Running head: COFFEE BUSINESS VENTURE
Coffee Shop
Student’s Name
Institution Affiliation
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Introduction
The business venture in this case study is a coffee shop located in New York. The name
of the shop is Hot Coffee Cafe. There are a variety of coffee brands that get produced to build a
positive reputation. In the initial stages of establishing the venture, the Coffee café offered
promotions to clients to lure them into the brands that were created. The shop will provide
instant coffee to clients and also a mixed packaged coffee brand for home preparation.
Question 1
Cost leadership is one of the strategies implemented in the coffee shop. The shop will
offer coffee products and services at lower prices to attract customers from diverse economic
backgrounds. This will help the shop compared to other competitors, as it will be able to
establish a brand. Besides, Hot Coffee will also apply a differentiation strategy in business
operations. Coffee will be imported from different countries to enhance high quality and create a
vast variety based on customer choices. According to Brett (2018), business success depends on
brand and reputation management. This will help increase my sales as the venture will attract
diverse customers.
Question 2
Initially, the venture relied on a single sourcing approach for supplies of the coffee.
However, with time the business has managed to establish relations with other vendors; thus,
outsourcing is utilized. The main limitation observed in the premise is the risk of failure in
supplies whenever the individual contracted fails. Additionally, as the business grows, the need
for outsourcing was realized to reduce overall cost. However, in some cases, the premise has
been acquiring the commodities from multisource. This reduced the monopoly control and
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overreliance of a single supplier failure, which could bring the business to a sudden halt. Mishra
et al (2019) advocate for diversification of suppliers in maintaining optimum stability.
The hot Coffee shop produces Espresso, Cappuccino, Café Latte varieties, among others.
There are several techniques which get applied to determine production cost. Through analysis,
minimization of the production costs, and maximization of quality products. A higher number of
coffee cups have recently been the daily routine, while the number of wasted coffee remains
minimal. Besides, the use of oral interviews has helped the business gain insight into the quality
of the coffee offered to the clients. The above has paramount significance because the venture
has built a brand.
Question 3
Labor productivity has been transformed as the venture grows exponentially. In a bid to
increase productivity, Hot Coffee invested in an electric coffee maker. Mankins (2017) attest to
the importance of technological updates on a firm for efficacy and profitability. The above has
led to increased production units with technological advancement. The factors, as mentioned
above, have led to enhanced customer service as the number of coffee cups prepared per unit
time has also increased. As time goes by, Hot Coffee’s prospect is to increase the number of
coffee shops under the same brand in different regions to capture more customers. Besides,
there’s an intention to establish an e-commerce site where customers will create orders over the
platform and deliveries made to their doorsteps.
Question 4
Product efficiency is determined by the quality and methods resulting in the final product.
The coffee blenders used in the shop are the best rated for their efficacy in blending. Update on
new technology kills also is a measure that regularly gets considered in conjunction with rising
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recipes for new brands. Additionally, the coffee brands acquired are of high quality while
preparation methods used to observe high levels of hygiene. Regular training and referencing
materials are at disposal such that any time an employee feels uncomfortable with a brand,
reference is quick and easier. Organizing the supply chain is also considered as it helps to retain
a smooth flow of activities in the shop throughout, as Arrondo et al (2018) advocate. The
physical layout will include reasonable spacing between the coffee tables and allowing smooth
flows of customers in and out of the shop.
Conclusion
In summary, the coffee shop introduced a few years ago is up surging in both capital and
infrastructure. The main objective is to take a firm position in the dynamic market.
Entrepreneurial skills have made Hot Coffee shop’s progress unique and sustainable as the
premise aspires to prosper further. Keeping in touch with technology is essential as it helps to
discover the market shifts and prepare in advance.
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References
Brett, M. R. (2018). Cost Leadership or Differentiation? Applying Porter’s Competitive
Strategies in Ecotourism: A Case Study of Mkhuze Game Reserve.
Arrondo, R., Garcia, N., & Gonzalez, E. (2018). Estimating product efficiency through a hedonic
pricing best practice frontier. BRQ Business Research Quarterly, 21(4), 215-224.
Mankins, M. (2017). Great companies obsess over productivity, not efficiency. Harvard
Business Review, 3.
Mishra, A. K., Rezitis, A. N., & Tsionas, M. G. (2019). Estimating Technical Efficiency and
Production Risk under Contract Farming: A Bayesian Estimation and Stochastic
Dominance Methodology. Journal of Agricultural Economics, 70(2), 353-371.