You are the owner of Kaldi Plc , a small caf located at the heart of a university campus. Kaldi sells specialty coffee, employs

 

You are the owner of Kaldi Plc$,$ a small caf$é$ located at the heart of a university campus.

Kaldi sells specialty coffee, employs $12$ experienced baristas and serves $5,000$ customers per month using just two espresso machines. Last month, another caf$é$ opened next to yours. Due to this, you expect your sales levels to drop in the forthcoming year.

Discuss how Kaldi can alter its level of operating gearing considering the new$-$found competition.