Assessment Of Issues And Strategies For Improving Coffeeville’s Business

Background

This formal report is given to Rufus and Emma in order to provide them with the information that is associated to their falling Coffeville business. The assessment of the business framework and the business information indicates that there are several issues and problems that are having an impact on the operations of the firm. The case study indicates that currently Coffeeville is having four stores all around the CBD area of Melbourne. Initially one shop was opened and the Rufus and Emma had the idea of expanding their business along with making a brand name for their company in the market. The company has highly motivated and trained employees and has the idea of controlling their indirect and direct costs. The company was able to expand themselves from one to four stores within a time period of 5 years and Rufus and Emma has been the spine of the business.

The level of employee turnover has been very low for the company and the shop has been able to update their menu within every 12 months. They have even incorporated hot dishes in the restaurant as well and thereby diversifying them from a coffee shop to a restaurant. Coffeeville has been developing steadily but there have been certain issues and problems that have been hindering their growth effectively. The issues can be highlighted according to their significance thereby it would help Rufus and Emma to understand them easily and undertake steps accordingly. By assessing the operational activities, it has been observed that utility expenses have been increasing at a steady rate from the past 18 months due to rise in price for the raw materials. With the rise in prices of the products in the market, there has been a significant rise in the wages of the employees by 15%. The rise in wages has even been as the employees are now trained and experienced and due to shortages of skilled labours their wages have been increased. There have been increases in the rent of the properties that have been taken as rent for the functioning of the stores. There has been a significant rise in the prices of coffee beans as well due to the shortage of coffee bean production globally and rise in demand. It has even been predicted that the price of coffee beans would rise again. There has been a general downfall of the business due to the fact that the customers have been reducing their level of expenditure due to the poor financial performance of their employers. The customers have even reduced their level of consumption due to health issues as well. One of the other issue that has been discovered has been that Rufus and Emma has mainly concentrated on their fourth store more and has looked to increase their sales there and in that manner has overlooked their other three stores. This has led to fall in their active members for their year of establishment. The rise in the prices of red meat has even had an impact on Coffeeville and therefore has forced them to raise their red meat food prices as well. Therefore, it can be said that changes in the environment and economic concerns along with rise in the interest in the home loan and terrorism has been main issue that has led to fall in the revenue and rise in cost for Coffeeville. Rufus and Emmna therefore need to undertake strategies with respect to the same in order to improve their profit level.       

Identified Issues and Problems

The attainment of this conclusion has been possible by going through the case study that has been provided by Rufus and Emma. Coffeeville has been experiencing losses and this can be identified by looking at their financial statements for the past few years where their sale of beverage, food external catering has decreased drastically. These issues can be regarded as authentic when the feedback of the customers from the feedback form and even from the Facebook pages have been assessed. Even though the customer spending pattern indicate that there have been rise in customer consumption from the year 2011 to 2014, but it is actually not the same as the prices of the products have increased and not the spending of the customers and thereby showing false results. The survey results even indicate that the issues that have been highlighted are true and have a key role to play in the decline in the saes of the company.

The management and the team meetings summary even explains the same as Rufus and Emma themselves reveal that catering services have decreased in the past few years. These are the main data and information that have useful for reaching the conclusion with respect to the issues that have been identified.

A list of the types and sources of data has been useful for the determination of the probable causes of the issues and that can support the process of decision making can be understood. The sources of the data have mainly been the financial statements of the shop from 2011 to 2015 that has indicated that there has been a fall in the level of profit with respect to the overall expenses. The survey feedback that has been attained from the customers even indicates that these are the main issues that have an impact on the operations of the firm. The answering of these issues can be fundamental for assisting in the process of decision making. The two most significant problems that have been identified has been that rise in the prices of the products in the economy has led to rise in the prices of the raw materials thereby compelling them to raise their food prices. The other issue has been shortages of experienced and skilled labour in the economy and in that manner Coffeeville has to increase the wages of their employees in order to retain them and maintain their competitive edge. These issues have significantly had an impact on the operations of the firm.

Data Sources and Analysis

The two sources that have been fundamental for the gathering of the information has been the financial statement of the company along with the budget variance that have indicated that there have been a rise in expenses over profit and the survey feedback from the customers have even been an evidence of the same. The validity and the reliability of the data was identified with the help of various tools like SPSS and excel spreadsheet with the help of which the data has been assessed and then authenticity of the data have been recognised.

The information and the data that have been rejected comprises of the data gathered from the customer purchasing pattern as this data reveals that purchasing among the customers have increased for the past few years even though expenditure level among the customers have declined. The false data has been due to the fact that rise in the prices of the products have balanced the fall in the customer expenditure. The internal business network and social network has played a vital role in the assessment and recognition of the issues and these have been the best methods with the help of which the issues and the problems have been identified and can be used for constructing the precise action course.

This report has been constructed in order to have an idea about the objectives of the analysis procedure with respect to the functioning of Coffeeville. It will even provide a small explanation of the management information and recognising the patterns and the trends. It will even answer how the management information system and the decision support system can be helpful for the assessment of the indented courses of action and their effect on the business.

The objectives of the analytical procedure have been to identify the issues that are related to the shop that is having an impact on their operations. The financial statement of the shop indicates that the net profit of the company has been reducing from 2011 to 2015 and therefore the cost of the company has been rising over the revenue of the firm.  The aim of the analysis process has been understand and construct strategies with the help of which the company can improve their level of operation and undertake the changes that would be influential for the development of the shop. The main objective of the analysis process has been to understand the core problem related to the shop and undertake comparative analysis with the help of which key aspects of shop can be understood.

Strategies for Improvement

The management information system or the decision support system is a tool that aids the management to understand the information that is crucial for them and to assess them in a distinct manner that would aid them to construct effective decisions that would lead to the development of the company. The management information system is a distinctive process which provides present, past and anticipated information on the internal operations as wel as internal intelligence in order to assist the process of decision making.

Due to a rise in the advancement of the technology, the company are making use of the management information system in order manage themselves effectively and efficiently. Information is the knowledge that is gained from the analysed figures and facts. The presence of an effective management information system can lead to competitive edge in a developed country and even in a market that is competitive in nature. The management information system can be tailored in order to facilitate the several functions of business and operations. An effective information system is helpful for providing reports with respect to each and every function in a business.

The management information system can be used by Emma and Rufus in order to manage the effective flow of data by managing the data in an accessible and practical manner. The system can monitor the business performance in the market and recognise the opportunities and threats with a distinct market. The management information system will gather the data from the outside and inside of the business and thereby will assess the data in rder to bring out relevant and productive information which can be exploited to assist the marketing functions. The processed data can be recorded so that it can be used in some future course of time. The system would therefore determine the patterns and the trends that would be followed in order to enhance the operations of the shop.

The management information system assists in the assessment of the proposed action course and their effect on the business. The management information system explains and processes the gathered data with the help of which the management of the shop can gain idea about the functional activities of the shop and thereby undertake decisions that would improve the operations of the shop and thereby increase their level of profit over the expenses.

The forecasted net profit and net sales stores 2 and 3 for the year 2014-2015 for each of the store has been given as follows: 

Effectiveness of Management Information and Decision Support Systems

The correlation to the budget variance from the year 2011 to 2015 has been given as follows:

The decision analysis report would indicate the trends and patterns that would be followed with the help of which Coffeeville can improve their current operational activities with the help of which Rufus and Emma can attain their profit and maintain their competitive edge in the market.    

This section of the report concentrates on the decision analysis report with respect to the actions that can be taken by Coffeeville in order to maintain their level of profit. The analysis report has been constructed with the help of the statistical, quantitative and sensitivity analysis mechanism in order to understand the most effective decision making process. Each set of recommended course that has been recognised is undertaken with the help of a single analysis technique.

The information that is available and has been used for the purpose of ascertaining the most suitable course of action that can be used by the company in order to undertake the final decision. The information that has been collected is reliable and valid due to the fact that these data has been collected from the annual report of the shop and thereby the financial figures have been true and authentic. On the other hand, the data with respect to the changes in the external factors have been identified with the help of the customer feedback survey that has been collected by the shop from their shop and even with the help of the social media. The best course of action has been looked upon as expanding their business and the data collected are in line with the same due to the fact that most of the figures indicate that there would be a change in the budget variance along with the rise in net profit. The expansion of the business with the development of food delivery and increase in working hours from 4pm to 8 pm would induce the general customers to spend economically and consumer their product even from home. The presence of healthy food items has even influenced the customers to come and have healthy diet. Therefore, the presence of these data has been discovered to be precise and authentic that would reveal effective course of action.

In order to undertake the decision two specialists have been appointed so that they can assist in the assessment and the decision making process. It has been observed that a financial consultant and a skilled hotel management professional have been appointed who would provide assistance with respect to the effective operations of the company. The financial consultant provides assistance with respect to the various financial activities that have been taking place in the shop and what strategies that can be incorporated in order to improve their financial position. The hotel management professional provides assistance with respect to the strategies that can be implemented within the operational level of the company with the help of which the efficiency of the company can be maintained and the shop would be able to maintain their competitive edge in the market.

Rufus and Emma are the key personnel of the shop and they have the final authority with respect to the decisions that would be undertaken in order to address the recognised business issue. They have this authority as they have are the management and owners of the shop and therefore are the head of the stores. This makes the legal authorities to undertake such decisions. The main goals and objectives that have been constructed initially by the shop and the various changes that have been taking place in the market has to be considered while undertaking the decisions. The sentiments of the customers even have to be considered as the customers play a key role in the development of the company.    

The recommendations that have been provided are in line with the values and objectives of Coffeeville as Coffeeville has the aim of maintaining their brand value and name by providing quality products by maintaining the most economical price possible and the advices that have been provided does not compromise with the product quality or price but concentrates on eliminating certain food items that was hampering the functional activities.

The three instances of emerging technologies that aids the firm with the information and knowledge involve the management information system, sensitivity analysis and correlation analysis. The management information system would assess the data that has been collected for the purpose of making decisions. The sensitivity analysis tries to explain the relation between the current plans and benefits that would be attained from the utilisation of the prospective plans that have been advises. The correlation tries to explain the connection between the variables that have been identified in the case study.

The three statistical analysis process that the shop can use involves transportation methodology that associates with the transportation process implied by the shop with respect to the delivery of the food items to the houses of the customers and transpiration of the raw materials in the shop.  Linear programming can be process with the help of which the company can undertake a comparison between the existing operational activities and the proposed activities that have been advised with the help of the decision making process. Dynamic programming can even be used for the purpose of understanding the process that would be deemed suitable.

The retail sales sector is the management information system that would be ideal for the shop in order to outline their key features to the customers and the market. The information system can be useful for recognising the risk management process as it assists risk management plan. The management information system explains the various problems and issues that are existent within the current operations of the company with the help of processing the data that has been gathered from the financial statements and the feedback of the customers. The issues that have been identified are assessed in order to construct effective decision making. The decision making process thereby informs the risk management plan with respect to the risks that are present at various levels of the operational activities thereby helping the shop to construct strategies and plans that would be helpful in mitigating the risks and thereby improving the operational level of Coffeeville.   

This assessment would provide an overall report of the process and the method that would be applied by Coffeeville after the identification of the issues and constructing the plans that would improve their business. Emma and Rufus have come to the decision of expanding their business rather than reduce their level of business and therefore have decided to bring in the meal delivery and take home venture. They are even in the idea that if they would have recognised this issue earlier then they would have been able to improve their business at a much earlier stage with the help of better information. Therefore, they have considered that an effective communication plan can be one of the effective ways with the help of which one can improve their level of business and can stay ahead of their competitors as it would convey them the business issues at the point of initiation.

Their current business makes use of the inventory control, point of sales system of ordering and a basic customer relationship management process that is inclusive of the database of the customers and the option of loyalty. They even have an accounting system that has been providing them with the financial profits and losses.

Coffeeville has been able to communicate and integrate with the food and beverages that have been existent and the systems of accounting as much as possible. This provides them with the real time updating of the actual data in an understandable and easy to read manner. The key financial data has been recognised as the revenue, cost and sales. This has enhanced them to prepare certain customised reports and most of the reports are in need of a generalised format. This system has been able to provide information and data that would aid in long and short term process of decision making. The current business issues have been able to be answered with the help of the various statistical techniques that have been exploited by Coffeeville. The objective of the shop has been the use of a system that would assist in recognising the probable issues and undertake faster, better and more precise decisions.

It is therefore seen that management information system along with the decision analysis report would help the business to recognise the issues and thereby construct plans and business decisions that would improve the operations of the business. The management information system has the characteristic of assessing the data that has been collected and in that manner understand the issues that would improve the operations of the business. The assessing of the data is done with respect to the business goals and objectives and therefore various plans are constructed with the help of which effective decisions can be constructed. The decision analysis report on the other hand aids in the selection of the most suitable option that is available to the business out of the overall business decisions with the help of which they can implement the plan and thereby improve their operational activities. The use of these systems will optimise the effectiveness and the quality of the information as assessing of the information would help in the development of the strategies that would disseminate the operations of the business. The various kinds of information that is required by them involves finding out the key areas where problems can arise. This information is required by Emma and Rufus during the construction of the process of decision making so that the issues can be mitigated and an effective operational plan can be developed. The management information system can be used by the company for the purpose of updating and retrieving the database and management information system would be helpful in mitigating the issues that are existent within the business. The management system will enhance the activities of the business as it is seen that management information system assesses the data available in a precise manner and even has an effective security system with the help of which the data remains confidential and secured. The development of this system would improve the intellectual property of the business as the issues that are pertinent to the business would be eliminated and would provide the business with the power so that they can frequently assess their business functions and identify any faults that are present and thereby rectify the mistakes that are seen in the business. The construction of the procedures and policies like frequent assessment of the operational policies, maintenance of quality products along with economical plan would help in increasing the productivity level of the business that would immediately influence the management to transform their business accordingly. The communication plan template would provide an idea of how communication plays a key role in the development of the business. 

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