operation management

Part 2, Question 3: SWOT analysis for xxx Coffee

SWOT Analysis for xxxx Coffee
Strengths	Weaknesses	Opportunities	Threats
Strong financial base due to internally sourced capital from the 5 partners.	Low barriers of entry into the market	Development of new products, coffee trends, and varieties in alliance with the vendors	Easy entrant into the market for other competitors
High-quality products: Unique Aroma based on source Rich flavor and taste	Many alternative or substitute competitive products	Attract new customers with special offers and a loyalty program	High product imitability
Focus on a strategic market or niche - Providing specialist but affordable coffee	Strong existing competitors	Build stronger customer relationships with the re-fillable bags/tins	Availability and preference of other drinks/beverages
Unique packaging with reusable bags and Tins - sustainability	Storage of the ingredient is not easy	Extension of product lines /ranges and expansion into new segments or geographies.	Competitors targeting the same focus group of customers
Advertising campaign to obtain good brand visibility e.g., refer a friend and get $10	Limited market share	Build our brand awareness by introducing an app, selling online, or offline (wholesale or retail), and via coffee subscription	Abilities of competitors to provide additional benefits to the customers
Ethical sourcing based on fair trade and direct contact with the farmers	Low brand awareness	Foster relationships with people who influence others online - “influencers”.	Underpriced products due to large competitors with history and more efficient processes
Having an innovation culture with investments in systems and technologies		Outsource coffee delivery services	Weak or ineffective bargaining power with the few suppliers
Good corporate culture		Possibility of global expansion, with a multi-domestic strategy and franchise model	Limited or low-profit levels
			Poor customer reviews and ratings on websites

Table: Oyeniyi M. (2020) SWOT Analysis for xxx Coffee

Part 2, Question 3: Three Years Strategic Plan

Following the outcome of the SWOT Analysis, several alternative strategies could be beneficial to xxx coffee, and these include

· A good corporate culture of continuous improvement in employees, systems, and processes

· Development of new products, coffee trends, and varieties in alliance with the farmers.

· Continuous investments in technologies and developing an innovation culture.

· Ethical procurement practices of not buying coffee beans from poor third world farmers

· Establish a strong web/online presence by developing a website and app

· Reinvests its profits in the first three years in expanding the business.

· Engage in B2B and B2C

· Retain B2B via supply deliveries to coffee shops/cafes and large organizations

· Retain B2C via loyalty program and social media presence on Instagram and Facebook

· Outsource same-day delivery services

· Strategic alliance with dropshipping companies.

XXX Coffee business in the first three years of operations should consider a business-level strategy focused on differentiating its products by investing in its core competencies of developing and producing a wide variety of premium yet affordable products. The company should utilize the new technologies and innovation while keeping a sustainability mindset.

· At the corporate level, a diversified supply chain strategy will create synergy for xxx coffee. Having a long-term agreement with selected farmers to internally research and develop new coffee quality/varieties will provide competitive advantages and profitability.

· Vertical forward integration including wholesale of products to large organizations and/or coffee shops and opening retail outlets which could be cafés, stores, or gift shops. This will reduce dependence on distributors and build stronger customer relationships.

· Explore related diversification to produce complementary products like chocolate with the same resources. This will provide xxx coffee larger market share than some competitors and an improvement in bargaining power with both suppliers/farmers and customers

Part 4. Question 1: Inventory Control Method for xxx Coffee

To maintain a clear view of our stock and inventory lifecycle, the Economic Order Quantity Model (EOQ) will be used as a base, to ascertain the correct inventory order quantities to be bought, with due considerations for demand rates, the total cost of production, and other variables. This model will help us minimize cost via the identification of the optimal order quantities that will balance the ordering and storage costs without keeping cash overly tired down. The EOQ is a convenient and robust inventory management method will allow us the flexibility of working with available estimates of demand, ordering cost as well as holding cost without fear of being outrightly wrong. We will also use the Quantity Discount Inventory Control method to avail ourselves of discount opportunities when offered by the farmers – that is, if quantity discount being offered, minimizes the total annual inventory cost.

Reference

Heizer, Render, Griffin (n.d), Operations Management: Sustainability and Supply Chain Management, 3rd Canadian Edition, ISBN-13: 9780134838076, Series: MyLab Operations Management

Karakowsky, L., Guriel, N. (2014). The Context of Business. [VitalSource Bookshelf 9.4.0]. Retrieved from vbk://9780133589573