% !TeX root = main.tex
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The purpose of the business case is to outline the Market Assessment and the Financial Summary of the project.
* What is the business concept?
* What are the financial requirements of product?
* Which are the key financial points such as return on investment?
* Can you explain the market assessment with data demographics and target markets?
* Which are the competitors and analyses competition?
* Which are the barriers to entry?
* Which are the data costs and revenues
\fi

\section{Business Case}
\subsection{Business Concept}
Coffee time aims to help companies better organise their staff, offers and resources to accommodate more efficiently to student’s usage times. Simultaneously, Coffee Time aids students select what café they want to go to, spend less time in queues and have an overall better experience in the café therefore improving student satisfaction.

The business concept for Coffee Time can be summarised under the Business Model Canvas \autocite{Osterwalder}, a strategic management tool that describes the product’s value proposition, infrastructure, customers, and finances.

\begin{figure}[H]
	\centering
	\includegraphics[width=\linewidth]{graphics/business_model.png}
	\caption{The Business Model Canvas}
	\label{fig:business_model}	
\end{figure}

\subsection{Value Chain}
By examining the value chain for IoT systems we determined at what steps the Coffee Time business could create additional value in accordance with its resources available. It was decided that the hardware and connectivity would be outsourced, however a smart object would be created to sense data in the cafes, in the system enablers step an app and desktop platform will be developed and offered to the customers including data analytics of the data gathered by the coffee time smart object and predictions for ambiance in the near future. Lastly, while packaging, provisioning and branding will be outsourced, coffee time will handle the customer relationships, billing and fault handling.

\begin{figure}[H]
	\centering
	\includegraphics[scale=1]{graphics/business_chain.png}
	\caption{Value chain diagram}
	\label{fig:business_Chain}	
\end{figure}

\subsection{Key Competitors}
There is no competitor in the market that focuses exclusively in improving the ambiance of cafes, however there are a wide range of IoT retail or home devices that measure similar features to Coffee Time but that are however, marketed to different customers.

\subsubsection*{Nest Learning Thermostat}
\begin{wrapfigure}{r}{0.3\textwidth}
	\vspace{-30pt}
	\begin{center}
		\includegraphics[width=0.3\textwidth]{graphics/business_c1.png}
	\end{center}
	\vspace{-30pt}
\end{wrapfigure}

Nest Learning Thermostat is a Google home IoT device that measures the temperature in the house, memorizes patterns and automatically lowers the temperature when the house is not being used in order to minimize energy costs \autocite{nest_learning}.

\subsubsection*{Footbot Air Quality Monitor}
\begin{wrapfigure}{r}{0.3\textwidth}
	\vspace{-30pt}
	\begin{center}
		\includegraphics[width=0.3\textwidth]{graphics/business_c2.png}
	\end{center}
	\vspace{-30pt}
\end{wrapfigure}

Footbot is a smart building IoT device used in workplaces and homes to ensure quality indoor air. The product measures chemical pollutants, particular matter, humidity and temperature and uses artificial intelligence to optimize HVAC systems in order to save energy and improve comfort \autocite{Foobot}. 

\subsubsection*{Real-time people counting system SensMax WebKit TS}
\begin{wrapfigure}{r}{0.3\textwidth}
	\vspace{-30pt}
	\begin{center}
		\includegraphics[width=0.3\textwidth]{graphics/business_c3.png}
	\end{center}
	\vspace{-60pt}
\end{wrapfigure}

This product is marketed to retail stores, shopping centres and outdoor facilities. It is a wireless real-life people counter to monitor how many people are in a store during the day. It can use the collected data to predict how many people will be in the store the next day \autocite{SensMax}.


\subsection{Barriers to Entry}
The Porter’s Five Forces framework will analyse the competitive rivalry in the market Coffee Time will enter in order to identify any barriers to entry and identify the intensity of the competition to predict the likelihood of profitability Coffee Time will obtain \autocite{Porter}. Each force is given a number from 1 to 5 to determine the level of competitiveness.

\begin{figure}[H]
	\centering
	\includegraphics[scale=0.45]{graphics/business_entry.png}
	\caption{Porter's five forces framework}
	\label{fig:business_entry}	
\end{figure}

Overall, the competitive rivalry is between low and medium. The threat of entry is high as it is a new market that has not been very explored and there is no saturation and barriers are low, however it does require specialist knowledge to create the product. Buyers have a high power, since there is a limited number of universities in the UK and the product only needs to be bought one time. However, there is a low threat of substitution as it is very unlikely to find another service that improves café ambiance. Lastly supply power is low as there are many providers for sensors and microprocessors and it would be easy to substitute a provider at a low cost.

\subsection{Cost Breakdown}
Coffee time is integrating the software and the hardware Assembly of the device is outsourced to a soldering and assembling plant.

\subsubsection{Research \& Development}
The R\&D phase involves the realisation of the final product, testing, prototype building and business plan development. The resulting cost is an aggregate of the work hours spent and the material costs (hardware and software) of the prototypes and testing. On completing the R\&D phase, a final product is conceived, and its prototype created.

\begin{center}
\begin{tabular}{l|l|l}
	Research and Development&Quantity&Amount\\
	\hline
	Research (market, technology)	& Workhours cost (30h) & £ 600.00 \\
	Software development 			& Workhours cost (8h)  & £ 160.00 \\
	Application development 		& Workhours cost (15h) & £ 300.00 \\
	Materials (hardware components) & Purchase cost 	   & £ 1,000.00 \\
	\hline
									& \textbf{Total}	   & \textbf{£ 2,060.00}
\end{tabular}
\captionof{table}{R\&D aggregate costing table.}
\end{center}

\subsubsection{Product}
The product consists of the device and the public mobile application. The cost of the device can be split into hardware cost and software cost outlined in \autoref{tab:hw_cost}.
\begin{savenotes}
\begin{center}
	\begin{tabular}{l|l|l}
		Description&Model Name&Amount\\
		\hline
		Microcontroller, WiFi Occupation& ESP8266& £ 5.51\\
		Temperature \& Humidity &BME280 &£ 7.09\\
		Air Quality &SGP30 &£ 4.71\\
		Housing Case with Screen &-&£ 8.00\\
		Wall mount &OtS\footnote{Off the Shelf item}& £ 2.00\\
		\hline
		& \textbf{Total}	   & \textbf{£ 27.31}
	\end{tabular}
	\captionof{table}{Hardware Costing table for one unit.}
	\label{tab:hw_cost}
\end{center}
\end{savenotes}

\subsubsection{Installation \& Maintenance}
In addition to the device cost (which is per unit) there are costs stemming from the installation and maintenance of the products. Please note these are estimated values.

\begin{savenotes}
\begin{center}
	\begin{tabular}{l|l|l}
		Description&Quantity&Amount\\
		\hline
		Installation&per café&£ 30.00\\
		Cloud Storage\footnote[2]{About 15\% of initial development cost}&12T per year&£ 150.00\\
		Device Maintenance&per device per year&£ 1.00\\
		Application Maintenance (15\%)\addtocounter{footnote}{1}\footnotemark[\value{footnote}]&per year&£ 45.00\\
	\end{tabular}
	\captionof{table}{Installation and Maintenance Costing table.}
	\label{tab:install_cost}
\end{center}
\end{savenotes}

The installation cost entails the device delivery, mounting on the wall and device-application setup. The devices will be delivered by the employee performing the installation and hence these tasks’ cost translates to work-hours cost.

\subsection{Sales Strategy}
The pricing mechanism used is initially dynamic as based on the market conditions real-time market pricing will lead to higher revenues. Once Coffee time is established and the market more mature it is possible to switch to a fixed pricing model.

\subsubsection{Packages}
Packages are designed for and promoted to coffee chains. They are designed to be enticing for their value and entail high client investment. Their aim is building initial and long-term partnerships with the industry, while serve as promotional material to the product as it is seen more by prospective clients. It is expected that larger coffee chains will opt for higher tier value packages as they will be more advantageous compared to a lower quantity standard price product.

\begin{center}
	\begin{tabular}{r|c|c}
		Package Name&Number of devices sold &Discount per device\\
		\hline
		Gold&  $\geq$100& 20\%\\ 
		Silver& $\geq$20& 12\%\\
		Bronze& $\geq$6 & 10\%\\
	\end{tabular}
	\captionof{table}{Table showing package contents.}
	\label{tab:packages}
\end{center}

\subsubsection{Profit Margin}
As initially the packages sold will serve as promotion material covering significant marketing costs, the profit margin can be lower. With no direct competitors in the market, the first-stage profit margin is set to 25\%.

\subsubsection{Subscription}
On gaining clients the contracts can be renewed to include monthly subscription fees for the use of the application. Although there is a risk of contract discontinuation the results from the product will have hopefully proven the value that they add and so that risk can be classified as low.

\subsubsection{Future}
As the company’s presence in the market is maturing, it is expected the cost of the product and marketing costs will decrease. The company’s outreach will be boosted by the market reputation and the existing clients’ product use; hence the marketing efforts can be reduced. On increasing demand by the addition of new clients, the cost of purchasing parts from suppliers susceptible to decrease as orders increase in size. As a result, the profit margin will increase and can be invested to cover previous debt and/or expansion strategies. The packages contents and value are due to be reconsidered in line with the new revenue streams.

\subsection{Financing}
\subsubsection{Seed Capital}
As a first step, a founding capital to develop the idea is required. This high-risk funding is aimed at conducting market research, product research, development and a business plan until an initial revenue is generated. The amount should cover the Research and Development costs. The source of seed capital is provided by savings of the founding group, or angel investors in the form of a loan.

\subsubsection{Series A,B,C Funding}
Once the company has gained a sales record, additional funding, called Series A financing can be sought through the following channels, in exchange of partial ownership \autocite{Funding}. Coffee time’s strategy should at this point, focus on longer terms goals.
\begin{description}
	\item[$\bullet$] Bank Loan
	\item[$\bullet$] Venture Capital
	\item[$\bullet$] Crowdfunding
\end{description}
This funding can be used towards scaling up or expanding the products to different markets.