Excel

From: Pan Zhao, Ruifeng Wen

Date: Feb 22nd, 2020

Subject: Analysis of Big City Bagels

For the Big City Bagels to continue with their success. Some of the answers that need to be answered include where Big City Bagels is strongest and weakest, and what are some of the creative ways Big City Bagel can use in so that it can increase their current customer base. Other questions that need to be answered are how the Big City Bagels can reduce overhead and cost to ensure there is an improvement in their profit margins without increasing the sales, and finally, the recommendation on one aspect they would use if they want to expand their business.

Where Big City Bagels is Strongest and Weakest

Big City Bagels is strongest in offering higher sales. Big City Bagels recorded higher sales in all its products based on sizes which includes plain bagel (mini), plain bagel (standard), poppy bagel (mini), poppy bagel (standard), cheese cream (2oz), cheese cream (80z), and catering (12 standard and 8oz) as shown in appendices A, B, C and D. These performance appendices also show that the demand for each product has been increasing since 2016. Big City Bagel recorded such higher sales because of its value in customer satisfaction. Big City Bagels is weakest in having more costs associated with the product that cannot be traced. Such costs are identified in all the annual quarters as illustrated in appendix E, F, G and H. the costs and expenses appendices also demonstrate that another weakness is that the Big City Bagels spends more in payment of rent and utilities. That higher expenditure on rent is because of the variety of branches that Big City Bagels has, which are located in rented houses.

Creative Ways Big City Bagels can use to Increase Sales with their Current Customer Base

While the sales team can make a big difference in the bottom line, the company does not want to ignore how the rest of the business can increase sales as well. While the Big City Bagels plans of boosting sales, the existing customers should be the key priority when trying to boost the sales. One of the ways the Big City Bagels should use is paying attention to the existing customer behavior. If possible, the company should study how the current customers interact and use the product (Ojala, 2018). If the current customers are heavily relying on one specific feature of the product being offered by Big City Bagels, then that could be a great place of offering an upgrade on the product. For instance, Poppy bagel seems to have the highest demand as shown in Appendices A to D. Another approach that the company can use is by delivering more personalized products. The company should not really see this as an upsell, and instead, it should see it as extending their relationship with the current customers.

Sales and marketing promotions are a great way that the Big City Bagels can increase its sales with current customers. Whether the company holds the customers once a month, once a quarter, or even what makes sense to the company, it needs to be regular. Once Big City Bagels has established a rhythm with the current customers, the customers will then start looking forward to using products of the company. The more the company will anticipate interacting with the customers in the future, the better. Additionally, the sales and marketing promotions will let others know about the company more (Le Meunier-FitzHugh, 2016). Such referrals should result in a larger customer base.

For the Big City Bagels to increase sales with their current customer base, it needs to ask feedback from the customers, such as if there is any problem that the customers would want to be helped with.

Customer feedback will help the company in measuring the satisfaction of the current customers. Customer satisfaction and loyalty are one of the most important ways that will help in determining the financial performance of the business. The satisfaction of the current customers is directly linked to a variety of benefits such as increased market share, and higher revenues for the business. Collecting feedback from the current customers will help the business in shaping its operations so the current customers can feel they are being attached to the company (Le Meunier-FitzHugh, 2016). Listening to their feedback will help in creating stronger relations with the current customers, and this is one of the critical ways that will help the business in gaining valuable brand ambassadors who will assist in spreading positive word-of-mouth on behalf of the company.

How Big City Bagels Can Reduce Overhead and Costs to Improve their Profit and Margins without Increasing Sales

There are a variety of ways that Big City Bagels can reduce overhead and costs to improve their profits without increasing sales. One of the keyways is identifying all the costs and expenses for approximately six months. After the company has done a careful analysis, then it should reduce the goals for its products. That process is referred to as the cost casting, and Big City Bagels should undertake the process monthly. Additionally, Big City Bagels should keep track of the costs regularly while comparing its forecast with what is effectively spent a month by month while verifying if the other goals apart from increasing sales have been achieved. Another critical way through which the Big City Bagels can reduce overhead and costs to improve their profits and margins without increasing sales is being careful with false impressions (Hamdollahzadeh & Firouzabadi, 2016). An increased sales volume does not always mean that the business is making large profits. Often an increase in sales provide an image of prosperity, while behind the scenes, the expenses are always consuming all the profits. To ensure that the business makes real results, then spending should be used in the most efficient manner. That can only be achieved through optimizing the return on investment and improving the procedures and internal methods.

Big City Bagels needs to analyze its costs in percentage terms as one of the ways of reducing overhead and costs to improve its profits without increasing sales. While analyzing the costs, the business needs to use a percentage instead of quantities of money. That is critical for the business because when the cost percentages are diminishing, then the business will be increasing its profits. On the other hand, when the sales volume of the business is remaining constant, the profits can be increased by reducing the costs of the products. The Big City Bagels can use reliable systems when reducing overhead and costs to improve their profits without increasing sales (Hamdollahzadeh & Firouzabadi, 2016). Before Big City Bagels can determine whether a cut in expenditure will result in increased profits, the business needs to have reliable information about its operations. That form of data can be obtained from a system that provides strategic management of the company's costs, profitability, and performance. With that kind of solution, the company will access to basic and complex graphic analyses and the company's capability of executing advances simulations for possible economic scenarios.

Focusing on Products

Big City Bagels` current business model has two types of sales, which include the in-store and catering, offers bagel and cream cheese options, and has customers in three states. In order to expand their business, Big City Bagel needs to focus on products. When the business notices that customers are beginning to buy their product wherever the business offers it, then it needs to begin focusing on that rather than building more features. The early customers are always amazing, and they always push the business to develop new features of the products, and instead of prioritizing new customers, the company should focus on retaining older customers through development in the way the products are manufactured (McDowell, Harris & Geho, 2016). The business should not spend much of its time improving the current experiences for the customers, but rather it should be focused on improving the product. The company should ensure that the product performs its immediate purpose before anything else.

The greatest motivator for the business to develop new features for a product is customer retention. If the business is being devoted to the development of new features, it should then satisfy the current customers. Focusing on the products will help the business take advantage of opportunities in various market sectors. Big City Bagel can expand its product line through customizing the already existing products or introducing new products that will match the customer needs within the target sectors. The introduction of products that will meet the changing needs of the customers is an important driver to expansion. Inviting the current customers to contribute to the development of the product can help in highlighting opportunities and focus attention on the development priorities (McDowell, Harris & Geho, 2016). Expansion on the product line especially offerings that fetch higher prices per unit such as catering, cream cheese and poppy bagel. As shown in Appendix I

Such a move can assist the business in increasing customer loyalty. Adding variants to the already existing products can enable the business to sell more to the existing customers. The business can only reach the purchasing records of the existing customers in identifying the products that the competitors are supplying to the market. The business can develop new products that will make so that it can offer a variety to the customers.

References

Hamdollahzadeh, A., &Firouzabadi, K. J. (2016). A Model to Determine Optimal Composition of Production to Obtain Maximum Profit & Reduce Overhead Costs by Linear Programming. Modern Applied Science, 10(10).

Le Meunier-FitzHugh, K. (2016). Sales and Marketing, and Customer Relationships: A Structured Abstract. In Rediscovering the Essentiality of Marketing (pp. 779-780). Springer, Cham.

McDowell, W. C., Harris, M. L., &Geho, P. R. (2016). Longevity in small business: The effect of maturity on strategic focus and business performance. Journal of Business Research, 69(5), 1904-1908.

Ojala, M. (2018). Increasing Sales per Receipt: Customer Analysis and Personal Selling as Tools.

Appendix

Appendix A: 2016 yearly Sales

Appendix B: 2017 yearly Sales

Appendix C: 2018 yearly Sales

Appendix D: 2019 yearly Sales

Appendix E: 2016 Costs and Expenses

Appendix F: 2017 Costs and Expenses

Appendix G: Costs Analysis 2018

Appendix H: 2019 Costs and Expenses

Appendix I: Returns per unit

Costs analysis 2018

Costs Analysis 2019

Best returns per Unit

2016 Yearly Sales Analysis

2017 Yearly Sales Analysis

Amount Ordered per product

Sales per Product in 2019

2016 Costs and Expenses

2017 Costs and Expenses