I4 - Joe's Java

.docx

School

Ohio University, Main Campus *

*We aren’t endorsed by this school

Course

100

Subject

Information Systems

Date

Dec 6, 2023

Type

docx

Pages

2

Uploaded by ProfessorMorning11666

Foram Desai 1. Look at Exhibit 1 of the case and identify three interesting insights about Joe’s Java that are relevant to the problem or the solution. Three insights about Joe’s Java that are relevant to the problem, or the solution are: a) His net income has not grown since 2016, despite a period of initial growth. This is the key issue that needs to be addressed. b) Because of the cost and the necessity for staff training, Joe has been cautious about investing in new equipment such as espresso and cappuccino machines, despite the rising customer demand. c) Also, his total expenses are also 3.5% more than the industry expenses whereas his net income is 3.5% less than that of the industry. 2. What is Joe’s problem? Joe’s major problem is that his profits have not grown in the past three years and also as a competitor a Starbucks has recently opened down the same street. 3. What are the underlying issues? These are various facets of the problem. One of the underlying issues is that Joe’s coffee shop lacks product diversification. Joe has been resistant to expanding the product offering beyond traditional filter coffee, espressos, and cappuccinos. Joe's Java needs to distinguish itself from larger chain competitors such as Starbucks. Joe has been hesitant to invest in new equipment or expand its product line. This opposition may be related to cost concerns and the need for more staff training, but it has hindered the shop's capacity to respond to changing client preferences. 4. What outcomes/objectives is Joe trying to achieve with his decision? If he decides to make changes in the product offering by including fancier coffees and/or baked goods, he would be able to tackle the problem of stagnant profitability. Also, he would be able to sustain himself in the evolving market. 5. What alternatives are given in the case? Are there other alternatives you can think of that will satisfy Joe’s objectives? The other alternative given in this case is selling his business away, but according to me selling the business would not be a way out and there is a possibility that he could not get the amount invested in the business back. Another alternative according to me is maybe relocating his coffee shop to some other place by analyzing the neighborhood and the market in general. 6. What assumptions, if any, are you making so that you can proceed with your analysis? Why did you need to make these assumptions? Assuming that Joe is willing to invest in new equipment and product diversification. This assumption is important since it serves as the basis for the suggested recommendations. I assumed that the customers would positively respond to the changes in the product offering and the enhancements in the store environment. Customer satisfaction is a key factor in the success of the proposed alternatives. 1
7. What alternative do you recommend and why? I would recommend he markets his products analyzes the market trends and accordingly brings diversification in the product offering. There can be some loyalty programs and he can offer customization in the drinks which can enhance customer retention and would make customer increase their spending. 8. What could make your recommendation difficult to implement or unsatisfactory? What would you do in the event that implementation was stymied? Potential challenges to implementation would be firstly the initial investment cost required for buying the required equipment and training the staff, this can be dealt with by taking a business loan from the bank and paying it with the profit earned by making the required changes. Secondly, adapting the business to the changing market may take time and effort, so one needs to be patient while adjusting to the changes happening. 9. What steps should Joe take immediately, in the short term, and in the longer term to implement your recommendation? Immediately he should start researching the market demands and analyze the trends. In the short run, he should launch new products and market them according to the customers’ mindset and the environment. Once, he introduces bakery products, he needs to ensure and maintain the quality to meet the high standards. In the long run, he should regularly analyze the market performance and adjust the pricing strategies and cost management as required. 10. How will your recommendation affect Joe’s Java financial performance? What items would you expect to change (and in what direction) as a result of implementing your solution? What other effects might your recommendation have on Joe’s Java? Financially, the recommendations would help Joe increase his revenue and would remove the problem of stagnant profitability. I would expect to have more equipment and product diversification. All the recommendations would lead to higher customer satisfaction. Also, promoting the new offering would provide market opportunities, generating excitement and curiosity among customers. 2
Your preview ends here
Eager to read complete document? Join bartleby learn and gain access to the full version
  • Access to all documents
  • Unlimited textbook solutions
  • 24/7 expert homework help