Tim's Coffee Shop - Research Paper Example

? Tim's Coffee Shoppe of the Executive Summary This study evaluates the different business perspectives of Tim’s Coffee Shop.In this process, regulations and management of the company have been thoroughly analysed. On the basis of this analysis, suggestions have been given to the company to make some alterations in its vision statement and to clearly define its long term and short term goals. Apart from that the marketing and HR analysis of the company has also been conducted. The study has highlighted some areas where the company needs to focus. For example, they are recommended to implement E-HRM and also make use of social media to promote their product. Finally, the report has presented some recommendations to the company by which they can improve their operation process. Table of Contents Regulations and Management 4 HR Analysis 7 Marketing Analysis 8 Finance and Accounting/Financial Statements 11 Problem Solving/Recommendations 12 References 13 Regulations and Management Summary Scholars such as Drucker, emphasizes that management denotes both “a function” and “the people” who discharge it (Drucker, 2012, p.14). The importance of management in an origination cannot be denied; thus, organizations have dedicated departments for managing the workforce. Tim’s Coffee Shoppe is a small sole proprietor business with 10 employees who are currently working and serving the customers visiting their coffee shop. Since the business is situated at a prime location and as a result the customer footfall quite high. Moreover, the service hours offered by the shop acts as a competitive advantage for the firm. However, there are certain areas where the company needs to improve. For instance, the vision statement can be modified and the company can clearly define its long term and short term goals. Action Items The vision statement of the company can be to provide the perfect cup of coffee in the perfect ambience. This would mean that the shop will provide good quality coffee. The store will provide a good strategic location and the ambience of the store will provide the customers with the ability to socialize or relax and pampered by the excellent customer service. To meet this vision the company needs to improve its present state of performance, improvise the quality of coffee and customer service, maintain the store ambience and provide additional value to the customers. Short Term Goals 1. The first goal of the company in the next year should be to increase the market share by attracting new customers which will in turn help to generate higher revenue. 2. The companies in the industry constantly strive for innovating new products based on customer demands in order to attract consumers and differentiate them from the competitors. With increasing health consciousness among customers, the companies are introducing healthy alternatives. Differentiation gives the companies a competitive advantage. 3. According to the survey records of the customers, majority of them mentioned that the customer service was poor. So it would be important for the company to improve customer service in order to attract new customers and retain existing customers. Long Term Goals 1. The quality of coffee is crucial for any coffee shop to become successful. But through the customer surveys it was found that the quality of coffee was average. So the company should focus on improving the quality of coffee and offer more competitive products. 2. The employees’ opinions reflected that they were satisfied with their jobs but were suffering from low morale. Some of them were planning to leave the company and join the competitors. So in the next 3 years, the company needs to develop a strong retention plan and provide customers with career growth opportunities. Federal and State compliance Issues Some of the Federal and State compliance Issues that the company might face are as follows:- Multiplicity Issues. Code issues (Community Development Law Center and Fair Housing Council of Oregon, 2009). Now in order to achieve those goals, the company needs to perform the following actions: - 1. The quality of coffee depends on the quality of coffee beans that are used. The company should identify alternative source and improve the quality of the coffee beans. Product innovation is one of the most prominent driving forces of the industry. This is the reason why the company needs to constantly innovate and strive to achieve new levels of innovation and competitive positioning in the industry. Understanding and responding to customers’ needs and demands are extremely important and primary requirements for product innovation. For this the company can arrange in-store feedback options by placing the feedback forms at convenient locations and allow the customers to express their views, or it can simply opt for an online feedback policy. 2. The employees should be provided with more learning opportunities and career development options. When recruiting new employees into the organization, the company should ensure cultural fit between the employee and the company. 3.  The driving forces that shape the coffee industry and bring competitive changes in the industry are product innovation, changing societal concerns, attitudes, lifestyles and growing buyer’s preference for differentiated products. Adding promotional offers like discounts or loyalty cards would attract more customers and also retain them, because the customers will feel rewarded. The new health conscious and diet beverages will provide customers with unique experiences and serve them the products that they demand. The company should revamp the menu and offer a wide range of products. HR Analysis Summary The human Resource (HR) department of an organization plays a pivotal role. In the context of Tim’s coffee shop, HR department also has a similar importance. However, due to lesser number of employees the company does not yet have a dedicated HR department. Since the business is situated at a prime location, customer footfall is high. Thus to manage it entire operation effectively, the company should have a HR department. Moreover, HR department will also be able to provide the required training to the existing employees. Action Items Considering the size of the firm, it is recommended that the company should implement Electronic Human Resource Management (E-HRM). E-HRM is a Human Resource Information System (HRIS) which like other HRIS Systems aims at facilitating an organization’s HR in performing various Human Resource functions. E-HRM, according to Ruel, Bondarouk, & Looise (2004), is a method for implementing Human Resource strategies, policies and practices in organizations through a conscious and directed assistance of web-technology-based channels. The implementation of this system would be best for Tim’s Coffee Shoppe, since it will help the business to recruit more employees as it is already short of staff members considering the rate of customer footfall. Talented and skilled recruitment of staff members can take place easily by means of an E-HRM system. The recruitment can target candidates from different areas, which would result in hiring the right employee for the right job. Moreover, this system would help Tim’s Coffee Shoppe to manage its employees, other policies, procedures, employee performance evaluation and employee data in the most cost effective way, thereby helping the business to recruit the most suitable candidates for the job vacancies available. Marketing Analysis Summary The success of any given business enterprise is influenced by numerous factors, all of which revolve around the business aspect of an enterprise and its clientele (Daviron & Ponte, 2006). When different business enterprises target the same markets within a given industry, competition intensifies. This is the scenario observed in the coffee industry (ICO, 2011). While players are many in number, the target market is relatively the same. As a result, each coffee house must move swiftly and strategically to lure consumers to buy its products, thereby building a market share within the industry. Depending on how the captured market share is managed, it can increase or decrease with time. Tim’s Coffee Shoppe competes intensively with Queequeg’s Coffee among other coffee houses. The above aspects apply to Tim’s Coffee Shoppe operations in the coffee houses industry. Tim’s Coffee Shoppe has to manage its clientele in a way that ensures Queequeg’s Coffee or any other coffee house does not win over them through competitive practices. This implies that coffee houses operating in the same industry engage one another in intensive competition that could result in one losing its customers to another based on the customer satisfaction factor. The 4 P’s of marketing inform the marketing practices of many business enterprises across the globe (Pride & Ferrell, 2012). Tim’s Coffee Shoppe operates in a highly competitive environment, where players are many and competition cannot be only price-based. To ensure that Tim’s Coffee Shoppe remains competitive over its rivals, the adopted marketing strategy must critically account for the 4 P’s of marketing. The product is highly rated by majority of customers. However, the shortcomings noted by a few should be used to enhance product offering and quality management at Tim’s Coffee Shoppe. Price of products at Tim’s Coffee Shoppe is rated as favorable and competitive. However, this does not rule out the need for market research in price competition in the industry. Product promotion is well executed at Tim’s Coffee Shoppe. However, there are shortcomings noted on the part of the company and employee efficiency and effectiveness. Finally, the location of Tim’s Coffee Shoppe is strategic and favorable to a majority of the customers. The advertisement can be done with the help of local newspapers and some cost effective ways of advertising such as advertisement in magazines and using flyers. However, the company might also apply some of the new advertisement techniques, such as social media advertisement. In this context the company will be able to target mass customers and that too in a cost effective manner. With this advertisement strategy the company has the opportunity to attain new customers. Action Items Based on the findings, a SWOT analysis of the company is presented. Strengths Location in downtown of Sunnydale, Illinois near railway station and university. Financially strong Satisfied employees Weaknesses Technological drawbacks including lack of Wi-Fi. Not accepting debit and credit cards. Clutter in the back rooms Low employee morale. Opportunities The company has the opportunity to open more coffee shops around the country. Tim’s Coffee shop can also make diversification into its product portfolio. Threats The company operates in a highly competitive environment. Low Switching cost. Finance and Accounting/Financial Statements Summary Tim's Coffee Shop will likely experience a high increase in revenue, but this does not guarantee that they will also see an increase in profits. The potential for substantially larger profits certainly exists due to the influx of large businesses. However, the realization of gains will depend largely upon the structure of business expenses and how they will get affected by the increased volume. In order to best illuminate the impact on profits and losses, it is assumed that Tim's business will double due to expansion of their customer base. If the new sales are similar in product distribution to existing customers, income should double to over $800,000. However, revenue is not the only statistic that will change due to the influx of new businesses and cannot be a predictor of profit changes without additional considerations. Increased business volume will result in changes to several types of expenses. Double the volume may mean that the number of employees would have to be increased accordingly. We could reasonably expect that salary expenses (including new hires and extended hours) would continue to double. There is the possibility of store space being insufficient to support such an increase, thereby limiting staff numbers and creating the threat of reducing the quality of customer experiences (Yu and Fang, 2009). Action Items The bottom line states that expenses will increase along with revenue. Most of these changes will come as a direct result of supplies associated with sales (and possibly available store space), but some could be mitigated through preparation (like negotiating a long term contract with rent and lease holders). Fortunately, the projected expenses will not be at par with total income, leaving behind a significant increase in profit. The presence of new large businesses in the area where Tim's Coffee Shop is located will certainly be beneficial to the company. Problem Solving/Recommendations The recommendations to the company for improving their business are as follows: - It is recommended that the company should recruit more employees in order to effectively serve the customers. The company should implement E-HRM system, so that activities such as training and people management can be effectively carried out. In the context of their promotional strategy, the company should consider using social media, so that the cost pertaining to promotion can be reduced. Tim’s Coffee Shop must try to include more products into the product portfolio. Finally, it is recommended that the company must invest more on the promotional purposes, in order to create a brand name for itself. References Community Development Law Center and Fair Housing Council of Oregon. (2009). Complexity hinders compliance with federal and Oregon accessibility laws. Retrieved from http://www.fhco.org/pdfs/dc_ComplexityHindersCompliance.pdf. Daviron, B., & Ponte, S. (2006). The Coffee Paradox: Global Markets, Commodity Trade and the Elusive Promise of Development. New York: Zed Books. Drucker, P. F. (2012). Management: Tasks, responsibilities, practices. Oxford: Butterworth-Heinemann. ICO. (2011). The Story of Coffee. The international Coffee Organization. Retrieved from http://www.ico.org/coffee_story.asp. Maatman, M. (2006).Measuring the effectiveness of e-HRM: The development of an analytical framework for the measurement of e-HRM and its application within a Dutch Ministry. Retrieved from http://essay.utwente.nl/583/. Pride, W., & Ferrell, O. C. (2012). Foundations of Marketing. Connecticut: Cengage Learning. Ruel, H., Bondarouk, T., & Looise, J. K., (2004). E-HRM: Innovation or irritation: An explorative empirical study in five large companies on web-based HRM. Management Revue, 15 (3), 364-380. Yu, H., & Fang, W. (2009). Relative impacts from product quality, service quality, and experience quality on customer perceived value and intention to shop for the coffee shop market. Total Quality Management, 20(11), 1273-1285. Read More