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Case 5-Tan Coffee

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Case 5-Tan Coffee

Including introduction of company

The presentation of the case is done by Lay Yong Tan who serves as the Chief Executive Officer of Tan Coffee. Tan has created the company from scratch for a period of five years, making it run five cafes in an area with low population. The experience comes from his training in Acadia University and his pursue for accounting course. He has worked with TD Waterhouse after becoming a Chartered Accountant and later moved to become a business consultant. The situation has seen him becoming an executive with a passion to coordinate and manage a company such as TAN Coffee. The situation experienced by the company comes from the aspect of market saturation. As much as the company has experienced continuous growth with the opening of the five stores, it does not mean that it has the capacity to maintain its expansion. Tan suggests that “You need to grow. And of course you start by selling one bag, two bags, and three bags. To reach a level where you are sustainable and for the business to continue, you need economies of scale. You need to grow to the point where you can manage as a CEO” [1].

The company may be considered to be a small business but it does not mean that its operations are minority. This is based on the dreams associated with Tan (owner of the business). The small business influences him to continue handling many things at the same time. He wants to grow big “(earn from $ 11.00 to approximately $ 400 per hour)” [2]. The company may be considered to be small because it has less than 25 employees in its five stores. The company also generates less than $ 1 million in its revenues annually. As much as it focuses on the coffee retail industry, it has also diversified its structure and flexible operations to provide accommodation and food services to the large Canadian market [17]. The above factors have associated the company to work hard in ensuring that it stays above competition. The growth of the business originates from the aspect of him having received training as a Chartered Accountant. TAN Coffee has excess capacity in terms of roasting coffee seeds. It takes 15 hours each two days to roast coffee in the seven days of the week. This means a gap of at least 3 days of roasting per week remaining. Success does not mean that Tan Coffee lacks any existing challenges. Tan plays the role of both a CEO and a CFO which involves the process of managing logistics and financial operations simultaneously. The leadership in the company is flexible and ensures continuous growth as it involves all the employees in the management of the company.

The focus of the business is on growth through evaluating the bottom lines to influence a strong financial health of its operations. Quality and positive impression of the business brand’s act as a framework through which the company operates in the market. Tan suggests “I am very proud of it. So it is like a hobby. If I have coffee I want to make sure it is the best.” [3].

The structure of the business revolves around the motto of the company. TAN Coffee works with “fresh is best” [8]. TAN Coffee selects a special coffee from the market. This comes from establishing strong relationships with producers who understand what it entails to flourish in the food industry, mostly in dealing with beverages. The roasting process takes place in small batches and through a strict inventory control. Coffee does not sleep on the shelfs but is roasted on the same day. A coffee that is not used in three days ends up in the brewing process. In the last five years, TAN Coffee has built a huge base of customers. They range from university students to retirees among others. Most of the customers are enthusiasts of freshly roasted coffee and like different tastes associated with the product.

To eliminate any problems associated with the development of TAN Coffee, the paper looks at the strengths and weaknesses found in its internal environment through a SWOT analysis. It gives three solutions to handle the different issues faced by TAN Coffee. This means creating unique customer experiences through quality tastes, affordable prices, and varieties of coffee products. The above factor involves the process of establishing TAN Coffee as the premier coffee company in Canada and its neighboring country and maintaining uncompromised principles while focusing on growth. The right strategies may focus on initiating respect, dignity, equality, and diversity among employees and maintaining the highest standards of excellence among customers. Standards of excellence include the management purchasing, roasting, and delivering fresh coffee to customers in the market. The main goal of the solutions involve the need to satisfy customers at all times.

SWOT (Strength, Weaknesses, Opportunities, and Threats) Analysis

In relation to its operations, one may say that TAN Coffee is an upcoming business with the urge to acquire a huge market share of the Canadian coffee industry in the near future. TAN’s Coffee competitive advantage originates from its strengths as described in the SWOT Analysis. The evaluation of the strengths in the business determines possible solutions used in addressing the weaknesses, threats, and opportunities (Andries, Debackere, & Looy, 2013). The SWOT analysis of TAN Coffee offers managers and customers with relevant data regarding internal and external factors affecting its business. As much as Tan (founder and CEO) reiterates that the company has expanded to reach five stores, several factors continue to threaten its business growth. Therefore, innovation serves as a backbone towards overcoming existing threats (Ceretta, Reis, & Rocha, 2016). The outcome of the SWOT evaluation may mean that TAN Coffee is a strong brand surrounded by many significant threats found in the Canadian and global markets.

Strengths of TAN Coffee in the Market

The component ensures the discussion of the internal factors associated with a company. As reiterated in the case analysis, several factors exist that influences it to remain relevant to the market. In summary, though TAN Coffee is small, it still possesses a strong image of its brand in the Canadian market. It also possesses an extensive national and local supply chain. It has diversified its business through providing accommodation and food services apart from its coffee segments. The name TAN has the three syllables meaning something important to customers and the management. It represents “the alternative network” [13]. Coffee products from specific distributors and roasters. Tan, who is the executive in TAN Coffee, has made it a passion to motivate quality delivery of roasted coffee among customers in the market. This is seen through the several trips (four to five annually) undertaken in different countries to evaluate coffee that is great for business.

Most businesses depend on their customers to influence growth and meet financial objectives (Lim & Weaver, 2014). A company like TAN Coffee has established a framework that continues to build a population of customers that are loyal to its services. The company has a good location to support accessibility. TAN Coffee has ensured that it locates its business premises in locations that are accessible to its different customers such as retirees, university students, and families. As a national brand, having a strong network of employees influences growth and expansion (Dhar, 2015). Yong Tan has ensured that he delegates much of the work to his employees. As much as they have to report sales and purchases, they need are left to be independent and flexible in their working environments (Gu, Tang, & Jiang, 2015). The Chief Executive Officer is left with the work of ensuring that logistical operations and financial business plans take place as per the objectives of the company. He does not meddle with the work of his employees. Each store has a team leader that ensures shelving and direct communication with the senior management.

The location of the stores create a central business structure when it comes to the management of the operations. Ottawa accommodates one café while Nova Scotia has the other four. The logistics are handled by Tan’s sister who ensures communication about stocks’ supplies and scheduling of operations. The coordination between the team leaders, Tan, and the sister. Tan (CEO) has a background in accounting, a major factor that influences him to run financial operations from the bottom to the top. He also possesses a diverse experience in consultancy and general business management in the coffee industry. The above factor means effective experience and good business development plans act as nutrients towards creating positivity in the professional environment of a business (Zarantonello & Schmitt, 2013). It also creates an ambient environment for business stakeholders to achieve their goals and influence growth in their companies and businesses.

Weaknesses of TAN Coffee

The weaknesses of TAN Coffee originates from its concept of management. Management is an important part of any business in the market (Bouskila-Yan & Kluger, 2011). It influences decision making and efficient operations. Poor management and inefficient organizational structure may serve as a major hurdle in the development of a business (Ahmed & Abdullahi, 2017). In relation to the above, it means that that TAN Coffee has failed to achieve its objectives and milestones due to the limited number of staffs working its professional environment. Tan has two executives to run the five stores. He also has team members who may not be as efficient as they should be in the running and coordination of activities in the five stores. This means that he should include more executives with different roles to influence development and assist in making decisions. A coffee company such as TAN Coffee requires several stakeholders such as finance directors, human resource officers, logistics managers, and subordinate employees to control and coordinate operations.

The concept of having different staff members with unique responsibilities may act as an advantage for any company as it enables it to eliminate any clashing and dilemma when it comes to providing the company with leadership and general expertise (Tohidi & Jabbari, 2012). TAN Coffee possesses a problem when it comes to delegation of tasks and responsibilities. Tan (CEO) has to travel to new countries by himself to check on the coffee products. He has to walk from one store to another to ensure that the operations of the stores are doing well. He has to look at the purchases made and some shelving processes involved. The company also makes less than $ 1 million annually, a factor that serves as a problem for its development. It means that it may lack the capacity to expand due to the dwindling amount of funds derived from its operations. The company has different business targets which are not the main objectives. This may sometimes be viewed as a problem because it has not considered focusing on one business. It should eliminate accommodation and food services to promote its coffee roasting business. This may make it become more pronounced as compare to its competitors in the market. This may influence the company to have many challenges in terms of business operations. TAN Coffee should focus on creating an environment whereby both customers and staff members are handled in a proper manner. This means that it needs to establish an effective framework that diversifies operations and meet the needs of customers in the market.

References

Ahmed, S., & Abdullahi, A. (2017). Leadership and project success in development sector. Journal of Economics & Management, 30, 5-19.

Andries, P., Debackere, K., & Looy, B. (2013). Simultaneous experimentation as a learning strategy: Business model development under uncertainty. Strategic Entrepreneurship Journal, 7 (4), 288-310.

Bouskila-Yan, O., & Kluger, A. (2011). Strength-based performance appraisal and goal setting. Human Resources Management Review, 2, 137–147. doi:10.1016/j.hrmr.2010.09.001

Ceretta, G., Reis, D., & Rocha, A. (2016). Innovation and business models: a bibliometric study of scientific production on Web of Science database. Gestão & Produção, 23(2),, 433-444.

Dhar, R. (2015). Service quality and the training of employees: The mediating role of organizational commitment. Tourism Management, 46, 419-430.

Gu, Q., Tang, T., & Jiang, W. (2015). Does moral leadership enhance employee creativity? Employee identification with leader and leader–member exchange (LMX) in the Chinese context. Journal of Business Ethics, 126 (3), 513-529.

Lim, Y., & Weaver, P. (2014). Customer‐based Brand Equity for a Destination: the Effect of Destination Image on Preference for Products Associated with a Destination Brand. International Journal of Tourism Research, 16 (3), 223-231.

Tohidi, H., & Jabbari, M. (2012). Role of human aspects in project management. Procedia-Social and Behavioral Sciences, 31, 837-840.

Zarantonello, L., & Schmitt, B. (2013). The impact of event marketing on brand equity: The mediating roles of brand experience and brand attitude. International Journal of Advertising, 32 (2), 255-280.

Decision Criteria

Variety coffee products, affordable prices, and quality taste

Uncompromised principles among employees focusing on dignity, equality, and diversity

Initiating high standards of excellence in the stores