Business Decision-Making - a New Joe on the Block - Case Study Example

Research Business Decision Making: A New “Joe” on the Block Name Course Professor University affiliate Date of submission Business Decision-Making Top three key decisions faced by Joe Decision-making is an important element of any business plan. Joe Brown in his attempt to create a coffee shop faces different decisive challenges forcing creating hard times in developing valid conclusions. One key decision faced by Joe is analyzing the trends of previous research on coffee and market. According to the internet studies, he receives more information related to the coffee information than what he expects. In the end, he is unable to draw valid information from the information availed (Henriques, 2005, 273). For instance, the information he finds regarding the coffee shops coffees provides almost similar comparative data. Extracting essential data from such diverse comparisons is a decisive challenge faced by Joe. The information that compare the tastes of major coffee shops in the United States such as Starbucks, McDonald’s, Burger King and Dunkin’ Donuts. Another key decision that faced Joe is determining the location of the coffee shop. According to the research, Joe sees as if the coffee shops are well spread within the United States (Lee 2012, 103). Therefore, establishing the best site to place the coffee shop becomes a great challenge. Focusing on the various existing coffee shops, Joe realizes the existing coffee shops already occupy the most of the existing strategic sites. Joe also faces key decision concept on the validity of the information provided in the secondary sources over the consumption of the coffee in the United States (William et al., 2013, 71). In fact, he questions all the information provided to an extent of opting for carrying out his primary research to create the validity of the information at hand. Some of the choices he needs first-hand clarity on are the preference and taste and the cost of selling the coffee (Van der Eijk, 2013, 53). He believes the secondary information on the trend on taste more or less the same regardless of the existing variety. Nevertheless, he asserts that the Starbuck coffee sells more than any other coffee though it has the minimal taste. Deliverables an outside researcher should produce In order to establish an informed decision, various deliverables are essential from the external field of research. First, a comparison of the prices of various coffees is important to Joe in understanding at what rate he should set his coffee to gain more customers (William et al., 2013, 71). For instance, Starbucks coffees seem expensive although it usually has the highest annual sales. Therefore, understanding the correlation between price and taste is also important. This information is only attainable through external sources, which compares various coffee making it easy for validating the taste and relation to cost. The location of consumption is also another important external variable that provides ambient information to Joe. An analysis of the consumption rate proves that most people who resided at the urban centers preferred Starbucks to other coffee. Conversely, people living in rural areas had a higher preference for local coffee, incense shop, and tea (Geva, 2000, 773). In such a case, Starbucks would have minimal sales due to the class of people in the area. Understanding the demographics of a certain place is an external variable that depends on the previous trends of sales. Therefore, Joe must consider the location of the coffee shop to ensure higher sales. The coffee drinking experience is also deliverable that provides more information on preference and taste. An analysis of all the existing coffee shops and the trend of purchase of the surrounding residents or rather consumers is an essential external feature (Monshouwer, Van Laar and Vollebergh, 2011, 158). For instance, the article asserts that an interview of 50 consumers put Starbucks at the top of Dunkin’ Donuts. Such consumers frequented the Starbuck shop creating a greater experience of consumption of that particular flavor. The other existing coffee shops were least mentioned. Although the information is important in establishing the taste, it externally obtained. The success of Joe’s business depends on the understanding of the coffee drinking experience, which predicts the future trends in consumption. Nevertheless, McDonald’s creation of a premium coffee experience did not appeal to the consumers. In this case, there is no comparison of the tastes. Another important deliverable is technology. Joe uses the internet, but his searches become futile and believe that the information accessed is not beneficial in creating ‘A Cup of Tea.’ The understanding of the results of the searches is a basic requirement in any upcoming business (William et al., 2013, 72). According to Joe, all the information gathered from the internet provided no clear information regarding the trend, taste and preference and locational distribution among other factors. In the end, he thinks of setting a new strategy of carrying out primary data collection to get reliable and valid results. It is essential for a researcher or a business planner to be able to extract accurate, precise and important information from the bulk of information provided (Smith Maguire and Hu, 2013, 670). Such information must have clear citations of which the research can refer to as well. Relevance of the coffee studies The study on the high price of the Starbucks’ coffee is relevant in setting the price of the ‘cup of Joe’ coffee shop. According to researchers, understanding the general taste of most coffee flavors might be very difficult. Nevertheless, most people tend to believe that highly priced coffee usually have a better taste and so tend to buy that coffee more (Smith Maguire, and Hu, 2013, 670). The taste of most coffee remains the same regardless of the price. Observably, Starbucks, which the highest charged coffee ($1.7) sells more compared to McDonald’s Premium Coffee, Dunkin’ Donuts, and Burger King at a price of $1.5 a cup, $1.2 and $1 respectively. The understanding of the price setting provides a footprint in the range of prices depending on the location and not the taste. Understanding the taste of the coffees from various shops was important during the decision-making. The first study determined minimal differences in the final flavor of the coffees from the varied shops. However, an analysis of the black coffee before the edition of any other substance proved the high quality of the Starbucks’ coffee (Rangaswamy, 2007). Consequently, the understanding of the consumption zone of each coffee is essential in understanding the targeted customer base. Understanding of the taste of various coffee determines the gap in the production. Therefore, it will contribute to the production of high-flavored coffee at the minimal cost possible. Additionally, the taste of various coffee determines the location since Joe will understand the consuming trend of the targeted customers. The constant growth of Starbucks is equally important in the decision-making process. According to the study, Starbucks continued to rise into a huge company. Nevertheless, most of the consumers showed a preference for local coffee, tea or an incense shop (Management Decision Making, 2007, 520). In understanding such trends, Joe would establish informed decision depending on the existing potential competitors either from the coffees business or from its substitutes. In this scenario, Starbucks scores the least with McDonald’s, Burger King, and Dunkin’ Donuts emerging the top in that order (Cho, 2014, 6). Understanding the role of small businesses is essential in determining the customer and setting of prices. The prices should suit the targeted population regardless of the size of the business. The study on the comparison of the coffee drinking experience is also relevant to the decision making in Joe’s case. Within a single location of St. Louis, Missouri, consumers frequent themselves to Starbucks than the other shops regardless of the high cost of its coffee. Understanding the uniqueness of its high performance with minimal consideration of the cost is important to Joe during the decision-making process. Starbucks beats all the other coffee shops particularly McDonald’s regardless of creating a premium coffee experience (Lewis, 2013, 98). From the study, it is evident that the consumption trend within a given period and place does not depend on the experience in the coffee shop business but rather the quality of the services offered. Notably, Starbucks is one of the recently established coffee shops. Nevertheless, it sells more compared to McDonald’s shop. Flaws that Joe should consider in making the decision In the first study, Joe needs to ensure a fair price for its cup of coffee. Essentially, Starbucks is selling at high prices due to its already established market structure. Therefore, for an upcoming coffee shop, the prices should be relatively low as compared to the existing coffee shops. Nevertheless, creating a better brand and taste is also essential in ensuring the creation of a complimentary to the highest valued coffee (American Agriculture Society, 2012, 48). The study on the best-tasting coffee requires a keen analysis of the additives to the final coffee. This is not established through the literal tasting but rather the quality of the final products. The determination of quality depends on the ingredients used and the proportions. Therefore, should focus more on such essentials in creating a unique brand. Regarding of the outstanding capital base and spread of Starbucks, Joe needs to focus on the previous branches of the company and relate it to the future trend. The understanding is important in establishing an ultimate strategy to hit the market. For any upcoming coffee shop, validating the information provided is crucial in defining the final product. References American Agriculture Society. (2012). Attractiveness of Coffee and the Elements for Building Attractive Coffee Shop. JCIT, 7(20), pp.47-55. Cho, M. (2014). Segmentation of Coffee Shop Customers based on Organic Coffee Choice Motives. easel, 24(6), 1-8. Geva, A. (2000). Moral Decision Making in Business: A Phase-Model. Business Ethics Quarterly, 10(4), p. 773. Henriques, A. (2005). Good decision? Bad business?. International Journal of Management and Decision Making, 6(3/4), p. 273. Lee, Eun Jeong, (2012). A Study on the Effect of the Consistency in the Brand Characteristics Consumer Characteristics, and the Visual Identity Characteristics on the Brand Attachment - Focusing on the Coffee Shop Brand ‘Starbucks’ -. A Journal of Brand Design Association of Korea, 10(1), pp.93-108. Lewis, D. (2013). Decision-Making in Complex Situations. Business Strategy Review, 24(4), pp. 37-40. Managerial Decision Making in International Business Journal of World Business Special Issue. (2007).Journal of World Business, 42(4), pp.520-521. Monshouwer, K., Van Laar, M. and Vollebergh, W. (2011). Buying cannabis in ‘coffee shops’. Drug and Alcohol Review, 30(2), pp. 148-156. Rangaswamy, P. (2007). South Asians in Dunkin’ Donuts: Niche Development in the Franchise Industry. Journal of Ethnic and Migration Studies, 33(4), pp. 671-686. Smith Maguire, J., and Hu, D. (2013). Not a simple coffee shop: local, global and glocal dimensions of the consumption of Starbucks in China. Social Identities, 19(5), pp.670-684. Van der Eijk, Y. (2013). Tobacco: Prohibition, Coffee Shops, or Discouragement?. The American Journal of Bioethics, 13(7), pp.51-53. William, Z., Barry, B., Jon, C. and J, G. (2013). Business Research Methods. 9th ed. Mason, OH: South-Western: Cengage Learning, pp.71-72. Read More