy to note that the love and taste that we all have for coffee is something that is catching on worldwide as a notable fact and point of reference. Coffee drinking is more than just using the caffeine to stay awake, but it is something that is specific to each cultural taste and flavor profile, and it is amazing to learn how it develops within each country. I give props to Asia for taking the time to implement coffee styles and habits into their own countries, rivaling that of the American way. Coffee drinking is something that can be celebrated and shared due to the fact it has a rich and antiquated history that we can all learn from and share worldwide. (Source: http://www.e-importz.com, 2010)

Production and Industry Coffee is one of the world's more important primary commodities. The coffee producing belt includes approximately 70 countries worldwide and employs approximately 20 million people. Information from the United States Department of Agriculture shows us that the world coffee production in 2008/2009 is forecast at a

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record 138.4 million bags or 132.276 pounds.

The Brazil Coffee House, for example, imports only select naturally processed green coffee exclusively from growers in the Cerrado and South Minas region of Brazil. The Brazil Coffee House franchises the option of owning and operating one of these unique plantation style coffee stores.

ASEAN Coffee Production

Association of South East Asian Nations (ASEAN) countries produce – and avidly consume – an astonishing variety of coffees. Between them Vietnam, Indonesia, Thailand and the Philippines produce about 18% of the world’s coffee, accounting for about 22% of global coffee exports. Malaysia, Laos and Myanmar produce some highly acclaimed arabica beans favored by experts and connoisseurs, while Singapore has become a coffee exporting hub and, thanks to its wide ethnic diversity, hosts pretty much every coffee culture and bean type you can think of in its many teeming, fragrant coffee shops. Coffee was originally introduced to much of the region by European colonizers. The French brought it to Vietnam, Laos and Cambodia, the Dutch to Indonesia, the Spanish to the Philippines and the British to Malaysia and Myanmar. In all these instances, it appears that early colonizers originally planted coffee plants for personal use, a hobby that quickly grew into a major international trade rivaling that of tea in its day. A parallel domestic trade flourished alongside the success of the regional coffee plantations as more and more local cultures adopted the fragrant beans into their own lives as it became available. Vietnam and Indonesia (12.6% and 4.59% of global production respectively) are the two largest coffee producers in ASEAN, followed by Thailand and the Philippines (0.65% and 0.55%). Malaysia, Cambodia, Laos and Myanmar also produce unique

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coffees, some of which are exported. (Source: http://www.teacoffeeasia.com, 2010)

Popularity of Fair-Trade and Organic Current buzz words in the coffee industry are ‘organic’, ‘shade grown’, ‘sustainable and fair-trade certified’. More and more Americans care about the conditions of the people who produce the products that they buy and the dangers to the environment. According to the Organic Trade association, the organic coffee market is now a billion dollar industry. To accommodate this trend, more coffee franchises have licensing agreements with Transfair to offer Fair Trade Certified coffee. Kelly’s Coffee and Fudge Factory Franchises offer a range of organic and fair-trade coffees and specialty espresso based drinks. Seattle's Best Coffee offers a premium assortment of Fair Trade Certified and certified organic coffees. They support Fair Trade, organic and responsible practices. Dazbog Coffee Franchising LLC also offers a line Certified Organic Dazbog Coffee. Dazbog Coffee Franchising LLC is ranked at 256 in the top 500 franchises for 2008 in the USA by entrepreneur magazine. That is up from a ranking of 349 for the year before. “Twenty years ago I never would have thought the industry would get this big” says Rick Kowalski, vice president of operations for “It’s a Grind Coffee House” (IAG Coffee Franchise, LLC). “The direction we’re going in now is [toward] more organic coffees as well as coffees where we develop a direct relationship with the growers. We get involved with their ability to improve their quality of life. We’re helping them develop clean water sources. That obviously helps everybody and the environment included” IAG Coffee Franchise, LLC was recently ranked in the top 500 franchises in the USA by Entrepreneur magazine for 2008. They offer franchises for the low initial investment fee of $25,000 - $36,000. Starbucks, the world’s biggest chain of coffee stores, is one of the largest buyers of Fair Trade Certified coffee. In 2009, they plan to double their purchases of Fair Trade Certified coffee to 40 million pounds, making the company the largest purchaser

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of Fair Trade Certified coffee in the world. All of the espresso-based coffee used in its European stores is Fair trade certified.

Key terms for Fair-trade and Organic Coffee Market

•

Organic coffee is grown without pesticides, herbicides or chemical fertilizers. For coffee to be sold as certified organic in the United States, it must be produced in accordance with U.S. standards for organic production and certified by an agency accredited by the U.S.

•

Sustainability addresses the environment as well as social and economic responsibilities.

•

Shade grown coffee is grown on certain plantations where bushes can be integrated into the rainforest. This preserves bio-diversity as the coffee is not grown in rows in cleared plots.

•

Fair-trade certified coffee means that small scale farmers are getting a fair price for their produce and are not being under cut by bigger corporations.

Starbucks and Seattle’s Best Coffee, Franchise:

Starbucks does not offer franchises. In North America, the majority of stores are Company-operated. As an exception, Starbucks may enter into licensing arrangements with companies who provide access to real estate which would otherwise be unavailable such as airport locations, national grocery chains, college and university campuses and hospitals. Seattle's Best Coffee is a subsidiary of Starbucks and offers franchises to operate a Seattle’s Best Coffee Café and/or Kiosk. The estimated initial investment for a single unit franchise is between $164,500 and $317,000. As of May 2008 Seattle’s Best Coffee has more than 540 cafes in the U.S. and 86 Seattle’s Best Coffee Express

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espresso bars. In addition, Seattle’s Best Coffee is available across the U.S. in supermarkets and at more than 3,900 foodservice locations, such as college campuses, restaurants, hotels and cruise lines. (Source: Franchise Direct is a member of the IFA, 2010)

Coffee Business in Thailand During the economic depression and fragile political stability of 2009, all businesses suffered setbacks and many jobs were lost, even the coffee business. The business growth was quite small when compared to the past 5 years. This could clearly be seen from the smaller number of orders from hotels, restaurants, and food courts, plus the regular customers were more conscious about their spending and most of them started to reduce their coffee consumption. The businesses had to adjust their marketing strategies to handle the situation and attract more customers. The strategies like membership and promotions make the customers feel that their cup of coffee are more valuable, thus, more enjoyable. After all, what they might need is a cup of excellent coffee as the reward during the hard time. Even though there are some setbacks in Thai coffee business, it is one of the businesses that are moving forward. It helps people taste more variety of coffee and makes people realize about what they choose to drink. The western style coffee like Espresso, Latte, Cappuccino, and coffee art is gaining its popularity in Thailand, and cafés are being a part of city life as new café pops up every day. These cafés become the third home, other than the offi ce and condo, for city people, and push the coffee business this far, so it is interesting to see where this high potential business will go on.

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Figure 2.5: The challenges for Thai coffee business in 2010 Expected Demand for Thai Coffee graph

60000 50000 Tons

40000 30000 20000

Produce

10000

coffee in demand

0 47/48

48/49

49/50

50/51

51/52

Year Source: Office of Agricultural Economics and Entrepeneurs

From the graph, we can see that there is an increase in demand from the consumers. On the other hand, the businesses do not have the long term development to produce enough coffee, so Thailand has to import coffee from oversea to match coffee demand. A factor that may cause this lack in supply may be from the high coffee produce that flooded the market and caused the drop in coffee price a couple of years ago. This price drop infl uenced the farmers to turn to other plants, and the government policy to reduced coffee plantation in southern Thailand to produce more profi table plantssuch as palm and rubber tree. Importing high volume of coffee from oversea slows the development of Thai coffee and makes Thai coffee more expensive. However, we still have to import the oversea coffee because we have to consider the domestic demands as the main factor. Mr. Weera Somboonwejchakarn, the president of VPP Progressive Ltd., and the owner of Café D’Oro said, “There is a small limitation in Thai coffee production that

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makes the world market not interested in it. We used to export 5% of total world coffee 10 years ago, but the produce in southern Thailand dropped, so we have to import because the domestic supply doesn’t suffi ce the demand. And I don’t think there is enough motivation for Thai coffee to compete in the world market.” Rather than the production problem, Thai coffee also faces with the challenge in the development of manufacturing processes. The quality of the coffee itself is good but it lacks the production control system for planting the coffee trees, keeping the product quality standard (GAT), pushing organic farming, to adding value to the product. Therefore, it is important to make farmers realize that produce standard is more important than the sale made. AFTA ASEAN Free Trade Area (AFTA) is aimed to attract foreign investment and increase the potential of ASEAN products in world market by eliminating the taxes between members. This can reduce the development gap and increases trades between countries. However, the produces that are sensitive to tax reduction will be exempted until 2010, and then the tax will be set to 0-5%. Thai government is expected to reduce the coffee import tax to 5% and this will widely affect Thai coffee market. A business can choose to introduce cheap, low quality coffee to the market, or it can improve its product to premium grade by importing quality raw ingredients to blend in and increase its price. Mr. Autsawin Kairasmi, CEO of Banrie Coffee, said “The free trade will open up many opportunities for businesses. They can choose to keep the same price and increase the value in other aspects such as improving the services and decorate the café to create more relaxing atmosphere. In addition, they can introduce new cheaper products like light, medium, and fancy coffee”. “The competition in coffee market is quite high. We need to develop and adjust our products all the time to satisfy the customers as much as we can, including product variety, and control the cost without losing the quality while maintaining the same price”, Ms. Parichart Greenwood, marketing manager of GFA Cooperation (Thailand) that own Coffee World Restaurant and Café franchise, also share the similar opinion.

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“In the coffee wise developed countries, they will focus on the qualityof coffee and import many different coffee beans to blend. They can create the best coffee by using the best ingredients without having to worry about import tax. In contrast, we still have import tax to worry about. The cost of importing green beans would decrease if the free trade area is in place, and we can improve our coffee in an acceptable price to give the customers the best” Mr. Witoon Sila-On, managing director of Bluecup coffee, added. However, it would be diffi cult for the business to compete in the price war, because AFTA will bring in more competition while Thai labour and coffee cost are still high when comparing to the neighbours. The AFTA will bring in cheaper coffee with the same quality, and would push Thai coffee to evolve from community grade to premium grade coffee. Mr. Meechai Amornpattanakul, chairman of Thai Barista Association and K2 executive said, "The farmers will be directly affected if they don’t improve the produce quality. This improvement can be carried out easier if the farmers change their point of view and discipline, because Thailand already have better public utility structure and supporting institutes such as the Department of Agriculture and The Doi Tung Royal Project". AFTA also infl uence foreign coffee chain to invest because the raw ingredient import cost is lower. The advantages in quality and international brand awareness will be an excellent factor to attract foreign and domestic customers. This is another factor to stress out the importance in improving the quality of Thai coffee to get the consumer’s trust. On the other hand, the consumers have to adapt themselves to the changes as well. The consumers must take interest in where the coffee bean comes from, not just worry about the caffeine level, because AFTA will allow low quality foreign coffee to come in. These coffees may be kept wrongly and may contain OTA (Ochratoxin A) which can cause cancer if consume.

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Government policy, help and aid

The government should introduce clear policy to protect the consumers, and this policy must focus on the safety of the consumers from OTA. For example, set the limitation of defected coffee beans and contamination percentage in the imported coffee. An agency should be introduced to inspect the low quality coffee from other countries. This type of agency will set up the standards for businesses to comply with and push our development to match with the world standard. Moreover, the government should support and set up coffee farmer association to keep the coffee standard, induce cooperation between farmers, and build up the negotiation power directly to the farmers. “If the government has the fund to set up the local coffee farmer association and help with the logistic, the farmers will be more effi cient and create better produces. For example, the government can help with the produce transportation and fuel cost in the northern mountainous areas where a lot of coffee is grown. These areas are hard to access and have high transportation cost which the farmers can’t afford, and sometimes the traders push the price down too far. But with the government help, the farmers can transport their produces to the roasting facility and increase their income” Mr. Prawit Jitnarapong, Beantrepreneur and Black Canyon CEO suggested. Ms. Sumolpin Chotikapookana, marketing and communication director of Starbucks Coffee (Thailand) also said, “It is vital to see the importance in the farmers and the coffee farmer community in order to get enough quality produces to suffi ce the consumer’s demand. Starbucks has the project to support the northern Thai Arabica coffee farmers under the name Muan Jaii Blend. We buy the produce at the higher than market price, and some income from Muan Jaii coffee will go back to the farmers” Rather than rolling out the policy to protect the consumers and supporting the manufacturing structure. “The government units like Doi Kum and Doi Tung Royal Projects should represent Thai coffee in a competition to get the foreign interest in our coffee, because Thai coffees in world stage are, currently, private brands only”, Mr. Autsawin added. Even though we can’t compete in the world market in the sense of product quantity because there is not much suitable terrain for coffee plantation, but it is

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still important to develop Thai coffee brand. We can push our coffee beans to compete in the quality coffee market, especially the Arabica coffee beans grown in the northern part of Thailand. Mr. Meechai also emphasized that "This is the point that must be changed. The government must not focus on the quantity of the produce, but focus on the profi t that will go to the farmers instead. Farmers can produce large quantity of coffee beans and still make a loss, but farmers can produce fewer coffee beans and make a profi t if they focus on the quality. When we think about quality, we won’t take quantity into much consideration, and the price will increase together with the quality" The government should not consider coffee to be just a normal agricultural produce because coffee has special characteristics. It blendsin with people lifestyle and we can use the origin of the coffee to promote marketing like wine, which the origin and the manufacturedyear are the factors that consumers pay special attention to. This is becausethe coffee that grows in different area and time will offer its own unique characteristics, unlike fruits where we can only say whichcountry it is from. Hence, Thai coffee will have its own uniqueness to offer to the market and develop the lasting coffee industry here if the government is ready to support. In conclusion, the government needs to have a clear policy to lead the coffee business, and every department such as the Ministry of Agriculture, Ministry of Commerce, and Ministry of Industry must work together. The cooperation would ensure the effi ciency of all processes to develop Thai coffee and the private businesses won’t have to compete in the market by themselves like they are nowadays.

Thai Coffee Market Direction in 2010

Despite all the setbacks and challenges, most of the entrepreneur believes that this year the coffee business will grow more than last year. There are some indications that the worst of the economic crisis had passed. Some companies in the auto industry and property industry are bouncing back and paid out bonuses at the end of last year,

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so the food industry is expected to catch on to the recovery as well. “I believe that all the opportunities for coffee business to grow are still open. Thailand has good produce and manufacturing processes, plus our café management is as good as the foreign coffee chains. The investment from the foreign chains would not scare us. If we have strong principle, we can keep our customers and lead Thai coffee businesses to grow”, Mr. Weeradej stated. Ms. Parichart commented that, “The competition this year is expected to rise with the expansion in some segments of the market like the instant coffee and coffee for health conscious consumers. This causes premium coffeebusiness to concentrate more in marketing, and fi nd new strategies to effectively reach our target customers and increase the market share”. This growth expectation infl uence the coffee chains to plan their expansion and started the location war, especially in the petrol station where the cost is lower than shopping mall and the café can open for 24 hours. The petrol stations in focus are the ones on main roads to reach large number of customers. “The shopping malls are slowing down their expansion so Black Canyon turns to petrol stations, and now has more than 40 petrol station cafes. These cafés attract customers who don’t like shopping malls to come and try new coffee, which is the strategy to give the target market the easier way to get to our coffee”, Mr. Prawit added. Beside the plan to open new cafés, many coffee chains plan to expand their target customers to attract the 18-25 years old customers. Previously, the only target customers are the working adults, but now the business sees the potential in the young adults as their lifestyles involve coffee every day. For instance, they may want a morning coffeebefore class, or a cup of coffee at night to keep them up and study longer. Coffee chain like Bluecup changes its logo and packages to look more contemporary, while Café D’Oro changes the café decorations and setup trips and photo activities to get the new target customers involvement as the strategy for attracting the new customers. The overall of Thai coffee market in this year seems to develop especially in the premium segment, despite the large instant coffee segment value which is double the premium market value, but doesn’t gain much growth. The growth in premium segment would be the result of the consumer behavior that tends quality coffee and western style coffee, plus factors that will push Thai coffee to be premium product.

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Mr. Witoon said “Most of the cafés use roasted ground coffee beans as they are, obviously, better than instant coffee, so it is a growing market. It is up to Thai people how much they are willing to spend on a cup of coffee. There are many grades of coffee to choose from and the consumers are starting to improve their knowledge about coffee and separate the taste”

Important Adjustment in Thai Coffee

There will be many factors that affect Thai coffee market in 2010 so we need to adjust to these changes, “We can focus on the superior freshness over imported coffee because imported coffee needs around 45 days to be shipped here and have the “best before” age of 2 years. In contrast, Thai coffee is transported straight from northern Thailand, measure the m oistness, and roast. The whole process takes about 25 days at Banrie Coffee, so the difference in freshness is a lot and fresher coffee means more aroma and better taste” , Mr. Autsawin explained. In addition to the freshness advantage, Thai cafés can adjust to consumer’s taste and trend quicker than the foreign coffee chains which need to refer to the policy from oversea headquarter. For example, we can observe the changes in consumer behavior or we can decorate the café to suit the target customers. If we use these advantages together with market strategies, it would not be diffi cult for Thai market to compete in the world stage. Mr. Meechai commented that, “Thai coffee has the potential to present itself as quality coffee to the world. We only need to add marketing and create the brand, because Thailand is well-known for its services. We can compete in the world with our smiles and fresh ingredients, or sell Thai culture together with the coffee” Ms. Sumolpin expressed Starbucks’ view as, “Thai coffee market is very competitive and it is important for the customers to have faith in our brand. The customers now are more careful and smarter at getting the most for their money. Although we have the advantage on brand awareness, but if we don’t provide good product and service for your money, then we fail to respond to your need”

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These are some anticipations from important figures in Thai coffee business, and only time can tell if the business can go in the expected direction. Nevertheless, Thai coffee had been growing all these years and the Coffee T&I team thinks that there are many opportunities for Thai coffee to develop and Thai cafés to grow. We can see this in big cities where the existing cafés expanded and new cafés are opening. This is a clear sign telling us that Thai coffee market is moving forward and will not stop growing. (Source: Coffee tea & I, Bimonthly Magazine Vol. 14 January – February 2010)

Latte Art

Latte art by definition is “milk art.” When it was first introduced, the idea behind it was to create the ultimate experience for the consumer. Rich espresso, sweet milk, finished off with a rosette or heart. The design intrigued the consumer while the taste kept them coming back day after day. But today many baristas and cafes are only getting half the picture. If you look around the industry today, you’ll notice a disturbing trend: latte art is being cheapened by good latte art. In fact, the baristas try to improve themselves and try new things because customers love seeing the growth in their favorite barista and watching the transformation. Instead, latte art is being cheapened by baristas putting a heart on a drink that has an over extracted shot, or milk that is too hot.

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Figure 2.6: Latte Art

(Source: Barista Magazine Online; October – November 2009 - 06 Issue, http://www.baristamagazine.com)

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Figure 2.7: Thai Coffee Consumption Comparing with Japan and America

100 90 80 70 60 50 40 30 20 10 0 Thailand

Japan

America

A CUP/ CAPITA/ YEAR

It shows that Thai people drink coffee more than 10 years ago that they consumed only 50 cups per capita for a year. (Source: www.kasikornresearch.com, 2009)

Behavioral Consumer From the research found that Thai coffee consumption is increased for each year, considering from the sale increasing of instant coffee canned. There are 3 mains for consumption: 1. Working and Read a book 2.

Good Taste

3. Thirsty

(23%) (15%)

(45%)

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So the quality, price and taste is important for consumer.

There are four types of coffee shops in Thailand: The first, coffee shop is foreign franchises such as Starbucks Coffee which is the biggest foreign franchise in Thailand, Suzuki Coffee, Gloria fasdf Jean’s Coffee and Au Bon Pain Coffee. Starbucks Coffee Thailand is a wholly owned subsidiary of Starbucks Corporation and it is very high consumption in Thailand. Starbucks Coffee Thailand was founded with the idea of bringing the Starbucks Experience to Thai consumers. Since the opening of the first store on July 17, 1998 at Central Chidlom, the company has expanded throughout the country (Pattaya, Chiang Mai, Samui, Phuket, Huahin, Nongkhai, Korat, Krabi, Rayong, and KonKaen). Figure 2.8: Starbucks Logo and Store

(Source: www.starbucks.co.th, 2010)

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Starbucks is huge in Thailand with constant rate of expansion As of April 2010, Starbucks has 133 stores in Thailand. STARBUCKS is a worldwide phenomenon. While traveling in Thailand, In particular- Bangkok, the capitals of Thailand respectively, are top heavy with Starbucks cafés. It seemed that everywhere – in fancy shopping centers and on the ground floor of large high-rise office buildings - there are a Starbucks. According to a 2007 census, Thailand had 132 Starbuck cafes, with Bangkok having the lion’s share at 72. While Black Canyon is major competitor to Starbucks in Thailand; In Thailand, the service was very friendly but most of the Starbuck employees had limited facility with English. They offered free WIFI and the customers can get discount rate for 10 baht when they bring their own Starbuck glasses to buy coffee at the stores. The clientele at a typical Starbucks café was a mix of local business executives and white-collar workers, the young University crowd with deep pockets along with tourists and expats. For Thais, having a Cappuccino, an Iced Caramel Macchiato or any one those fancy designer coffee drinks represents a real splurge as the prices are almost the same as in the United States. Please consider that the standard of living and the average salary is considerably higher in the USA, and the cost of one large cappuccino ($3.00 -3.40USD) will buy you a decent dinner at a local restaurant in Bangkok. Apparently, having coffee at Starbucks confers a measure of status with the locals. Yes, Starbucks is huge in Thailand - such is the way of the World. (Source: http://www.calypsoislandtours.com, 2010)

Starbuck Main Products and Services At local Starbucks, they serve an incredible variety of handcrafted coffee & espresso beverages. Some use time-honored recipes. Some are new creations straight from their kitchens. All are delicious. This is just a taste of what’s in store for customers.

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Espresso This is the very essence of coffee, in its most concentrated form. Starbucks® espresso is rich and wonderfully caramel-like. Caffè Americano Despite the name, this is actually a European way to enjoy coffee: espresso with hot water. Caffè Latte The traditional classic – steamed milk and espresso, lightly topped with foam. Try it with a syrup of your choice (like vanilla, caramel or almond) for a special treat. Cappuccino Honoring a tradition that goes back generations, our skilled baristas carefully pour hand-foamed milk over espresso. Caffè Mocha Delicious Starbucks® mocha chocolate, espresso, steamed milk and whipped cream. No cold or sad day can resist its power. Caramel Macchiato A Starbucks original. Foamed milk marked with espresso and vanilla, then topped with a distinctive caramel pattern. Sweet, buttery and intense. Brewed Coffee Every day, we serve one of our exquisite whole bean selections as fresh, hot coffee. Signature blends, exotic country varieties, and decaf too. Starbucks Card A Starbucks store in your wallet! The Starbucks Card offers you the convenience of treating yourself – or someone else – to your favorite Starbucks beverages, food or merchandise, with one quick and easy payment method. It's the perfect gift for holidays, birthdays, or just to say thanks. Starbucks Card is welcome in so many places. Definitely all Starbucks coffee branches in Thailand. And the card is

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also welcome in Starbucks Hong Kong, UK, Australia, Greece, Hawaii and more than 5,500 stores in North America and Canada. (Source: www.starbucks.co.th, 2010)

Price of Starbucks compared to Thai coffee shops The price of a Starbucks coffee, hot latte, or an iced drink in Bangkok is comparable to Starbucks in the US. Now, think about that. The average salary in Thailand is around 240 baht a day (or $7 a day). And a Starbucks latte is $3.40, half a day's salary for a cup of coffee. Needless to say, the only people who frequent Starbucks in Bangkok are the hi-so (high society types), western, Japanese, Korean tourists, or middle-class or hi-so college students, who buy one coffee and sit there all day. The Thai coffee shops, on the other hand, unless they're chain coffee shops like Coffee World and True Coffee are much cheaper than Starbucks and the coffee tastes the same, or usually better. In a very nice, independent Thai coffee shop, you can get a hot latte for 55 baht (or $1.60), more than half the price of a latte at Starbucks in Bangkok. Iced coffee drinks are between 35 and 55 baht ($1 to $1.60) depending on the coffee shop and, in my opinion, are just as delicious as Starbucks iced drinks. Many of the Thai coffee shops now do iced-blended type drinks too at a fraction of the price of the $3.50-$4 Starbucks frappuccinos. (Source: http://www.associatedcontent.com, 2010)

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Figure 2.9: Au Bon Pain Logo and Store

(Source:http://www.aubonpainthailand.com, 2010)

Figure 2.10: Suzuki Logo and Store

(Source: http://www.suzukicoffee.com, 2010)

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Figure 2.11: Gloria Jean’s Coffees Logo and Store

(Source: http://www.gloriajeanscoffees.co.th, 2010) The Second, foreign investors who built new brand coffee shop in Thailand are Coffee world, Coffee Beans and etc. Coffee World is famous in this type of industry and it is the third rank of favorite coffee shop that Thai customers want to drink coffee in their store nowadays it has 60 stores in Thailand; in 1997 British investor was launched Coffee World to offer consumer in Thailand which the first branch at ABAC University. The target market is the students who have high income to the products, then it expanded to Silom Road to serve the businessmen and officers and expanding to Central, BigC and Lotus. Coffee World operates a variety of outlets, ranging from large outlets of up to 160sqm to small kiosks of 25sqm.The outlets are designed to give the look and feel of luxurious and comfortable living rooms. Coffee World constantly innovates by frequently introducing new food and beverage creations. They use both Thai Coffee and import coffee and the prices are between 45 – 65 Baht.

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Products and Services Coffee World is a premium specialty coffee house that offers a comprehensive range of hot and iced coffees with fresh complementary foods such as waffles, sandwiches and our signature cakes, muffins and cookies. The company places a lot of emphasis on picking and roasting the finest Arabica beans to create rich brews prepared by our highly trained baristas (professional coffee makers). To prepare its iced and iceblended coffees we favor the use of fresh ingredients, instead of using pre-mixes. The internet WIFI is provided. Figure 2.12: Coffee World Logo and Store

(Source: http://www.coffeeworld.com, 2010)

(Source:http://coffeeworld.com, 2010)

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Figure 2.13: The Coffee Bean Logo and Srote

(Source:http://coffeebean.com, 2010 ) The Third, coffee shops own by Thai entrepreneurs or Thai brand name and they also expand to the franchise such as Black Canyon Coffee, 94 Coffee, The Coffee Maker, Wawee Coffee, Doitung Coffee, Doi Chang Coffee and Etc. There are small entrepreneurs to big entrepreneurs. The most successful in this type is Black Can You Coffee that is the largest and most well known operator of franchised coffee houses in Thailand. The management and every employee have as their goal to continually develop and improve the Black Canyon Coffee brand. Their target markets are officer and family because they try to be distinctive from competitors by serving foods. Black Canyon now has more than 190 branches all around Thailand. Black Canyon also operates kiosks under the "Black Canyon X'press" name in several stations of Bangkok's elevated commuter train system (BTS Skytrain). Each year, Black Canyon serves more than one million cups of coffee to Thais and foreigners visiting Thailand, who appreciate the flavor and aroma of real coffee, and keep coming back for more.

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Products and Services Black Canyon's excellent reputation is based on serving coffees of the highest quality, with the best aroma and taste, made from 100% fresh coffee beans imported from around the world, as well as those grown in Thailand under Royal patronage. Black Canyon coffee houses also serve an extensive food menu. The menu combines Western dishes such as soups, salads, pasta and French fries with Eastern favorites like fried rice and noodles; and Thai specialties tom yum, som-tam, etc. A unique feature of the menu are the "fusion" dishes which combine East and West, examples of which are spaghetti with green curry sauce, fusilli noodles in tom yum soup, spaghetti with red panang shrimp sauce, etc. The internet WiFi is provided.

Figure 2.14: Black Canyon Logo and Store

(Source: http://blackcanyoncoffee.com, 2010)

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Figure 2.15: 94 Coffee Logo and Store

(Source: www.94coffee.com,2010)

Finger 2.16: The Coffee Maker Logo and Store

(Source: http://www.thecoffeemaker.co.th, 2010)

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The forth that the coffee shop was launched by Thai entrepreneurs and they cooperate with gas station in Thailand which they have contracts between coffee store entrepreneurs and gas stations company such as Baan Rai Coffee and Café Amezon which have contracts with PTT or Public Company Limited; The Group's principal activity is the operation of petroleum business and it is big and well known company in Thailand. Ban Rai coffee store contracted with PTT for many years and there are 70 branches with gas station; many people feel familiar when they visit PTT gas station but now their businesses are terminated coffee store’s contract with PTT and political problem with economics crisis so they close all coffee stores. Nowadays PTT opens Café Amazon Premium which launch by PTT that they sell franchise for pump station dealers and other people who want to do the coffee stores business.

Figure 2.17: Amazon Coffee Logo and Store

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(Source: http://www.oknation.net, 2010)

Coffee Business in Phuke Nowadays there are many coffee entrepreneurs in Phuket Provice because it is the famous tourist destination of Thailand which there are famous foreign brand names, famous Thai brand name, local famous brand names and regular shops suck as Starbucks, Black Canyon, Boncafe, Tiny, Kopi De Phuket, China Inn Café and Restaurant, Glastnost and Phuket 346. They provide many kinds of coffee and cake; it depends on menus which each shop are created that there are also different style of decoration. The most famous local coffee shop is Kopi De Phuket because it is original Phuket Coffee Style. Kopi de Phuket, which opened in 2001, is halfway between" The Books" and the Tourism Authority of Thailand office on Phuket Rd. It is in fact the second Kopi; the first is a tiny coffee shop in the On On Hotel on Phang Nga Rd that has been open since 1999. The new Kopi remains at heart a coffee house, a place for people to chat and indulge in traditional Phuket-style drinks such as the black-as-hell kopi O brewed to a generations-old and, naturally, secret recipe from beans grown in Northern Thailand. Kopi de Phuket also offers a range of juices and smoothies but the real selling point for me is the food because there are vaiety of food for customers which are own created, including traditional Phuketain style and etcs. The atmosphere at Kopi de Phuket is relaxed, the range of refreshments is intriguing, it's cheap and it offers an insight into a culture that seemed, until the shop opened, to have all but vanished. Best of all, Kopi de Phuket is not Starbucks, nor part of any other coffee shop franchise business. What better compliment could there be?

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Figure 2.18: Kopi De Phuket Store

(Source: http://kopiphuket.com, 2010)

Actually there are many coffee stores in Phuket but they are in downtown or other place of Phuket but OKey Coffee will open at Karon Beach that the beach has low competiotors of premium coffee store so this business is very interesting. (Source: Survey by asking local people and restaurant in Karon beach by Mr.Pattarapong; researcher, 17 Apr 2010)

Phuket International Hospitality Show 2009 September 24-26, 2009; Royal Phuket Marina International Ehxibition & Conference Center Phuket, Thailan

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The Phuket International Hospitality Show is the first International Exhibition of Food & Drink, Hotel, Bakery, Restaurant & Food service Equipment, Supplies & Services for the hospitality industry in Phuket and nearby provinces of Krabi (Ko Phi Phi and Ko Lanta), Phang Nga (Ko Yao) and Surat Thani (Ko Samui), and may attract trade from Bangkok. The show was held on September 24-26, 2009 at the Royal Phuket Marina International Exhibition & Conference Center in the heart of Phuket, Asia’s leading tourist destination. A three-day series of lectures and seminars were on the agenda as well targeting relevant hotel and restaurant topics. Even the fi rst time of international hospitality show that was held in Phuket but the professional show organizer made its success. The show was arranged to help the people in the hospitality industries to realize what the coming trends and comprehend what the new challenges that they need to prepare themselves to be in the forefront of the business. All of the exhibitors and visitors said that they will defi nitely plan to participate next year. Figure 2.19: Phuket International Hospitality Show 2009

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(Source: Coffee tea & I, Bimonthly Magazine Vol. 13 November – December 2009)

2.3 Product and Service There are main 3 types of products that almost of coffee stores are provided. Beverages:

Hot Drinks Figure 2.20: Hot Drink

There are 5 international main coffees brewing: -

Espresso concentrated coffee beverage brewed by forcing hot water under pressure through finely ground coffee.

-

Cappuecino is an Italian coffee drink prepared with espresso, hot milk, and steamed-milk foam.

-

Ristretto is a very "short" shot of espresso coffee.

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-

Mocca is a variant of a caffè latte. Like a latte, it is typically one third espresso and two thirds steamed milk, but a portion of chocolate is added.

-

Caffee Latte is a coffee drink made with espresso and steamed milk.

Cold Drinks Figure 2.21: Cold Drinks

Coffee - Based

Soft drinks & Smoothies

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(Source: http://www.boncafe.co.th, 2010)

Cake & Cookies: Almost of coffee store provide cake and cookies for their customers. Figure 2.22: Cake & Cookies:

(Source: http://cake2thailand.com, 2010)

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Food: Some of coffee store provide foods which are international and national foods. Figure 2.23: Food

(Source: http://my-recipes-taste-good.com, 2010)

Service: Most of premium coffee stores provide Wi-Fi to customers to play internets. 2.4 Vision To be, and be recognized as, the best premium coffee shop to enjoy and relax near the beach and expanding a new branch at other beach in Phuket within 3 years, as well .

as

serve

variety

of

good

quality

coffee

cups

and

service

mind.

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2.5 Mission OKey Coffee provides the best place to enjoy and relax on holiday or free time for our customer that the customers can impress with variety of premium coffee cup and other products near the beach in comfortable environment which we will serve with service mind. We try to provide the happy time to our customers with good quality of products because we select only good quality of raw materials and we also treat employees’ welfare seriously, provide training and reward them to satisfying for good performance because we seek for customer satisfaction and loyalty of our products which can advertise with “Word of Mouth”, enough to keep the company financially healthy for the short term. We believe in sustainability of coffee brewing industry and adopt fair trade policy as a key to drive our business forward so we can expand a new OKey Coffee branch to serve customers at other beach in Phuket.

2.6 Strategies They are 3 levels of strategies in organization: 2.6.1 Corporate Strategy 2.6.2 Business Strategy 2.6.3 Functional Strategy

2.6.1 Corporate Strategy Premium Coffee Store is the business that it needs to develop products and maintenance standard of services continuously so the premium coffee store business should have good management systems which are human resource management, sale and service systems, stock system and efficiency marketing otherwise it can affect to high cost of production. Most of successful entrepreneur of this business use the Information Technology System to control in each departments. “OKey Coffee” is the new business that will launch at Karon beach in Phuket,

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it is also new entry in the market so we need to plan the good strategies for our business. According to vision of our company is “To be, and be recognized as, the best premium coffee shop to enjoy and relax near the beach and expanding a new branch at other beach in Phuket within 5 years, as well as serve variety of good quality coffee cups and service mind”, our business need to growth by increasing sales and profits, especially focus to create growth within the organization so we adopt growth strategy for our business which is horizontal concentric growth strategy by internal development because we need to expand our business to the new market in Phuket with in 3 years.

2.6.2 Business Strategy Figure 2.24: Porter’s Five Geneic Strategies

According to OKey Coffee is launched near the beach and it is in tourist destination. We adopt differentiation focus because we target on tourists because there

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are many tourists there, especially foreign tourists. There are few competitors in Karon because it has few premium coffee stores so it is good opportunity for our business. OKey Coffee aim to open the best premium coffee store near the beach in Phuket and we want to expand a new branch into the new market within 3 years so we need to focus on our products and service, especially our place is very important because it is our unique and it can attractive our target group. We focus only the place that near the beach which the customers can impress our products with beautiful view of blue beach, fresh atmosphere and good decoration. We also provide the different of products or variety of menus for our customers that they are different from competitors and providing the high quality of services which we concern with service mind so our customers satisfy and brand loyalty with our products and services; customer satisfaction can create word of mouth so we can keep forward for new market.

2.6.3 Functional Strategy The functional level strategy will give the detail of the strategy for each function of OKey Coffee that represent in the function of marketing, production and service, organization, management information system, and financial and accounting.

Marketing strategy OKey Coffee marketing strategy will be focused at getting new customers, retaining the existing customers, getting customers to spend more and come back more often. Establishing a loyal customer base is of a paramount importance since such customer core will not only generate most of the sales but also will provide favorable referrals.

Products and Services Strategy -

Create branding, logo and slogan to increase brand image, and making customer to remember easily

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-

Focused on products and services that are variety and high quality or proving best value of products and services. The clean and save is also important.

-

Create unique packages for attractive the customers

-

Create new menus for monthly, high season or peak season -

Free Wi - Fi

Price strategy -

Estimated cost and selling price of competitor

-

Estimated production cost of raw material plus operation cost and setting reasonable price with products and services

Place strategy

-

Locating on convenient place which near the beach and crowded of people so it can be more attractive customer than competitor.

Promotion strategy -

Advertising product and service though of media such as brochure, Company web site and public relation such as donating box

-

To changing new one of products that there are accidents by customer wrongs such as coffee cups are split or broken. It will lead the business to good standard and it can be “Word of Mouth” which is the good promotion.

-

Wearing staff uniform of OKey Coffee

-

Discount some menu of beverage in low season

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Financial strategy -

Loan money from investor in Dubai 100% and paying high interest rate follow The Thai Civil and Commercial Law, this is the cost of turnover for business

-

Recruit expert financial personal for financial statements to systematic, clear, and accurate in every month and improving the accounting system and finance in standard form

-

Financial evaluate systematic and controlling within organization

-

Discipline with financial, savings and non credits

Human resource strategy -

Focus on training employees for high quality of service, such as there is training teamwork, customer service skill, persuasion talking, action and manners, and good personality service to customer, training about ethic and etc.

-

Training employees to remember the customers and their menus

-

Divide work, and assign appropriate position to employee

-

Tracking task and evaluate performance of employee

-

Motivation employees by rewards or bonuses

-

Providing Social Welfare for employees

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Chapter 3 Marketing Feasibility Study

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3.1 MARKETING ANALYSIS

3.1.1 General Environment Analysis Figure 3.1: Environment Factors

(Sources: http://www.marketingteacher.com and http:// www.tutor2u.net, 4 Oct 2007)

Political Factors To operate business in Thailand need to following Thai Policies which is Department of Business Development Ministry of Commerce that Company Limited Registration According to the Civil and Commercial Code, Company Limited is that kind of company which is formed with a capital divided into equal shares, the liability of the shareholders being limited to the amount unpaid on the shares respectively held by them. There are details of Company Limited Registration According to the Civil and Commercial Code in appendix part. (Source: Department of Business Development Ministry of Commerce Thailand; http://www.dbd.go.th, 26 Apr 2010)

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Revenue Department of Thailand which Corporate Income Tax (CIT) is a direct tax levied on a juristic company or partnership carrying on business in Thailand or not carrying on business in Thailand but deriving certain types of income from Thailand. There is Corporate Income Tax (CIT) in appendix part. (Source: Revenue Department of Thailand; http://www.rd.co.th, 26 Apr 2010)

In addition, there are other governmental organizations which we need to contact for the business that the details are in appendix part. Thailand's Central Committee on Minimum Wages approved increases in the minimum daily wage of between THB 1 and THB 8 to ease the effects of inflation for workers in 71 provinces. On the upper end of the scale, Ayudhya received an increase of THB 8, making its new minimum wage THB 181, while on the other end, Nan, Payao, Prae, Pitsanulok, Utharadit, Pichit and Loey were given a THB 1 increase in their daily rates. Meanwhile, minimum daily wages in Mae Hong Son, Sukhothai, Chiang Rai, Petchboon and Uthaithani remain the same. Bangkok was given a THB 3 increase, bringing the capital's minimum daily wage to THB 206, and another 62 other provinces received adjustments between THB 2 and THB 7. There are details of Labor Cost in appendix part. Table 3.1: Minimum Wage Rate 2010 MINIMUM WAGE 2010 Announced minimum wage rate since 1 January 2010 Minimum

Wage

Rate

The enforcement of the new minimum wage rate made in January 1, 2010. The wagerates detailed as follows; Bath Area 206

Bangkok and Samutprakarn

205

Nakornpratom ,Nonthaburi, Pratumthani and Samutsakorn

71

204

Phuket

184

Chonburi and Saraburi

181

Pranakornsriayuthaya

180

Chachengsao

178

Rayong

173

Nakornratchasima , Pang-nga and Ranong

171

Chiangmai

170

Krabi , Prachinburi and Lopburi

169

Kanchanaburi

168

Petchaburi

167

Chantaburi and Ratchaburi

165

Singhaburi and Angthong

164

Prachaubkirikhan

163

Loei , Samutsongcram and Srakaew

162

Trang

161

songkla

160

159

Chumporn , Trad ,Nakornnayok ,Naratiwat, Yala ,Lumpoon , Uthaithani and Ubonratchatani Nakornsrithammarat, Pattani ,Pattalung ,Satoon ,Suratthani, Nongkhai and Udonthani

158

Kampaengpetch ,Chainat ,Nakornsawan ,Petchaboon and Suphanburi

157

Kalasin ,Khonkean, Chaingrai , Burirum ,Yasothon ,Roi-ed and Sakonnakorn

156

Chaiyaphum, Lumpang and Nongbualumpoo

155

Nakornpanom, Mugdahan and Amnatchareon

154

Mahasaracram

72

153

Tak , Phitsanulok, Maehongsorn, Sukaothai , surin and Uttraradit

152

Nan and Srisaket

151

Payao, Pichit and Phrae

(Source: Ministry of Labor; http://eng.mol.go.th, 26 Apr 2010)

Politic crisis not affecting investment in upper southern region Wanida Maikijmou, Director, Regional Investment and Economic Center 6 (Surat Thani) for the Thailand Board of Investment (BOI), reported the overview of investment in the upper southern region of Thailand in the first quarter of 2010. She said that the BOI had supported investment privileges for projects twice the size of last year. It’s indicated that the investment in the upper southern region was expanding continuously in the recovery since the world economic recession and political crisis in Thailand. From January – March 2010, BOI had supported investments for 18 projects worth 6,000 million baht. The investment this year was 2-3 times higher than last year when there were only 8 investment projects worth 2,000 million baht that had been supported by BOI in first quarter of 2009. Wanida said that most of the projects this year were about agricultural products like palm or rubber trees and the tourism industry. She also predicted that the investment in the second quarter of this year would continuously expand since there were over 20 projects asking for investment support from BOI, with each of these projects worth 600 – 700 million baht. But the political problems in Bangkok might slow down the investors to establish their projects in Thailand. Yet BOI is confident that the investment rate of this year would be higher than last year. It’s estimated that there would be 60 projects approved for investment support, worth 20,000 million baht. (Source: http://www.phuketindex.com, 9 Apr, 2010 at 13:52)

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BOI says Phuket needs more investment, Wanida Maikitmao, the Director of Regional Investment and Economic Center 6 at Thailand’s Board of Investment (BOI), said that the investment perspective of Phuket during the past 2-3 years is quite good since many big projects related to tourism have been started on the island. Wanida mentioned that BOI has mainly supported new projects that help tourism such as hydrofoil boats between Phuket and Phi Phi, a Water Park on Mai Khao Beach, etc. She further commented that in 2010, there might be other projects in Phuket therefore BOI plans to soon set up its office on the island to facilitate investors in investment information and contacts. (Source: http://www.phuketindex.com, 3 Mar, 2010 at 13:50)

Phuket plans industry development On March 11th, 2010, Apichai Amornpisut, Head of Phuket Industry Office (PIO), presided over a meeting on Phuket Industry Development Strategy Review. Other officers from related government offices joined the meeting such as Prajiad Aksorndharmakul, Head of Phuket Development Strategy Office in Phuket Provincial Office, Ornanong Suwannakarn, the President of Phuket Industry Association, and representatives from private sectors in Phuket. Apichai said that PIO has set up the strategy to develop industrial sections in Phuket following the policy issued by the Ministry of Industry for 2008 – 2011. To make the plan fix the island’s circumstances, PIO needed to brainstorm with the entrepreneurs in Phuket to find the most effective framework, action, and budget plan for this. To develop industrial sections in Phuket, PIO will support and enhance the seafood products and souvenir entrepreneurs in manufacturing capacity and encourage them to use more technology to reduce production costs and be friendly for the environment at the same time. Written on 12 Mar, 2010 at 11:25

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Figure 3.2: Phuket hosts seminar on Free Trade Area and Business Opportunities in South of Thailand

Poonsri concluded that the last seminar about this had indicated that 0% tax agreements made between ASEAN members including Thailand, Malaysia, Indonesia, Philippines, Brunei and Singapore, would be advantageous for trading between Thailand and ASEAN countries. It’s estimated that there could be approximately 25% growth in business in this region. In addition, there was a commitment that the member countries must let ASEAN investors hold 70% of stock in hospitality business by 2015 and adjust the laws hindering investors to do business in such countries, especially by letting foreigners hold 51% of shares in all hospitality businesses. Therefore DTN has been holding seminars around Thailand to make people understand and adjust their way of doing business, following the world economic situation and listen to their opinions before integrating it into Thailand’s economic strategy.

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(Source: http://www.phuketindex.com, 25 Mar 2010 at 14:00)

AFTA ASEAN Free Trade Area (AFTA) is aimed to attract foreign investment and increase the potential of ASEAN products in world market by eliminating the taxes between members. This can reduce the development gap and increases trades between countries. However, the produces that are sensitive to tax reduction will be exempted until 2010, and then the tax will be set to 0-5%. Thai government is expected to reduce the coffee import tax to 5% and this will widely affect Thai coffee market. A business can choose to introduce cheap, low quality coffee to the market, or it can improve its product to premium grade by importing quality raw ingredients to blend in and increase its price. Mr. Autsawin Kairasmi, CEO of Banrie Coffee, said “The free trade will open up many opportunities for businesses. They can choose to keep the same price and increase the value in other aspects such as improving the services and decorate the café to create more relaxing atmosphere. In addition, they can introduce new cheaper products like light, medium, and fancy coffee”. “The competition in coffee market is quite high. We need to develop and adjust our products all the time to satisfy the customers as much as we can, including product variety, and control the cost without losing the quality while maintaining the same price”, Ms. Parichart Greenwood, marketing manager of GFA Cooperation (Thailand) that own Coffee World Restaurant and Café franchise, also share the similar opinion. “In the coffee wise developed countries, they will focus on the qualityof coffee and import many different coffee beans to blend. They can create the best coffee by using the best ingredients without having to worry about import tax. In contrast, we still have import tax to worry about. The cost of importing green beans would decrease if the free trade area is in place, and we can improve our coffee in an acceptable price to give the customers the best” Mr. Witoon Sila-On, managing director of Bluecup coffee, added. However, it would be difficult for the business to compete in the price war, because AFTA will bring in more competition while Thai labour and coffee cost are still high when comparing to the neighbours. The AFTA will bring in cheaper coffee with the

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same quality, and would push Thai coffee to evolve from community grade to premium grade coffee. Mr. Meechai Amornpattanakul, chairman of Thai Barista Association and K2 executive said, "The farmers will be directly affected if they don’t improve the produce quality. This improvement can be carried out easier if the farmers change their point of view and discipline, because Thailand already have better public utility structure and supporting institutes such as the Department of Agriculture and The Doi Tung Royal Project". AFTA also influence foreign coffee chain to invest because the raw ingredient import cost is lower. The advantages in quality and international brand awareness will be an excellent factor to attract foreign and domestic customers. This is another factor to stress out the importance in improving the quality of Thai coffee to get the consumer’s trust. On the other hand, the consumers have to adapt themselves to the changes as well. The consumers must take interest in where the coffee bean comes from, not just worry about the caffeine level, because AFTA will allow low quality foreign coffee to come in. These coffees may be kept wrongly and may contain OTA (Ochratoxin A) which can cause cancer if consume.

Government policy, help and aid The government should introduce clear policy to protect the consumers, and this policy must focus on the safety of the consumers from OTA. For example, set the limitation of defected coffee beans and contamination percentage in the imported coffee. An agency should be introduced to inspect the low quality coffee from other countries. This type of agency will set up the standards for businesses to comply with and push our development to match with the world standard. Moreover, the government should support and set up coffee farmer association to keep the coffee standard, induce cooperation between farmers, and build up the negotiation power directly to the farmers. “If the government has the fund to set up the local coffee farmer association and help with the logistic, the farmers will be more effi

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cient and create better produces. For example, the government can help with the produce transportation and fuel cost in the northern mountainous areas where a lot of coffee is grown. These areas are hard to access and have high transportation cost which the farmers can’t afford, and sometimes the traders push the price down too far. But with the government help, the farmers can transport their produces to the roasting facility and increase their income” Mr. Prawit Jitnarapong, Beantrepreneur and Black Canyon CEO suggested. Ms. Sumolpin Chotikapookana, marketing and communication director of Starbucks Coffee (Thailand) also said, “It is vital to see the importance in the farmers and the coffee farmer community in order to get enough quality produces to suffi ce the consumer’s demand. Starbucks has the project to support the northern Thai Arabica coffee farmers under the name Muan Jaii Blend. We buy the produce at the higher than market price, and some income from Muan Jaii coffee will go back to the farmers” Rather than rolling out the policy to protect the consumers and supporting the manufacturing structure. “The government units like Doi Kum and Doi Tung Royal Projects should represent Thai coffee in a competition to get the foreign interest in our coffee, because Thai coffees in world stage are, currently, private brands only”, Mr. Autsawin added. Even though we can’t compete in the world market in the sense of product quantity because there is not much suitable terrain for coffee plantation, but it is still important to develop Thai coffee brand. We can push our coffee beans to compete in the quality coffee market, especially the Arabica coffee beans grown in the northern part of Thailand. Mr. Meechai also emphasized that "This is the point that must be changed. The government must not focus on the quantity of the produce, but focus on the profi t that will go to the farmers instead. Farmers can produce large quantity of coffee beans and still make a loss, but farmers can produce fewer coffee beans and make a profi t if they focus on the quality. When we think about quality, we won’t take quantity into much consideration, and the price will increase together with the quality" The government should not consider coffee to be just a normal agricultural produce because coffee has special characteristics. It blendsin with people lifestyle and we can use the origin of the coffee to promote marketing like wine, which the origin and the manufacturedyear are the factors that consumers pay special attention to. This is

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becausethe coffee that grows in different area and time will offer its own unique characteristics, unlike fruits where we can only say whichcountry it is from. Hence, Thai coffee will have its own uniqueness to offer to the market and develop the lasting coffee industry here if the government is ready to support. In conclusion, the government needs to have a clear policy to lead the coffee business, and every department such as the Ministry of Agriculture, Ministry of Commerce, and Ministry of Industry must work together. The cooperation would ensure the effi ciency of all processes to develop Thai coffee and the private businesses won’t have to compete in the market by themselves like they are nowadays.

(Source: Coffee tea & I, Bimonthly Magazine Vol. 14 January – February 2010)

Economy Factors Thailand’s Economic Projection for 2010 The Ministry of Finance made an upward revision on Thailand’s Economic Projections for 2010 to 4.5 percent per year, from the previous forecast of 3.5 percent per year, The Ministry of Finance of Thailand announced that the Thai Economy in 2010 is expected to expand at 4.5 percent, or within a range of 4.0 to 5.0 percent per year, an improvement from the December 2009 forecast of 3.5 percent. Mr. Satit Rungkasiri, the Director-General of the Fiscal Policy Office (FPO), gave details on Thailand’s economic projections as of March 2010 that the upward revision on Thailand’s Economic Projections for 2010 is due to improvements in export and private consumption sectors. Particularly, the faster-than expected economic recoveries of major trading partners, especially those in Asian region, has and will continue to contribute to the high growth in Thai exports of goods and services. Moreover, domestic spending in 2010 has a tendency to further expand from the low base last year. Thus the Thai economy is considered more balanced as its expansion is now driven by both internal and external drivers.

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Mr. Ekniti Nitithanprapas, the Director of Macroeconomic Policy Bureau and the Spokesperson of the Ministry of Finance, added that export volume of goods and services in 2010 is forecasted to grow at 9.7 percent per year, from the contraction of -12.7 percent per year in 2009, as the economy of Thailand’s major trading partners continue to recover. Meanwhile, private spending in 2010, especially private consumption, is expected to show an improving trend, due to higher farm income following higher agricultural price and better employment situation. Private consumption is projected to expand at 4.3 percent per year, while private investment is expected to grow from the low base last year at 8.2 percent per year. For internal economic stability, headline inflation is projected to rise to 4.0 percent per year (or within the range of 3.5 - 4.5 percent per year) given higher oil prices and higher prices of goods as services that use oil as inputs. The conjecture of the cessation of Government’s measures to alleviate cost of living during the third quarter of the year would also contribute to higher inflation. For external stability, Thailand is projected to record a smaller current account surplus in 2010 at 2.4 percent of GDP (or within the range of 1.9 – 2.9 percent of GDP), as the revival in domestic demand and low base last year are expected to lead to faster expansion of import value. The Director-General of FPO concluded that these economic projections have already taken into account the potential impact from the suspension of investment projects in Map Ta Phut Industrial Estate area and the ongoing political situation. If the government could quickly resolve these problems and accelerate the disbursement under the “Stronger Thailand 2012” program to achieve at least 80 percent of approval budget framework, the Thai economy would likely to grow at the high case of projection range at 5.0 percent per year in 2010. Table 3.2: Major Assumptions and Economic Projections of 2009 and 2010 (As of March 2010) 2009

Major Assumptions

2010f

2010f

(As of

(As of Mar 10)

Dec 09)

Average

Range

80

Exogenous Variables

-1.2

3.0

3.7

3.2 - 4.2

61.4

80.0

80.0

75.0 - 85.0

0.3

7.0

8.6

8.0 – 9.0

-2.5

6.8

8.0

7.5 – 8.5

34.3

33.0

32.5

31.5 – 33.5

1.25

1.50

1.50

1.25 – 1.75

Expenditure

2.47

2.55

2.59

2.55 – 2.63

1) Economic Growth Rate (percent y-

-2.3

3.5

4.5

4.0 – 5.0

-0.1

3.4

4.3

3.8 – 4.8

- Real Private Consumption

-1.1

3.3

4.3

3.8 – 4.8

- Real Public Consumption

5.8

3.9

4.2

3.7 – 4.7

3) Real Investment Growth (percent y-

-9.0

7.8

7.8

6.8 – 8.8

- Real Private Investment

-12.8

8.0

8.2

7.7 – 8.7

- Real Public Investment

2.7

7.4

6.8

6.3 – 7.3

4) Export Volume of Goods and

-12.7

8.0

9.7

9.2 – 10.2

-21.8

17.4

18.9

18.4 – 19.4

6) Trade Balance (billion U.S. dollar)

19.4

7.8

4.8

3.8 – 5.8

- Export Value of Goods in U.S. dollar

-13.4

15.5

18.0

17.0 – 19.0

-24.9

27.7

31.9

30.9 – 32.9

20.3

9.6

7.2

6.2 – 8.2

1) Average Economic Growth Rate of Major Trading Partners (percent y-o-y) 2) Dubai Crude Oil Price (U.S. dollar per Barrel) 3) Export price in U.S. dollar (percent y-o-y) 4) Import price in U.S. dollar (percent y-o-y) Policy Variables 5) Exchange Rate (Baht per U.S. dollar) 6) Repurchase Rate (Policy Rate) at year-end (percent y-o-y) 7)

Fiscal-Year

Pubic

(Trillion Baht) Projections

o-y) 2) Real Consumption Growth (percent y-o-y)

o-y)

Services (percent y-o-y) 5) Import Volume of Goods and Services (percent y-o-y)

(percent y-o-y) - Import Value of Goods in U.S. dollar (percent y-o-y) 7) Current Account (billion U.S.

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dollar) - Percentage of GDP

7.7

3.3

2.4

1.9 – 2.9

8) Headline Inflation (percent y-o-y)

-0.9

3.4

4.0

3.5 – 4.5

Core Inflation (percent y-o-y)

0.3

1.5

1.5

1.0 – 2.0

9) Unemployment Rate (percentage of

1.5

1.3

1.3

1.0 – 1.5

total labor force)

f = forecast by Fiscal Policy Office, Ministry of Finance, Thailand

Attachment: Thailand’s Economic Projections for 2010 1. Economic Growth The Thai economy in 2010 is forecasted to grow at 4.5 percent per year (or within the range of 4.0 – 5.0 percent per year), an improvement from December 2009 projection of 3.5 percent per year. The main positive factors attributing to this growth is from the stellar recovery of major trading partners’ economy, especially those in Asia which has a better growth potential than others. This leads to the rebound of growth of export volume of goods and services being projected at 9.7 percent per year (or within the range of 9.2 – 10.2). Domestic spending, in addition, accelerates especially private consumption which is expected to grow at 4.3 percent per year (or within the range of 3.8 – 4.8 percent per year). The positive factors of this recovery are higher farm income following global agricultural price, better household income from overall economic recovery, and a drop in unemployment rate to its normal level. Private investment in 2010 is expected to speed up from the low base with low policy interest rate. This would support private investment to grow further at the rate of 8.2 percent per year (or within the range of 7.7 – 8.7 percent per year). Furthermore, public spending plays an important role in supporting the Thai economy to unceasingly grow. To be more specific, public capital expenditure under the “Stronger Thailand 2012” project would help public investment grow at the increasing rate of 6.8 percent per year (or within the range of 6.3 – 7.3 percent per year). Public consumption, on the other hand, is expected to grow at 4.2 percent per year (or within the range of 3.7 – 4.7 percent per year). Import volume of goods and services is expected to expedite its growth rate to 18.9

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percent per year (or within the range of 18.4 – 19.4 percent per year) with the recovery of domestic spending and more manufacturing of export goods.

2. Economic Stability Internal economic stability is expected to improve, with headline inflation in 2010 rises to 4.0 percent per year (or within the range of 3.5 – 4.5 percent per year). This is due to global oil and agriculture prices which are expected to rise following global economic recovery. Unemployment rate is expected to revert to the normal rate of 1.3 percent of total labor force (or within the range of 1.0 – 1.5 percent of total labor force). As for external stability, current account in 2010 is projected to record a smaller surplus of 7.2 billion US Dollar, or approximately 2.4 percent of GDP (or within the range of 1.9 – 2.9 percent of GDP) due mainly to the higher growth of import value relative to export value. Import value is forecasted to grow at 31.9 percent per year (or within the range of 30.9 – 32.9 percent per year) from the fast domestic spending and import price in the global market, while export value is projected to expand at 18.0 percent per year (or within the range of 17.0 – 19.0 percent per year, due to major trading partners’ economic recovery and higher export price. In conclusion, the Thai economy in 2010 has a tendency for better balanced recovery, with the positive factors coming from better domestic spending and better export performance in tandem with faster-than-expected recovery of trading partners’ economy. Nevertheless, major risk factor that comes into play is from the suspension of investment projects in Map Ta Phut Industrial Estate area and the ongoing political peril which could slow down the recovery of private spending than expected. Public sector needs to accelerate the budget disbursement and “Stronger Thailand 2012” project to reach their respective goals while private sector is not yet fully recovered.

(Source: The Ministry of Finance; http://www.mof.go.th, 29 March 2010)

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Investment Situation in Phuket

At the practical seminar “Investment Promotion for Economic Stimulation” held by the Ecnomic Investment Center Region 6, Acharin Pattanapanchai, the center’s deputy secretary general acting for the investment advicer of the center, said that Phuket’s economic is relied to tourism industry and businesses that support tourism activities included hotels, hospitals, boat rental, cruises, property, software, and etc. In 2008, Phuket got income from this industry about 87,314 million baht and it bas been estimates to be increased to 95,000 in the next year. Apart from these, the project called Phuket ICT R&D Innovation Paradise would attract more investors from world leading ICT companies to invest here, this would help to generate 40,000 million baht of income on the island within 2011. Acharin also concluded that there were 122 investment projects approved in Phuket. The investment value was 49,575 million baht. Consequently, 20,158 locals have been hired by those projects. Now , there are 55 of the projects which are under the process. Most of the project are medium and small project with investment fund under 200 million baht, 72 projects are the investments that help to promote tourism industry like cruises, ferries, water par and etc. While around 20 project are related with electronics, software, and agriculture. The rest of them are abalone farms, glove factory, cold storages and food suppliers. From the total 122 projects, 54 projects are owned by Thais, 52 projects are the joint venture between Thais and foreigners, and 16 project are foreigners’ projects. However, Acharin commented that even the investment situation in Phuket seems to be good but there are factors that can disturb investment in 2010 on the island such as economic situation, politics, basic infrastructure and workforce. (Source: http://www.phuketindex.com. 19 Feb, 2010 at 11:05)

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Economic Executive Summary at January 2010 of Phuket Economic Structure of Phuket Tourism is the main economic structure of Phuket that it considers Gross Provincial Product (GPP) of Phuket in 2007. The main productions of Phuket are hotels and restaurants; 38.92 percents, Logistic and Transportation; 14.12 percents, Wholesalers and Retailers; 10.54 percents, Constructions; 5.15 percents and others; 31.27 percents. Figure 3.3: Gross Provincial Product (GPP) at January 2010 of Phuket

Gross Provincial Product of Phuket

Others 31.27 %

Construction, 5.15%

Hotel and Restaurant 38.92%

Wholesaler and Retailer 10.54%

Logistic and Transportatio n 14.12%

Economic perspective of Phuket on January 2010 was slow-down when compare with last year in the same period. Although tourismindustry indicates growth, including private consumption and private investment, considering other economic indicating is slow-down such as government expenditures, industry and etc. In addition other industry is contraction because there are two factors that hold back economy to expand:

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Positive Factors: this factor effect the economic growth of Phuket which is travel festival because it is the high season, including at beginning period of this month is New Year Festival so there are more Thai and foreign tourists who visit to celebrate festival in Phuket. It affect to increase tourist and consumption growth. Negative Factors: this factor is the threats for economic growth which is the uncertainty of political and although global economic trend to recovery, we need to follow up continuously. Oil prices change to increase continuously, result to the confidence of investors and consumers. Forecasting to Phuket economic performance in next month will be better because it is the travel festival, including there is the good news of global economic situation that it adjusts to be better. In addition there are more governmental investments and increasing of inflation rate with laying value added taxes so they affect to economic perspective is better.

Demand Economy (Production): Slow Down Service and Tourism: growth that it considers to tourist number who travel through Phuket International Airport and its growth is 33.36 percents. Both domestic and international flights are increased and the tourists who entry to port of entry is also grown to 48.17 percents because they are travel festival and New Year Festival. Agriculture: contraction that it considers to the contraction of rubber quantity at 51.68 percents, when compare with last year in the same period. Because of it has more rain at this period so the rubber planters can rubber tap decreasingly and the rubber price is growth at 98.87 continuously, resulting from decreasing of rubber quantity and including rubber speculation at agricultural future exchange. Fishery: contraction that it considers to aquatic animal quantity and the contract value of aquatic animal between 21.24 and 16.75, when compare with last year at the same period respectively. Because of non local fishing boats are gradual go back so the number of fishing boat is decreased. Industry: slow down that it considers to electrical used quantity in factory which is growth at 12.75 percents, when compare with last year in the same period

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respectively. But considering from number of factory and register cost, it will be slow down at 0.92 percents respectively.

Supply Economy (Expense): Growth Private Consumption: growth that it considers from laying value added taxes increasingly, when compare with last year in the same period at 14.87 percents. In addition quantity of electrical used from household is adjusted to be better at 12.92 percents and including car and motorcycle registrations adjust to be better respectively. Investment: growth, considering from cost added of entrepreneurs cost and value of new cost. Number of entrepreneurs who come to register growth at 45.72, 38.36 and 24.24, when compare with last year in the same period respectively and entrepreneur cost of close down is also contraction. Government Expenditure: contraction, expenditure amount of government fund contract at 44.93, when compare with last year in the same time. Government Expenditure of investments are contract, although expenditures are growth, there are few growth when comparing with other.

Financial Economy: Slow Down Circulating fund situation in Phuket consider from quantity of revolving credit and deposit in province which are: 1. Credit: slow down, total credit amount of commercial bank in Phuket at the 31 of January 2010 is slow down to 4.11 percents, when compare with last year at the same period and the MLR credit interest rate is 5.85 – 6.25 2. Deposit: contract, quantity of revolving deposit of commercial bank at January in Phuket is contract to 2.4, when compare with last year at the same period and the interest rate of deposit is 0.5 percents. Economic Stability: Slow Down

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Inflation: slow down, considering from index price of consumer in Phuket is slow down to 2.6 percents, when compare with last year in the same period but comparing with last month that it show growth because it was affected from foods and beverages, including high improvement of others which are not foods and beverages. Index price of supplier in this month show that is growth to 11.5 percents, including comparing with last month is also growth. Employment: growth, considering from number of employment is increase and beneficiary of Social Security is growth to 5.84 percents and 3.45 percents from last year at the same period, including layoff number is also contract to 13.52 percents.

During the economic depression and fragile political stability of 2009, all businesses suffered setbacks and many jobs were lost, even the coffee business. The business growth was quite small when compared to the past 5 years. This could clearly be seen from the smaller number of orders from hotels, restaurants, and food courts, plus the regular customers were more conscious about their spending and most of them started to reduce their coffee consumption. The businesses had to adjust their marketing strategies to handle the situation and attract more customers. The strategies like membership and promotions make the customers feel that their cup of coffee are more valuable, thus, more enjoyable. After all, what they might need is a cup of excellent coffee as the reward during the hard time. Even though there are some setbacks in Thai coffee business, it is one of the businesses that are moving forward. It helps people taste more variety of coffee and makes people realize about what they choose to drink. The western style coffee like Espresso, Latte, Cappuccino, and coffee art is gaining its popularity in Thailand, and cafés are being a part of city life as new café pops up every day. These cafés become the third home, other than the offi ce and condo, for city people, and push the coffee business this far, so it is interesting to see where this high potential business will go on. A factor that may cause this lack in supply may be from the high coffee produce that flooded the market and caused the drop in coffee price a couple of years ago. This price drop infl uenced the farmers to turn to other plants, and the government policy to

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reduced coffee plantation in southern Thailand to produce more profi table plantssuch as palm and rubber tree. Importing high volume of coffee from oversea slows the development of Thai coffee and makes Thai coffee more expensive. However, we still have to import the oversea coffee because we have to consider the domestic demands as the main factor. Mr. Weera Somboonwejchakarn, the president of VPP Progressive Ltd., and the owner of Café D’Oro said, “There is a small limitation in Thai coffee production that makes the world market not interested in it. We used to export 5% of total world coffee 10 years ago, but the produce in southern Thailand dropped, so we have to import because the domestic supply doesn’t suffi ce the demand. And I don’t think there is enough motivation for Thai coffee to compete in the world market.” Rather than the production problem, Thai coffee also faces with the challenge in the development of manufacturing processes. The quality of the coffee itself is good but it lacks the production control system for planting the coffee trees, keeping the product quality standard (GAT), pushing organic farming, to adding value to the product. Therefore, it is important to make farmers realize that produce standard is more important than the sale made.

Thai Coffee Market Direction in 2010 Despite all the setbacks and challenges, most of the entrepreneur believes that this year the coffee business will grow more than last year. There are some indications that the worst of the economic crisis had passed. Some companies in the auto industry and property industry are bouncing back and paid out bonuses at the end of last year, so the food industry is expected to catch on to the recovery as well. “I believe that all the opportunities for coffee business to grow are still open. Thailand has good produce and manufacturing processes, plus our café management is as good as the foreign coffee chains. The investment from the foreign chains would not scare us. If we have strong principle, we can keep our customers and lead Thai coffee businesses to grow”, Mr. Weeradej stated. Ms. Parichart commented that, “The competition this year is expected to rise with the expansion in some segments of the market like the instant

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coffee and coffee for health conscious consumers. This causes premium coffee business to concentrate more in marketing, and find new strategies to effectively reach our target customers and increase the market share”. This growth expectation influence the coffee chains to plan their expansion and started the location war, especially in the petrol station where the cost is lower than shopping mall and the café can open for 24 hours. The petrol stations in focus are the ones on main roads to reach large number of customers. “The shopping malls are slowing down their expansion so Black Canyon turns to petrol stations, and now has more than 40 petrol station cafes. These cafés attract customers who don’t like shopping malls to come and try new coffee, which is the strategy to give the target market the easier way to get to our coffee”, Mr. Prawit added. Beside the plan to open new cafés, many coffee chains plan to expand their target customers to attract the 18-25 years old customers. Previously, the only target customers are the working adults, but now the business sees the potential in the young adults as their lifestyles involve coffee every day. For instance, they may want a morning coffee before class, or a cup of coffee at night to keep them up and study longer. Coffee chain like Bluecup changes its logo and packages to look more contemporary, while Café D’Oro changes the café decorations and setup trips and photo activities to get the new target customers involvement as the strategy for attracting the new customers. The overall of Thai coffee market in this year seems to develop especially in the premium segment, despite the large instant coffee segment value which is double the premium market value, but doesn’t gain much growth. The growth in premium segment would be the result of the consumer behavior that tends quality coffee and western style coffee, plus factors that will push Thai coffee to be premium product. Mr. Witoon said “Most of the cafés use roasted ground coffee beans as they are, obviously, better than instant coffee, so it is a growing market. It is up to Thai people how much they are willing to spend on a cup of coffee. There are many grades of coffee to choose from and the consumers are starting to improve their knowledge about coffee and separate the taste”

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Important Adjustment in Thai Coffee There will be many factors that affect Thai coffee market in 2010 so we need to adjust to these changes, “We can focus on the superior freshness over imported coffee because imported coffee needs around 45 days to be shipped here and have the “best before” age of 2 years. In contrast, Thai coffee is transported straight from northern Thailand, measure the m oistness, and roast. The whole process takes about 25 days at Banrie Coffee, so the difference in freshness is a lot and fresher coffee means more aroma and better taste” , Mr. Autsawin explained. In addition to the freshness advantage, Thai cafés can adjust to consumer’s taste and trend quicker than the foreign coffee chains which need to refer to the policy from oversea headquarter. For example, we can observe the changes in consumer behavior or we can decorate the café to suit the target customers. If we use these advantages together with market strategies, it would not be diffi cult for Thai market to compete in the world stage. Mr. Meechai commented that, “Thai coffee has the potential to present itself as quality coffee to the world. We only need to add marketing and create the brand, because Thailand is well-known for its services. We can compete in the world with our smiles and fresh ingredients, or sell Thai culture together with the coffee” Ms. Sumolpin expressed Starbucks’ view as, “Thai coffee market is very competitive and it is important for the customers to have faith in our brand. The customers now are more careful and smarter at getting the most for their money. Although we have the advantage on brand awareness, but if we don’t provide good product and service for your money, then we fail to respond to your need” These are some anticipations from important figures in Thai coffee business, and only time can tell if the business can go in the expected direction. Nevertheless, Thai coffee had been growing all these years and the Coffee T&I team thinks that there are many opportunities for Thai coffee to develop and Thai cafés to grow. We can see this in big cities where the existing cafés expanded and new cafés are opening. This is a clear sign telling us that Thai coffee market is moving forward and will not stop growing.

(Source: Coffee tea & I, Bimonthly Magazine Vol. 14 January – February 2010)

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Socio-cultural and Environment Factors Climate Roughly on the same latitude as Central America, Phuket’s climate is a lot easier going than say, Costa Rica’s. The average temperature is 28 degrees Celsius and varies from 22 degrees to 35 degrees depending on the time of year. One thing you can depend on, however, is that it’s always humid on this island. From November to April the skies are generally clear and a fresh northeasterly breeze sweeps through the region, making yachting, scuba diving and a host of other water sports instantly accessible. From May until October Phuket is a lot wetter, due to westerly monsoons, but it doesn’t rain all day every day. For this reason, Phuket’s rainy season can sometimes be a misnomer. There is a mini-summer in June/July when the island is perhaps at its most idyllic with quiet beaches and glorious weather for three or more weeks.

Geography A central mountain range forms the backbone of the island. The highest point is 529 metres. Much of the rest of the island is given over to rubber and pineapple plantations. The West Coast is studded with truly beautiful beaches from where you can witness spectacular sunsets whereas prawn farms, mangrove forests and yachting facilities dominate the East side of the island. If there is one word that has been used to describe Phuket it is "Verdant". The island positively bursts with green plants, crops, trees and shrubbery. There is the Khao Phra Taew National Park in the northwest of the island where wild animals live in their natural habitat and Phuket is no more than two hours away from some of the most unspoiled jungle in Asia: at Khao Sok National Park. 32 smaller islands - almost all easily accessible by boat - surround Phuket, affording a rich choice of day trips and scuba/snorkeling sites.

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History Since early times Phuket has been a melting pot of races and ethnic beliefs. The early populations were made up of hunters and gatherers. When trade routes opened and people began to travel more freely the island hosted a multitude of nationalities. Sub continental Indians, Arabs, Malay and Mokken sea nomads all arrived to make their cultural mark but with the advent of tin mining in the 18th century the demography of the island changed radically. Hokkien Chinese migrants from Penang, seeking employment in the tin industry, arrived in large numbers and subsequently intermarried with locals, adding a persuasive Chinese hue to the multi ethnic mix on the island. At this point Phuket Town became the island’s capital and centre of administration, superseding Thalang. With the recent decline of the tin industry many mines were abandoned, leaving ugly scars and craters on the landscape. Happily, many of these eyesores have been converted and assimilated into golf courses and hotel grounds. The result is quite spectacular and a triumph for local environmentalists. In the early eighties, tourism replaced tin mining and rubber as the island’s major industry. For historians, the best place to see architectural evidence of Phuket’s 18th and 19th century melting pot and financial boom is Phuket Town itself, with its Sino-Portugese style buildings. Whole streets of this mode of architecture exist downtown and exotic rubber and tin-financed mansions are to be found ensconced in the rapidly growing suburbs of this sprawling provincial capital. Phuket Town may not be the prettiest sight but it’s certainly the place to check out the recent history of this island.

Religion Because of the proximity of Phuket to Malaysia, there is a greater percentage of Muslims on the island than in central or northern Thailand. 35% of Phuket’s population is Muslim, compared to about 5% nationwide. Buddhism, however, is the main religion on Phuket although there are a higher number of mosques than Buddhist wats or temples on the island: Some 38 to 37, respectively. Visitors are encouraged to dress politely when viewing holy places in Thailand. Despite the heat, arms and - whenever possible - legs should be covered. Shoes must be removed when entering temples.

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Culture Thais are proud of their rich culture, and rightly so. It’s a mixture of easy going Buddhism with strong roots in familial obligations yet is never imposing to the outsider. This is one of the reasons why Thailand is so attractive to foreigners. Thais, you’ll soon notice, are easy going people. One of the central beliefs in Thai culture is the importance in having fun: Sanuk. No wonder then that Thailand has long been called "The Land of Smiles." Tellingly, one of the worst comments one could possibly make about a work mate, a boss or anyone for that matter in Thailand is: "He’s such a serious person." A smile, therefore, goes a long way in this country. Thais have different taboos from the west. For example: Visitors should not touch Thai people’s heads, it being the highest part of the body. Contrariwise the feet, being the lowest part, are not to be raised above, or pointed at objects or people. Open anger and extreme emotion is also frowned upon. A favourite Thai expression in times of stress is: "Jai yen, jai yen." Meaning: "Keep a cool head/heart - don’t lose face by losing your temper." Elders should always be treated with extreme respect. The wai – a closed palm greeting should be used when greeting elder people or anyone in a position of authority. Simply close palms, prayer-like and place them, fingers-upward, under your chin. A slight bow at the same time will do wonders. Do not wai people of a lower social bracket than yourself. It will only confuse and muddle things. If a waitress, a hotel clerk or a child wais to you, simply smile and nod back. Despite the complexity of correct social behaviour in Thailand the visitor is readily forgiven for his/her gaffes. It’s all part of that famous Thai hopitality. (Source: Kata Karon Hotel Association, http://www.katakaron.com, 27 Apr 2010)

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Figure 3.4: Amount of Foreign Tourists 2008 – 2009 in Phuket 1300000 1200000 1100000 1000000 900000 800000 700000 600000 500000 400000 300000 200000 100000 0

1217303

1190032

2008

2009

The number of tourists is the important factors for our business because our main target group is foreign tourists. In year 2008 the total number of foreign tourists is 1,217,503 and there are 1,190,032 tourists in 2009, we will see the number of tourists is decreased to 2.26%. While there are 8,389 flights to Phuket in 2008 and there are 8,219 flights in 2009 which the flight in year 2009 is decreased to 2.03%. They do not affect our business much because the trend of tourism in 2010 is in high level because there are too many foreign tourists come to visit phuket and the number of reservation for accommodations are 79.82%. (Source: Phuket Provincial Governor's Office, 14 Marh 2010)

Phuket Festivals & Events The number of reservation for accommodations are high because there are many festivals and event in Phuket for each years which is very interesting. Phuket is one of the most popular tourist destinations in Thailand. It is also the largest island in the country. Various festivals and events in Phuket are organized throughout the year. Some festivals are so popular that they have become tourist

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attractions in Phuket. The Phuket festivals highlight the multi religious and multi cultural society of the island. The list below will give you a fair idea about the number and nature of Phuket festivals and events.

Chinese New Year traditions Celebrate New Year's Day of Chinese New, the New Year Chinese which is match on the 1st of China's first month or the 2nd, 3rd on Lunar, rituals have all 3 days. •

The first day is 29th of Month 12 of Chinese; there are food preparation and offering it for the next day. Make a spirit offering Pay respect to god.

•

Day two is 30th of months 12 of China, there is God offering 2 period, the morning pay homage to the god, and fatherhood on afternoon. Then will be dining together in families and giving hongbao to children.

•

The third day is the 1st day of 1st month 1 of the Chinese. People will dress a new set for a fortune to pay homage at their shrine. Today is considered a day trip, may visit other local relatives. It is no working, no say anything obscene or no any admonishment or rebuke each other.

Thank God tradition To welcome and thanks God that help and protect the human. It begins after midnight on the 8th 0f March 8 of Chinese, or the starting time on the 9th of the 1st months. The important thing are 2 sugarcane, both sweet and meat food.

Chinese tradition festival A month, Chinese belief that Hell are considered to permit the wraith come out to get the fathers of each family's the annual merit which be paying homage on the 15th of March 7th, The Chinese will has a “PaiPou” or decorated offering wraith and spirit

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with a dessert, and carved fruits as a animals, also with “Hung Guu” or dessert turtle red powder made from glutinous rice, with soy shake or made from wheat flour without nucleus, symbol to long live. •

The offering locations as following.

•

At Kathu Shrine on the lunar 17th of Month 6th of Chinese.

•

At Talaad Yai Area on the lunar 13th of Month 7th of Chinese

•

At Talaad Nuea Shrine on the lunar 16th of Month 7th of Chinese

•

At local vegetable market on the lunar 17th-18th of Month 7th of Chinese

•

At Baan AoKea (Takua-Pa Rd) on the lunar 21st of Month 7th of Chinese

•

At ChaoPo TorKong Shrine (Baan Bang Neow) on the lunar 19th-30th of Month 7th of Chinese.

The Po-Tor The Phuket Chinese Festival will have the ceremony on China's months 7th or on Thai's months 9 by offering the fathers and Holy Spirit with a sacrifice made with flour waffle is a large like a small / big red paint. The Chinese believe that turtle is so old stand by begging turtles to renew themselves and thus holds great merit.

Moon sacrifice tradition It pays respect to god with the Waiprajan dessert called “Tong Chew Pear” and also with snazzy dessert on the Lunar 15th of Months 8th of Chinese.

Vegetarian traditions Set ourselve on precept, pay the hearts clean, no meat consumption for 9 days which starting on the Lunar 1st of the Months 9, every night of March 9 or aroung September to October. It is the tradition that Chinese residents in Phuket to take a long

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time since photochemical protest in 2368 B.E. There will be many such rituals ceremony, invite God to fire walking, exorcise, and warriors farewell etc. This festival is one of the most event which has been featured in Faith and sequin both Thai and foreigners.

Leeway Traditions By group of fishermen at Rawai Beach & Baan Sapam, there will be a Leeway on Lunar 13th of month 6th. For the fishermen at Koh Sirae start on Lunar 14th of month 6th, and fishermen at LeamKa (northern Phuket) will start on Lunar 15th of month 6th. For the Lunar Month of 11th there will ne the tradition like Loy Krating Day in Thai's tradition as ceremony exorcise with building boats from wood ,barber, nails, a wood doll, put bad things into the boat and then to float to bring the sad misfortune that troubles away with the sea. And then dance around the ship which song is known “Rong-ngeng”.

Thai customs festival (months 10th) A Thai belief that hell is let wraith and that spirit come out to get the fathers of each family's the annual merit which be paying homage, review the merits and measures for the many kind of dessert : Laa, Tien, Tontai, Tom ect. Time match on back lunar 8th of Month 10th and also again on back lunar 15th of Month 10th.

The Ceremony Thao Thep Kasatri and Thao Sri Sunthorn. It is the annual set on 13th March to celebrate of two heroine, there will be any activities to remember the bravery of this two heroine that have protected Thalang City from Enemy at that time.

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The ShengMeng Traditions (Shen tradition of April) It is a major grouping of relatives to worship the fatherhood, it is annual on 5th of April, but the paying respect will start on date before 5th of April for 10 days, and again after 5th of April for 10 days.

Customs release turtles To make merit and invite Monk to prayer, then release turtles into the sea at NaiYang Beach Natural Park. It is anual on 13th of April (SongKran Day).

Seafood Festival In May every year, there will be the Seafood Festival to promote The Phuket SeaFood to another, persuade the tourist to visit Phuket in rainy season. There will be a lot of activities, the parade contest, The SeaFood Shops, the each Local Food demonstrate, and the cultural shows from each different local.

Laguna Phuket Triathlon It is on October of eavery Day.

Walking turtles Festival. It observs the turtle to spawn on the beach at dawn. It is between October to February on Turtles spawn season, there will be big turtle whic is difficult to find now.

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Phuket Tourism Festival to open the season It is annual on 1st of November at Patong Beach to welcome tourist. It also show the harmony between the travel agency and governor and citizen. There are many activities such as giving food offerings to a Buddhist monk on morning, Water sports, beauty contest from tourist etc.

Phuket King's Cup Regatta 5st December of every year, there will be the Royal Cup sailing competition which it has started since 2530 B.E, to Honor of His Majesty, the King's 60 year anniversary, the continue till now as every year. There are many inter sailboat to join competition the King's Cup. (Source: Phuket Provincial Governor's Office, 28 Apr 2010)

Phuket Tourism This is very important factors that influence our business forward because the main target group of our business is tourists. A tropical paradise, Phuket has a bit of everything that promises to make a holiday to this beautiful province memorable for the whole life. Phuket tourism is not just about beaches, though of course the beaches of Phuket rank highest in the tourist attractions of Phuket. A trip to Phuket can reveal several other attractive spots of the province to the tourists. These include dense tropical forests which provide a safe haven to several species of flora and fauna. Among the wild animals, you might have an occasional glimpse of rare species of reptiles. If you have a passion for wild life then get ready to explore the forests of Phuket and rediscover nature in her splendid form. Phuket has much to offer, from mangrove forests to brilliant sunset as you visit Laem Phromthep, the island's southernmost point. Like the rest of Thailand, Phuket also is famous for preserving her rich historical and cultural heritage. While on a trip to Phuket make sure you do not miss out on the

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various historical and cultural attractions of Phuket. If you have interest in history or archaeology, visit Phuket to experience the brilliance of old Sino-Portuguese architecture. Discover the many facets of Phuket tourism with a trip to this island. The mixed cultural charm would surely inject the feel of pleasure into your mind.

Low – High season is affected our business because the number of tourists depend on high and low seasons. There are 3 seasons for travel in Phuket which are: Low Season is 01 May to 31 October in each year which there are few of tourists . High Season is 1 November to 15 December and 16 January to 30 April in each year which there are many of tourists so products and services are very expensive more low season. Peak Season or Peak Period is 16 December to 15 January in each year which there are the most tourists in Phuket because they come to celebrate the Christmas festival, Light up Phuket and New Year festival so almost of accommodation, restaurant and flight reservation will be full. So during peak periods there are the most tourist amount in Phuket. (Source: http://www.asiarooms.com, 27 Apr 2010)

Phuket's Record High Sets Pace for Global Upturn

A RECORD number of passengers passed through Phuket airport in January, providing the first real evidence that the boom on the holiday island is back. Phuket, demonstrating its remarkable ability to recover from both natural and manmade disasters, is now a pacesetter for renewal in the global tourism industry. The total of 749,518 arrivals and departures in January is an increase of a remarkable 33.23 percent on the figure for the same month in 2009. Not only that, it's

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well above the 635,060 for January 2008, when Phuket hummed along in the middle of a then-record high season. At peak times lately, with multiple flights arriving or departing, Phuket airport has seemed to be bursting at the seams, with queues of passengers sometimes extending back 50 metres from the main terminal entrance scanner. A massive increase in the number of flights appears the prime force driving the resurgence of the island as a holiday destination for international and domestic travellers alike. January's total of 4524 flights represented a 30.49 percent increase on the same period in the previous year. That figure also even soars well above the 4155 flights recorded in January 2008, before the economic dip set in. Biggest increase of all came among international passengers, up by 40.60 percent on January 2009. While Thailand suffered heavy losses to tourist numbers early last year after the December 2008 occupation and blockade at Suvarnabhumi airport, Phuket's numbers dropped, but not to disastrous levels. Comparisons with the record January of 2008 establish that the 2010 bounce is genuine, not just a statistical aberration based on a low January 2009 figure. The turnaround is backed by reports from Phuket resort managers, who have been pleasantly surprised at the speed and the strength of Phuket's recovery. Ashleigh Brayshaw, Director of Marketing Communications at Sheraton Grande Laguna, said: ''It has been a great start to the year. The meetings segment is also very strong.'' She said figures were healthy across all the brands at the large Laguna Phuket destination resort, usually a bellwether for the island's top-end market. The surge back to prominence, similar in many ways to the island's quick recovery after the 2004 tsunami, seems to be a product of several factors: Substantial discounting and special packages at resorts has made the island top value again for tourists. Direct flights to Phuket are up, to the point where the airport no longer has space for additional overnight airline parking. Charter flights have increased rapidly, with the Tourism Authority of Thailand scoring successes on road trip presentations, especially in China. Budget airlines, led by AirAsia creating an island hub and Jetstar out of Australia, have seized on Phuket's geographical advantage and rapidly opened new region-wide routes. Pundits still say it will be early 2011 before Asia's tourism market fully recovers from the worldwide economic downturn, yet Phuket suddenly appears to be the tourism industry's upturn pathfinder. Even if people are still paying less to get to Phuket and

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spending on average about 20 percent less when they get here, all indications are that Phuket is literally off to a flying start to 2010.

In the full year 2009, Phuket

international arrivals and departures were down by 4.91 percent, with the domestic side compensating a little by increasing 5.04 percent. Goods being flown in also reflect the massive 2010 rebound, increasing year on year for January by 52.83 percent, with international cargo flights more than doubling.

Thailand's quirky politics, though,

remain unpredictable. Yet it appears travellers are prepared to take the country's increasingly settled appearance since the Asean red-shirt resort invasion of April 2009 at face value, as a sign that it's time to return. The figures for the period from October 2009 to January 2010 also reflect a pronounced return to normal, with the number of arrivals and departures rising to 2,436,570 in that period, up by 27.48 percent on the previous comparable period. January's surge in international traffic has been exceptional, but in the October-January period, domestic travel to Phuket has also strongly improved by 35.15 percent. Resort managers predict that February will be just as potent, with the Chinese New Year-Valentine's Day peak around February 14 likely to bring figures to rival the 2009 Christmas-New Year. Phuket Bike Week in April, running into the Thai New Year at Songkran, is also expected to close out a high season in which Phuket tourism impressively turned around its fortunes. (Source: Phuket Wan By Alan Morison, http://phuketwan.com, Saturday, February 6, 2010)

Natural Disaster Tsunami is the natural environment factor because it hit Southeast Asia on December 26, 2004. It was the deadliest disaster in modern history killing over 240,000 people. A tsunami is a series of ocean waves. They are one of the biggest disasters in the world. Phuket also was affected from Tsunami in 2004. Our business can be affected from Tsunami because it is located near the beach.

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Technology Factors Nowadays technology has become one of the most important tools in manufacturing organizations. Controlling the activities and information flow will lead manufacturing organizations to operate efficiently and better manage their resources. Coffee industry needs new technology for process of production and coffee store also need the technology for support the business such as coffee brewing machine, computer, Wi-Fi and etcs.

Technology Equipments Coffee Brewing Machine: La Marzocco’s GB/5 AV- 3 Group Figure 3.5: Coffee Brewing Machine

La Marzocco’s is the most famous and the best quality of coffee brewing machine brand in Italy. Most of barista around the world select this brand because the World Barista Championship (WBC) use machine of this brand in competition and Starbuck coffee and Gloria Jean’s also use machine of this brand to serve the high quality coffee cup. Setting the bar higher, Featuring PID temperature controls, solid-state relays, preheating system and adjustable steam flow. The GB/5 takes temperature stability to a new level, electronically monitoring all machine functions. Saturated brewing groups and dual boiler-technology inside. Ideal for the most classic & elegant cafés. La Marzocco's dual boiler technology ensures good steam power whilst maintaining optimal brewing temperatures, Espresso coffee machines have two main

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functions: brewing of espresso and steam production. A large draw on power to produce steam can jeopardise the thermal stability in single-boiler machines. This can mean over or under-extracted coffee. La Marzocco has a dedicated boiler for each of these functions: therefore it uses two boilers, completely separate one from the other, so that they can both be working at the same time without interfering with each other. The coffee boiler contains a large quantity of water at an optimal temperature, kept constantly under control by a precision thermostat which ensures a maximum temperature variation between one coffee and the next of less than ± 1° C, while other manufacturers' machines with a single boiler rely on less suitable pressure gauges to regulate even the most important parameter, the temperature. Finally, among the La Marzocco machines, those with the PID system ensure a temperature variation between one coffee and the next of even less than ± 0.5° C, an out-and-out record in the field. La Marzocco's steam boiler is also by far more efficient given that it does not contain heat exchangers. The steam pressure can, in fact, be adjusted at whatever level required, without detracting from the coffee brewing temperature, thus enabling the perfect preparation of milk-based drinks. (Source: La Marzocco S.r.l.; http://www.lamarzocco.com, 2010)

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Coffee Grinder Figure 3.6: Compak K6 Grinder Professional Barista (WBC)

Compak K6 Grinder, attractive coffee grinder for heavy duty use. Grinds and dispenses approx 7g of espresso coffee per dispense. The grinder built for the professional barista who demands a perfect grind with performance and agility. Excellent feature,production capacity and price ratio. Has a continuos micrometrical regulation system and an aluminium dispenser with a buit-in coffee press. In addition it was used by WBC for Thailand Barista Champion Competition in 2008. (Source: http://www.compak.es, 03 May 2010)

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Blender Figure 3.7: Blendtec Smoother Blender

The Legendary Performer, for years the Smoother has set the standard in blending frozen drinks. The Smoother is still the choice of many of the world's leading beverage retailers. No blending chore is too tough for the Smoother. The Smoother was designed with you in mind. There is no need to purchase a different machine if you change the layout of your counter. The Smoother combines power with intelligence and beauty. In addition Starbuck also use this brand so it is very popular in Thailand. (Source: ALLIED METALS (THAILAND) CO., LTD. http://www.alliedmetals.com, 03 May 2010)

Point - OF – Sales System (POS) If you're a veteran retailer, you know the problem: Your inventory doesn't match your tallies. Sales are going unrecorded. Your staff is spending far too much time chasing mistakes instead of tending to customers. Something is seriously wrong, and

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you're just not sure what the problem is. These and other snafus suggest that it's time that your business did away with its cash registers and stepped up to a point-of-sale (POS) system. A POS system is a computer software and hardware network that records sales as they're occurring; it solves a variety of operational and record-keeping headaches. In a coffee shop, like any business establishment, it's important to keep records of all transactions so we need to find the POS system for our coffee shop. POS Systems need to keep track of our inventory and ingredients, analyze profit and loss margins, determine our top-selling items, and record employee hours and wages. With this Coffee Point of Sale System we can easily sell and redeem gift cards and implement loyalty plans to attract new customers and to turn existing customers into regulars.

Figure 3.8: HP ap5000 All-in-One POS System

The POS all-in-one system is designed as a touch-enabled point-of-sale one that minimizes the workspace and enhances promotional activities. The company has also revealed that its TouchSmart hardware is powering Escalate Retail's Interactive Store Kiosk. “Addressing customer preferences, HP has expanded its retail store portfolio with an all-in-one solution that provides increased flexibility and results for a variety of business market segments,” Ray Carlin, vice president, Retail Store Solutions Global Business Unit, HP, said. “As the retail market recovers from economic hard times, HP has developed a broad retail product portfolio to best meet changing customer needs.” The HP ap5000 enables retailers to create a comprehensive POS hardware solution

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through a self-contained combination of products. The system itself combines the processing power of its CPU with a touch-enabled display and a magnetic stripe reader. The screen itself can be either a two-line customer display or a 10.4-inch LCD. Functionality is not the only asset of this system, however. The HP ap5000 only needs one power outlet and little desk space, making it excellent for customer-facing areas through a reduced cable clutter and overall sleek design. (Source: http://welcome.hp.com, 03 May 2010)

Figure 3.9: Coffee Shop POS Systems and Coffee Shop Software

(Source: http://posnation.com, 03 May 2010)

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Wi-Fi Hotspot

Figure 3.10: Wi-Fi Service

(Source Triple T Internet Company Limited: http://support.3bb.co.th or http://www.3bb.co.th, 03 May 2010)

Internet Service

Figure 3.11: HP Pavilion P6383L •

Intel® Core™ 2 Quad processor Q9300

•

2.5 GHz, 6MB L2 Cache, 1333MHz FSB, EM64T, Execute Disable Bit, EIST"

•

Intel® G41 Express Chipset, 750 GB 3G SATA hard drive at 7200RPM,

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•

DVD±RW/±R Super multiDrive with Lightscribe Technology, Double Layer (8.5GB)

•

16X DVD±RW/±R Drive, 4GB RAM DDR3 up to 4GB with 1066MHz FSB RAM"

•

Integrated Intel High Definition Audio, 5.1 Surround Sound Ready

•

nVidia GeForce GT220 PCI-Express Graphics card 1GB dedicated allocated by windows 7 up to 2303MB with HDMI and DVI capabilities

•

Integrated 10/100 Base-T Ethernet, 15 in 1 media reader

•

6 USB 2.0 Port (2 Front 4 Rear)

•

1 PCI Express(x16 ) ,2 PCI Express(x1) and 1 PCI

•

HP Deluxe Multimedia keyboard, Optical Scrolling Mouse

•

FreeDOS, PC Doctor program preloaded

•

1-year limited on-site warranty

•

HP Pavilion 20" LCD with speaker

(Source: www.pantipcity.com, 03 May 2010)

3.1.2 Competition Analysis (3C Analysis)

Competitor Analysis Because of OKey Coffee is located at Karon Beach and targeting the tourists who are visited there so the competitor analysis is analyzing the coffee entrepreneurs which are both direct and indirect competitors in Karon Beach. For the premium coffee store business, it has very low competition. There is only one which is the direct competitors in the market. Almost of coffee products can find in Seven-Elevens, Minimarts and restaurants which are instant coffee; plastic packages and instant canned coffee; can and bottle package so it does not fresh good quality of coffee and there are not variety of products for the customers who visit the beach.

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Direct Competitors in Karon Beach Figure 3.12: Andaman Coffee Co. Logo

Company Name: Andaman Coffee Company Limited Branch: 3 Branches in Phuket Address Branch 3: 210/4 Karon Road, Karon, Muang, Phuket 83100 / Tel: (+66 76) 286-512 Email Address: http://www.andamancoffee.com

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Products & Services

Figure 3.13: Products and Service of Andaman Coffee Co. Hot Beverage

Iced Beverage

Blended

Tea & Juice

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114

Ice-cream

115

Bakery & Beverage

116

Sandwich & Waffle

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Internet

(Source: Andaman Coffee Co. Branch 3, 210/4 Karon Road, Karon, Muang, Phuket 83100, 03 May 2010)

Andaman Coffee Co. is the strong competitor in the market because there are 3 branches in Phuket which the branch one and two are located on Kata beach; the beach next to Karon beach and the branch three is located on Karon which is our competitor so they can attract the customers to buy their products because this brand name is well know in the this area. They serve their products and service to customers who have more purchasing power. They seek out the Arabica coffee beans that the products of Andaman Coffee Co. are good quality. There are main menu of coffee such as Espresso, cappuccino, latte and etc and they also have their own menu but there are not much. They are agreeable from customer even though it is not a big brand, it does not have a big fame all over our country, but it is well known for tourists there. According to Karon beach, it may have less choice for the customers because there is only one premium coffee store there. Andaman coffee store that is similar to Starbucks, but does not quite have the same touch. It also provides internet café and printing to customers. They always provide a comprehensive service to the customer satisfactions.

The

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products are not much variety. The package of this store is present with their logo on the packages such as coffee plastic glass and toothpick set.

Prices The Andaman Coffee products and service are all set in western prices, so it's not cheap because the premium coffee market in Karon Beach is dominated by them and almost of their customers are foreigners. The prices also were increased by added land value because it is in front of the beach so the customers pay higher prices due to the lack of competition. Especially internet café price are not attractive the customers that they charge only high price without concern with the customers who play for long times. The price ranks of products and service: •

Hot Beverage is between 55 – 75 baths

•

Iced Beverage is between 60 – 95 baths (Only soda is 40 baths)

•

Blended is between 95 – 120 baths

•

Tea is between 50 – 95 baths

•

Ice cream: 1 scope = 60/ 2 scopes = 110/ 3 scopes = 165/ 4 scopes = 220/ 5 scopes = 275 ** The customer can get discount when order more scopes

•

Bakery is between 55 – 105 baths

•

Sandwich and Waffle are between 95 -120 baths

•

Internet is 120 baths for 1 hour/ Printing is 25 baths for 1 sheet

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Place Figure 3.14: Andaman Coffee Co. Plece

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(Source: Andaman Coffee Co. Branch 3, 210/4 Karon Road, Karon, Muang, Phuket 83100, 03 May 2010)

The Andaman Coffee Co. is dominated niche market at Karon beach. It open 10.00 AM – 9.30 PM and this store is smaller than branch one and two but this store is located in front of the beach which is the tourism place so the customers can see and convenience but it is not located in the crowded place because the crowded place of Karon beach is in Karon Traffic Circle. It is opposite our shop that it is on the way to Kata beach but our shop is on the way to Patong beach and it is in Karon Traffic Circle area, but it is not so far from our store. The inside decoration is colorful modern style with green and orange tone color. They provide sofas and international magazines and there is out door atmosphere as well.

Promotions (updated promotions)

Free Wi –Fi Buying one of product, free Wi – Fi for 15 minutes Ice cream Customers can get discount when order ice cream more 1 scope

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Andaman Point Card Figure 3.15: Andaman Promotion

Andaman Point Card provides the customers to collect the points by buying complete to twenty cups can get one Andaman shirt free.

(Source: Andaman Coffee Co. Branch 3, 210/4 Karon Road, Karon, Muang, Phuket 83100, 03 May 2010)

Actually the premium coffee store always provide free Wi – Fi and some of them limit times to use because protecting the customers who use for long time that the store may waste of electric costs and there are not have seats for new customers so the business can not get lot of profits. The Andaman coffee provides only 15 minutes that it is very few times so it looks not attractive the customers who want to play for free Wi – Fi but the point card promotion is very interesting because it can show the royalty of their customers for products and it is the good way to motivate customers to buy. In addition they do advertising via an internet such as their own website (It is not update anymore) and face book.

Staff Uniform The staffs of Andaman Coffee Co. wear the uniforms which have company logo on their grey shirts with black long pants. When customers come, the staffs always say

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greeting and they always say “Thank you” when customers leave the store. This promotion can make the customers feel impressive and satisfy with their service. Indirect Competitors in Karon Beach

Convenience Store or Minimart, Supermarket Figure 3.16: Convenience Store or Minimart

(Source: http://www.phuket.com, and CP ALL PUBLIC COMPANY LIMITED http://www.cpall.co.th 2010) The convenience store and minimart in Karon beach are indirect competitors of our company because they also provide coffee and other beverages. Their products are general which there are in the market. The quality of product is different from premium coffee because they are not fresh so the taste of premium coffee is better. Coffee products are not premium coffee but they are instant coffee that they are instant coffee; the customers need to brew before drinking and instant coffee canned; the coffee already brewed. It is the convenience way for customers because they can be easy to find this kind of coffee in the market. The prices are cheaper than premium coffee. They are big company and famous brand names which have advertising via television, news

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papers and magazines such as Nescafe of Nestle and Birdy. In addition they also provide variety of beverages that the customers have many choices for them.

Restaurant Figure 3.17: Restaurant at Karon beach

(Source: http://www.phuket.com, 2010) There are many restaurants in Karon beach that provide coffee for their customers but their products are not premium coffee because they are instant coffee. They also provide other beverages such as energy drink, orange juice, coconut and etc which there are variety of choice for customers. The prices are expensive that are the same our product because it is in restaurant but there are less choice for customers and lower quality.

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General Shop or Small Shop beside the Road

Figure 3.18: General Shop or Small Shop beside the Road

(Source: http://www.phuket.com, 2010) This is also indirect competitors of our company because they provide beverage that they are alternative for customers. They also sell coffee that brewing the instant coffee or it is original Thai style. The products are normal so the prices are cheaper. The customer can be convenience to see because there are many shops beside the road. Almost of them do not have any attractive promotion because it is low cost and easy to sell. The customers do not concern on quality much.

Customer Analysis Because of Phuket is the most popular tourist destination of Thailand so our customer that we focus on tourist group. Mr.Praterng Sorn-Kham (Director of Phuket International Airport) tell that, in travel season of Phuket has passengers come to Phuket both domestic and international are more than 100,000 people per month and the ratio from international and domestic is 3:1.

(Source: Phuket e news, http://phuketenews.blogspot.com, 08.35 PM on 26 Jan 2010)

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Amount of Tourist

Figure 3.19: Tourist Arrivals Phuket 2009

Tourist in Phuket 2009 1,190,032

1,200,000 1,000,000 800,000 600,000

306,783

400,000 200,000 0 Thai

Foreigner

(Source: Office of Tourism Development, http://www.tourism.go.th, 02 Nov 2009 )

From graph, we can see that the amounts of foreign tourist arrivals to Phuket are more than Thai tourists. There are foreign tourists more a million per year while there are Thai tourists less than half million.

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Thai Tourist Gender Figure 3.20: Gender of Thai Tourists Arrival Phuket 2009

38%

Male

62%

Female

0

10

20

30

40

50

60

70

The research tells that there are 62 percents of Thai tourists are women and 38 percents are men. Age Figure 3.21: Age of Thai Tourist Arrivals Phuket 2009

57%

43%

25 - 34 Other

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Most ages are between 25 -34 years old (43%) and others are 57 percents.

Revenue

Figure 3.22: Revenues of Thai Tourist Arrivals Phuket 2009

28%

72%

Less Than or Equal 49,999 baht Other

The revenues are less than or equal to 49,999 baht (72%) and others are 28 percents.

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Factors to Choose the Coffee Shop

Figure 3.23: Factors to Choose the Coffee Shop for Thai People

Taste Atm osphere Qu ick Service Variety of Products Reasonable Price Comfortable and Meeting Brand Reliability Convenien ce Bakery an d Foo d

0

1

2

3

4

5

6

7

8

9

10

Promotion

The factors that influence Thai tourists to choose the coffee shop are taste of coffee, atmosphere at the shop, quick service, variety of products, reasonable price of product, the comfortable and suitable for meeting, brand reliability, convenience to buy such as they are near office or on the way to home, taste of bakery and food and attractive promotion. They are the reasons why Thai tourists choose coffee to their drink.

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Foreign Tourist

Number Tourists of Each Continent

Figure 3.24: Tourists of Each Continents in Phuket 2009

17%

63%

Europe Asia Australia North America Other South Africa 1% 3%

4%

12%

From graph the most number of tourists who come to travel at Phuket in year 2009 is European countries which there are 764,980 tourists (63%). Second there are 198,967 tourists (17%) that is very different from Europe. Third there are 147,915 tourists (12%) from Australia. Fourth there are 41,823 tourists (4%) from North America Fifth there are only 5,561 tourists (1%) from South Africa and there are 30,786 tourists (3%) from other. (Source:Office Of Tourism Development, http://www.tourism.go.th, 02 November 2009)

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Top Ten Country

Figure 3.25: Top Ten Coutry of Foreign Tourists Year 2009 in Phuket

Russia 6.79%, 57,338 Germany From 7.62%, 57,338

Singapore 6 .61%, 49,770

Finland 6.47%, 48,699 Australia 19.52%, 146,962

the most number of tourists who come to travel in Phuket in year 2009

separate by country which are Australia, Sweden, UK, Germany, Russia, Finland, Korea

14.78%, 111,255 Denmark, France, Japan and USA. In addition it is high season on October last year

found that there are tourists increase to 20 percents.

China 7.63%, 57,454

Malaysia 8.09%, 60,867

Sweden 14.43%, 108,582

England 8.06%, 6 0,690

From the most number of tourists who come to travel in Phuket in year 2009 separate by country which are Australia, Sweden, UK, Germany, Russia, Finland, Denmark, France, Japan and USA. In addition it is high season on October last year found that there are tourists increase to 20 percents. (Source: Phuket Provincial Governor's Office, 14 Marh 2010)

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Gender

Figure 3.26: Gender of Foreign Tourist Arrivals in Phuket 2009

60%

Male

40%

Female

0

10

20

30

40

50

60

70

On the other hand almost of foreign tourists in Phuket are men (60%) and there are 40 percents of women. Age Figure 3.27: Age of Foreign Tourist Arrivals in Phuket 2009

20% 25 - 54 Other

80%

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Most age between 25 – 54 years old (80%) and others are 20 percents.

Revenue

Figure 3.28: Revenues of Foreign Tourist Arrivals in Phuket 2009

37.5%

62.5%

50,000 baht up Other

The revenues are 50,000 baht up (62.5%) and there are 37 percents of others.

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Tourists Who Ever Drunk Coffee in Thailand

Figure 3.29: Tourists Who Ever Drunk Coffee in Thailand

100 90 80 70 60 50 40 30 20 10 0

88.24% 69.84% 67.74%

North America

Europe

Other

63.08%

China, Taiwan and Hong Kong

57.41%

Japan

There are 72.21 percents of foreign tourists who ever have drunk coffee in Thailand. The tourists from North America are the first (88.24%), second are from Europe (69.84%), and third are China, Taiwan and Hong Kong (63.08). The less number is from Japan (57.41%) and there are 67.74 percents of other countries.

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The Important of Coffee

Figure 3.30: Tourists who Realize Important of Coffee

48 47

46.3%

46 45

43.6%

44 43 42 41 40

Yes

No

There are 43.6 percents who like to drink coffee but they do not realize on important of coffee. In the other hand there are 46.3 who realize on important of coffee because they need to drink for health in daily life.

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Type of Coffee Bean

Figure 3.31: Tourists who Realize Type of Coffee Bean

100 90 80 70 60 50 40 30 20 10

52.6% 18.2%

Do not Realize

Arabica

25.6%

Other

There are 56.2 percents of foreign tourists who do not realize on type of coffee bean but there are 18.2 percents that like Arabica Bean that there is the highest amount when comparing with other coffee beans which there are 25.6 percents.

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Favorite Coffee Drinks Figure 3.32: Favorite Type Coffee Drinks

100 90 80 70

55.8%

60 50 40

18.4%

25.8%

30 20 10 Premium Coffee or Instant Coffee or Fresh Coffee Instant Coffee Canned

Both

Almost of foreigners prefer to drink premium coffee or fresh coffee (55.8%) rather than drink Instant coffee or instant coffee canned that there are only 18.4 percents. There are 25.8 percents of foreigners who like both types of coffee.

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Taste

Figure 3.33: The Favorite Taste of Foreign Tourist

14.4 Iced Coffee

47.9

Black Coffee

24.1

Put Milk and Sugar

The first favorite taste for coffee drinking of foreign tourist is putting milk and sugar (47.9) and second there are 24.1 percents for black coffee. Third there are 14.4 which is iced coffee.

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Price Figure 3.34: Price and Packing Satisfaction of Foreigners for Coffee in Thailand

41.6

45 40 35 30 25 20 15 10 5 0

33.7 24.7

55 - 120 Baht 25 -35 Baht 10 -20 Baht

Coffee Cup

Coffee Mug

Instant Coffee Cup

Almost of foreigners choose the coffee that brewing cup by cup which prices are between 55 – 120 baht for a cup (41.6%) and second is coffee mug which price 25 – 35 baht for a cup (33.7). Third is instant coffee cup which price are between 10 – 20 baht for a cup (24.7)

Popular Place Figure 3.35: The Popular Place for Foreign Tourist

Coffee Shop or Coffee Outlet

First

Restaurant or Coffee Shop at Hotel General Restaurant

Second

Third 0

0.5

1

1.5

2

2.5

3

3.5

139

The first popular place for foreigners is coffee shop or coffee outlet and second is restaurant or coffee shop at hotel. Third is general restaurant.

Most Satisfaction Place

Figure 3.36: The Most Satisfaction Place for Foreign Tourist

Restaurant or Coffee Shop at Hotel Coffee Shop or Coffee Outlet

First

Second

General Shop Third 0

1

2

3

4

The most satisfaction place for foreigner is restaurant or coffee shop at hotel. Second is coffee outlet or coffee store and third is the general shop that sells variety of beverages.

140

Decoration Figure 3.37: The Favorite Decoration

55.7

60 50

33.5

40 30 20

10.8

10 0 Classic

Modern

Other

The most favorite decoration of the foreign tourists is classic style, secondary style is modern and third is other styles which in a few.

The Most Forth Influence Factors of Foreigner Satisfaction Figure 3.38: The Most Forth Influence Factors of Foreigner Satisfaction for Coffee Business in Thailand

First Price

Second Atmosphere in the Shop and Convenience to buy Service

Third Forth

Variety of Product

0

1

2

3

4

5

141

The foreigner satisfaction for coffee business in Thailand is middle level which there is average 3.43 scores from 5. The most influence factors of foreigner satisfaction is price and second it is atmosphere in the shop and convenience to buy the product. Third it is service which the entrepreneurs provide to them. Forth it is variety of products.

The Less Two Influence Factors of Foreigner Satisfaction Figure 3.39: The Less Two Influence Factors of Foreigner Satisfaction

First

Giving Own Coffee Information Giving Own Coffee Equipment Information

Second

0

1

2

3

4

The less two influence factors of foreigner satisfaction which the first is giving own coffee information of the entrepreneur and second is giving own coffee equipment information.

142

Nationality Satisfaction

Figure 3.40: Nationality Satisfactions for Coffee Business in Thailand

First

North America Eropean Country, China, Taiwan and Hong Kong Other

Secondr

Third

0

0.5

1

1.5

2

2.5

3

3.5

When we divide into nationality satisfaction of foreigners for coffee business in Thailand, the information show that North America is the most satisfaction and next they are Europe country, China, Taiwan and Hong Kong and other country are low.

Foreigner Satisfaction Who Work in thailand Figure 3.41: The Most Foreigners Satisfaction Who Work in Thailand

First Eastern Country Western Country

Second

0

0.5

1

1.5

2

2.5

143

The most foreigner satisfactions who work in Thailand, the information show that the Eastern country is more satisfied than Western country.

Company Analysis OKey coffee provides good variety of coffee and other products and services which can make the customer to enjoy and be happy when they visit our outlet. Our company prides to serve premium Arabica from Doi Chaang Coffee that is world class coffee and the best coffee in the world because it is accepted from international country such as Italy, Canada, China and etc. Doi Chaang Coffee is a single-origin, premium Arabica. It is certified organic, forest canopy grown, hand picked, fresh water processed, sun dried, hand sorted and freshly roasted to ensure the highest possible quality for each cup of Doi Chaang Coffee. Naturally low in caffeine, it has a complex and flavourful profile which is enhanced and released through detailed cultivating, processing and roasting methods. For this reason we can sure that our every cup of coffees are high quality. In addition we use world class machine from Italy which is the best coffee machine provider and we also use other equipments which are high technology for our store. We make sure that the prices of our products and service are reasonable for the customers so the customers will be satisfaction with our products and services because we have studied this very well. We also find the best place to complete our high quality of products and services and it can be competitive with our competitors. We have the good promotions that can be attractive our customers to purchase our products services so we believe that our company will be beyond our competitors.

SWOT Analysis The following SWOT analysis captures the key strengths and weaknesses within the company, and describes the opportunities and threats facing OKey Coffee.

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Strengths - Strong financial resource - Variety of products and services - High quality of raw materials and equipments - Fast service because use high technology when there are many customers - Have unique menus - Good quality management system because use the high technology to support our management system - Convenience, good atmosphere, clean place and attractive decoration - Quantity and quality are reasonable with products and services or value of money - Impressive service of our staff

Weaknesses - New brand - Brewing cup by cup is slow; 3 minutes : 1 cup so lose of sale opportunity - The maintenance of machine is waste of time for production. Opportunities - Most of foreigners drink fresh coffee and premium coffee is also popular now. - There are good quality raw material resources in Thailand. - OKey coffee is located on tourist destination so high and peak seasons can gain lot revenues. -

There are only one direct competitor so it is low competitions and we can be easy to entry in the niche market

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Threats

-

Premium coffee

is consumed in specific

group, time

and occasion

-

There are other beverages that can drink to replace coffee qualification

-

There are many instant coffees and instant coffee canned to sell in general market.

-

Coffee has culture for drinking that need to take time for study and development for

accepting so the market expanding can not be fast.

Five Forces Analysis Threat of new entrants: High Premium coffee store business is easy to copy so it is easy to entry to the business for new competitors. The reasons are: - Low costs which depend on the size and location of business - There are raw materials of business in country such as Arabica Bean from Northern of Thailand or Robusta Bean from South of Thailand - For general of business, it no needs to use high technology so it is low cost of machine investment. - It is easy to get premium coffee information such as brewing method, roasted coffee beans and raw material resource.

Rivalry Among Existing Firms: High Because of nowadays the premium coffee business is very popular and the market is more expand so it can attract the new competitor entry into the business that both Thai entrepreneurs and foreign entrepreneurs get into for the market share of this business. The target markets of premium coffee are middle class up by divided in to: -Business zone, Department Store and Tourist Destination and the big dominant market share of premium coffee in Thailand are: • Foreign Chain such as Starbucks, Au Bon Pain, Gloria Jeans and UCC

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• Thai Chain such as Coffee World, Black Canyon • There are many independent coffee stores in all regions of Thailand and including Phuket which is the tourist destination and the target is tourists who are visited there. •

There will be very high competition of premium coffee business in 2010 because

there are increase expanding in market of each entrepreneurs by concern developing new market and they also develop new product together. • Starbucks and Coffee World will be more expanding their chain. • Black Canyon will increase distribution channel to gas station service and airport and including Phuket. • There is no Switching cost so there are high competitions because the consumers do not pay for changing brand name of products and services

Bargaining power of buyers : Low Because of it is the retailer business which provides premium product to consumers directly and there is a positioned price so the consumer can not bargain the price but if the consumer think that it is not reasonable price, they may not buy the products.

Bargaining power of suppliers: Medium The important raw materials of OKey coffee are divided: -

Coffee bean, it is the agricultural product which the lowest price are

positioned by government so Bargaining Power of OKey coffee for suppliers is low. In addition nowadays the price of Arabica coffee bean in country is low and although the premium coffee market trend to growth increasingly in the future but the quantity production of premium coffee is enough for marketing plan of OKey coffee. There are many of suppliers in Thailand and the cultivating of coffee bean in Thailand is good quality and accepting from international country so no need to import. • Packaging

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The plastic glass is industry productions which there are many suppliers in Thailand so the Bargaining Power of Suppliers are low because our company can order from other suppliers which providing lower prices. Threat of substitutes: High There are many products that can take place premium coffee which maybe instant coffee and energy drink that they are easy or convenience to buy in the market.

3.2 STP Analysis STP is the marketing’s tools for accessing to the customer in common using, that including of Segment market, Target market, and Positioning.

3.2.1 Market Segmentation OKey Coffee will focus its marketing activities on reaching foreign and Thai tourists who come to visit the Karon. Our market research shows that these are the customer groups that are most likely to buy premium coffee products that most of them are foreigners. Since premium coffee consumption is universal across different income categories and behavior to drink coffee in Thailand. The chart below outlines the total market potential (in number of customers) of OKey Coffee drinkers in Karon beach.

148

Figure 3.42: Market Analysis

10% Foreign Tourist

80%

Thai Tourist Local People

10%

3.2.2 Target Analysis OKey coffee divide target group into 3 groups which are foreign tourist, Thai tourist and local people. OKey Coffee cater to people who want to get their daily cup of great-tasting coffee and food or variety of products in a relaxing atmosphere. Such customers vary in age, although our location on Karon beach and it is in front of the beach means that most of our clientele will be travelers who visit there and local people. For us, this will provide a unique possibility for building a loyal client base. Main customer of OKey coffee is foreign tourists who stay at Karon beach that most of them are male and they ever drunk coffee in Thailand and the satisfaction of them are in middle level so this mean most foreigner like coffee in Thailand. There are 80 percents which are very high number and they have high revenue which are more 50,000 baht per month so the potential is high purchasing power to pay for products and services with medium to high price that they can pay at prices between 50 – 120 baht. Most of them like to drink premium coffee at the coffee outlet or coffee shop which have good atmosphere, good service and variety of products. Most of them like decoration in classic style. Secondary customers are Thai tourists who visit on Karon beach. Most of them are female. The revenues are less than or eaqual to 49,999 per month. They also

149

concern on taste of coffee ,atmosphere and variety of service and premium coffee are popular in Thailand now so Thai people are more consume premium coffee and local people which are officers and people who work on the beach so OKey coffee can get income from local people in low season.

3.2.3 Position Analysis

Figure 3.43: Positioning of OKey Coffee

Variety of Products and Services ☺OKey Coffee

Reasonable Price Convenience Classic

NOT

☻Andaman Coffee NOT OKey coffee position on variety of products and services with reasonable price according to customer wants and needs. OKey coffee’s products and services are high quality to serve the customers in classic decoration store at convenience place for complete in the customers relax time. Our store can serve the products to meet the wants and needs of customers with their friends and family. The position of our products and services are beyond our competitor like Andaman Coffee because they are not variety of

150

products and services and the prices are expensive. OKey coffee also locates at convenient place which the Andaman coffee is not.

3.3 Marketing Mix Strategy The Marketing Mix model (also known as the 4 P’s). There is Product, Price, Place (distribution) and Promotion. These four P's are the parameters that the marketing manager can control, subject to the internal and external constraints of the marketing environment. The goal is to make decisions that center the four P's on the customers in the target market in order to create perceived value and generate a positive response. OKey Coffee marketing strategy will be focused at getting new customers, retaining the existing customers, getting customers to spend more and come back more often. Establishing a loyal customer base is of a paramount importance since such customer core will not only generate most of the sales but also will provide favorable referrals.

3.3.1 Product Strategy Branding Strategy; we use the word “OKey” which means OKey Coffee store as our brand which they are OKey in products, OKey in price and OKey in place. The word OKey is easy to remember so the customer will imagine to OKey coffee when they want to drink good taste of coffee with reasonable price at convenient place.

151

Figure 3.44: Logo of OKey Coffee

Logo It is simple but it is unique itself and easy to remember. It can present about our finest coffee store and feeling to everyone who drinks our coffee and other products. When customers see this logo, they can smile and feel well. The objective below the brand OKey is a fantastic smile which would make our customers feel happy. It also expresses the uniqueness of Thailand as it’s known as the land of smile.

Slogan; “OKey Coffee Wake Up and Smell the Variety” Our slogan, this phrase would make the customers remember our brand more easily because it is just only a short word and also has a good meaning. Every time that our customers see or hear the slogan, they would feel happy because they know that they will not be lonely anymore.

• Products and services strategy OKey Coffee is provided the variety of products and services to meet the customer needs with the good training of our staffs to make the customer satisfaction. OKey coffee concern on clean and save because it can create the customer reliability. There are more choices for the customers than competitor such as secondhand books,

152

foods that the competitors do not provide to the customers. In addition there will be new products or special product in high or peak season for increase in prices and sales. We need to think that the products should be balance in sale because if some of products hold back other, we should not sell because we will lose some of income. Our packaging is also classic as our shop because OKey coffee is the new business so the packaging should be attract the customers Product

Core Products -

Coffee; Iced Beverage, Hot Beverage, Blend Beverage

-

Tea

-

Juice

-

Smoothie

-

Non Iced Beverage

-

Food

Supporting Products -

Coffee Bean - Bakery

-

Ice Cream

-

Secondhand books

Why we provide supporting products according of customers want and needs such as bakery and foods are main supporting products for coffee shop nowadays. Service -

Internet

-

Free Wi Fi that do not limited time use for customer who bring computer by giving password

153

3.3.2 Price Strategy OKey coffee estimated production cost of raw material plus operation cost and added land value then setting reasonable price for our target group. We will set in different prices that they depend on costs. Our price will set more threefold from cost on core products and some of supporting products. Some supporting products set in the general price. OKey coffee store sets reasonable prices to meet the customer needs and wants which the prices are medium. We will set the price on products that the competitor does not have quite high prices such as foods and own menu of our company. We will set the price are quite cheaper than competitors on some menu which Setting different prices of product that they are low cost raw material which competitors sell in high prices but we are sell low price such as Andaman Coffee sell Thai Tea 95 baht but we sell in 75 baht because it is very low cost. The price of the same menu with competitor that we do not set in expensive than them and we will set same price on some menus. To increase price on popular menus in high and peak season but they are not over competitor. To discount some menus of beverage in low season or Green season for attract more customer.

154

3.3.3 Place Strategy

Figure 3.45: Karon Traffic Circle

OKey coffee store is located at the beach Karon Traffic Circle which is the main road or commerce zone in the beach and there are crowded of tourists who walk on or shopping there from day time to night time because there are supermarkets, mini marts and restaurants. The area is made up entirely of photo labs, pharmacies, banks and

155

tailors and more tailors and more bars than Las Vegas, although with more modest prices. In addition there are guest house and hotels around there. Especially OKey coffee is opposite Phuket Karon Corner Inn Hotel which this hotel do not have break fast for their guest so they can come to visit our shop because we provide foods and beverages. Our shop is in front of the beach which is on the convenient building because there are shopping place in the first floor so the customers are easy to get our shop at the second floor. There are in door and out door atmosphere for customer. There are comfortable warm lighting, coffee bar, sofa, private space and international selection of variety magazine, you can enjoy out door atmosphere as well which customer can see the beach from our store. From these reasons OKey coffee can be more attractive customer than competitor. To changing new one of products that there are accidents by customer wrongs such as coffee cups are split or broken. It will lead the business to good standard and it can be “Word of Mouth” which is the good promotion.

3.3.4 Promotion Strategy Advertising Strategy OKey Coffee no need to advertise much because it is located at the good location and Phuket is tourist destination, especially Karon has only one premium coffee competitors so we can easy to sell. The best advertisement is building shop standard to customer perception and accepting our shop because it can lead to “Word of Mouth” of customer that this method is very effective for coffee store business. Advertising product and service though various of media, such as: -

Brochure that we will put our brochure on front at hotel and guest house

in Karon beach. -

Company web site that our customer can leave their comment there.

-

Blackboard in front of shop

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-

Face books that is the good channel to introduce our business on global

and we can exchange idea with customers and people who are interested in coffee and Free. These can present image, brand name and logo of company quickly and clearly so customers are easy and understand about products and services. We will do public relation such as donating box because this can promote good image of company.

Figure 3.46: Website of OKey Coffee

157

Figure 3.47: Face Book of OKey Coffee

Staff Uniform This strategy the same of competitors that the staffs need to wear OKey Coffee uniforms because when customers come, the staffs always say greeting and they always say “Thank you” when customers leave the store. This promotion can make the customers feel impressive and satisfy with their service.

3.4 Sales Forecast/Profit Estimation Our company located at Karon beach in Phuket. As we know there are three seasons in Phuket which are: Low Season is 01 May to 31 October in each year which there are less tourists. From research of our competitor and entrepreneurs there, we can estimate sale of our company in this period:

158

Table 3.3: Standard Average Sale Forecast in Low Season

Products

Time

Average Units

Average Prices

Beverage Sale/ cups

Day

50

75

Food Sale/ plates

Day

25

120

3

150

and Service

Coffee

Bean

Sale/ Week

bags Bakery/ prices

Days

25

75

Ice Cream/ scope

Days

15

50

Book/ Days

10

180

6*3

100

Secondhand books Internet

Service/ Days

hours

This period our sale may not less than high season and peak period or our sale will be stable. We will launch OKey Coffee business on January, 2011 which is in high season and peak period because there are many tourists or many demands so we can easy to sell our products more low season. We may not get the profits on first month because we are ne entry into the market so the customer may not know our products so they do not much purchasing our products. Although we have to use a lot of money for investment such as building rental, equipment, raw material, salaries, tools, interior decoration cost etc. but we think that we can make profit later when our product enter market for year two or three which are 2012 and 2013.

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High Season is 1 November to 15 December and 16 January to 30 April in each year which there are many of tourists so products and services are very expensive more low season. Table 3.4: Standard Average Sale Forecast in High Season

Products

Time

Average Units

Average Prices

Beverage Sale/ cups

Day

100

75

Food Sale/ plates

Day

45

120

6

150

and Service

Coffee

Bean

Sale/ Week

bags Bakery/ prices

Days

45

75

Ice Cream/ scope

Days

30

50

Book/ Days

20

180

8*3

100

Secondhand books Internet

Service/ Days

hours

Peak Season or Peak Period is 16 December to 15 January in each year which there are the most tourists in Phuket

160

Table 3.5: Standard Average Sale Forecast at Peak Period

Products

Time

Average Units

Average Prices

Beverage Sale/ cups

Day

125

75

Food Sale/ plates

Day

50

120

10

150

and Service

Coffee

Bean

Sale/ Week

bags Bakery/ prices

Days

55

75

Ice Cream/ scope

Days

45

50

Book/ Days

25

180

10*3

100

Secondhand books Internet

Service/ Days

hours

*** We assume the sale forecast on very low volume in the period when compare with total sale of competitors and real situation because our project can be safe that when we are operated our project and it can show the feasibility so the project will be survive.

161

Table 3.6: Sale Forecast of Year 2011 (YEAR 1) Year 2011 Sale Volume Products and Service Per Month

Price

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Total

Beverage

75

775

780

785

785

790

785

790

795

795

800

1,085

1,550

10,515

Food

150

620

625

630

630

620

625

610

620

625

630

775

930

7,940

Coffee Bean

150

5

7

7

7

5

5

4

6

7

6

9

10

78

Bakery

75

465

470

475

480

460

465

470

470

475

485

495

620

5,830

Ice Cream

50

620

630

800

1050

450

460

465

460

465

475

600

900

7,375

Secondhand Book

180

155

155

157

160

140

140

155

150

160

160

175

180

1,887

Internet Service

100

186

130

140

150

124

128

125

129

135

140

145

170

1,640

Year 2011 Total Sale Products and Service Per Month

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Total

Percent

Beverage

58,125

58,500

58,875

58,875

59,250

58,875

59,250

59,625

59,625

60,000

81,375

116,250

788,625

24 %

Food

93,000

93,750

94,500

94,500

93,000

93,750

91,500

93,000

93,750

94,500

116,250

139,500

1,191,000

36.7 %

750

1,050

1,050

1,050

750

750

600

900

1,050

900

1,350

1,500

11,700

0.3 %

Bakery

34,875

35,250

35,625

36,000

34,500

34,875

35,250

35,250

35,625

36,375

37,125

46,500

437,250

13 %

Ice Cream

31,000

31,500

40,000

52,500

22,500

23,000

23,250

23,000

23,250

23,750

30,000

45,000

368,750

11 %

Secondhand Book

27,900

27,900

28,260

28,800

25,200

25,200

27,900

27,000

28,800

28,800

31,500

32,400

339,660

10 %

Internet Service

12,400

13,000

14,000

15,000

12,400

12,800

12,500

12,900

13,500

14,000

14,500

17,000

164,000

5%

Total

258,050

260,950

272,310

286,725

247600

249,250

250,250

251,675

255,600

258,325

312,100

398,150

3,300,985

100 %

Coffee Bean

162

Figure 3.48: Sale Forecast of Year 2011 (YEAR 1)

Price (Baht)

Month

163

Figure 3.49: Percent of Sale Forecast Year 2011 (YEAR 1)

Baverage Food Coffee Bean Bakery Ice Cream Secondhand Book Intenet

164

Table 3.7: Sale Forecast of Year 2012 (YEAR 2) Year 2012 Sale Volume Products and Service Per Month

Price

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Total

Beverage

75

2,480

2,010

2,100

2,200

800

790

750

765

795

800

1,800

2,850

18,140

Food

150

1,200

1,000

900

1,000

700

600

590

700

780

800

1,000

1,550

10,820

Coffee Bean

150

12

9

8

10

5

5

4

5

6

8

12

18

102

Bakery

75

775

700

720

750

500

520

485

470

475

600

750

800

7,545

Ice Cream

50

950

850

800

1,100

450

400

465

460

465

500

900

950

8,290

Secondhand Book

180

250

220

190

200

150

155

165

150

175

180

250

300

2,385

Internet Service

100

500

460

450

480

200

250

300

320

300

400

500

580

4,740

Year 2012 Total Sale Products and Service Per

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Total

Percent

Beverage

186,000

150,750

157,500

165,000

60,000

59,250

56,250

57,375

59,625

60,000

135,000

213,750

1,360,500

28 %

Food

180,000

150,000

135,000

150,000

105,000

90,000

88,500

105,000

117,000

120,000

150,000

232,500

1,623,000

33 %

Coffee Bean

1,800

1,350

1,200

1,500

750

750

600

750

900

1,200

1,800

2,700

15,300

0.4 %

Bakery

58,125

52,500

54,000

56,250

37,500

39,000

36,375

35,250

35,625

45,000

56,250

60,000

565,875

12 %

Ice Cream

47,500

42,500

40,000

55,000

22,500

20,000

23,250

23,000

23,250

25,000

45,000

47,500

414,500

8%

Secondhand Book

45,000

39,600

34,200

36,000

27,000

27,900

29,700

27,000

31,500

32,400

45,000

54,000

429,300

8.6 %

Internet Service

50,000

46,000

45,000

48,000

20,000

25,000

30,000

32,000

30,000

40,000

50,000

58,000

474,000

10 %

Total

568,425

482,700

466,900

511,750

272,750

261,900

264,675

280,375

297,900

323,600

483,050

668,450

4,882,475

Month

100 %

165

Figure 3.50: Sale Forecast of Year 2012 (YEAR 2)

Price (Baht)

Month

Figure 3.51: Percent of Sale Forecast Year 2012 (YEAR 2)

10%

28%

8.9%

Beverage Food

8%

Coffee Bean Bakery Ice Cream

12%

Secondhand Book Internet

0.4%

33%

167

Table 3.8: Sale Forecast of Year 2013 (YEAR 3) Year 2013 Sale Volume Products and Service Per Month

Price

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Total

Beverage

75

3,100

2,800

2,900

3,000

1,000

800

750

770

800

800

2,500

3,100

22,320

Food

150

1,500

1,250

1,000

1,300

750

680

590

680

800

830

1,300

1,550

12,230

Coffee Bean

150

24

18

12

15

6

7

8

9

11

12

20

28

170

Bakery

75

1,000

900

850

900

500

590

550

470

500

600

1,000

1,100

8,960

Ice Cream

50

1,200

1,100

1,000

1,150

500

450

465

460

465

500

1,000

1,250

9,540

Secondhand Book

180

300

250

200

230

150

155

165

150

175

180

280

330

2,565

Internet Service - 3 cases

100

930

850

800

900

300

250

300

320

300

400

600

900

6,850

Year 2013 Total Sale Products and Service Per

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Total

Percent

Beverage

232,500

210,000

217,500

225,000

75,000

60,000

56,250

57,750

60,000

60,000

187,500

232,500

1,674,000

28.5 %

Food

225,000

187,500

150,000

195,000

112,500

102,000

88,500

102,000

120,000

124,500

195,000

232,500

1,834,500

31%

Coffee Bean

3,600

2,700

1,800

2,250

900

1,050

1,200

1,350

1,650

1,800

3,000

4,200

25,500

0.5%

Bakery

75,000

67,500

63,750

67,500

37,500

44,250

41,250

35,250

37,500

45,000

75,000

82,500

672,000

11.8%

Ice Cream

60,000

55000

50000

57500

25000

22500

23250

23000

23250

25000

50000

62500

477,000

11.2%

Secondhand Book

54,000

45,000

36000

41400

27000

27900

29700

27000

31500

32400

50400

59400

461,700

7.8%

Internet Service

93,000

85,000

80,000

90,000

30,000

25,000

30,000

32,000

30,000

40,000

60,000

90,000

685,000

12.2%

743,100

652,700

599,050

678,650

307,900

282,700

270,150

278,350

303,900

382,700

620,900

763,600

5,883,700

100 %

Month

Total

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Figure 3.52: Sale Forecast Year 2013 (YEAR 3)

Price (Baht)

Month

Figure 3.53: Percent of Sale Forecast Year 2013 (YEAR 3)

12.2% 7.8%

28.5%

Beverage Food Coffee Bean Bakery

8.2%

Ice Cream Secondhand Book

11.8%

Internet

0.5%

31%

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Figure 3.54: Conclusion Sale Forecast 2011 – 2013 (3 Year)

Conclusion Marketing Expenses 2011 - 2013 7,000,000

5,883,700

6,000,000

Baht

5,000,000

4,882,475 3,300,985

4,000,000 3,000,000 2,000,000 1,000,000 0 Year 1

Year 2

Year 2

Total Sales Forecast of 3 Years = 14,067,160 Baht

3.5 Marketing Expenses (Sale Incentive)

OKey Coffee has expense as follow: -

-

Web Site

:

Phuket Windown

Price -

3,500 Baht/First year

-

Next year 2,500 Baht

Brochure

:

At Phuket Sticker

Price -

500 Units/ 3.50 Baht Per Unit

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Table 3.9: Market Expenses of Year 2011 (YEAR 1)

Market Expense Year 1 (Baht) Market Activities

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Total

Web Site

3,500

Brochure

1,750

1,750

1,750

5,250

Total Market Expense

5,250

1,750

1,750

8,750

3,500

Table 3.10: Market Expenses of Year 2012 (YEAR 2)

Market Expense Year 2 (Baht) Market Activities

Jan

Web Site

2,500

Brochure Total Market Expense

2,500

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Total 2,500

1,750

1,750

3,500

1,750

1,750

6,000

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Table 3.11: Market Expenses of Year 2013 (YEAR 3)

Market Expense Year 3 (Baht) Market Activities

Jan

Feb

Web Site

2,500

Mar

Apr

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Total 2,500

Brochure 2,500

1,750

1,750

3,500

1,750

1,750

6,000

Figure 3.55: Conclusion Market Expenses 2011 - 2013 ( 3 Year)

Conclusion Marketing Expenses 2011 - 2013 10,000

8,750

8,000 Baht

Total Market Expense

May

6,000

6,000

Year 2

Year 2

6,000 4,000 2,000 0 Year 1

Year 3

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3.6 Conclusion in market feasibility

According to market analysis OKey Coffee Company emphasizes and gives precedence to external factor to run the Company for eliminate the problems that will happen in the future such as political/legal, economic, socio-cultural, demographic, and technological. We analyze about the competition in the market and we also analysis the competitors of our company that make us to know the competitive in the market and know the demand of customers what they wants and needs. These make our company know how we should do on step that we know how to make strengths beyond competitors, what are weaknesses, opportunities and treats of our company. So OKey Coffee thinks to create marketing mix strategy (4 P’s) to make different from our competitors that our company know what we should provide to meet the needs of our target groups.

The market forecast is an important thing that we should the feasibility to sell product or service in that market because this can point us to know that this business should launch or not. From sale forecast in 2011 – 2013 of our company we found that our products can sell at high volumes on high season and very high on peak period because there are many tourist visit there which are Christmas and New Year and the sale are less and stable volumes on low season. Although on low season our sale will be less but from the environment analysis of Phuket, we found that there are many festival in each year so there are tourist visit there continuously.

We forecast our sale will be increase continuously and it will be stable after because the customer will know our products more and because of our promotion strategy they will impress with our products and service so our business will keep walking with word of month of our customers and OKey Coffee will growth step by step.

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Chapter 4

Technical Feasibility Study

174

4.1 Production and Operation Analysis This Chapter explains about the technical analysis that including product characteristic, Location and building, the product and service process thought the management analysis as well as the overall about cost.

4.1.1 Product characteristics

Doi Chaang Coffee

Figure 4.1: Doi Chang Premium Coffee

Doi Chaang Coffee is a single-origin, premium Arabica. It is certified organic, forest canopy grown, hand picked, fresh water processed, sun dried, hand sorted and freshly roasted to ensure the highest possible quality for each cup of Doi Chaang Coffee. Naturally low in caffeine, it has a complex and flavourful profile which is enhanced and released through detailed cultivating, processing and roasting methods.

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Price: 5 kg / 4500 Baht

Cultivation Doi Chaang Coffee is naturally cultivated and processed in the remote Doi Chang Village of Northern Thailand. Rich fertile soil, high elevations and ample rainfall make Doi Chang Village one of the premium coffee growing regions of the world. We naturally cultivate a variety of Arabica plants under a canopy of sun-filtered plum, peach, pear and macadamia nut trees in altitudes between 1200 and 1600 metres above sea level. The fallen leaves from our various fruit and nut trees create nutritious mulch for our coffee plants, providing a subtle fruit and nutty taste to our coffee. The shade and high altitudes slow the growth of our coffee cherries, creating a more complex, dense and intensely flavoured bean. Harvesting

Our cherry flowers begin to bloom in February and the cherry fruit is ready for harvesting from November to March. Selectively hand picking only our ripe cherries ensures minimal damage to our plants and that only our best cherries are processed.

Fully Wet-Method Processing

This labour intensive traditional processing method washes and flushes the bean from its fruit. Although time consuming, the wet-method helps maintain the inherent qualities of our beans.

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Extraction

First, we pre-wash our cherries in a tank of fresh spring water where all our ripe cherries will sink to the bottom and any unripe cherries will float to the top and be removed. Second, we remove the skin and pulp by putting our cherries through a pulping machine. Third, our beans are fermented in water for 48 hours to remove the mucilage layer and allow a series of chemical reactions to occur which enhance our coffee's aromatic and flavour qualities. Finally, we thoroughly hand wash our beans with fresh flowing spring water to remove all traces of the mucilage and prepare the beans for drying. All the mucilage and fermented byproducts will be recycled as fertilizer for the coffee plants. Drying

We evenly spread our parchment-covered beans on patios to naturally sun dry over the next seven to eight days. During this time we continuously hand rake and respread our beans to ensure they fully dry. In the evenings we pile up and cover the beans to protect them from moisture. Once our beans are dried to an 11% moisture level they are warehoused until we need them for roasting.

Hulling & Sorting This final stage of processing is done just prior to roasting. Our coffee beans are removed from the final parchment layer with the use of a hulling machine. The coffee beans are initially sorted and graded by shaking the beans through different sized sieves and then hand selected to ensure only the finest grade beans are roasted. There are variety of products in OKey Coffee store which are:

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Hot Beverage: Coffee/ Non Coffee

Table 4.1: Hot Beverage: Coffee/ Non Coffee

Menu/ Price

Description

OKey Espresso Shot Only black Coffee from Doi Chang coffee bean

Price: 50 Baht OKey Espresso macchiato

An espresso macchiato is a normal amount of regular espresso, served in a small glass or cup, with a tablespoon of

Price: 60 Baht

hot foamed milk added to it. Macchiato in Italian means ‘marked’ or ’stained’, through which it gave this drink its name.

OKey Americano

A shot of espresso mixed with hot water to create a long black coffee

Price: 60 Baht OKey Cappuccino

A luxurious mixed of espresso steam milk and frothed milk, finished with sprinkle of real chocolate or cinnamon

Price: 75 Baht

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OKey Cappuccino chiaro

Cappuccino

chiaro

contains

a

smaller proportion of coffee and a larger share of milk than in ordinary cappuccino. Price: 75 Baht OKey Macchiato

Something different, A shot of espresso make with a little frothed milk

Price: 75 Baht

OKey Latte Macchiato

Latte macchiato is made (as the name suggests) of milk with a dash of coffee. Actually it is more milk than coffee. A well-made latte macchiato is made up of

Price: 75 Baht OKey Mocha

several layers that are not mixed up. A wonderful fusion of espresso, steamed milk and chocolate

Price: 75 Baht OKey Latte

A delicious mixture of espresso and steamed milk crowed with a smooth longer of froth milk

Price: 75 Baht

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OKey Hot Chocolate

The

hot

chocolates,

this

sophisticated European version includes bittersweet chocolate, espresso, and a strip of orange rind, making a perfect afterPrice: 65 Baht

dinner drink. Be sure to remove from heat when a string of tiny bubbles forms around the edge of the pan, because boiling might cause the milk to curdle.

OKey Hot Chocolate Caremel

Salted caramel is a wonderfully complex flavor. When combined with hot chocolate, it provides plenty of stimulation for your taste buds. All of this is wrapped in a velvety blanket of milk and heavy

Price: 75 Baht

cream that is perfect for relaxing away an evening.

OKey Hot Milk Wonderful

pure

milk

with

sprinkle of real chocolate or cinnamon

Price: 50 Baht

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Iced Beverage: Iced and Blended Coffee/ Non Coffee

Iced coffee is a cold version of a hot favorite. Purists make it with cold-drip coffee, by pouring hot coffee over ice. Sometimes, espresso drinks prepared with cold milk and then iced will also be called "iced coffees." Iced coffee may be flavored, sweetened and/or topped. Blended menus are also provided. A favorite summer drink, frappé is a cool refresher on a hot day for coffee lovers. It's easy to make using instant coffee (decaf or full octane), and while it can be whipped, the traditional version is shaken ... never stirred.

Table 4.2: Iced Beverage: Iced and Blended Coffee/ Non Coffee

Menu

Price

Iced - Coffee

85 Baht

OKey Black Coffee

95 Baht

OKey Iced-Espresso

80 Baht

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OKey Iced-Cappuccino

80 Baht

OKey Iced-Mocha

80 Baht OKey Iced- Cafe Latte

80 Baht OKey Earl Grey Iced-Coffee

95 Baht

OKey Frappe Esprsso

95 Baht

OKey Frappe Capucino

90 Baht

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OKey Frappe Mocha

105 Baht

OKey Frappe

105 Baht

OKey Vanilalla

95 Baht

OKey Mocha

90 Baht

OKey Tiramisu

105 Baht

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OKey Iced Chocolate

95 Baht

OKey Rum Raisin

105 Baht

Tea: Hot/ Ice True teas (like green or black teas) are caffeine-containing infusions from the leaves of a particular type of camellia plant, but our coffeehouse include "herbal teas," which come from other plants and are usually caffeine free. Herbal teas (also called "tisanes" or "herbal infusions") are things like mint, chamomile, rooibos and ginger. We provide in to cup and pot which are:

About the Brand

Since 1706, Twinings has been at the forefront of the tea trade. Customers in more than 100 countries enjoy Twinings products, and not just the popular traditional favorites: Twinings now includes products such as fruit and herbal infusions, aromatic teas, and iced teas. These fresh flavors reflect a worldwide trend toward a healthier and more varied lifestyle. The new flavors are as successful as the traditional ones, because Twinings prepares them using skills acquired through three centuries of experience. After quenching thirsts for so many generations, no one knows better than Twinings

184

how to deliver a drink that's in perfect condition. Although British-based, and still operating in England, Twinings also has plants in North Carolina and Calcutta, India. Success in the competitive worldwide tea market was confirmed in 1972 (and again in 1977) when Twinings became the first tea company to win a Queen's Award for Export.

•

Earl Grey Earl Grey tea was named after Charles Grey, the second earl in his line. He was

Prime Minister to King William IV in the early 19th century. The legend is that the Earl was given the recipe by a Chinese mandarin with whom he was friends, and whose life he had saved. Earl Grey is a blend of Indian and Ceylon teas. The tea gets its unusual flavor from oil of BERGAMOT. Bergamot is a small acidic orange. The latest research indicates that the Bergamot orange is a cross between the sweet or pear lemon (Citrus Limetta) and the Seville or sour orange (Citrus Aurantium). The sour orange is native to southern Vietnam, hence the Chinese connection. This tea has a light refreshing taste, and can be served hot with or without milk or sugar. It can be used to make iced tea.

•

English Breakfast Twinings English Breakfast Tea was originally blended to complement the

traditional, hearty English breakfast, from which its name derives. Their refreshing and invigorating flavor makes English breakfast one of the most popular black teas to drink at any time or occasion - not just for breakfast. English breakfast can be enjoyed with or without milk, sweetened or unsweetened - the choice is yours. English breakfast tea is a rich and satisfying robust tea, traditionally blended with Kenyan and Assam black teas.

•

Peppermint For hundreds of years people have enjoyed herbal infusions. Peppermint tea

has been a favorite because of its distinctively refreshing aroma and taste.

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Peppermint tea is naturally caffeine free and may be served anytime of the day. Twinings Herb Teas are enjoyed for their light and delicate taste as well as their relaxing and reviving properties. Twinings teas are blended in England.

•

Earl Grey Lavender Fair Trade certified. Choice Organic Earl Grey with Lavender owes its

flavorful foundation to the selected organic teas from India & Ceylon. These are blended with Bergamot, A Mediterranean citrus, and then enhanced with the lightest touch of lavender blossoms. the quintessential afternoon tea. Choice Organic Teas are certified as organically grown by an independent third party. Every aspect of the cultivation, handling and packaging is carefully inspected to insure the integrity of this product from the gardens of origin to your cup. Choice Organic Teas come from garden tended by traditional methods, without the use of chemicals. Conscious practice of top soil management and weed control create a balanced environment to alleviate any agricultural problems. Through diligent care of the environment, our growers produce exceptional teas and herbs. Fair Trade guarantees fair wages for workers, improving their opportunities for better healthcare, hosing and education. By choosing Fair Trade tea, you are directly contributing to the livelihood of tea growing communities. This Fair Trade tea is independently certified by TransFair USA. USDA organic. Certified organic by QAI, Inc. The tea bags in this package are made with unbleached natural fibers. A special environmentally-safe, high barrier envelope protects the freshness and flavor of the tea.

•

Darjeeling For centuries people have enjoyed tea as an invigorating and refreshing

beverage. Today the natural, healthful properties of tea are being rediscovered. Black tea and green tea naturally contain flavonoid antioxidants, which may help protect the body from the damage caused by harmful free radicals. Twinings

186

Darjeeling tea is from the Darjeeling region of India, in the foothills of the Himalayas. Darjeeling tea has a distinct, but delicate flavor, and is often referred to as the Champagne of Teas. Darjeeling is great in the afternoon or as an elegant accompaniment with lunch. Twinings tea is blended in England.

•

Formosa Oolong This auction is for a Vintage Twinings Formosa Oolong Tea from London

England. This is in good condition and comes from a smoke and pet free home. Please check out my other vintage auctions along with another Twinings (Blackcurrant ~NEW~) Tea and store items up on ebay this week. Thanks for looking!

•

Herbal Lemon Twinings Lemon Twist herbal tea. Let me tell you that we're really missing

out because even the herbal tea blends are better than they are here. Faithful readers also know that herbal tea has been a struggle over here. They're usually some sweet, rosehip hibiscus mess with no character but that's not the case with Twinings Lemon Twist. This tea has just the right mix of these ingredients: 18.7% lemon grass, and 18.7% lemon peel along with other herbs to give it the glorious glow necessary to really be by appointment to her majesty Queen Elizabeth II as the packaging says. If you find it, buy it.

**Price: Cup 50 Baht / Pot 65 There are two styles of Thai iced tea: with or without milk. Tea with milk is called cha yen. Tea without milk is called cha dum yen. •

Thai Iced Tea with Milk/ Price = 85

187

•

Thai Iced Tea without Milk/ Price =

80

Fruit Juices and Smoothies Juice Popular types include orange, apple, pineapple, grape, carrot and grapefruit. They may be in single-serving bottles or poured from a larger container. -

Orange

-

Pine apple

-

Apple

-

Carrot

-

Coconut

**Price: 60 Baht/ Orange 75 Baht Smoothie Smoothies are usually a mixture of some kind of dairy (such as ice cream, milk or yogurt) or a milk alternative (like soymilk) with fruit (either fresh or as a fruit concentrate). Common fruit flavors include banana, strawberry, mango, peach and mixed berry. Smoothies are occasionally topped with whipped cream or flavored syrup. Sometimes, coffeehouses will replace fruit with coffee or espresso and add extra flavors, like candy bars or flavored syrups.

-

Orange

-

Strawberry

-

Pineapple

-

Kiwi

-

Banana

188

**Price: 110 Baht Food Table 4.3: Thai Food Menu/ Price

Description

Pad Thai

A dish of stir-fried rice noodles with eggs, fish sauce, tamarind juice, red chilli pepper, plus any combination of bean sprouts, shrimp, chicken, or tofu, garnished with crushed peanuts, coriander and lime, the juice of which can be added along with Thai condiments. Pad Thai is one of

Price: 130 Baht

Thailand's national dishes.

Tom yam gung lemon grass soup with prawns (With Rice)

Tom yam kung, or spicy shrimp soup, is the number one of the top ten Thai dishes loved by foreigners, according to a recent investigation. And in fact, it is one of the most favourite dishes for Thai people as well. It is simply because it is so delicious for its unique sour and spicy taste that

Price: 200 Baht

you will certainly need it more and more if you try it just once.

Green Chicken Curry (With Rice)

Green Chicken Curry it a favored dish from Central Thailand, and visitors to Thailand love it because it not too spicy and easy on the palet. A good meal for an evening dinner, here it is cooked with chicken legs but you can use chicken breast instead if preferred. I recommend corn fed chicken, it has much more flavour and a softer texture.

Price: 160 Baht

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Fried Rice with pork/sea food

Simple local Thai food "Thai Fried Rice with Prawns or Pork" or "Khao Pad Goong" because quick and easy meal for all to enjoy. Beautiful thing about fried rice is that you can substitute prawns with

Price: 130/ 150 Baht

virtually

anything

in

your

pantry;

vegetables, beef, chicken or even plain.

Stuffed Omelet (With Rice)

One of delicious dishes in Thailand that isn't spicy is "stuffed omelet" or "khai yat sai" in Thai. It is a little tricky making the egg envelope. It works best with a big wok and a gas flame. In the ingredients pictured below, you can see carrots, onion, minced pork, tomato, coconut milk, 4 eggs

Price: 135 Baht Seafood/ Pork in Gravy

and peas in the middle.

Stir-fried noodle Seafood with Gravy Sauce Stir-fried noodle in Gravy Suce of your Choice Pork, Chicken, Beef, Seafood

Price: 150/ 135 Baht Stir-fried pork with holy basil(With Rice)

with Vegetable One of the most famous Thai dishes around the world is this one, stir-fried pork fried with chili and holy basil. You don’t have to use minced pork, as variations include chicken or beef. In Thai it is called moo pat ga-prao. The last part refers to the basil. It is quite simple to cook and the result is very

Price: 135 Baht Massaman Curry (With Rice)

delicious. Massaman is the Thai word for "Muslim", which is the community to heartily thank for this concoction of coconut milk, potatoes, roasted peanuts, bay leaves, sugar, cinnamon, and tamarind sauce. The meat of choice is often beef or chicken, but because it's been embraced by the Buddhists,

Price: 150 Baht

pork can also be found.

190

Table 4.4: International Foods Menu/ Price American Breakfast

Description Generally includes most or all of the following: two eggs (fried or poached), sliced bacon or sausages, sliced bread or toast with jam/jelly/butter,

pan

cornflakes

other

or

cakes

with

cereal,

syrup,

coffee/tea,

orange/grapefruit juice

Price: 180 Baht English Breakfast

Two eggs the way you like, bacon, sausage, hash brows and baked beans with grilled tomato and mush room toast, coffee or tea and juice

Price: 190 Baht American Club Sandwich: The original triple-decker sandwich

Price: 140 Baht

A layered sandwich that's an allAmerican summertime special.

191

Tuna Sandwich his grilled tuna sandwich is made with rye

bread,

celery,

onion,

and

mayonnaise. Price: 140 Baht Spaghetti Chicken Sauce

Spaghetti sauce recipe with Italian sausage and basil and tomato sauce and paste. A spaghetti sauce recipe and links to several others.

Price: 150 Baht Spaghetti Meat Sauce

Our recipe for homemade meat sauce for spaghetti, all of the flavor, a fraction of the calories. Made in the slow cooker for convenience and a pantry's worth of spices for a low-fat and low-calorie healthy supper.

Price: 160 Baht Spaghetti cream sauce

This easy spaghetti gets complex flavor from a combination of mushrooms (try a mix of cremini, shiitake, black trumpet,

portobello,

and

chanterelle),

cream, and a secret ingredient—tawny port.

Price: 160 Baht

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Coffee Bean Ego coffee 250 gram Doi Chaang Coffee is a grade B Arabica. It is certified organic, forest canopy grown, hand picked, fresh water processed, sun dried, hand sorted and freshly roasted to ensure the highest possible quality for each cup of Doi Chaang Coffee. Naturally low in caffeine, it has a complex and flavourful profile which is enhanced and released through detailed cultivating, processing and roasting methods. Price: 90 Baht per unit

Figure 4.2: Doi Chang Ego Coffee

Price of Our Shop: 150 Baht

193

Premium Italian Gelato Ice Cream

Pluto Ice Cream

The Pluto Ice Cream Company Ltd. was established in 2001 at Phi Phi Island. From the beginning we used Carpigiani's machines: Labotronic 28/42 and Pastomaster 60 because we were aiming at a high quality product. It was obvious in our opinion that all ingredients must be of the highest quality. We used Italian ingredients from the most important Italian brands and - under the supervision of master Italian ice-cream experts - we arranged recipes to enable our ice-creams to become acknowledged as the best quality ones produced in Thailand. In 2003 we bought more Carpigiani's machines (Labo 40/60 and Pastomaster 30) and we began to obtain wholesale customers. In 2004 we came to the conclusion that our main business should be the wholesale market and moved our production lab to Phuket City, in the meantime we improved our sale outlets in Phi Phi reaching a total of 4 shops. Our decision of moving the machinery to Phuket proved a great idea because at the end of 2004 the Tsunami totally destroyed the shops in Phi Phi. 2005 was dedicated to reconsidering our production: we produced dessert in mono-portions (tartufo, cassata, semifreddo) and increased the number of ice-cream and sorbet flavours. In 2006 tourism returned to Phuket and this was the factor which enabled us to obtain the best quality Hotels and Restaurants in Phuket as our customers. At the same time we were award Health certification (OYO) as a results of further improvements made in our laboratory. This prestigious certification also applies to all our ice cream products During this period we imported a special refrigerated truck for delivering our product to customers. The truck received hygienic and sanitary certification as requested by our “Starwood” and “Small Luxury Hotels” customers. At the end of 2006 we improved our production power by purchasing some more machines: Carpigiani's Labotronic 60/90 and 22007 was the “consolidation and expansion year” for the group of our customers: we increased the territory, achieving more than 20 new Hotels in

194

Khao Lak and Krabi. Starting from January 2008, we started a relationship of collaboration with a company specializing in the distribution of food products. We have thus reached the market in Bangkok, Pattaya and Koh Samui, increasing markedly our production. This led us to take into account expansion of space dedicated to the laboratory. We thus have bought the land, drawn up the project and started the work of building the new factory. At the beginning of January 2010 the production moved to the new factory. With the new complex we plan to further extend the type of our products, by introducing new tastes (for example typically Italian variations) and new articles (semifreddo mono-portions and ice cream cakes), to recruit new specialized personnel and to improve the services offered to our customers.

Italian Gelato

Ice-cream is a delicious and nourishing food but to obtain the best result advanced technological equipment is necessary, able to produce an ice-cream perfect for the palate, but most important of all, hygienically safe. Pluto Ice Cream is extremely experienced in this area guaranteeing results by using machines and equipment produced by undisputed world leader in this sector: Carpigiani SPA in Bologna. The process begins whit the pasteurization of individual fresh product (milk, eggs, cream) which establishes the mixture that must then become ice-cream. In every type of food bacteria are presents in a natural form. These multiply very quickly in a temperature of between 15-20 °C and 50-60 °C. Below or above this temperature, however, the bacterial proliferation is considerably slowed down. The aim of pasteurization is to abolish the presence of bacteria in ice-cream. During this phase the mixture is brought to a temperature of between 65 and 85 °C (depending on the ingredients the ice-cream is composed of) and then rapidly cooled to a temperature of approximately 4 °C. Parallel to the pasteurization of the ingredients, when the mixture is at a

195

temperature of between about 60 and 75 °C, the phase of homogenization is undertaken, during this stage the fatty substances in the ice-cream are diminished and amalgamated so that the product becomes more creamy. This operative cycle is completed within a couple of hours at the maximum, after which the maturation phase begins whit the mixture must be stirred rapidly continuously (whipped or whisked) and kept to the temperature of about 4 °C. The maturation facilities and increased absorption of the solid components present in the mixture to obtain a thicker final composition and the ability to permit air to enter more easily during the whipping or whisking phase. Maturation lasts for about 4-6 hours. Whipping or whisking is the phase of the production process of ice-cream in which it passes from a liquid stage into that of a solid paste. This transformation in achieved thanks to the contemporary action of three elements: •

shaking

•

cooling

•

admitting air into the mixture. During the whipping/whisking activity the mixture is rapidly brought to a

temperature from roughly 4 °C to about -15 °C. Fast reduction of temperature avoids the solidification of water which would result in the formation of crystals of an undesired large dimension: the ice-cream turns out "smoother" and less lumpy. It is during this phase that the mixture solidifies forming a solid paste which kept in continuous movement, englobing air and increasing volume developing into artisan gelato. The main difference between artisan gelato and industrial ice-cream is the way in which air becomes incorporated in the mixture. In artisan gelato air is englobed in a natural way during the stirring phase, thanks to the movement of the mixture during the freezing stage. On the other hand, in industrial ice-cream, air is insufflated in large quantities into the mixture through a pump. This process of production allows the ice-cram to double its volume (this is the reason that industrial ice-cream is sold according to

196

volume and not weight!) with the same procedure soft ice-cream, or American icecream, appears softer and more voluminous regarding artisan gelato, even if its organoleptic characteristics result of an inferior quality.

Varieties

Figure 4.3: Variety of Pluto Ice cream

SORBETTO The sorbetto is a preparation composed of water, sugar, fruit juice and/or pulp and infusions, to which milk or liqueur may be added by request.

197

GELATO The base of fruit or cream is used with different ingredients added depending on the two versions. The fruit version is made with milk and cream, sugar and fresh fruit; the cream version however is prepared with milk, cream, egg yolk and sugar. Specific ingredients are then added (chocolate, vanilla, pistachio, hazelnuts, etc.) that grant their own characteristic taste to the gelato.

SEMIFREDDO Presented in different forms (round, dome-shaped, mini-portions, tiny pieces, etc.) requiring a process different from that of gelato. The composition of semifreddo requires ingredients of a soft consistency, such as whipped cream and Italian meringue, fruit purée, which are combines in layers to the creamy foundation (egg, sugar, and other specific ingredients). This is normally laid onto a base of sponge cake soaked with sugar syrup.

TARTUFO A base of different gelato flavours placed in concentric layers in a half mould. The combinations may be different: * Creamy, in which the outer layer consists of chocolate gelato, pistachio or nuts and the core is made of chocolate cream. Another variety exists with the addition of

crisp

biscuit

to

the

outer

layer;

* Fruity in which the outer layer consists of lemon gelato, lemoncello or strawberry and the core is a base of lemon cream or strawberry cream.

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CASSATA SICILIANA In a semispherical form. A covering of "semi-freddo" consisting of ricotta and a mixture of candied fruit is presented on a base of chocolate gelato.

TIRAMISÙ A layer of Savoiardo biscuit soaked with Illy coffee, covered with mascarpone cream, topped with cocoa powder are the components of this splendid well-known Italian dessert.

SOYA GELATO This product is manufactured substituting milk and cream from animal origin with soya milk. This gelato, produced in various flavours, is particularly directed towards those who: * Are intolerant of dairy products or cannot digest milky products; *

Sufferer

from

diabetes;

* Are vegetarian and animal rights activists, who choose only plant products. There are many advantages to Soya Gelato: the low quantity of calories compared to traditional gelato, the added fat is of vegetable origin therefore rich in unsaturated fatty acids and absolutely absent of cholesterol and the sugar content is of a low percentage and doesn't include lactose. From January 2010 we will be taking advantage of our new premises by further expanding our range of our products, introducing new flavors (eg more typically Italian variations) and new items (Semifreddo single portion cakes and ice cream). We are also increasing our staff numbers to offer these new services to our clients.

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Figure 4.4: Transportation of Pluto Ice Cream

Price: 600 – 800 depend on taste Our shop select premium Italian Gelato Ice Cream because it is the international tastes which is appropriate with our main customer. We will choose the taste that the customers like but in the beginning we will choose general taste and next we will add more tastes. Price: 1 Scoop/ 60 Baht 2 Scoop/ 105 Baht 3 Scoop/ 155 Baht 4 Scoop/ 205 Baht 5 Scoop/ 250 Baht **Topping 10 Baht Whipping 10 Baht

(Source: http://www.icecreamthailand.com, 2010)

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Bakery Figure 4.5: Kanda Bakery Shop

FAVOURITE CAKE 6 Tastes (40 Baht per Piece)

1. Brownie Banoffee 2. Choc Special 3. Mocha Almond Praline 4. Black Forest 5. White Choc Mousse Cake 6. Dark Choc Mousse Cake CHEESE CAKE 1. Berry Cheese Cake 2. Strawberry Cheese Cake 3. London Cheese Cake 4. German Cheese Cake 5. Brownie Cheese Cake

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CHOCOLATE CAKE

1. Soft Choc 2. Choc Special 3. Crazy Oreo 4. Black Forest 5. Black Vanilla Cake 6. White Choc Mousse Cake 7. Dark Choc Mousse Cake 8. Oreo Mousse Cake FRESH FRUIT CAKE 1. Brownie Banoffee 2. Orange Cake 3. Lemon Cake 4. Orange Mousse Cake 5. Blueberry Cream Cake 6. Strawberry Cream Cake COFFEE CAKE 1. Mocha Cino Cream Cake 2. Cafe Latte Cake 3. Mocha Almond Praline 4. Cappuccino Mousse Cake TEA CAKE 1. Milk Tea Cake 2. Green Tea White Chocolate Mousse

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3. Chiffon Green Tea VANILLA FRESH CAKE 1. Vanilla Almond Butter Cake 2. Vanilla Fresh Butter Cream Cake Manu Roll (20 per piece) 1. Orange Roll 2. Lemon Roll 3. Mocha Roll 4. Blueberry Roll 5. Strawberry Roll 6. Chocolate Roll Cookie 1. Brownie Almond 2.5*2.5"

= 28 Baht per piece

2. The $250 Cookie Recipe

= 450/kg

3. Chocolate Chip piper Cookies = 400/kg 4. Double Chocolate Chipper Cookies 5. Cornflakes Cookies

= 350/kg

6. Banana Nut Cookies

= 350/kg

7. Peanut butter cookie

= 350/kg

8. Ladyfinder

= 450/kg

9. Graham Crackers

= 400/kg

= 380/kg

Manu Puff & PIE

1. Spinach croissant 100g/ 1 piece/ pack = 20 Baht

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2. Danish Bacon 44g/ 1 piece/ pack = 20 Baht 3. Chicken Pie 70g/ 1 piece/ pack = 15 Baht 4. Red Pork Pie 64g...1 piece/ pack = 15 Baht 5. Coconut Tart/ 100g...1
/ pack = 20 Baht Price of Our Shop:

Cake 90 Baht per pieces Roll 65 Baht per piece Spinach croissant 65 Baht per piece Danish Bacon 65 Baht per piece Chicken Pie 65 Baht per piece Coconut Tart 70 Baht per piece

Used Book or Secondhand Book We will cooperate with Apple Book in Karon Beach which is the biggest secondhand book in Karon beach and it is also wholesaler. We will buy the book from this shop and sell in the same price. First time we will order 300 units which is: Price: 45 Baht per units order 100 units 75 Baht per units order 100 units 140 Baht per units order 100 units Price of Our shop:

45 Baht per units/ Sell 150 Baht 75 Baht per units/ Sell 180 Baht 140 Baht per unit/ Sell 250 Baht

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Life Time Most coffee machines are simple devices that include a reservoir for water, a heating element for heating the water and keeping the water warm, tubing for carrying the water from the reservoir to the drip maker, which flows into the coffee pot and a warming plate. You simply fill the reservoir with water, the water then heats and flows through its tubing and coffee of your choice into the pot after you switch it on. Depending on your needs of accessories, everything else is extra options, such as milk frothers and wands for whipping.

What to Look for in a Coffee Machine? Depending on the type of gourmet coffee you prefer, the amount of time, you plan in making coffee and your budget will determine your decision of which type of coffee machine is best for your personal, business, dorm room, entertainment or RV and camping needs. While considering the type of coffee machine you plan to purchase, you should also consider any accessories or gadgets you might find useful when making a nice steaming cup of coffee or a cold cup of coffee. Coffee machines also come in a wide variety of styles and colors to match your decor and lifestyle. •

Espresso machine

•

Cappuccino machine

•

Coffee pods

•

Roasting machines

•

Grinders You will want a coffee machine that offers easy cleaning to lengthen the lifetime

of your coffee machine no matter which type of coffee machine you select. Make sure you follow all the instructions of the manufacturer. Espresso and Cappuccino machines are available as manual makers, semiautomatic or automatic espresso makers, which are less expensive and easy to use. They

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are either, steam, piston, pump or air pressure driven. They are available for stove or counter top, which range from automatic to semi and super-automatic. Coffee pods are those single serving that are self contained and placed inside a coffee machine or a coffee pod machine designed especially for the use of coffee pods, using a pressurized brewing system, are quite popular. You can make your own coffee pods or purchase them. Roasting machines and coffee grinders are wonderful for creating your very own special blends to enjoy by yourself or with your friends and loved ones, at home, office, camping or anywhere else you want to relax. They come with various means of functioning so you can make a great cup of coffee any time you get ready.

Problems with Coffee Machines Some of the most common problems that might cause a coffee maker to quit working are, a bad on and off switch or power cord, clogging within the tubing, especially with calcium. The power cord and switch are replaceable, or simply replace the coffee machine with a new one, and running some clear vinegar through the coffee machine helps to cut down on calcium build-ups. However, at times the temperature sensors or heating element may give out, when this happens it is best just to replace your coffee machine. Perhaps at that time even consider a few extra options with your new coffee machine. (Source: http://www.coffeemachines101.com, 2010)

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Coffee Recipe OKey Espresso A concentrated drink produced by forcing hot water through finely ground coffee with an espresso machine for a brewed quantity of approximately 1 oz. A perfect espresso is deliciously smooth, with full body, intense aroma and a velvety crema.The classic espresso recipe: a single shot of espresso, approximately 1-1/2 ounces. Best served in a pre-heated espresso cup. OKey Espresso Macchiato A single shot of espresso topped with 1-2 tablespoons of foamed milk right in the espresso cup. OKey Americano Espresso diluted with hot water to drip coffee strength. OKey Cappucino Traditionally prepared with 1/3 espresso, 1/3 steamed milk and 1/3 foam in a small cup typically 4-6 ounces in capacity. Cappuccino can be garnished with a light sprinkle of ground chocolate, cocoa powder, cinnamon, nutmeg or vanilla powder. For flavored cappuccino, simply add some quality coffee syrup such as Monin to taste. OKey Cappucino Chiaro The traditional cappuccino consists of an espresso, on which the barista pours the hot foamed milk, resulting in a 2 cm (¾ inch) thick milk foam on top. Variations of the mixtures are usually called cappuccino chiaro (light cappuccino, also known as a wet cappuccino) with more milk than normal

207

OKey Macchiato Ingredients •

4 shots espresso (or 1 1/3 cups regular coffee)

•

1 cup heavy cream

•

1 cup chocolate liqueur

•

Whipped cream, recipe follows

•

Cocoa powder, for sprinkling

Directions Pour each shot of espresso into a mug. To each mug, add 1/4 cup of the heavy cream and 1/4 cup of the chocolate liqueur. Top each mug with a dollop of whipped cream and a sprinkling of cocoa powder. Whipped Cream: 1/2 pint heavy cream, chilled 1/2 teaspoon vanilla extract 1 tablespoons powdered sugar Using an electric mixer, whip the cream in a large bowl until soft peaks form. Add the vanilla and the sugar and continue to beat until it reaches the consistency of whipped cream. OKey Latte Macchiate

Latte macchiato is a coffee-based beverage, which literally means marked milk. This refers to the method of preparation, wherein the steamed "pure" white milk gets "stained" by the addition of espresso. It differs significantly from cafè latte in that only ½ (or less) of an espresso shot is being used.

208

The macchia is the little 'spot' of crèma being left on top of the milk to clearly distinguish that is a latte macchiato and not a cafè latte, where the espresso traditionally has been added before the milk, hence having no "mark". •

"Latte macchiato" can be correctly used to describe the Starbucks drink branded as a "caramel macchiato". This drink is made by combining vanilla flavored syrup with steamed milk and then pouring the espresso on top of the milk, then topping it all off with caramel sauce.

•

Other flavors are made using a similar method with a different flavored sauce topping. The sauce then melts from the heat of the espresso directly under it and seeps down into the drink.

OKey Mocha Mix 1/3 part espresso to 2/3 part steamed milk, after dissolving cocoa or chocolate syrup with the milk to taste. OKey Latte A double-shot of espresso mixed with approximately 5 ounces of steamed milk, typically little or no foam is added to the top. Served in a large bowl type or glass cup 912 ounces in capacity. For flavored latte, simply add some quality coffee syrup such as Monin to taste. OKey Hot Chocolate Ingredient 1 box (about 14-qt.) powdered milk 1 1 lb. box powdered sugar 1 2-lb. box Nestle's Quik 1 7 or 8 oz. jar Coffee Mate

209

Mothod In a large airtight container, mix ingredients together well until even colored and no streaks remain. Cover tightly in a snap top container and keep away from humidity. Store a plastic 1/4 or 1/3 measuring cup in the container for convenient measuring. To prepare, measure out 1/4 or 1/3 cup of the mix and stir into 1 cup boiling water. Makes many servings and keeps indefinitely. Variation: For extra rich hot chocolate, add 1/4 cup ground chocolate powder or unsweetened cocoa. OKey hot Chocolate Caramel INGREDIENTS •

1/2 cup whole milk

•

1/4 cup heavy cream

•

5 ounces good-quality milk chocolate, coarsely chopped

•

3 tablespoons Caramel Sauce

INSTRUCTIONS 1. Combine milk and cream in a small saucepan over medium heat and cook until simmering, about 4 minutes. 2. Add chocolate and whisk until completely melted, about 2 minutes. Whisk in caramel sauce until incorporated. Serve immediately.

OKey Hot Milk Ingredients •

1 cup milk

•

1 teaspoon vanilla extract

•

2 tablespoons white sugar

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•

1/4 teaspoon ground nutmeg

Directions 1. In a large mug, stir together the milk, vanilla and sugar. Heat in the microwave on full power for 1 minute and 30 seconds. Stir in nutmeg, and serve hot.

OKey Iced Coffee Ingredients •

2 teaspoons instant coffee granules

•

1 teaspoon sugar

•

3 tablespoons warm water

•

6 fluid ounces cold milk

Directions 1. In sealable jar, combine instant coffee, sugar and warm water. Cover the jar and shake until it is foamy. Pour into a glass full of ice. Fill the glass with milk. Adjust to taste if necessary. OKey Black Coffee Ice Ingredients: 1 cup strong coffee or espresso ice cubes sugar or sweetener of choice (optional) large piece of fresh lemon peel Instructions: Use a vegetable peeler to remove a large strip of rind from a fresh lemon. (You can use the insides of the lemon for something else). Rub the yellow side of the peel around the rim of the glass. Stir the coffee and sweetener (if using) together in the glass until the sweetener dissolves. Fill the glass with ice cubes. Twist the lemon peel over the glass, releasing the lemon's essential oils into the coffee. Stir and enjoy!

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OKey Iced Espresso Mix a single espresso shot (cooled) with 2-3 teaspoons cocoa, 1/2 t vanilla extract and 1-cup cold milk. Pour over ice in a tall glass and top with whipped cream. OKey Iced Cappuccino

Ingredients •

3 ounces espresso

•

6 to 8 ice cubes

•

3 to 4 ounces whole milk

•

3 to 4 ounces milk froth, steamed and foamed

Directions Using an espresso bean grinder, grind some espresso beans to make 1 tablespoon of ground coffee. Using a commercial espresso machine, put the 1 tablespoon of ground coffee into the portafilter (the cupped handle) and tamp the grounds lightly. Insert the portafilter into the machine and place your glass or cup underneath. Set the machine for a double shot and turn it on to extract the espresso, which should be a thick golden brown crema. Add 6 to 8 ice cubes to a mixing glass and pour the espresso over the cubes. Stir to bring the temperature down. Using a spoon or strainer, strain the cooled espresso into a serving glass, leaving the ice behind (if desired, ice can be included or added later). Add the cold milk to the cooled espresso in the serving glass. Using the steam wand of the espresso machine, steam the whole milk so that a tight, small-bubble, microfoam is created. Using a spoon, add only the tight microfoam (about 3 to 4 ounces or an amount equal to the other parts) to the milk and espresso. Serve without any garnishes so as not to mask the delightful flavors. Serve immediately.

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OKey Mocha Ingredients •

1 tablespoon chocolate syrup

•

1 cup double espresso or very strong coffee, hot

•

1/4 cup half and half

•

4 ice cubes

Directions Stir chocolate syrup into hot coffee until melted. Transfer to a blender, add half and half and ice cubes, and blend at high speed for 2 to 3 minutes. Serve immediately in a tall, cold glass. OKry Iced Caffe Latte Ingredients •

4 shots espresso (about 1 1/2 ounces each)

Directions 1/4 cup Cinnamon Simple Syrup, recipe follows •

1 1/3 cups whole milk

•

Crushed ice, for serving

•

Special equipment: 4 small mason jars

Combine the espresso, flavored simple syrup, and milk in a small pitcher. Fill each of the mason jars with crushed ice. Pour the latte mixture over the ice and serve immediately.

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OKey Frappe Cappuccino •

18 to 22 ice cubes, crushed

•

7 ounces double-strength coffee, chilled

•

2 tablespoons granulated sugar

•

2 tablespoons flavored syrup of choice

•

Whipped cream for garnish

Instructions 1. Combine ice, coffee, and sugar in a blender, blending until well-blended and smooth. 2. Add syrup and blend. 3. Pour into large glass. 4. Add whipped cream for garnish.

OKey Frappe Mocha Ingredient 4 cupschilled coffee 4 tbspinstant chocolate milk 1 1/2 cups milk 1/2 cup whipped cream 4 scoops vanilla ice cream

Pour chilled coffee, milk, and instant chocolate milk powder into a blender. Mix together. Add whipped cream and ice cream, and blend together at 'frappe' setting. Pour into a coffee mug. Garnish with whipped cream, nutmeg, cinnamon, or chocolate shavings.

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OKey Vanilla 1 (14 oz) can pure, unsweetened coconut milk or real milk 1/2 cup very strong brewed decaf coffee or decaf espresso 5 drops liquid stevia extract (more or less to taste)* 2 drops pure vanilla extract** 2 drops pure almond extract optional - 1 organic free range egg yolk 1 cup crushed ice cubes Place everything in a blender, blend well, pour into a tall glass, over more ice cubes if you like, and serve with a straw. *Omit the stevia if you prefer your drink unsweetened. ** The easiest way to measure out small liquid quantities is to use eye droppers type dispensers. I keep my old bottles of tinctures with their eye droppers for using in other applications, such as a recipe like this! You can purchase eye dropper dispensers at many natural food stores or herb stores (if they don't carry them in stock, ask if they can order a few for you - they're great to have around). OKey Tiramisu The tiramisu is a rich, tantalizing, and oh so luscious drink. Several liquers combine effortlessly with vanilla ice cream to form a positively distinguished libation. I came upon this recipe through a good friend who tends bar at a local restaurant, she was kind enough to pass it along, and now I'm passing it along to you. Enjoy! 1 oz. Amaretto Liquer 1 oz. Kahlua Liquer 1 oz. Godiva White Chocolate Liquer 6 oz. Milk 3 to 4 Scoops of Vanilla Ice Cream 5 Ice Cubes

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Combine all ingredients in a blender and blend until desired. Top with whipped cream and white chocolate shavings :) OKey Iced Chocolate Ingredients •

2 tablespoons cocoa

•

2 teaspoons cornflour

•

1/4 cup sugar

•

2 cups milk

Directions 1. 1 In a saucepan combine first 3 ingredients with a small bit of the milk, to form a lump free paste. 2. 2 Add rest of the milk and bring to boil,. 3. 3 Remove and let cool. 4. 4 Refrigerate until chilled. 5. 5 Serve in a large glass with ice cream and whipped cream sprinkled with grated chocolate. 6. 6 Can easily be double, tripled, etc. Old Thai Tea - Cha Yen

Thai Tea is a real favorite in Thailand. When you buy Thai Tea on the street, you normally get it in a small plastic bag with a straw. Since it's very easy to make it just like you find in Thailand, you can avoid paying $3.50 to Starbucks.

1-2tablespoonsThai tea 1 tablespoon sweet condensed milk 1 tablespoon sugar

216

1 teaspoon

milk

1 cup

hot water

Add sugar and sweet condensed milk to a glass or cup. Put one tablespoon of Thai tea to a tea sock. Place the tea sock directly above the glass. Pour hot water into the tea sock. Set the tea sock aside. Stir until the sugar and sweet condensed milk are dissolved. Add ice and top the tea with milk. Cha Dum Yen - Cha

Dum Yen

1-2tablespoonsThai tea 2 tablespoonssugar 1 cup

hot water

Add sugar to a glass or cup. Put one tablespoon of Thai tea to a tea sock. Place the tea sock directly above the glass. Pour hot water into the tea sock. Set the tea sock aside. Stir until all the sugar is dissolved. Add ice. Food Recipe Prawn Pad Thai Ingredients •

200 g rice noodles

•

2 tablespoons canola oil

•

2 eggs, lightly beaten

•

1 tablespoon chopped ginger

•

2 large red chilies, chopped

•

25 medium green raw prawns, peeled,leaving just tail

•

1/4 cup lemon juice or lime juice

•

2 tablespoons fish sauce

•

1 tablespoon sugar

217

•

40 g bean sprouts

•

2 green onions, sliced

•

2 tablespoons chopped peanuts

Directions -

Place the rice stick noodles in a bowl and cover with boiling water.

-

Allow to soak till soft.

-

Drain and rinse with cold water. -

Heat 1 tablepsoon of the oil in a wok over high heat.

-

Add the eggs, swirl, stir gently and cook until just set.

-

Remove from the wok and set aside.

-

Add the remaining oil, ginger and chilli to the wok and cook for 1

minute. -

Add the prawns and cook for 3 minutes or till they start to turn pinkish.

-

Add the noodles, lemon juice, fish sauce and sugar and cook for another

3 minutes. -

Toss through the cooked egg, beansprouts and green onions/scallions.

-

Serve IMMEDIATELY, sprinkled with the peanuts.

-

You can add more peanuts if you like it crunchier.

218

Tom yam gung lemon grass soup with prawns Ingredients -

1/2 kilogram of medium-size prawn

-

1/2 kilogram of straw mushroom

-

20 pieces of slice young galangal

-

4 leaves of torn kaffir lime

-

9 pieces of cut lemongrass (3 cm per one piece)

-

5 grams of pound chili bird

-

1/2 cup of roughly chopped coriander

-

4 cup of chicken rib soup

-

1 teaspoon of salt

-

5 tablespoons of fish sauce

-

5 tablespoons of lime juice

Direction 1. Wash and clean prawns by remove its shell except shell at tail for beautification. 2. Clean straw mushroom and cut it to 4 pieces of half up to its size. 3. Boil chicken rib soup then put lemongrass, galangal and prawn. Wait until prawns are cooked about 4 minutes then put straw mushroom, kaffir lime leaves and fish sauce. Put it down from the stove. 4. Seasoning with lemon juice and pound chili bird. 5. Decorated with chopped coriander and serve with warm rice.

Green Curry Chicken

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Ingredients : 1 tablespoon Cooking oil 1 Chopped onion 2 tablespoons Green curry paste (ready made) 1 1/2 cups Coconut milk 1/2 cups Water 500 g Chicken thigh fillets, cut into bite-sized pieces 100 g Green beans, cut into short pieces 6 Kaffir lime leaves 1 tablespoon Fish sauce 1 tablespoon Lime juice 1 teaspoon Finely grated lime rind 2 teaspoons Soft brown sugar 1/4 cup Fresh coriander leaves Direction : •

Heat the oil in a wok or heavy-based pan.

•

Add the onion and curry paste to the wok and cook for 1 minute, stirring constantly.

•

Add the coconut milk and water to the wok and bring to the boil.

•

Add the chicken pieces, beans and lime leaves to the wok, stirring to combine. Reduce the heat and simmer for 15 to 20 minutes or until the chicken is tender.

•

Add the fish sauce, lime juice, lime rind and sugar to the wok, stir to combine.

•

Sprinkle with fresh coriander leaves just before serving.

•

Serve with steamed rich

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Pork Fried Rice Ingredients •

1 (6 ounce) boneless pork loin chop, cut into 1/2 inch pieces

•

1/4 cup finely chopped carrot

•

1/4 cup chopped fresh broccoli

•

1/4 cup frozen peas

•

1 green onion, chopped

•

1 tablespoon butter

•

1 egg, beaten

•

1 cup cold, cooked long-grain rice

•

4 1/2 teaspoons reduced-sodium soy sauce

•

1/8 teaspoon garlic powder

•

1/8 teaspoon ground ginger

Directions In a large skillet, saute the pork, carrot, broccoli, peas and onion in butter until pork is no longer pink. Remove from skillet and set aside. In same skillet, cook and stir egg over medium heat until completely set. Stir in the rice, soy sauce, garlic powder, ginger and pork mixture; heat through. Prawn Fried Rice Ingredients

- 2 Cup (Basmati) Rice - 1 Tsp (grated0 Ginger - 8 Oz (about 30 nos.) Prawn - 1 Medium Carrot - 8 French Bean - 2 Green Chili

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- 1 Small Onion - To taste Salt - A pinch Ajinomoto - 4 Cups Water - 4 Tbsp Cooking Oil - 1 Tsp Soya Sauce Direction 1. Use uncooked frozen shrimp without tail and head. Chop French beans. Peel and cut carrot into 1.5 inch long thin strips. Chop onion and green chili finely. 2. Wash and soak rice in four cups of water for one hour. 3. Cook rice till almost done but not fully. 4. Heat oil and fry onion, grated ginger and green chili lightly. Add carrot and beans and cook for three minutes. 5. Add shrimp and cook for two minutes, add cooked rice and salt. Fry for fifteen minutes with stirring. Add Soya sauce and ajinomoto. Mix well. Serve hot. Stuffed Omelet Ingredients -

2 eggs

-

4-5 tbsp. diced mushrooms, green peppers or cooked vegetables

-

1 onion finely chopped

-

dash of grated cheese

-

dash of pepper

-

salt to taste

Direction -

Preheat frying pan on medium heat for 2 to 2 1/2 minutes.

-

With the fingers, sprinkle a few drops of water on the pan. When the -

222

dance in little beads, pan is properly preheated. -

Break egg into a bowl and whip briskly with a fork.

-

Add other ingredients, stir quickly and pour into preheated pan. Till the

pan, if necessary, to distribute the omelets evenly. -

Then heat to low and cook about 1-1/2 minutes or until the bottom of

omelets is firm and lightly browned. -

With wooden or plastic spatula, turn omelets over and cook 1 to 1 1/2

minutes -

Slip omelets out of pan into plate.

Thai Stir Fried with Holy Basil Ingredients •

1 lb boneless chicken thighs, coarsely chopped, or cut into small bite-size pieces

•

4-6 cloves garlic, finely chopped

•

2-3 shallots, thinly sliced (or substitute with 1/2 cup sliced onion)

•

2-3 tbsp peanut oil for stir-frying

•

2 tsp black soy sauce (the semi-sweet kind, siew dohm)

•

1-2 tbsp Thai fish sauce (nam bplah), to taste (Golden Boy brand is recommended)

•

1 cup fresh Thai holy basil (bai gka-prow), or substitute with: 1/4 cup dried holy basil, soaked to soften plus 1/2 to 1 cup fresh Thai sweet basil (bai horapa)

•

2 small kaffir lime leaves (bai ma-gkrood), very finely slivered (optional)

•

5-10 Thai chillies (prik kee noo), chopped and pounded with a mortar and pestle; or 2-3 fresh jalapeno or fresno peppers, cut into large slivers

•

Dash of ground white pepper

Preparation Prepare the ingredients as indicated. Leave the fresh basil leaves whole; the flowers may also be used. The dried holy basil will soften when soaked in tap water for 10-15

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minutes. Pull off and discard the hard stems. Drain. Heat a wok until the surface is smoking hot. Swirl in the oil to coat the wok surface. Wait a few seconds for the oil to heat, then stir in the garlic, followed a few seconds later with shallots. Stir another few seconds before adding the chicken. Stir-fry a minute or two, or until most of the chicken has started to change color on the outside and is no longer pink. Toss in the chillies, slivered kaffir lime leaves and reconstituted dried holy basil (if using). Sprinkle black soy sauce over the mixture and stir-fry another 15-20 seconds. Then add fresh basil leaves and fish sauce to taste. Stir and mix well. Stir-fry another half a minute, or until the basil is wilted and the chicken is cooked through. Sprinkle with white pepper. Stir and transfer to a serving dish, or spoon directly over individual plates of plain steamed rice. Massaman Curry Ingredients (serves 4) •

2 tablespoons vegetable oil

•

650g gravy beef or chuck steak, trimmed

•

1 cup coconut cream

•

2 tablespoons massaman curry paste (see related recipe)

•

1 cup coconut milk

•

1 cup chicken stock

•

1/2 cup unsalted roasted peanuts

•

2 medium potatoes, peeled, cut into 3cm pieces

•

1 cinnamon stick

•

2 bay leaves

•

5 cardamom pods, lightly crushed (see note)

•

2 tablespoons brown sugar

•

1 tablespoon tamarind concentrate (see note)

•

1 tablespoon fish sauce

•

steamed jasmine rice, to serve

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Method 1. Heat oil in a large saucepan over medium-high heat until hot. Add beef. Cook, stirring constantly, until evenly browned. Transfer to a plate. Add 2 tablespoons coconut cream to pan. Cook over medium heat for 20 seconds or until hot. Add curry paste. Cook for 1 minute or until aromatic. 2. Return beef and juices to pan. Add coconut milk, stock, peanuts, potatoes, cinnamon stick, bay leaves, cardamom pods, sugar, tamarind concentrate, fish sauce and remaining coconut cream. Stir to combine. 3. Reduce heat to low. Cover and simmer, stirring occasionally, for 1 1/2 to 2 hours or until beef is tender. Serve with rice. American Braakfast

Ingredients 1 ½ lb ground pork ¾ tsp salt ½ tsp freshly ground pepper 1 tsp dried sage 1 tsp dried marjoram

Direction

1) In a large bowl, combine the pork, salt, pepper, sage and marjoram and mix well with a fork. Knead the sausage into a large ball. (Taste for seasoning by pinching off an olive-size piece of sausage and placing it in a small nonstick skillet. Cook the small piece over medium heat, turning often, until it's no longer pink in the center, 3 to 5 minutes. Taste, then add additional salt, pepper or herbs to the sausage mixture as desired.)

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2) Cover the bowl with plastic wrap and chill the uncooked sausage mixture for 1 hour. Using your hands, form the meat into 24 uniform balls, then flatten each into a patty.

3) Place 8 of the patties in a large nonstick skillet and cook over medium heat until browned and cooked through, about 5 minutes per side. Drain on paper towels, repeat with the remaining patties and serve.

Step 1: You will need •

2 sausages

•

100 g mushrooms

•

2 Rashers bacon

•

2 eggs

•

150 g baked beans

•

vegetable oil

•

ketchup or brown sauce

•

1 knife

•

1 chopping board

•

1 wooden stirring spoon

•

1 spatula

•

1 small saucepan

•

2 frying pans

•

Serves:

•

1

•

Preparation Time:

•

5 minutes

•

Cooking Time:

•

15 minutes

1. Step 2: Sausages We start with our sausages. Quality is crucial here - go for ones with a high percentage of pork and natural ingredients.

Place them in a frying pan with preheated vegetable oil.

They'll take the longest to cook of all our ingredients, around 12 minutes, with regular turning required. They make a lovely, reassuring sizzle as they fry.

226

2. Step 3: Mushrooms Wash and slice the mushrooms. Add them to some preheated vegetable oil in a separate frying pan, then stir and toss them on a gentle heat for about 5 minutes.

After that, consign them to a warm plate until the rest of the fry-up is finished, which won't be long now. Because things are really starting to hot up. 3. Step 4: Bacon Bacon next; when the sausages have been frying for 8 minutes, add the rashers to the same pan and turn them every minute or two. 4. Step 5: Baked beans As soon as your bacon's under way, the baked beans go on the stove. They require a gentle heat and plenty of stirring.

Now it's a total juggling act! 5. Step 6: Eggs While you keep an eye on all that sizzling and bubbling, replenish the other frying pan with oil and put it on a medium heat in readiness for the eggs.

Keep turning the bacon and stirring the beans; then crack one egg... and two, into the empty frying pan. Transfer it to the hottest plate on the stove if necessary

-

keep

stirring

those

beans!

And

we're

nearly

done.

The final touch is to get your spatula and splash hot oil over the eggs until the yolks go opaque. This is a sure sign that they're cooked properly.

And when they're done, the whole meal is done.

227

6. Step 7: Serve Add it all to the plate with the mushrooms on and get ready for the Full English experience.

Try a little tomato ketchup or brown sauce for the finishing touch to the perfect fried breakfast.

American Club Sandwich Ingredients •

Bread, toasted -- 3 slices

•

Mayonnaise -- 3 tablespoons

•

Chicken breast, cooked and thinly sliced -- 1/4 pound

•

Tomato -- 3 to 4 slices

•

Cooked bacon -- 3 to 4 pieces

•

Lettuce -- 1 leaf

Method 1. Spread the mayonnaise on one side of each of the slices of bread. 2. Spread the sliced chicken on one of the slices of bread. Top with another slice of bread. 3. Lay the tomatoes over the second slice of bread. Top with the bacon slices and the lettuce. Place the last slice of bread on top of that. 4. About 1-inch in from each of the sides of the sandwich, insert a long toothpick. Carefully slice the sandwich on the diagonal into 4 triangles and serve with a side of potato chips.

228

Tuna Sandwich Ingredients: •

6 to 7 ounces white tuna, drained

•

1 rib celery, finely chopped

•

1 hard-cooked egg, peeled and chopped

•

3 tablespoons mayonnaise

•

1 tablespoon finely chopped dill pickle

•

salt and pepper, to taste

•

1 to 2 tablespoons grated or finely chopped onion, optional

Spaghetti Chicken Saurce

Ingredients •

1 (16 ounce) package uncooked angel hair pasta

•

3 tablespoons olive oil

•

4 skinless, boneless chicken breast halves - cut into strips

•

2 tablespoons chopped garlic

•

2 tablespoons dried basil

•

2 tablespoons Cajun-style blackened seasoning

•

salt and pepper to taste

•

10 roma (plum) tomatoes, diced

•

2/3 cup crumbled feta cheese

Directions 1. Bring a large pot of lightly salted water to a boil. Add pasta and cook for 5 to 8 minutes or until al dente. Drain. 2. Heat olive oil in a large skillet over medium heat. Add chicken pieces, and cook, stirring until browned on the outside. Stir in the garlic, basil, Cajun seasoning, salt, and pepper, then mix in the tomatoes. Cook until tomatoes are semi soft,

229

and chicken is cooked through. Toss with pasta, and serve with crumbled feta cheese on top. Spaghetti Meat Saurces Ingredients

3 tablespoons olive oil 1 pound

beef

ground

1 pound

pork

ground

1 each

onion

chopped

1/2 each

green bell pepper chopped

3 cloves

garlic

5 cups

tomatoes, canned crushed

1/4 cup

tomato paste

minced

1 tablespoon chili powder 2 teaspoons basil

leaves - ground

1/2 teaspoon

cloves

ground

3 each

bay leaves

2 cups

chicken broth

1/2 teaspoon

salt

1/4 teaspoon

cayenne pepper

Directions Heat olive oil in a large skillet over medium-high heat. Add beef, pork, onion, green pepper, and garlic and sauté until browned, about 10 minutes. With a slotted spoon to drain off the fat, place the sautéed ingredients in a 4 quart saucepan. Add the remaining ingredients and mix well. Slowly bring to a boil, reduce heat, cover, and simmer for 2 hours.

230

Spaghetti Cream Saurce Ingredients: •

1 28 oz. can store-bought spaghetti sauce (or homemade)

•

1/2 cup heavy cream

•

1/4 cup grated Parmigiano-Reggiano cheese

•

2 Tbsp. chiffonade of fresh basil (thin little strips) Preparation:

1. Pour spaghetti sauce into a heavy saucepan. Heat over medium heat until just starting to bubble around the edges. 2. Add cream. Reduce heat to medium-low and let simmer 15 minutes. 3. Stir in cheese. 4. To make a chiffonade, roll stack a few fresh basil leaves on top of each other. Roll up tightly like a cigar. Slice from the short end to make strips. Sprinkle on top of pasta for garnish.

4.1.2 Service Process When the customer entry to our shop, the staff will say greeting with good welcome, then customer can order the favorite menus which we provide to them. We sure that our staffs can provide high quality of good service when the customer entry to our store because we have to train our staff well and we are focus on the service mind that we want the customer impress with everything of our shop because it can cause word of mount to gain our customer and they will come back to visit our shop again and again.

There are Internet Café which are 3 computer cases and Free Wi – Fi for our customers that they can enjoy with their searching. The internet café fee: Price: 1 hour = 100 baht

231

4.1.3 Location OKey Coffee is located on Karon Beach, Patak Road, T. Karon, Muang District and it is also in front of the beach and near Karon Circle Traffic which it is the main road of the beach. There are many tourists there. Our coffee store is on right hand side of Karon Circle traffic which are the orange building on corner. It is on the way to Patong beach and it is very easy to see. Figure 4.6: Map of Karon Beach

232

(Source: http://mapsphuket.com, 2010)

Figure 4.6: Karon Circle Traffic and Environment

This is building of our shop.

233

(Source: Photo on 06 May 2010 )

Figure 4.7: The Building of OKey Coffee

234

235

Figure 4.8: Environment around Building

(Source: Photo on 06 May 2010)

OKey coffee rent the Green Room of building which front width 10 M, long 5 M. It is on the second floor of the building. The price is 20,000 Baht per month which this price set by the Karon Municipality of Phuket because this building is own by government.

236

4.1.4 Facility Layout OKey Coffee devide into inside and outside store.

Pattern outside the Store Figure 4.9: Pattern Out side the Store or Environment

We provide out side atmosphere to impress the view of the beach for our customer that there are 8 chairs like mini bar a long shop 10 M, sitting in front of the beach so the customer will enjoy to drink our coffee with good surrounding. There are

237

black broad that write about our introducing menus or special information of our store for customers. Pattern inside the Store Figure 4.10: Door

Figure 4.11: Counter Bar Area Zone

238

This is our counter bar zone that there are coffee equipment, ice cream freezer, bakery display cabinet and chair to provide the customers. Figure 4.12: Secondhand Book Zone

239

Figure 4.13: Sofa and Magazine Corner

Figure 4.14: Internet Café Zone

240

Figure 4.15: Decoration of Store

241

Figure 4.16: Toilet Room

It is next to sofa corner. Figure 4.17: Kitchen Room

242

It is be hind the counter zone counter. 4.1.5 Machine/Tools/Equipment Decoration Tool and Equipment Figure 4.5: Decoration Tool and Equipment Decoration Tool and Equipment

Description

Telephone

PANASONIC

KX-TSC11MX.Single

phone call. Displays the name and number to call.Button Navigatar. Add ease of use.Screen LCD 2 line 16 the main story.50 number memory with 2 colors.1 year warranty. PRICE: 990 Baht Air ConditionerHITACHI RAS- • Air Wall Type • Size 23700 BTU

S24CE

• Disinfection of bacteria with light & UV • Nano Titanium filter discs eliminate bacteria and odor quickly • Speed Cool cooling system, accelerate faster • Silent Cool system noise reduction • 4-way air distribution system • Panel cooling large increases in thermal efficiency • Label low fiber 5

PRICE: 39,990 Baht

(Source:

• Warranty 1 year if manufacturing defects

http://

www.phuketbranches.com) Plug

PRICE: 250 Baht

• Size

3M

243

Television

- Size 32

PRICE: 15,990 Baht Book Self

PRICE: 3,000 Baht Cabinet

- Size 1.20 m

PRICE: 1,600 Baht Table Set

- Table 1 unit 105 x 74 cm - Chair 4 units 50.5 cm x 45.5 cm x 86.5 cm - Brown color

PRICE: 7,999 Baht Bar chair

- Oak wood - Height: 77 cm - Size: 55x44xH109 cm

PRICE: 3,200 Baht

244

Sofa:

- Brow Coulor

BOLONA

- Size 315*210*145 cm

PRICE: 22,900 Baht Computer: HP Pavilion P6383L

-

Intel® Core™ 2 Quad processor Q9300

-

2.5 GHz, 6MB L2 Cache, 1333MHz FSB, EM64T, Execute Disable Bit, EIST" •

DVD±RW/±R

Super

multiDrive

with

Lightscribe Technology, Double Layer (8.5GB) •

16X DVD±RW/±R Drive, 4GB RAM DDR3 up to 4GB with 1066MHz FSB RAM"

•

Integrated Intel High Definition Audio, 5.1 Surround Sound Ready

•

nVidia GeForce GT220 PCI-Express Graphics card 1GB dedicated allocated by windows 7 up to

2303MB

with

HDMI

and

DVI

capabilities •

Integrated 10/100 Base-T Ethernet, 15 in 1 media reader

Price: 21,840 Baht

•

6 USB 2.0 Port (2 Front 4 Rear)

•

1 PCI Express(x16 ) ,2 PCI Express(x1) and 1 PCI

•

(Source: www.pantipcity.com, 03 May 2010)

HP Deluxe Multimedia keyboard, Optical Scrolling Mouse

•

FreeDOS,

PC

Doctor

preloaded •

1-year limited on-site warranty

•

HP Pavilion 20" LCD with speaker

program

245

Computer Table

•

Size 80x60x75 cm

Price 2,250 baht Computer Chair

Price 1,750 baht

Logitech Webcam C500 1.3MP Features/Specifications: Video/5MP

Photo

USB

Webcam

2.0

(Interpolated) w/Built-in

•

Logitech Webcam C500 1.3MP USB 2.0 Webcam

Microphone & Laptop LCD ClipOn

•

General Features:

•

Color: Black

•

Hi-Speed USB 2.0 certified

•

1.3 megapixel sensor

•

Photo resolution: 8 megapixel (interpolated)

•

Video recording at 1280 x 1024

•

Built-in Microphone with Logitech RightSound technology

•

Logitech Video Effects

•

Up to 30 frames per second

•

Broad IM compatibility (Skype, Windows Live Messenger, Yahoo! Messenger, AIM, and

246

more) •

Snapshot button for capturing photos

•

Universal clip fits notebooks, LCD or CRT monitors

•

6-foot cable length

•

Compatible with Microsoft Windows XP (SP2 or higher), Windows Vista, or Windows 7 (32 & 64-bit)

Price 999 baht Router Wireless

•

Warranty 3 months

- D-Link Wireless Router 54Mbps 4 Ports UTP 10/100 Mbps DSL-2640T •

Standards: IEEE 802.3/3u, IEEE 802.11b/g

•

Data Rate: Up to 54Mbps

•

Security: Up to 256-bit WEP, WPA

•

Ports: 1x 10/100M WAN, 4x 10/100M LAN

•

Features: Combined Wireless Router and ADSL Modem Solution, Network Security with Integrated Firewall Features, Up to 150x Faster Than Dial-Up Modems

•

Price 1,350 baht Black Board

Price 1,000 baht

Warranty: 3 Years

247

Coffee Machine/ Tool/ Equipment Table 4.6: Coffee Machine/ Tool/ Equipment of OKey Coffee Store Coffee Machine/ Tool/Equipment Coffee

Brewing

Machine:

La

Marzocco’s GB/5 AV- 3 Group

Description - 3 groups - Height (x)cm/in. 47.5/19 - Width (z) cm/in. 47.5/19 95/371/2 - Depth (y) cm/in. 62.2/241/2 - Weight kg/lbs 74/163 - Voltage VAC 200 Single/Three Phase 220 Single/Three Phase 380 Three Phase -

High Wattage elements 6100

-

Steam Boiler capacity liters 11

- Coffee boiler capacity liters 5 • Dual-boiler technology and saturated brewing groups available: • Stainless steel boilers & brewing groups • PID temperature control (proportional integral derivative) • Brew water pre-heating system • Multifunction keypads and digital display (pls see left picture) • Customized steam valve with adjustable steam flow • Omni-directional stainless steel steam wands • Hot water economizer • Solid stainless steel housing and base • High wattage heating elements • Available automatic (AV), semi- automatic (EE) and mechanical paddle (MP) (for latter

PRICE: 460,000 Baht

option see specific brochure) Options

248

• High base (for larger cups sizes x= +2,5cm./1in.) • High legs (x= +7,5cm./3in.)

(Source: http://www.boncafe.co.th)

• Cup warmer • Auto steam • PortaflonTM kit with coated portafilters and steam wands • Barista lights Coffee Grinder: Compak K6 Grinder Professional Barista (WBC)

The grinder built for the professional barista who demands a perfect grind with performance -

and Motor

power

-

(w):

320

RPM:

-

ø

-

agility.

Grinding Production

Hopper

capacity

disc

1250 (mm):

64

(lb/h):

23-27

(lb/kg):

3.75/1.7

-

Height x width x depth (in/mm):

-

25x8.3x14.4/635x210x365

- Special doser for competition.

PRICE: 29,000 Baht (Source: http://www.hillkoff.com) Tamper: CAFELAT TAMPER Royal Red

–

So-called because of the "crown" on the top, the Royal is our premium tamper featuring a combination of different materials. The lower portion of the handle may be rubber or wood, whilst the top portion is always satin brushed aluminium.

249

Material :

PRICE: 1,550 Baht (Source: http://www.hillkoff.com)

Height incl. base : 90mm Colour options : Red Product Weight : 350g with a 58mm base Packaging :

Blender: Blendtec Smoother

Rubber and Stainless Steel

1 complete tamper per box

The Legendary Performer For years the Smoother has set the standard in blending frozen drinks. The Smoother is still the choice of many of the world's leading beverage retailers. No blending chore is too tough for the Smoother. The Smoother was designed with you in mind. There is no need to purchase a different machine if you change the layout of your counter. The Smoother combines power with intelligence and beauty. More Power The Blendtec Smoother Blender ™ delivers 50 percent more power than other commercial blenders. Hard ice cream, big ice cubes, frozen fruit...bring 'em on! More power means less blending time and faster delivery to your customer. Versatility The Blendtec Smoother ™ was designed with you in mind. No need to purchase a different machine if you change the layout of your counter. Put the Blendtec Smoother ™ anywhere it's versatile. Attractive,

Functional

Design

The Blendtec Smoother ™ is a designer's ideal: low profile, functional, and space-saving. The jar is half the weight of other jars, stackable, and can be personalized with your company logo. The lid was designed to require little effort--easy on and easy off.

PRICE: 50,000 Baht

Features A heavy-duty 13, 15, 18, or 20 AMP motors. The most

250

(Source:

powerful

http://www.espressofriend.com)

GE

motors

available.

Lexan®

Jars.

Liqid Crystal Display (LCD) reports cycle counts and helpful

diagnostics.

Acrylic sound enclosure offers bright, clear, 360° visibility. Footprint

Dimensions

Above-counter

placement:

9"w

X

9"d

X

17"h

In-counter placement: 9"w X 9"d X 11" h Shipping

size

and

Box

weight:

dimensions:30"x14"x13.5"

Weight: 30 lbs.

Knockbox: CAFELAT KNOCKBOX

Material :

Stainless Steel and rubber

Height incl. base : 16cm Diameter Colour options : Product

Black

Weight

Packaging :

:

1200g

1 complete knockbox and 1 extra rubber bar per box.

PRICE: 1,500 Baht (Source: http://www.hillkoff.com)

*** Includes: 1 extra knock bar for future replacement

251

Measuring Cup: Anchor

3 Piece Set: •

Anchor Hocking Clear Glass

•

3 Piece Open-Handle Measuring Cup Set

•

8 oz., 16 oz., and 32 oz. Measuring Cups

•

Red Decoration

•

Gift Boxed

PRICE: 999 Baht (Source: http://www.hillkoff.com) Pitcher: TIAMO PITCHER

-

Capacity

:

700

cc

- Material : Stainless Steel and Milk Frothing

PRICE: 999 Baht (Source: http://www.hillkoff.com) Tamper Hanger

PRICE: 300 Baht (Source: http://www.hillkoff.com)

•

Material : Plastic and Rubber

•

Colour options : Black

•

Product Weight : 60g

•

Packaging : Retail gift packaging with EAN 13 barcode

252

Tamping Mat Corner Material :

Rubber

Height incl. base : 26cm (W) at the back 22xm (W) at the front and 21cm (D) Colour options : Product

PRICE: 550 Baht

Black

Weight

Packaging :

: 1 mat per box

(Source: http://www.hillkoff.com) Cream Whipper or Whipped Cream Maker: Whip It

- Cream Whipper, whip – it - Size: 1 litter for - Material : High quality Aluminum

PRICE: 2,600 Baht (Source: http://www.hillkoff.com) Cooking and Frothing Thermometers

- Frothing thermometers 24 V - 10 minutes frothing

PRICE: 950 Baht

(Source: http://www.hillkoff.com)

570g

253

Whip Cream Nozzle

- Club shape

PRICE: 950 Baht

(Source: http://www.hillkoff.com) Espresso

Machine

Group

Head

Cleaning Brush

- Size: 7.25 quot -

PRICE: 350 Baht (Source: http://www.hillkoff.com) Grinder Cleaning Brush

PRICE: 220 Baht (Source: http://www.hillkoff.com) Cafiza Espresso Machine Cleaner Powder

Material

:

Stan

less

254

PRICE: 690 Baht

(Source: http://www.hillkoff.com)

Checker - Size: 20 Oz Size: 20 onz

- Material: Stan less

Material: Stand less

PRICE: 1,250 Baht (Source: http://www.hillkoff.com) Beverage Mix Picher Size: 10 Oz Size: 20 onz

Material: Stand less

Material: Stand less

PRICE: 225 Baht (Source: http://www.hillkoff.com) Beverage Mix Picher Size: 16 Oz Size: 20 onz Material: Stand less

PRICE: 300 Baht

(Source: http://www.hillkoff.com)

Material: Stand less

255

Beverage Mix Picher Size: 32 Oz Size: 20 onz

Material: Stand less

Material: Stand less PRICE: 390 Baht

(Source: http://www.hillkoff.com) Milk Jigger - Size: Small Size: 20 onz

- Size: Medium

Material: Stand less

- Size: Large

PRICE: 90 Baht

(Source: http://www.hillkoff.com) Cocoa Mill - Size: 296 ML (10 Oz) Size: 20 onz

- Height: 10 cm

PRICE: 145 Baht

- Material: Stan less

(Source: http://www.hillkoff.com) Sugar Sprinkle Material: Stand less Size: 20 onz Material: Stand less PRICE: 290 Baht

(Source: http://www.hillkoff.com)

256

Sprinkle Size: 20 onz

- Cacao, cinnamon Sprinkle

Material: Stand less PRICE: 35 Baht

(Source: http://www.hillkoff.com) Topping Bottle Size: 20 onz Material: Stand less

Size: 700 ML Material: Plastic – Grade A

PRICE: 30 Baht

(Source: http://www.hillkoff.com) Topping Bottle Size: 20 onz

Size: 1 – 2 Oz

Material: Stand less

PRICE: 70 Baht

(Source: http://www.hillkoff.com) Coffee Bean Spoon Size: 20 onz Material: Stand less PRICE: 50 Baht

(Source: http://www.hillkoff.com)

Size: 7 g

257

Coffee Powder Spoon Size: 20 onz

Size: 8 g

Material: Stand less PRICE: 100 Baht

(Source: http://www.hillkoff.com) Milk Frothing Spoon Size: 20 onz Material: Stand less

PRICE: 49 Baht

(Source: http://www.hillkoff.com) Tea Spoon Size: 20 onz Material: Stand less

PRICE: 25 Baht

(Source: http://www.hillkoff.com) Coffee Spoon

- Width: 2.5 -

PRICE: 720 Baht

Length: 11.6

- 12 units (pack)

258

Syrup Pump Size: 20 onz

- For standard bottle 750 ML

Material: Stand less PRICE: 150 Baht

(Source: http://www.hillkoff.com) Coffee Filter Paper Box Size: 20 onz Mat: Stand less

PRICE: 80 Baht

(Source: http://www.hillkoff.com) Straw Box - Size: Standard Size: 20 onz

- Material: Wood

Mat: Stand less PRICE: 850 Baht

(Source: http://www.hillkoff.com) Espresso Coffee Cup - Height: 56 mm / 18 mm - Width: 5 mm/ 110 mm PRICE: 35 Baht

(Source: http://www.sairungdesign.com)

- Water Goblet 2.5 Oz (70 ml)

259

Coffee Cup - Height: 7.8 cm Size: 20 onz Mat: Stand less

- Width: 8.5 cm / 15 cm - Water Goblet 248 ml

PRICE: 50 Baht

(Source: http://www.sairungdesign.com)

Iced Beverage - Height: 15 cm Size: 20 onz Mat: Stand les

- Width: 7.55 cm - Water Goblet 14 Oz (405 ml)

PRICE: 30 Baht (Source: http://www.sairungdesign.com)

Smoothie Glass Or Fruit Juice - Height: 16.6 cm - Width: 6.4 cm Size: 20 onz

- Water Goblet 15 Oz (425 ml)

PRICE: 115 Baht

(Source: http://www.sairungdesign.com)

Ice Cooler

PRICE: 15,000 Baht

(Source:http://www.mr-stainless.net)

Material: Stand Less

260

Computer: HP ap5000 All-in-One POS System

PRICE: 6,599 Baht

261

262

263

264

265

Epson's

Printer

U220B,

TM-U220:

TM-U220D

TM-U220A,

printers

are

TM-

compact,

reliable and fast, and offer all the easy-to-use features important to the retail, restaurant and hospitality industries. All three printer models in the Epson TM-U220: TM-U220A, TM-U220B, TM-U220D series are optimized for high-speed throughput so customer receipts and kitchen orders print faster than ever. For maximum efficiency, the TM-U220 A (with journal take-up and auto-cutter), TM-U220 B (with auto-cutter only) and TM-U220 D (no options) all offer drop-in paper loading and two-color, black and red printing to highlight special offers and print more visible logos, and an adjustable paper width feature that allows you to

Price: 7,095 Baht

use 58, 70 or 76 mm paper rolls for more flexibility and greater cost savings.

Coffee Shop POS Systems and Coffee Shop Software

0

266

Price: 120,000 Baht

(Source: http://posnation.com, 2010) Ice Cream Machine/ Tool/ Equipment Figure 4.7: Ice Cream Machine/ Tool/ Equipment Ice Cream Machine/ Tool/Equipment

Description

Ice-Cream Dipper

- Ice-cream Freezer Ic 08; - Size: 80 x 75 x 90 cm. 8 trays for stock, -

20 Celsius for its temperature

PRICE: 42,000 Baht

(Source: http://www.biggelato.plazathai.com)

Ice-Cream Dipper - Size: 20/ 70 g/ 4 Oz Size: 20 onz PRICE: 300 Baht

(Source: http://www.biggelato.plazathai.com)

267

Spoon

- Stand less Steel

Size: 20 onz PRICE: 173 Baht

(Source: http://www.biggelato.plazathai.com)

Spoon

- RW482 Plastic Tray [Brown] 29 x 42.3 x 2.5 cm.

Size: 20 onz

PRICE: 48 Baht

(Source: http://www.biggelato.plazathai.com)

Sunday Glass

Size: 20 onz PRICE: 678 Baht per Deozen

(Source: http://www.biggelato.plazathai.com)

268

Big Glass

- 4 inches

Size: 20 onz PRICE: 58 Baht (Source: http://www.biggelato.plazathai.com)

Kitchen

Table 4.8: Kitchen Machine/ Tool/ Equipment

Machine/ Tool/Equipment

Description

Kitchen sink cabinet

• Tea

color

• Size

1.50 m

Price 5,800 baht

269

Refrigerator Toshiba GR-MG41KD

• 12.4 queue • Hybrid Guard System consists of the system • UV Fresh Guard with LED lighting adding to the fresh food and clean more • Cool Air Wrap distributed cooling thoroughly • Hybrid Plasma System eliminates odor and bacteria • Beautiful art glass panel doors • Rack glass (Tempered Glass Shelf)

Price 17,190 baht

• Design a single Press-handed grip beautiful capture

Insolated

container

of

(SANYO EHM981X)

hot

water • Containing 2.5 • Can

liters

pour water levels

• Easy to

use

Price 680 baht

Microwave SHARP R-247

• 22

liter

• working with • Electronic • Button

microwave

control with a DIGI-ANA that

light shows scheduling a LIGHT-

UP DIAL-time visibility •

Set the cooking time from 15 seconds to

30 minutes and choose a heat level 5 Price 2,818 baht

270

PANASONIC SR-MM18N

•

825-watt

10-cup

rice

cooker

with

advanced fuzzy-logic technology •

Settings include regular rice, quick rice, rice porridge, slow cook, and steam

•

2 preset timers; 12-hour "keep warm"; non-stick coated inner pan for quick clean up

•

Measuring cup, rice-scoop holder, deluxe steaming basket, and instructions included

•

Measures 9-2/7 by 13-8/9 by 11 inches

Price 2,990 baht

Pot: Zebra

- Width 30 cm - Contain 9.2 liter - Material: Stand less steel

Price 935 baht Mortar: Zebra

- Size: Medium (7) - Width: 7 inch - Deep 3 inch

Price 420 baht Knife: Zebra “Chef”

- Long: 8 inch - Stand less steel sus 420j2

Price 116 baht Spoon - Fork: Zebra “Chef”

- Thick: 2 mm - 6 pairs - Stand less Steel

271

Price 218 baht Soup Spoon: Zebra

- Thick: 2 mm - Stand less steel

Price 68 baht

Dessert Fork: Zebra

- Thick: 1 mm - Long: 13.5 cm - Stand less Steel

Price 288 baht - Width: 35 cm Pan: Zebra

- Size: 35x 57 x 11 cm - Stand less steel

Price 725 baht Ladle: Zebra

- Long: 30 cm - Stand less steel

Price 41 baht

272

Spade: Zebra

Price 110 baht Dish: Zebra

- Width: 10 inch (26 cm)

Price 78 baht Bowl: Zebra

Price 100 baht

Gas Stove: OTTO

Price 1,718 baht

- Width: 7 inch (17 cm)

273

Water Glass: Ocean Glass

- Size width 71 mm x heigh 82 mm - Contain 8/ ¼ oz (235 ml)

PRICE: 210 Baht Per Dozen

(Source: http://www.biggelato.plazathai.com)

Napkin

PRICE: 200 Baht

(Source: http://www.hillkoff.com)

Dessert Dish

PRICE: 45 Baht

Size: Width: 22 inch, Length: 42 inch

274

Toilet

Table 4.9: Toilet Machine/ Tool/ Equipment

Coffee Machine/ Tool/Equipment

Description

Toilet door: Diamond Door

• Size

80x200 x 3.1 cm

• Strong wood

Grade A

Price: 3,500 Baht Injection line 007 CR

• Made

from ABS plastic

• Head

press made from brass material

• German

stainless

• Guarantee

Price: 175 Baht

for 1 year

275

Basin NASCO MILANO

- Teak wood - Height 90 cm

Price: 2,500 Baht

Mirror

• Used

mirror/ more 65 years old

- Length: 22 inch - Width: 12 inch

Price: 1,500 Baht Flush toilet NASCO MODANA

• Two

piece toilet

• Water

Price 1,549 baht

saver 6 liter

276

4.1.6 Logistics Management

Figure 4.18: Major Logistics Functions

(Source: http://www.atkinson.yorku.ca, 2010)

Logistics is the management of the flow of goods, information and other resources, including energy and people, between the point of origin and the point of consumption in order to meet the requirements of consumers. Logistics involves the integration of information, transportation, inventory, warehousing, material-handling, and packaging, and occasionally security. Logistics is a channel of the supply chain which adds the value of time and place utility. Today the complexity of production logistics can be modeled, analyzed, visualized and optimized by plant simulation software. Logistics management is that part of the supply chain which plans, implements and controls the efficient, effective forward and reverse flow and storage of goods,

277

services and related information between the point of origin and the point of consumption in order to meet customer & legal requirements. A professional working in the field of logistics management is called a logistician.

Our products transportation

Actually the Doi Chang Coffee Company is in Chiang Rai which is in the north of Thailand but nowadays There are the distributors in northern part and central part that are in Bangkok and they sell in the same price and after I contact to the company about the logistic, they tell to order from Bangkok because the distance is nearer than Chiang Rai and it can save cost so our company will order from Bangkok Coffee bean and Ego coffee bean, we order from Doi Chang Coffee Original Company Limited, Branch 2 39/545 Moo 13, Ladprao Wanghin Raod, Ladprao Bangkok 10230. The logistic cost is free because we order more than 10 Kilograms so we do not pay for any fees. This is the way of logistic of our company: Figure 4.8: Logistic management of Our Company

Ice cream, we order from Pluto, premium Italian gelato ice cream that it is at 34/58 Sakdidet Road, Moo 1, T. Vichit, A. Muang, Phuket 83000.

278

Figure 4.9: Ice Cream Logistic management of Our Company

Bakery that we order from Kanda bakery which is located on 31/33, it is opposite UOB bank, Ruchadapisek Road, T. Taladyai, Muang Phuket 83000

Figure 4.10: Bakery Logistic management of Our Company

4.1.7 Facility Management

Cost of utilities We focus on customer first because good service should to think a demand of customer “What they want?” So, we provide technology service that importance to customer and décor our shop for attractive customer too. OKey Coffee provides the internet cafe and free high-speed wireless (Wi - Fi). For make more service efficiency to customer and brand royalty to our product. The significance of our shop is we reallocate in cost of telephone and internet we divide to pay at TOT Public Company Limited.

279

Figure 4.11: Internet Service and Wi-Fi Hot Spot

Service

Rate/ Month

Telephone Setting 3,700 Baht + Vat 259 Baht = 3,959 Baht Including: - Lightening Protection System and All System Setting Telephone

1000 Baht (Base Average) - Cell phone call and Domestic call = 2 Baht per minute

Internet 4 Mbps/1 Mbps - Free System Setting

(Source: http://www.tot.co.th, 06 May 2010)

690 Baht

280

Electricity bill: Pay at Provincial Electricity Authority (ePayment). The cost of electricity used is normal cost. For maintain public benefit and revenue of our shop, to make convenience for customer and good service to them.

Figure 4.12: METROPLITAN ELECTRICITY AUTHORITY

281

(Source: http://www.mea.or.th/internet, 10 May 2010)

282

Water supply: We pay at Provincial Waterworks Authority.

Figure 4.13: Water Work Authority

(Source: www.pwa.co.th, 10 May 2010) Advertisement’s Tax -

A board which contain all of Thai language; 3 baht/500cm2

-

A board which contain both Thai and English, images or any signs; 20 baht / 500 cm2

-

For these boards; 40 baht / 500 cm2 •

A board with no Thai language

•

A board with a few Thai language, and place under or lower than other

language -

For any boards that paid already, you must pay more than the normal cost, if you fix a board which make a rate of tax paying change; following [1],[2] and [3].

-

The lowest cost of any board is 200 baht.

283

4.2 Cost of Investment 4.2.1 Pre- Operating Cost Rental Rate -

The rental rate is 20,000 Baht per month and prepaid rental free is 1 year

that there are 240,000 Baht Billboard of Company

Figure 4.14: Example of Company’s Billboard

The logo cost design of OKey Coffee is 2, 500 Baht. The logo of our company is classic style that it is unique with coffee bean and name of our company which it makes our customer to remember easily and it is the image of real Arabica of OKay Coffee. The billboard cost of our company is 5,000 Baht.

Billboard tax Billboard of OKey Coffee Company is wreath feature and it makes by English font and pays the fee for set company billboard. We need to pay billboard tax in Thailand. The size of billboard equal:

284

Width 120 Centimeters and height 80 Centimeters 120 x 80 = (7,200 / 500) x 40 = 768 Baht per year We need to pay billboard at Karon Municipality, No. 1 Kata Road, T. Karon, Muang Phuket 83100. Telephone no. 667-633-0189

Document for registration paying tax - Copy of Household Registration and personal Identification Card - VAT Registration - Certificate - License to set billboard

Company Limited Registration -

Capital investment 2,100,000 baht

-

Fee and Document for register 11,050 baht

-

Total 11,050 baht

*** The condition of company limited registration is in appendix part.

Commercial Registration Fee New commercial registration of 50 Baht

(Ministry of Commerce, http://www2.moc.go.th, 2010)

285

Company Registration (License)

Restaurant /Food shop -

Restaurant license 1,000 Baht per year

***Pay at Kaoron Municipality

4.3.1 Investment Cost Table 4.10: Investment Cost

No Description

Product

1

Prepaid Rental Fee (1 Year)

2

Design/ Decoration/ Painting/ -

12

Price/Unit

Total

(Baht)

(Baht)

240,000

240,000

380,000

380,000

Counter/ Equipment Setting Service and Others 3

Telephone Setting

1

3,959

3,959

4

Electric System Setting

1

50,000

50,000

5

Water System Setting

1

15,000

15,000

6

Setting security cameras

1

2,000

2,000

7

Logo Design

1

2,500

2,500

8

Billboard

1

5,000

5,000

9

Bill Board Tax

1

768

768

10

Company

11,050

11,050

50

50

1,1050

11,050

Limited 1

Registration 11

Commercial Registration Fee

12

Company

1

Registration 1

(License) Total

721,377

286

Furniture and Equipment of Store 1

Telephone

1

990

990

2

Air Conditioner

1

39,990

39,990

3

Television

1

15,990

15,990

4

Book Self

2

3,000

6,000

5

Cabinet

1

1,600

1,600

6

Table Set

5

7,999

39,995

7

Bar chair

8

3,200

25,600

8

Sofa

1

22,900

22,990

9

Computer

3

21,840

65,520

10

Computer Table

3

2,250

6,750

11

Computer Chair

3

1,750

5,250

12

Webcam

3

999

2,997

13

Router Wireless

1

1,350

1,350

14

Black Board

1

1,000

1,000

Total

236,022

Coffee Equipments and Tools 1

Coffee Brewing Machine

1

460,000

460,000

2

Coffee Grinder

1

29,000

29,000

3

Tamper

2

1,550

3,100

4

Blender

1

50,000

50,000

5

Knock box

1

1,500

1,500

6

Measuring Cup

2

999

1,998

7

Pitcher

2

999

1,998

8

Tamper Hanger

2

300

600

9

Tamping Mat Corner

1

550

550

10

Cream Whipper

2

2,600

5,200

287

11

Cooking

and

Frothing 1

950

950

2

950

1,900

Group 1

350

350

Thermometers 12

Whip Cream Nozzle

13

Espresso

Machine

Head Cleaning Brush 14

Grinder Cleaning Brush

1

220

220

15

Counter Clean Brush

1

690

690

16

Checker

2

1,250

2,500

17

Beverage Mix Picher (10 oz)

2

225

450

18

Beverage Mix Picher (16 oz)

2

300

600

19

Beverage Mix Picher (32 oz)

1

390

390

20

Milk Jigger

1

90

90

21

Cocoa Sprinkle

1

145

145

22

Sugar Sprinkle

3

290

870

23

Sprinkle

10

35

350

24

Topping Bottle

6

30

180

25

Jigger

1

70

70

26

Coffee Bean Spoon

2

50

50

27

Coffee Powder Spoon

2

100

200

28

Milk Frothing Spoon

3

49

147

29

Tea Spoon

25

25

750

Coffee Spoon

3

720/ Dozen

2,160

30

Syrup Pump

10

150

1,500

31

Coffee Filter Paper Box

1

80

80

32

Straw Box

1

850

850

33

Espresso Coffee Cup

30

35

1,050

34

Coffee Cup

40

50

2,000

35

Iced Beverage Glass

20

30

600

36

Smoothie or Fruit Juice Glass

20

115

2,300

37

Ice Cooler

1

15,000

15,000

38

Computer: POS System

1

6,599

6,599

288

39

40

Printer

Coffee Shop POS Systems and

1

7,095

7,095

1

120,000

120,000

-

-

25,000

Coffee Shop Software

41

Other Coffee Equipments

Total

749,082

Ice Cream Tool/ Equipment 1

Ice-Cream Freezer

1

42,000

42,000

2

Ice-Cream Dipper

1

300

300

3

Spoon

25

173

4,325

4

Tray

6

48

288

5

Sunday Glass

2

678/ Dozen

1,356

6

Big Glass

6

58

342

Total

48,611

Kitchen Tools/ Equipments 1

Kitchen sink cabinet

1

5,800

5,800

2

Refrigerator

1

17,190

17,190

3

Insolated

680

680

container

of

hot 1

water 4

Microwave

1

2,818

2,818

5

Rice Cooker

1

2,990

2,990

6

Pot

1

935

935

289

7

Mortar

1

420

420

8

Knife

2

116

232

9

Spoon/ Fork

4

218/6 pair

872

10

Soup Spoon

25

68

1,700

11

Dessert Fork

3

288/ Dozen

864

12

Pan

1

725

725

13

Ladle

1

41

41

14

Dessert Dish

35

45

1,575

15

Spade

1

110

110

16

Dish

30

78

2,340

17

Bowl

30

100

3,000

18

Gas Stove

1

1,718

1,718

19

Water Glass

4

210/ Dozen

840

20

Napkin

3

200

600

21

Other Kitchen Equipments

-

-

15,000 60,450

Toilet Tool and Equipment 1

Toilet door

1

3,500

3,500

2

Injection line

1

175

175

3

Basin

1

2,500

2,500

4

Mirror

1

1,500

1,500

5

Flush toilet

1

1,549

1,549

6

Other Equipments

-

-

5,000

Total

14,224

Total of Machine/ Tool/ Equipment

1,108,389

Total Fixed Assets

1,829,766

Net Working Capital

270,234

Total Investment Cost

2,100,000

290

4.3.2 Depreciation Table 4.11: Total Depreciation Year 2011 Investment

Amount

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Total

Design/ Decoration/

380,000

3,167

3,167

3,167

3,167

3,167

3,167

3,167

3,167

3,167

3,167

3,167

3,167

38,000

Billboard

5,000

83

83

83

83

83

83

83

83

83

83

83

83

1,000

Computer

65,520

1,820

1,820

1,820

1,820

1,820

1,820

1,820

1,820

1,820

1,820

1,820

1,820

21,840

212,573

3,543

3,543

3,543

3,543

3,543

3,543

3,543

3,543

3,543

3,543

3,543

3,543

42,515

460,000

7,667

7,667

7,667

7,667

7,667

7,667

7,667

7,667

7,667

7,667

7,667

7,667

92,000

Coffee Grinder

29,000

483

483

483

483

483

483

483

483

483

483

483

483

5,800

Blender

50,000

833

833

833

833

833

833

833

833

833

833

833

833

10,000

POS System

133,694

2,228

2,228

2,228

2,228

2,228

2,228

2,228

2,228

2,228

2,228

2,228

2,228

26,739

Other

76,388

1,273

1,273

1,273

1,273

1,273

1,273

1,273

1,273

1,273

1,273

1,273

1,273

15,278

48,611

810

810

810

810

810

810

810

810

810

810

810

810

9,722

Painting/ Counter/ Equipment Setting Service and Others

Other

Store

Tools

and

Equipments Coffee Brewing Machine

Coffee

Equipments and Tools Ice

Cream

291

Tools

and

Equipments Kitchen

Tools

60,450

1,008

1,008

1,008

1,008

1,008

1,008

1,008

1,008

1,008

1,008

1,008

1,008

12,090

14,224

237

237

237

237

237

237

237

237

237

237

237

237

2,845

1,535,460

23,152

23,152

23,152

23,152

23,152

23,152

23,152

23,152

23,152

23,152

23,152

23,152

277,829

and Equipments Toilet

Tools

and Equipments Total

Table 4.12: Total Depreciation Year 2012 Investment

Amount

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Total

Design/ Decoration/

380,000

3,167

3,167

3,167

3,167

3,167

3,167

3,167

3,167

3,167

3,167

3,167

3,167

38,000

Billboard

5,000

83

83

83

83

83

83

83

83

83

83

83

83

1,000

Computer

65,520

1,820

1,820

1,820

1,820

1,820

1,820

1,820

1,820

1,820

1,820

1,820

1,820

21,840

212,573

3,543

3,543

3,543

3,543

3,543

3,543

3,543

3,543

3,543

3,543

3,543

3,543

42,515

Painting/ Counter/ Equipment Setting Service and Others

Other

Store

Tools

and

Equipments

292

Coffee Brewing

460,000

7,667

7,667

7,667

7,667

7,667

7,667

7,667

7,667

7,667

7,667

7,667

7,667

92,000

Coffee Grinder

29,000

483

483

483

483

483

483

483

483

483

483

483

483

5,800

Blender

50,000

833

833

833

833

833

833

833

833

833

833

833

833

10,000

POS System

133,694

2,228

2,228

2,228

2,228

2,228

2,228

2,228

2,228

2,228

2,228

2,228

2,228

26,739

Other

76,388

1,273

1,273

1,273

1,273

1,273

1,273

1,273

1,273

1,273

1,273

1,273

1,273

15,278

48,611

810

810

810

810

810

810

810

810

810

810

810

810

9,722

60,450

1,008

1,008

1,008

1,008

1,008

1,008

1,008

1,008

1,008

1,008

1,008

1,008

12,090

14,224

237

237

237

237

237

237

237

237

237

237

237

237

2,845

1,535,460

23,152

23,152

23,152

23,152

23,152

23,152

23,152

23,152

23,152

23,152

23,152

23,152

277,829

Machine

Coffee

Equipments and Tools Ice

Cream

Tools

and

Equipments Kitchen

Tools

and Equipments Toilet

Tools

and Equipments Total

293

Table 4.13: Total Depreciation Year 2013 Investment

Amount

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Total

Design/ Decoration/

380,000

3,167

3,167

3,167

3,167

3,167

3,167

3,167

3,167

3,167

3,167

3,167

3,167

38,000

Billboard

5,000

83

83

83

83

83

83

83

83

83

83

83

83

1,000

Computer

65,520

1,820

1,820

1,820

1,820

1,820

1,820

1,820

1,820

1,820

1,820

1,820

1,820

21,840

212,573

3,543

3,543

3,543

3,543

3,543

3,543

3,543

3,543

3,543

3,543

3,543

3,543

42,515

460,000

7,667

7,667

7,667

7,667

7,667

7,667

7,667

7,667

7,667

7,667

7,667

7,667

92,000

Coffee Grinder

29,000

483

483

483

483

483

483

483

483

483

483

483

483

5,800

Blender

50,000

833

833

833

833

833

833

833

833

833

833

833

833

10,000

POS System

133,694

2,228

2,228

2,228

2,228

2,228

2,228

2,228

2,228

2,228

2,228

2,228

2,228

26,739

Other

76,388

1,273

1,273

1,273

1,273

1,273

1,273

1,273

1,273

1,273

1,273

1,273

1,273

15,278

48,611

810

810

810

810

810

810

810

810

810

810

810

810

9,722

Painting/ Counter/ Equipment Setting Service and Others

Other

Store

Tools

and

Equipments Coffee Brewing Machine

Coffee

Equipments and Tools Ice

Cream

Tools Equipments

and

294

Kitchen

Tools

60,450

1,008

1,008

1,008

1,008

1,008

1,008

1,008

1,008

1,008

1,008

1,008

1,008

12,090

14,224

237

237

237

237

237

237

237

237

237

237

237

237

2,845

1,535,460

23,152

23,152

23,152

23,152

23,152

23,152

23,152

23,152

23,152

23,152

23,152

23,152

277,829

and Equipments Toilet

Tools

and Equipments Total

295

Table 4.14: Total Depreciation Investment

Amount

Depreciation

Annual Depreciation

Monthly Depreciation

Design/ Decoration/ Painting/ Counter/ 380,000

10 Years

38,000

3,167

Equipment Setting Service and Others Billboard

5,000

5 Years

1,000

83

Computer

65,520

3 Years

21,840

1,820

Other Store Tools and Equipments

212,573

5 Years

42,515

3,543

Coffee Brewing Machine

460,000

5 Years

92,000

7,667

Coffee Grinder

29,000

5 Years

5,800

483

Blender

50,000

5 Years

10,000

833

POS System

133,694

5 Years

26,739

2,228

Other Coffee Equipments and Tools

76,388

5 Years

15,278

1,273

Ice Cream Tools and Equipments

48,611

5 Years

9,722

810

Kitchen Tools and Equipments

60,450

5 Years

12,090

1,008

Toilet Tools and Equipments

14,224

5 Years

2,845

237

Total

1,535,460

-

277,829

23,152

296

4.4 Operating Cost 4.4.1 Direct Material Cost Table 4.15: Beverage Raw Material

No

Raw Material

Price Per Unit

Doi Chang Arabica Coffee

4,500/ 5 kg

Davinci Syrup

330/ 750 ml

1

2

- Vanilla - Hazel Nuts - Butter Scotch Caramel - Blue Culacao - Caramel - Macadamia Nut - French Vanilla - Cinnamon - Toast Hazelnut - Peppermint - Rum - English Toffee - White Chocolate

Picture

297

3

Natural Brown Sugar 100 %

39/ 500 g

4

Sweetened Condensed Milk

29/ 505 g

5

Tasteless Condensed Milk

25/ 405 g

6

Instant Whipping Cream

230/ 500 g

7

45/ 450 g Black Thai Tea

8

Davinci Sauce Caramel

660/2.6 kg

Davinci Sauce Chocolate Davinci

9

10

Sauce

660/2.6 kg White

Chocolate

660/2.6 kg

Frappe Powder

140/ 550 g

Premium Cocoa

180/ 500 g

298

12

Fresh Milk from Farm (Buy 5 28/ 1 kg kilos up per time)

13

Cinnamon Powder

65/ 1 kg

14

Fructose

40/ 1.5 kg

15

Tea •

Earl Grey

•

English Breakfast

•

Peppermint

•

Earl Grey Lavender

•

Darjeeling

•

Formosa Oolong

•

Herbal Lemon

155/ 1 box 25 bags

16

Orange 20 - 25 baht / kg

299

17

Banana (Buy from

30/ 1 hand of

secondhand book)

banana

18

Strawberry

145/ kg

19

Coconut

10/ 1 unit

20

Pine Apple

10/ 1 unit

21

Kiwi

18/ 1 unit

22

Carrot

30/ kg

23

Apple

95/ 10 units

300

24

Ice

2/kg

Table 4.16: Package and Other Equipment

Iced and Blended Coffee Straw Size: 20 onz

- Size: Medium/ 250 pieces

Mat: Stand less

PRICE: 22 Baht

(Source: http://www.hillkoff.com) Hot Coffee Straw Size: 20 onz Mat: Stand less PRICE: 20 Baht

(Source: http://www.hillkoff.com)

- 100 pieces

301

Fruit Juice or Smoothie Straw Size: 20 onz

- Size: Large/ 250 pieces

Mat: Stand less PRICE: 30 Baht

(Source: http://www.hillkoff.com) Iced Cover

- Size: 16 Oz/ 50 pieces

Size: 20 onz Mat: Stand less PRICE: 40 Baht

(Source: http://www.hillkoff.com) Hot Cover - Size: 8 Oz/ 50 pieces/ Black Size: 20 onz PRICE: 55 Baht

(Source: http://www.hillkoff.com) Hot Paper Cup - Size: 8 Oz / 50 pieces Size: 20 onz PRICE: 60 Baht

(Source: http://www.hillkoff.com)

302

Iced Cup Size: 16 Oz / 50 pieces Size: 20 onz Mat: Stand less PRICE: 85 Baht

(Source: http://www.hillkoff.com) Coffee Filter Paper Size: 20 onz

- 100 pieces

Mat: Stand less PRICE: 85 Baht

(Source: http://www.hillkoff.com) Cafiza Espresso Machine Cleaner Powder

Cafiza™ Espresso Machine Cleaner Powder for cleaning group heads and filters on you

espresso

machine.

- Concentrated formula eliminates residue in group -

heads,

valves,

and

lines.

Integral to the daily back-flush regimen.

- Foam and solubility balanced for optimal rinsing.

PRICE: 750 Baht

- NSF certified for metal compatibility and safety.

(Source: http://www.hillkoff.com)

-

Dishwashing Liquid

PRICE: 27 Baht

Available online in 20 oz. containers. Size: 566 g.

303

Pen: Laser

PRICE: 4.25 Baht

For our research by interview coffee entrepreneurs, we can conclusion operating cost that divides into type of products: Table 4.16: Average Operating Cost Products

Costs

Sale Price

Profit

Service

(Base Average)

(Base Average)

(Base Average)

Beverage Sale/ cups

35%

75

65 %

Food Sale/ plates

40%

150

60%

Coffee Bean Sale/ 60%

150

40%

and

bags Bakery/ prices

50%

75

50%

Ice Cream/ scope

50%

50

50%

180

50%

100

80%

Secondhand Book/ 50% books Internet

Service/ 20%

hours

We can calculate the operating cost of product of each month from: Sale forecast per day x cost of product x 30 = Product operating cost of each month

304

Table 4.17: Average Operating Expenses of Year 2011 Year 2011 Sale Volume Products and Service Per Month

Cost

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Total

Beverage

26.25

775

780

785

785

790

785

790

795

795

800

1,085

1,550

10,515

Food

60

620

625

630

630

620

625

610

620

625

630

775

930

7,940

Coffee Bean

90

5

7

7

7

5

5

4

6

7

6

9

10

78

Bakery

90

465

470

475

480

460

465

470

470

475

485

495

620

5,830

Ice Cream

25

620

630

800

1050

450

460

465

460

465

475

600

900

7,375

Secondhand Book

90

155

155

157

160

140

140

155

150

160

160

175

180

1,887

Internet Service

25

186

130

140

150

124

128

125

129

135

140

145

170

1,640

Year 2011 Operating Cost Products and Service Per Month

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Total

Beverage

20,345

20,475

20,606

20,606

20,737

20,606

20,737

20,868

20,868

21,000

28481

40,687

276,016

Food

37,200

37,500

37,800

37,800

37,200

37,500

36,600

37,200

37,500

37,800

46,500

55,800

476,400

450

630

630

630

450

450

360

540

630

540

810

900

7,020

Bakery

41,850

42,300

42,750

43,200

41,400

41,850

42,300

42,300

42,750

43650

44,550

55,800

524,700

Ice Cream

15,500

15,750

20,000

26,250

11,250

11,500

11,625

11,500

11,625

11,875

15,000

22,500

184,375

Secondhand Book

13,950

13,950

14,130

14,400

12,600

12,600

13,950

13,500

14,400

14,400

15,750

16,200

169,830

Internet Service

4,650

3,250

3,500

3,750

3,100

3,200

3,125

3,225

3,375

3,500

3,625

4,250

42,550

133,945

133,855

139,416

146,636

126,737

127,706

128,697

129,133

131,148

132,765

154,716

196,137

1,680,891

Coffee Bean

Total

305

Table 4.18: Average Operating Expenses of Year 2012 Year 2012 Sale Volume Products and Service Per Month

Cost

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Total

Beverage

26.25

2,480

2,010

2,100

2,200

800

790

750

765

795

800

1,800

2,850

18,140

Food

60

1,200

1,000

900

1,000

700

600

590

700

780

800

1,000

1,550

10,820

Coffee Bean

90

12

9

8

10

5

5

4

5

6

8

12

18

102

Bakery

90

775

700

720

750

500

520

485

470

475

600

750

800

7,545

Ice Cream

25

950

850

800

1,100

450

400

465

460

465

500

900

950

8,290

Secondhand Book

90

250

220

190

200

150

155

165

150

175

180

250

300

2,385

Internet Service

25

500

460

450

480

200

250

300

320

300

400

500

580

4,740

Year 2012 Total Operation Cost

Products and Service Per Month

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Total

Beverage

65,100

52,763

55,125

57,750

21,000

20,738

19,688

20,081

20,869

21,000

47,250

74,813

476,177

Food

72,000

60,000

54,000

60,000

42,000

36,000

35,400

42,000

46,800

48,000

60,000

93,000

649,200

Coffee Bean

1,080

810

720

900

450

450

360

450

540

720

1,080

1,620

9,180

Bakery

69,750

63,000

64,800

67,500

45,000

46,800

43,650

42,300

42,750

54,000

67,500

72,000

679,050

Ice Cream

23,750

21,250

20,000

27,500

11,250

10,000

11,625

11,500

11,625

12,500

22,500

23,750

207,250

Secondhand Book

22,500

19,800

17,100

18,000

13,500

13,950

14,850

13,500

15,750

16,200

22,500

27,000

214,650

Internet Service

12,500

11,500

11,250

12,000

5,000

6,250

7,500

8,000

7,500

10,000

12,500

14,500

118,500

266,680

229,123

222,995

243,650

138,200

134,188

133,073

137,831

145,834

162,420

233,330

306,683

2,354,007

Total

306

Table 4.19: Average Operating Expenses of Year 2013 Year 2013 Sale Volume Products and Service Per Month

Cost

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Total

Beverage

26.25

3,100

2,800

2,900

3,000

1,000

800

750

770

800

800

2,500

3,100

22,320

Food

60

1,500

1,250

1,000

1,300

750

680

590

680

800

830

1,300

1,550

12,230

Coffee Bean

90

24

18

12

15

6

7

8

9

11

12

20

28

170

Bakery

90

1,000

900

850

900

500

590

550

470

500

600

1,000

1,100

8,960

Ice Cream

25

1,200

1,100

1,000

1,150

500

450

465

460

465

500

1,000

1,250

9,540

Secondhand Book

90

300

250

200

230

150

155

165

150

175

180

280

330

2,565

Internet Service - 3 cases

25

930

850

800

900

300

250

300

320

300

400

600

900

6,850

Year 2013 Operating Cost Products and Service Per Month

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Total

Beverage

81,375

73,500

76,125

78,750

26,250

21,000

19,688

20,212

21,000

21,000

65,625

81,375

585,900

Food

90,000

75,000

60,000

78,000

45,000

40,800

35,400

40,800

48,000

49,800

78,000

93,000

733,800

Coffee Bean

2,160

1,620

1,080

1,350

540

630

720

810

990

1,080

1,800

2,520

15,300

Bakery

90,000

81,000

76,500

81,000

45,000

53,100

49,500

42,300

45,000

54,000

90,000

99,000

806,400

Ice Cream

30,000

27,500

25,000

28,750

12,500

11,250

11,625

11,500

11,625

12,500

25,000

31,250

238,500

Secondhand Book

27,000

22,500

18,000

20,700

13,500

13,950

14,850

13,500

15,750

16,200

25,200

29,700

230,850

Internet Service

23,250

21,250

20,000

22,500

7,500

6,250

7,500

8,000

7,500

10,000

15,000

22,500

171,250

343,785

302,370

276,705

311,050

150,290

146,980

139,283

137,122

149,865

164,580

300,625

359,345

2,782,000

Total

307

4.5 Organization Expenses (Cost) Staff Recruiting Customer service is paramount to the success of the OKey Coffee Store. Therefore, tremendous care must be given to hiring the right persons. Furthermore, OKey Coffee must also be sufficiently staffed, in order to ensure that all customers who walk into a OKey Coffee Store are provided with the same amount of service. All staff manning OKey Coffee Store must also be given the appropriate training so that they would know how to service the customers, from greeting them at the door to serving food and drinks at their table. The following are the different positions that must be filled in our store: Management Staff: -

Manager

-

Cashier

Kitchen Staff: -

Chef

Customer Service Staff: -

Barista

-

Service Staff (Waiter and Waitress)

Operating Hours Operating hours are typically 09:00 am to 10:00 pm.

308

4.6 Organization expense (Cost) 4.6.1 Employee Salary Table 4.20: Employee Salary Position

No. of Position

Wage Rate

(Person)

(Baht Per Month)

Manager

1

14,000

Chef

1

9,000

Barista

1

9,000

Service Staff (Waiter and 2

7,000

Waitress) Housekeeper

1

6,500

Total Payment

6

52,500

*** Minimum Wage of Phuket is rate 204 Baht per day 4.6.2 Bonus Table 4.21: Employee Bonus Position

No. of Position

Bonus

(Person)

(Baht Per Year)

Manager

1

2,000

Chef

1

1,300

Barista

1

1,300

Service Staff (Waiter and 2

1000

Waitress) Housekeeper

1

1000

Total Payment

7

7,600

309

4.6.3 Electricity supply/ Month Estimate use of electricity 3,000 unit * 2.4649

= 7,394.7 baht

Service expense

= 228.17 baht

Total electricity expense / month

4.6.4 Water Supply/ Month

-

600

Baht per Month

4.6.5 Drinking Water

-

2,000 Baht per Month

4.6.6 Telephone -

500 Baht per Month

4.6.7 Internet -

690 Baht per Month

= 7,622.87 baht

310

4.4.8 Staff Shirt -

The shirt prices is 220 per a pieces and our staff will get 3 shirt for each

one so there are 6 staff of our store we need to make 18 shirt. We will give to them every 2 years. -

Total of shirt staff is 3,960 Baht per 2 year

311

Table 4.22 Organization Expense 2011

Year 2011 Organization Expense

Organization

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Total

52,500

52,500

52,500

52,500

52,500

52,500

52,500

52,500

52,500

52,500

52,500

52,500

630,000

7,600

7,600

Expense Salary Bonus 6,000

6,300

6,300

6,300

6,500

6,500

6,500

6,500

6,500

6,500

7,000

7,000

77,900

400

480

480

480

480

480

480

480

480

480

530

550

5,800

1,500

1,600

1,600

1,600

1,600

1,600

1,600

1,600

1,600

1,600

1,800

1,800

19,500

Telephone

500

400

400

400

400

400

400

400

400

400

450

600

5,150

Internet

690

690

690

690

690

690

690

690

690

690

690

690

8,280

Electric Supply Water Supply Drinking Water

Staff Shirt Total

3,960

65,550

3,960 61,970

61,970

61,970

62,170

62,170

62,170

62,170

62,170

62,170

62,970

70,740

758,190

312

Table 4.23 Organization Expense 2012

Year 2012 Organization Expense

Organization

Jan

Feb

Mar

Apr

May

Jun

52,500

52,500

52,500

52,500

52,500

52,500

Jul

Aug

Sep

Oct

52,500

52,500

Nov

Dec

Total

Expense Salary

52,500

52,500

52,500

Bonus

52,500

630,000

7,600

7,600

Electric Supply

7,200

7,200

7,200

7,200

6,800

6,800

6,800

6,800

6,600

6,700

7,500

8,000

84,800

Water Supply

520

520

520

520

500

500

500

500

500

500

570

650

6,300

Drinking Water

1,900

1,800

1,800

1,800

1,700

1,700

1,700

1,700

1,700

1,700

2,000

2,200

21,700

Telephone

500

400

400

400

400

400

400

400

400

400

550

600

5,250

Internet

690

690

690

690

690

690

690

690

690

690

690

690

8,280

63,310

63,110

63,110

63,110

62,590

62,590

62,590

62,590

62,390

62,490

63,810

72,240

763,930

Staff Shirt Total

313

Table 4.24 Organization Expense 2013

Year 2013 Organization Expense

Organization

Jan

Feb

Mar

Apr

May

Jun

52,500

52,500

52,500

52,500

52,500

52,500

Jul

Aug

Sep

Oct

52,500

52,500

Nov

Dec

Total

Expense Salary

52,500

52,500

52,500

Bonus

52,500

630,000

7,600

7,600

Electric Supply

9,300

8,500

8,500

8,500

7,500

7,500

7,500

7,500

7,500

7,500

8,900

9,700

98,400

Water Supply

700

600

600

600

550

500

550

550

550

550

680

750

7,180

Drinking Water

2,300

2,000

2,000

2,000

1,700

1,700

1,700

1,700

1,700

1,800

2,200

2,500

23,300

Telephone

600

550

550

550

500

500

500

500

500

500

550

700

6,500

Internet

690

690

690

690

690

690

690

690

690

690

690

690

8,280

Staff Shirt

3,960

Total

70,050

3,960 64,840

64,840

64,840

63,440

63,390

63,440

63,440

63,440

63,540

65,520

74,440

785,220

314

Chapter 5 Financial Analysis

315

5.1 Income Statement Table 5.1: Income Statement Year 2011 OKey Coffee Company Limited Income Statement For Year End December 31, 2011

316

Table 5.2: Income Statement Year 2012 OKey Coffee Company Limited Income Statement For Year End December 31, 2012

317

Table 5.3: Income Statement Year 2013 OKey Coffee Company Limited Income Statement For Year End December 31, 2013

318

5.2 Statement of Balance Sheet Table 5.4: Statement of Balance Sheet Year 2011 OKey Coffee Company Limited Statement of Balance Sheet For Year End December 31, 2011

319

Table 5.5: Statement of Balance Sheet Year 2012 OKey Coffee Company Limited Statement of Balance Sheet For Year End December 31, 2012

Table 5.5 Statement of Balance Sheet Year 2012

320

Table 5.6: Statement of Balance Sheet Year 2013 OKey Coffee Company Limited Statement of Balance Sheet For Year End December 31, 2013

5.3 Statement of Cash Flo

321

5.3 Statement of Cash Flow Table 5.7: Statement of Balance Sheet Year 2011 OKey Coffee Company Limited Statement of Cash Flow For Year End December 31, 2011

322

Table 5.8: Statement of Balance Sheet Year 2012 OKey Coffee Company Limited Statement of Cash Flow For Year End December 31, 2012

OKey Coffee Company Limited Statement of Cash Flow

323

Table 5.9: Statement of Balance Sheet Year 2013 OKey Coffee Company Limited Statement of Cash Flow For Year End December 31, 2013

324

Chapter 7

Summary

325

7.1 Summary of project feasibility study Thailand coffee consumption is worth more than 4,000 million baht (US$130 million) in 2007, with an annual growth rate of 25% so hundreds of new coffee shops, both chains and non-chains, are open every year, reflecting a continued increase in demand for new coffee machine equipment and supplies. Thailand Coffee, Tea & Drinks 2010 and Thailand Bakery & Ice Cream 2010 are currently the BEST and LARGEST coffee bakery & ice cream show in the country, signifying a golden opportunity for manufacturers/distributors of equipment and supplies for coffee, tea, drinks, bakery, and ice cream wishing to penetrate the 80 million people market (66 million Thais and 14 million tourists). Thailand Coffee, Tea and Drinks 2010 and Thailand Bakery & Ice Cream 2010 aims to attract more than 30,000 buyers from all over Thailand and neighboring countries to meet entrepreneur. More than US$100,000 (three million baht) marketing and promotion budget is set to draw buyers. The show is well supported by both local and regional trade publications, thus ensuring publicity to the target group. Full supports from Thailand Barista Association and related government agencies. A comprehensive coffee and bakery activities i.e. National Thailand Barista Championship, Bakery Competition. We can see many opportunities why this project should launch this project. From my study of project feasibility study and evaluation that show me many things for the feasibility because the premium coffee is low costs but it can provide high profits and high demand of consumption, this is the reason why many new coffee shop available almost on every corner in Thailand’s larger cities and chief tourist destinations. Obviously, the world’s big players are now here, but a number of local coffee shop chains have also emerged. From my survey of the market for this project is very interesting because the premium coffee is very boom and the study of PEST analysis cab support our business well and there are very low competitions in the market so it is not so difficult to entry in the market for our business. We need study competitors very well that what is their SWOT and analysis to adapt with our business beyond than them. The technical analysis can make me to know how to do for investment and how much the cost that we need to prepare. The chapter five is show the circle financial of this project.

326

Appendix Company Limited Registration

327

Company Limited Registration According to the Civil and Commercial Code Company Limited Is that kind of company which is formed with a capital divided into egual shares, the liability of the shareholders being limited to the amount unpaid on the shares respectively held by them. Establishment of Company Limited To establish the company limited, shall process according to the following: 1. Must have at least 3 persons signing together in order to prepare Memorandum and then register. Upon receiving the amount of shares, the director must register as the company within 3 months from the date of company’s meeting to establish the company. The promoters must have the following qualifications : (1) Be ordinary person, not juristic person (2) Be 12 years old or more (3) Must reserve to buy at least 1 share Information used to register the Memorandum (1) Company’s name (the same as the name reserved) (2) Location of head office (located at which province) (3) Objective of the company (4) Registered capital must be divided into each share with the same value (share’s value must be at least 5 Baht) (5) Name, address, age, occupation and number of shares that persons who start up the company reserve to buy the shares) (6) Name, address, age of 2 witnesses

328

2. When the Memorandum has been registered, shall perform the following :

(1). Every promoter manage to reserve and buy all the shares (2). When all the shares are reserved, the promoters must with out delay hold a general meeting of subscribers which shall be called the statutory meeting.

3. Meeting agenda.

(1) The adoption of the regulations of the company, if any. (2) The ratification of any contracts entered into and any expenses incurred by the promoters in promoting the company. (3) The fixing of the amount, if any, to be paid to the promoters. (4) The fixing of the number of preference shares, if any, to be issued, and the nature and extent of the preferential rights accruing to them. (5) The fixing of the number of ordinary shares or preference shares to be allotted as fully or partly paid-up otherwise than in money, if any, and the amount up to whice they shall be considered as paid-up. The description of the services or property in return for which such ordinary shares or perference shares shall be allotted as paid-up shall be expressly laid down before the meeting (6) The appointment of the first directors and auditors and the fixing of their respective powers. No resolutions of the statutory meeting are valid unless passed by a majority including at least one half of the total number of subscribers entitled to vote, and representing at least one half of the total number of shares to such subscribers.

4. The promoters shall over the business to the directors.

5. The directors shall the reupon cause the promoters and subscribers to pay forth with upon each share payable in money such amount, not less than twenty-five percen of the share's value .

329

6. When the collection of share’s price is complete, the authorized director shall prepare the request for the registration of company’s establishment and submit to the registrar. Regarding the submission for registration, the authorized director shall sign the name on the request and must submit to register within 3 months from the date of company statutory meeting. If not registered within the specified period, the company statutory meeting shall be void and if would like to register to establish the company, shall arrange the meeting for persons who reserve to buy the shares again.

3. Regarding the company establishment, if can perform every step as follows within the same day that the promoters prepare the Memorandum, and the director can request to register the Memorandum and register the company within the same day.

(1) Shall have the persons reserve to buy all the shares that the company can be registered. (2) Arrange the meeting to establish the company to consider various affairs according to the Civil and Commercial Code, section 1108, and all the persons who start up the company and all the persons who reserve to buy the shares shall attend the meeting, and all of them shall agree in the affairs in the meeting. (3) Persons who start up the company assign all the affairs to the director. (4) The director call the person who reserves to buy the shares to pay the shares according to the Civil and Commercial Code, section 1110, section 2 and such share’s price has already been paid. Registration The company limited’s registration shall be divided into 2 steps as follows : 1. Registering the Memorandum. 2. Registering the company limited’s establishment The registration of the modification / change or liquidation of the company limited

330

In case that the company limited agrees to modify or change any registered transactions or the shareholders would like to liquidate the business, shall request for the registration of the modification / change of such transactions or registration of the company’s liquidation at the company and partnership registration office that the head office of the company is located on. The registration to establish and modify any transactions shall be performed according to the method and criteria specified by the law and the government’s rules. Registered Transaction that the Company has to register to Modify or Change 1. The modification or change of memorandum before the company’s establishment 2. Extraordinary resolution to (1) Increase capital (2) Decrease capital (3) Merge the company 3. Company’s merger 4. The modification or change of memorandum of association after the company’s establishment 5. Capital increase 6. Capital decrease 7. Regulations’ modification 8. Director 9. Number or name of authorized directors 10. Location of head office and / or branches 11. Company’s seal 12. Other transactions that should be publicized Place for Registration (the same as partnership) Registration Procedure 1.Submit in person can perform according to the following : (1) In case of registering for the establishment or changing the

331

company’s name, the persons who start up the company or company’s director shall request for verifying and reserving the company’s name to confide that such name is not duplicated or similar to other names pervious registered. Upon reserving the name, shall request for the registration of memorandum of association within 30 days by reserving the name in person or via internet at www.dbd.go.th . (2) Purchase the request and form from the Department of Business Development or any of 7 business development office or provincial business development office or download from internet from www.dbd.go.th . (3) Prepare the request for registration and other attachments to the registrar for consideration. (4) Pay the fee according to the officer’s order (5) If aiming to issue the certificate of registered transactions, shall submit the request and pay the fee to the officers. (6) Receive the certificate of registration. 2. Steps for registering partnership and company via internet (see the steps in partnership) Criteria of Signing the Signature on the Request for Registration (1) The signature in the request and the attachments, the person shall sign by him / herself. (2) The signature in the request, the person shall sign in front of the registrar

and

demonstrate

the

ID

card

to

the

registrar

for

verification.

In case that the person cannot sign the name in front of the registrar, the person who request

shall

sign

the

name

in

front

of

the

following

person

:

2.1 In case of signing in the country (1) Administration Officer or Senior Police in the area of the person who requests. (2) Member of Thai BAR or (3) Other persons as notified by the central registrar are - Certified Public Account - Committee member or officer of the Thai chamber of commerce or provincial chamber of commerce who can certify the signature of persons who request

332

for the registration of partnership / company with the head office located in the province that the Chamber is located according to the notification of the Central Partnership Registration Office. 2.2 In case of signing in foreign countries (1) Authorized officer of the Thai embassy or consulate, or head of the office under the Minister of Commerce responsible for the operations in any country or other officers authorized to perform on behalf of such abovementioned person (2) Person who can completely certify according to the law of that country and (3) 2 Reliable persons who can certify in front of the registrar that the signature is such person’s signature. Duties of Company (1) The company limited must prepare the financial statement once a month in every 12 months and at least one auditor shall audit to propose to the ordinary shareholder’s meeting to approve the financial statement within 4 months from the closing date, and submit the financial statement to the business information service office, department of business development, or any provincial business development office within 1 month from the date of financial statement’s approval although such businesses have not yet been started or have not ceased temporarily; otherwise, they shall have the fine penalty of no more than 50,000 Baht. (2) The director shall prepare the copy of list of all shareholders’ names that are holding the share at the time of the annual shareholders’ meeting and the list of persons who are not the shareholders from the date of the last shareholders’ meeting and submit to the department of business development or any provincial business development office within 14 days from the date of the meeting; otherwise, they shall have the fine penalty of no more than 10,000 Baht. (3) Must arrange the annual shareholders’ meeting within 6 months from the juristic person’s registration date, and arrange the next meeting of at least one time for every 12 months; otherwise, they shall have the fine penalty of no more than 20,000 Baht.

333

The invitation for the shareholders’ meeting shall be advertised on the local newspaper for at least one time of at least 7 days before the meeting date, and shall send via reply mail to every shareholder named in the company’s registration for at least 7 days before the meeting date, except the invitation for the shareholders’ meeting to vote for the extraordinary resolution shall be sent for at least 14 days before the meeting date. (4) Must prepare share certificate to the company’s shareholders; otherwise, they shall have the fine penalty of no more than 10,000 Baht. (5) Must prepare the book of shareholders’ registration of the company; otherwise, they shall have the fine penalty of no more than 20,000 Baht. (6) Any companies that relocate the location of head office must request for the registration to the registrar; otherwise, they shall have the fine penalty of no more than 20,000 Baht. In case that the juristic person does not submit the yearly financial statement as specified by the law, such juristic person has offense, and the managing director or authorized director on behalf of the juristic person shall also have the offense too. Businesses that the Law specifies the period of time of submitting the registration 1) Request for registering the company’s establishment shall be submitted within 3 months from the date of company’s establishment. 2) Request for registering the appointment of new directors or the resignation of directors shall be submitted within 14 days from the date of appointment or date of resignation 3) Request for registering the extraordinary resolution of capital increase or capital decrease of the company limited or the company’s merger shall be submitted within 14 days from the extraordinary resolution date 4) Request for registering the new regulation or modification of the company limited’s regulation must be submitted with 14 days from the extraordinary resolution date 5) Request for registering the company’s merger shall be submitted within 14 days from the date of merger 6) Request for registering the company’s liquidation shall be submitted

334

within 14 days from the liquidation date 7) Request for registering the change of liquidator shall be submitted within 14 days from the date of change 8) Request for registering the modification of liquidator’s authority shall be submitted within 14 days from the date that the meeting has the resolution or the court has the decision 9) Request for registering the completeness of the company’s liquidation shall be submitted within 14 days from the date that the meeting has the resolution 10) The submission of the report of partnership’s liquidation shall be submitted every 3 months and the liquidator shall submit the report within 14 days from the date that the 3-month period expires.

335

Fee Rate for Registering Company Limited Registration Company Limited

Baht 500.-

1. Registering the memorandum of association

50.-

1.1 Registered capital of no more than 1,000,000 Baht 1.2 Every 100,000 Baht of the increase of registered capital

50.-

(fraction of 100,000 Baht shall be counted as 100,000 Baht)

25,000.-

1.3 Registered capital of more than 50,000,000 Baht

5,000.-

2. Register for company limited’s establishment

500.-

2.1 Registered capital of no more than 1,000,000 Baht 2.2 Every 100,000 Baht of the increase of registered capital

500.-

(fraction of 100,000 Baht shall be counted as 100,000 Baht)

250,000.-

2.3 Registered capital of more than 50,000,000 Baht

5,000.-

3. Registering the company’s merger

250,000.-

4. Registering the medication 4.1 Registering the extraordinary resolution

400.-

(capital increase / capital decrease / company’s merger) 4.2 Registering the capital increase

500.-

(calculate according to every 100,000 Baht of the increase)

250,000.-

(Increase for more than 50,000,000 Baht)

400.-

4.3 Registering the capital decrease 4.4 Registering the modification of every clause of the

400.-

memorandum of association 4.5 Registering the modification of every clause of the

400.-

regulation 4.6 Registering for new directors

per person

400.-

4.7 Registering for partners’ resignation (no limit)

400.-

4.8 Registering the modification of directors’ authority

400.-

336

4.9 Registering the change of location of head office and / or branches

400.-

4.10 Registering the modification of seal

400.-

4.11 Register other transactions that should be publicized

400.-

5. Registering the company’s liquidation

400.-

6. Registering the change of liquidators

400.-

7. Registering the modification of liquidator’s power and authority

400.-

8. Registering the modification of liquidation office

400.-

9. Registering the completeness of liquidation

400.-

(Source: Department of Business Development Ministry of Commerce Thailand; http://www.dbd.go.th, 26 Apr 2010)

337

Appendix Corporate Income Tax

338

Corporate Income Tax (CIT) is a direct tax levied on a juristic company or partnership carrying on business in Thailand or not carrying on business in Thailand but deriving certain types of income from Thailand. The term “juristic company or partnership” (hereinafter called “company”) means a limited company, a limited partnership or a registered partnership incorporated under Thai law or foreign law as well as an association and a foundation. The term also includes any joint venture and any trading or profit-seeking activity carried on by a foreign government or its agency or by any other juristic body incorporated under a foreign law. 1. Taxable Person Corporate income tax is levied on both Thai and foreign companies. A Thai company means a company incorporated under the law of Thailand. Thai company is subject to tax in Thailand on its worldwide net profit at the end of each accounting period (12 months). A foreign company means a company incorporated under foreign law. Generally, a foreign company is treated as carrying on business in Thailand if it has an office, a branch or any other place of business in Thailand or has an employee, agent, representative or go-between for carrying on business in Thailand. A foreign company carrying on business in Thailand is subject to CIT only for net profit arising from or in consequence of business carried on in Thailand, at the end of each accounting period. However, a foreign company engaged in international transport is subject to tax on its gross receipts. When a foreign company disposes its profit out of Thailand, such profit will be subject to tax on the sum disposed. Profit also means any sum set aside out of profits as well as any sum which may be regarded as profit.

A foreign company, not carrying on business in Thailand but deriving certain types of income from Thailand, such as service fees, interests, dividends, rents, professional fees, is subject to corporate income tax on the gross amount received. It is collected in the form of withholding tax by which the payer of income shall deduct the tax from the income at the rate shown in 3 (Tax Rates).

339

2. Tax Calculation In the calculation of CIT of a company carrying on business in Thailand, it is calculated from the company's net profit on the accrual basis. A company shall take into account all revenue arising from or in consequence of the business carried on in an accounting period and deducting therefrom all expenses in accordance with the condition prescribed by the Revenue Code. As for dividend income, one-half of the dividends received by Thai companies from any other Thai companies may be excluded from the taxable income. However, the full amount may be excluded from taxable income if the recipient is a company listed in the Stock Exchange of Thailand or the recipient owns at least 25% of the distributing company's capital interest, provided that the distributing company does not own a direct or indirect capital interest in the recipient company. The exclusion of dividends is applied only if the shares are acquired not less than 3 months before receiving the dividends and are not disposed of within 3 months after receiving the dividends.

In calculating CIT, deductible expenses are as follows: 1.

Ordinary and necessary expenses. However, the deductible amount of the following expenses is allowed at a special rate:

- 200% deduction of Research and Development expense,

- 200% deduction of job training expense,

- 200% deduction of expenditure on the provision of equipment for the disabled; 2.

Interest, except interest on capital reserves or funds of the company;

3.

Taxes, except for Corporate Income Tax and Value Added Tax paid to the Thai government;

4.

Net losses carried forward from the last five accounting periods;

5.

Bad debts;

340

6.

Wear and tear;

7.

Donations of up to 2% of net profits;

8.

Provident fund contributions;

9.

Entertainment expenses up to 0.3% of gross receipt but not exceeding 10 million baht;

10. Further tax deduction for donations made to public education institutions, and also for any expenses used for the maintenance of public parks, public playgrounds, and/or sports grounds; 11. Depreciation : Provided that in no case shall the deduction exceed the following percentage of cost as shown below. However, if a company adopts an accounting method, which the depreciation rates vary from year to year, the company is allowed to do so provided that the number of years over which an asset depreciated shall not be less than 100 divided by the percentage prescribed below.

Depreciation

Types of Assets

Rates

1.

Building 1.1

Durable

building 5

%

- Durable building acquired within 5 September 2001 – 4 initial September

2002

-

4

September

2002 allowance of 20% on the date

-

Plant

of

of

SMEs* acquisition and

the

residual shall be

341

depreciated 1.2 Temporary building

at the rate in 1.1

initial allowance of 25% on the date

of

acquisition and

the

residual shall be depreciated at the rate in 1.1

100 % 2. Cost of acquisition of depleted natural resources 3.

Cost

of 3.1

acquisition no

written

of

lease lease

5% rights agreement 10

%

3.2 written lease agreement containing no renewal clause or 100% containing renewal clause but with a definite duration of renewal divided periods

the

by

original

and renewable lease periods 4. Cost of acquisition of the right in a process, formula, goodwill, trademark, business license, patent, copyright or any other

rights:

342

4.1

unlimited

period

of

use 10

4.2 limited period of use

%

100% divided

by

number

of

years used 5. Other depreciation assets not mentioned in 1.-4. used in 100

%

SME, which have value altogether not exceeding 500,000 baht,

and

are 5.1

acquired

before

machinery

December used

in

31,

2010 R&D initial allowance of 40% on the date

5.2

of

machinery acquired before December 31, 2010 acquisition and

the

residual can be 5.3

cash

registering

machine depreciated at the rate in 5

initial 5.4 passenger car or bus with no more than 10 passengers allowance of capacity

40% on the date

of

acquisition and

the

residual can

343

be depreciated at the rate in 5 initial allowance of 40% on the date

of

acquisition and

the

residual can be depreciated at the rate in 5

depreciated at the rate in 5

but

the

depreciable valve

is

limited

to

one

million

baht 6.

Computer

and 6.1

accessories SMEs* initial allowance of 40% on the date acquisition

of

344

6.2 other business

and

the

residual can be depreciated over 3 years

depreciated over 3 years

initial 7.

Computer

programmes 7.1

SMEs*

allowance of 40% on the date

of

acquisition and

the

residual can be depreciated

7.2 other business

over 3 years

depreciated over 3 years * SMEs refer to any Thai companies with fixed assets less than 200 million baht and number of employee not exceeding 200 people.

3. Tax Rates The corporate income tax rate in Thailand is 30% on net profit. However, the rates vary depending on types of taxpayers. Taxpayer

Tax Base

Rate

345

1. Small company1

-

Net

profit

exceeding

1

not 15%

million

baht 25% - Net profit over 1 million baht but not exceeding

3

million

baht

30%

- Net profit exceeding 3 millionbaht 2 2. Companies listed in Stock Exchange - Net profit for first 25%

of Thailand (SET)

300

million

baht

- Net profit for the 30% amount exceeding 300 million baht 3. Companies newly listed in Stock Net Profit

25%3

Exchange of Thailand (SET) 4. Company newly listed in Market for - Net Profit for first 5 20 Alternative Investment (MAI)

accounting

- Net Profit after first 5 30 % accounting periods 5.

Bank

deriving

profits

from Net Profit

10 %

International Banking Facilities (IBF) 6.

Foreign company engaging in Gross receipts

3%

international transportation 7. Foreign company not carrying on Gross receipts

10%

%

346

business

in

Thailand

receiving

dividends from Thailand 8. Foreign company not carrying on Gross receipts

15%

business in Thailand receiving other types of income4 apart from dividend from Thailand. 9. Foreign company disposing profit Amount disposed.

10%

out of Thailand. 10.

Profitable

association

and Gross receipts.

2% or 10%

foundation. Notes: 1 A small company refers to any company with paid-up capital less than 5 million baht at the end of each accounting period. 2 The reduced rate applies for currently listed companies for 3 accounting periods from 2008-2010. 3 The reduced rate applies for newly listed companies for 3 accounting periods from 2008-2010 4 These incomes are •

income by virtue of jobs, positions or services rendered;

•

part of value received from the amalgamation, acquisition or dissolution of juristic companies or partnerships which exceeds the cost of investment;

•

part of the proceeds derived from transfer of partnership holdings, shares, debentures, bonds, or bills or debt instruments issued by a juristic company or partnership or by any other juristic person, which exceeds the cost of investment; and

•

income specified in c and d in Table 1.1.

347

4. Withholding Tax Certain types of income paid to companies are subject to withholding tax at source. The withholding tax rates depend on the types of income and the tax status of the recipient. The payer of income is required to file the return (Form CIT 53) and submit the amount of tax withheld to the District Revenue Offices within seven days of the following month in which the payment is made. The tax withheld will be credited against final tax liability of the taxpayer. The following are the withholding tax rates on some important types of income. Types of income

Withholding tax rate

1. Dividends

10 %

2. Interest1

1%

3. Royalties2

3%

4. Advertising Fees

2%

5. Service and professional fees 3 % if paid to Thai company or foreign company having

permanent

branch

in

Thailand;

5% if paid to foreign company not having permanent branch in Thailand 6. Prizes

5%

Notes: 1. Tax will be withheld on interest paid to associations or foundations at the rate of 10%. 2. Royalties paid to associations or foundations are subject to 10% withholding tax rate. 3. Government agencies are required to withhold tax at the rate of 1% on all types of income paid to companies.

348

5. Tax Return and Payment Thai and foreign companies carrying on business in Thailand are required to file their tax returns (Form CIT 50) within one hundred and fifty (150) days from the closing date of their accounting periods. Tax payment must be submitted together with the tax returns. Any company disposing funds representing profits out of Thailand is also required to pay tax on the sum so disposed within seven days from the disposal date

(Form

CIT

54).

In addition to the annual tax payment, any company subject to CIT on net profits is also required to make tax prepayment (Form CIT 51). A company is obliged to estimate its annual net profit as well as its tax liability and pay half of the estimated tax amount within two months after the end of the first six months of its accounting period. The prepaid

tax

is

creditable

against

its

annual

tax

liability.

As regards to income paid to foreign company not carrying on business in Thailand, the foreign company is subject to tax at a flat rate in which the payer shall withhold tax at source at the time of payment. The payer must file the return (Form CIT 54) and make the payment to the Revenue Department within seven days of the following month

in

which

the

payment

is

(Source: Revenue Department of Thailand; http://www.rd.co.th, 26 Apr 2010)

made.

349

Appendix

Labor Cost

350

Labor Costs Median Monthly Salaries for Selected Positions (Survey Date - Q3/2009) Notes: Bonus conditions vary from business to business, although one to two months extra salary a year is closest to the average. These figures are based on the results of a survey of BOI-promoted companies, conducted in August 2009. MD/GM Financial Controller/ CFO

120,000 80,750

3,455.93 2,325.55

Personnel Manager/ HR Director

60,000

1,727.97

Office Manager

50,425

1,452.21

Plant Manager

65,000

1,871.96

Purchasing Manager

50,000

1,439.97

Marketing Manager

52,500

1,511.97

Executive Secretary (Bilingual)

35,000

1,007.98

Typist

8,500

244.80

Office Clerk

10,000

287.99

Receptionist

10,000

287.99

Programmer

20,000

575.99

Webmaster

19,000

547.19

Accountant

18,000

518.39

Researcher

20,800

599.03

Translator

25,000

719.99

Sales/ Marketing Staff

17,000

489.59

Public Relation Staff

14,800

518.39

Engineer

20,000

575.99

Technician

11,000

316.79

Skilled Labor

8,500

244.80

Semi-Skilled Labor

7,000

201.60

Unskilled Labor

6,000

172.80

351

Driver

8,000

230.40

Housekeeper

6,090

175.39

IT Positions* Years

of

IT

Job Description

Baht

US$

Experience 2-3 Web Application Developer/ Software Engineer/ Programmer (NET, XML, Java, J2EE, C++, 3 - 5 MySQL, PHP, OO tools, etc.) 5 - 7+

3-5 AS/400 Programmer 5 - 7+

2-3 Database Developer (Oracle PL/ SQL, SQLServer, etc.)

3-5

5 - 7+

System Analyst (salary varies with technical or application-specific knowledge)

skills

and

industry 5 - 7+

25,000

- 719.99

35,000

1,077.98

35,000

- 1,077.98

50,000+ 50,000 60,000+

- 1,439.97

-

1,727.97+

- 1,077.98

50,000

1,439.97

50,000

- 1,439.97

60,000

1,727.97

- 777.58

35,000

1,077.98

35,000

- 1,077.98

45,000

1,295.97

40,000

- 1,151.98

55,000+

-

1,439.97+

35,000

27,000

-

-

-

-

-

-

1,583.97+

50,000

- 1,439.97

60,000

1,727.97

-

352

Business Analyst (liaise between users and IT; not technology-specific)

5 - 7+

DBA (Oracle, SQL-Server)

5 - 7+

Applications Development Manager

8 - 10+

- with CMM / CMMI experience

8 - 10+

Solutions Architect / System Architect

10+

Helpdesk / Technical Support

3-5

Software Tester

5-7

Software Quality Assurance Manager

10+

IT Auditor, with certifications (CISA, CPA, COBIT, ITIL, etc.)

10 - 12+

ERP / CRM / Data Warehouse Implementation 5 - 7 Consultant (SAP, Oracle, Siebel, SAS, DataStage, etc.)

7 - 10+

45,000

- 1,295.97

60,000

1,727.97

55,000

- 1,583.97

70,000

2,015.96

70,000

- 2,015.96

85,000+ 80,000 100,000+

100,000 120,000+

27,000

- 2,303.96

-

-

2,879.94+

- 2,879.94

-

3,455.93+

- 777.58 1,077.98

40,000

- 1,151.98

60,000

1,727.97

100,000

- 2,879.94

-

-

-

3,887.92+

100,000

- 2,879.94

150,000

4,319.92

55,000

- 1,583.97

70,000

2,015.96

70,000

- 2,015.96

120,000+

-

2,447.95+

35,000

135,000+

-

3,455.93+

-

-

-

353

Network Engineer, with vendor certifications (CCNA, etc.)

Network

Administrator,

with

vendor

certifications

Presale

Technical

Consultant

(Network

Engineer or System Engineer for an IT vendor)

System Engineer / System Administrator with vendor certifications (MCSE, SCSA, etc.)

3-5

5 - 7+

7 - 10

3-5

5 - 7+

Network Security Administrator with vendor certifications

5-7

(Cisco, Checkpoint, etc.)

Infrastructure

Manager

with

certifications (CCNP, MCSE, etc.)

Data Center Manager

vendor

7 - 10+

10 - 15

Project Manager, with certifications (PMP, etc.) 10 - 12+

Project Director / Program Director

15+

35,000

- 1,077.98

45,000

1,295.97

48,000

- 1,382.37

60,000

1,727.97

70,000

- 2,015.96

90,000+

32,000

-

-

2,591.95+

- 921.58

40,000

1,151.98

38,000

- 1,094.38

50,000+

1,439.97

50,000

- 1,439.97

65,000

1,871.96

65,000

- 1,871.96

85,000+

-

-

-

-

-

2,447.95+

120,000

- 3,455.93

150,000

4,319.92

90,000

- 2,591.95

150,000

4,319.92

150,000

- 4,319.92

180,000

5,183.90

-

-

-

354

IT Manager (salary varies significantly by industry and by the size of IT department and IT infrastructure)

IT Director

10 - 12

12+

15+

Chief Information Officer / Chief Technology Officer (often includes some regional responsibility)

15 - 20+

80,000

- 2,303.96

100,000+ 100,000

2,879.94+ - 2,879.94

170,000+

160,000

-

4,895.90+

- 4,607.91

200,000+

200,000

-

-

5,759.89+

- 5,759.89

300,000+

-

8,639.83+

Notes: IT salaries assume staff with at least reasonable command of English (or better, for the more senior jobs). If the English proficiency is not strong, salaries may be slightly lower.Source: (Source: 2009, 2010 ISM Technology Recruitment Ltd. Q3, 2009, www.ismtech.net) * Salaries are subject to 4% social security fund contribution and 1% workman’s compensation contribution (for first 15,000 baht per month of salary) Overtime Regulations Overtime on regular working days

1.5 time/hr

Regular work on public holidays A. Monthly salary employees

1 time/day

B. Daily labor

2 time/day

Overtime performed on public holidays

3 time/hr

(Source: Ministry of Labour, as of June 2009 Website: www.mol.go.th)

355

Severance Payment Entitlements Workers employed for: More than 120 days but less than 1 year

30 days

More than 1 year but less than 3 years

90 days

More than 3 years but less than 6 years

180 days

More than 6 years but less than 10 years

240 days

10 years and up

300 days

(Source: Ministry of Labour, as of June 2009, Website: www.mol.go.th) 2010 Minimum Daily Wage Baht

Area

206

Bangkok and Samut Prakan

205

Nakorn Pratom, Nonthaburi, Pathum Thani and Samut Sakhon

204

Phuket

184

Chonburi and Saraburi

181

Ayutthaya

180

Chachoengsao

178

Rayong

173

Nakhon Ratchasima, Pang-nga and Ranong

171

Chiang Mai

170

Krabi, Prachinburi and Lopburi

169

Kanchanaburi

168

Petchaburi

167

Chantaburi and Ratchaburi

165

Singhaburi and Angthong

164

Prachaub Khiri Khan

163

Loei, Samut Songcram and Sa Kaeo

162

Trang

161

Songkhla

356

160

159

158

157 156 155

Chumporn, Trat, Nakhon Nayok, Narathiwat,

Yala,

Lamphun and Ubon Ratchatani Nakhon Si Thammarat, Pattani, Pattalung, Satun,Surat Tthani, Nong Khai and Udon Thani Kamphaeng Phet, Chai Nnat, Nakhon Sawan, Suphanburi and Uthai Thani Kalasin, Khon Kaen, Chaing Rai, Buri Ram, Yasothon, Roi-et and Sakhon Nakhon Chaiyaphum, Lampang and Nong Bua Lamphoo Nakhon Phanom, Phetchabun, Mukgdahan and Amnat Charoen

154

Maha Sarakham

153

Tak, Phitsanulok, Sukothai, Surin and Uttraradit

152

Nan and Si Saket

151

Payao, Pichit, Phrae and Mae Hong Son

(Source: Ministry of Labor, as of January 2010; Website: www.mol.go.th) Public Holidays 2010 Most national holidays and festivals are of a religious nature and serve to evoke a sense of devotion to the monarchy, the religion, and the nation. Some are celebrated by the lunar calendar and thus vary in date from year to year, while others are celebrated according to the solar calendar. Bank Holidays for 2009 are: January January 1 (Thursday) - New Year’s Day January 2 (Friday) - Additional holiday granted by government February February 9 (Monday) – Makha Bucha Day April April 6 (Monday) – Chakri Day

357

April 13-15 (Monday-Wednesday) – Songkran Festival May May 1 (Friday) – National Labour Day May 5 (Tuesday) – Coronation Day May 8 (Friday) – Visakha Bucha Day July July 1 (Wednesday) – Mid-year Closing (Bank Holiday but not a public holiday) July 7 (Tuesday) – Asahna Bucha Day August August 12 (Wednesday) – H.M. Queen’s Birthday October October 23 (Friday) – Chulalongkorn Day (Rama V Day) December December 7 (Monday) – Substitution day for H.M. King’s Birthday (which is on Saturday, December 5) December 10 (Thursday) – Constitution Day December 31 (Thursday) – New Year’s Eve (Source: Thailand Board of Investment, http:// www.boi.go.th, Updated 24 March 2010)

358