Caribbean Internet Cafe

920 WordsMar 15, 20124 Pages
T Case Summary of: Carribean Internet Café 1. What managerial issues should David consider before starting Caribbean Internet Café? Managerial Issues: Broadly defined as all issues which have an impact on a business manager’s decision. In this case, David should consider: - Political, Economic, Social, Technological (PEST) issues analysis: (i) Political: Bureaucracy and corruption may potentially slow down the pace of enhancing the necessary infrastructure for internet accessibility and usage e.g. laying of telephone lines, persistently high cost of computers etc. (ii) Economic: PC and internet connection prices may fluctuate greatly, or drop to such an extent that people can generally afford them. (iii) Social: There is a…show more content…
How many customer visits will CIC need in order for the Café to break-even in year 1? Year 2? Optimistic Realistic Pessimistic Total fixed cost 2,479,400 2,479,400 2,479,400 Contribution margin 180 180 180 BEP based on no. of visits 13,774.44 13,774.44 13,774.44 Days 312 312 312 Customer per day 44 44 44 The break-even for both year 1 and year 2 should be the same since there are no items mentioned in the case that would be varied based on passing of time. 6. What other information should David consider in reaching a decision? (you should here also draw on topics studied in any other courses and from your own experiences) - Competition: Competitors can potentially duplicate the concept. Entry Barriers are also not high, and can be easily overcome by the other 6 internet service providers. - Agency Costs: The issue of whether the interests of the manager with experience in the restaurant industry are aligned with David’s. - Cultural Risk: Coffee is not traditionally popular in Jamaica. - Concentrated Supplier (which is JTL): A contingency plan should be in place if JTL withdraws its support (terminates the loan or cancels lease of telephone line etc.) for CIC, or divests its 50% stake to a hostile partner. - Usage Patterns: The possibility of PCs and internet usage becoming so affordable and widespread that there is no

More about Caribbean Internet Cafe

Open Document