Words: 3735
Broadway Cafe Project 1 Running head: Broadway Cafe Project Buffy A. Ryals Strayer University November 7, 2010 Broadway Cafe 2 Table of content Abstract…………………………………………………………3 Introduction…………………………………………………….. 4 Business Dilemma………………………………………………5 Competitive Advantage…………………………………………6-8 First-move Advantage………………………………….. 9 Making Business I………………………………………9 Making Business II…………………………………….. 10 E-Business………………………………………………………10-12 Networking, Telecommunication, an Wireless Computing……. 12-13 Customer Relation Management……………………………….. 13-14 Systems Development………………………………………….. 5-16 Conclusion………………………………………………………17 Reference Broadway Cafe 3 Abstract My grandfather established the Broadway Cafe in 1952. I have since inherited the shop, which is located in Downtown Detroit, Michigan. The cafe specializes in coffees, homemade soups, salads, and a variety of finger foods. Previously, inventory was completed when there were no more items available. Inventory, just as payroll was completed by writing the employees information in a notebook. Business was running quite smoothly until Starbucks moved within a two-block radius of our business.
Today, business relies strictly on technology and therefore I must make various changes to be sure that my business does not “belly-up”. Broadway Cafe 4 Introduction The Broadway Cafe is a family inherited coffee shop located in Downtown Detroit, Michigan. The business specializes in coffees, teas, finger foods, soups, and salads. Until Starbucks moved within a two-block radius of the cafe, many referred to the cafe as the “one-stop, hot shop”. Grandfather Ryals, conducted a great business in his time.
However, new and improved methods are needed to keep the business as successful as it was then, now that we have much competition closing in. Mr. Ryals had acquired a wealth of knowledge about the coffee business. Unfortunately, prior to his death, he was unable to share the information with us. His system for record keeping consisted of a notebook that tracked inventory along with payroll and coupons. His advertising plan was by word-of-mouth only. Additionally, since he had the memory of an elephant, he never recorded any family recipes or made a list of his regular clients.
In order to bring the Cafe into the 21 Century, quite a few changes are much needed to stay in business. The business needs to gain a competitive advantage though technology, deploy a wireless network for customers, and use CRM to implement marketing campaigns and sales strategies, as well as develop project management activities for implementing solutions to resolve the competition. Broadway Cafe 5 Business Dilemma: The Broadway Cafe has been in business since 1952. There is a rumor that Starbucks may be opening a store a couple blocks away. As an employer, I do not want my employees to be threatened by these changes.
I have determined that a strategy is needed to address their concerns as while I remain competitive in a changing market. On November 8, 2010, I will hold a meeting with my employees. In this meeting, I will assure them that they our business is doing well as it has over the last 50 years. Although there will be some changes, the changes will not affect their salary, insurance benefits, or the amount of hours they have worked previously. I will build customer loyalty by creating a rewards offer. In order to bring the Cafe into the 21 Century, many changes are needed.
First, the business needs to gain a competitive advantage though technology, deploy a wireless network for customers, use CRM to implement marketing campaigns and sales strategies, and develop project management activities for implementing solutions. Broadway Cafe 6 Competitive Advantage: A competitive advantage is product or service that an organization’s customers place a greater value on than similar offerings from a competitor. These advantages are usually temporary because a competitor, which in turn creates a perpetual cycle of improvement strategies (Baltzan & Phillips, 2007), often duplicates them.
Techniques to consider, would be environmental scanning, first-movers advantage, and Michael Porter’s Five Forces Model (Baltzan & Phillips, 2007). Currently, The Broadway Cafe is the only coffee shop in the area. However, recently, there have been postings that a Starbucks plans to move within the vicinity of our business. To improve the business and create a competitive advantage, we must first, research the competition through environment scanning (Baltzan & Phillips, 2007). Environmental scanning is the acquisition and analysis of events and trends in the environment external to an organization (Baltzan & Phillips, 2007).
After reviewing the website of two competitors, Starbucks. com (2010) and Panera. com (2010), it appears these businesses are technologically advanced. The first step this Cafe must make is to install computers to provide accurate record keeping and store information. We have to develop a plan for employees that create an environment of respect and dignity in which leads by example and gives back to the community (Starbucks, 2010). We would offer free samples and free delivery on purchases totally $30. 00 or more within a 5 mile radius.
We would guarantee hot drinks would remain hot and cold drinks would remain cold. Offering the customer a reason to come back with free samples is good business a practice (Panera Bread, 2007). The Broadway Cafes buyer power would be considered Broadway Cafe 7 high, due to its business declining over the past 2 years. If another coffee shop does move into the area, it would likely create an even more competition, while driving buyer’s power higher for customers.
To reduce buyer power the Cafe must make its self more attractive for customers to buy from it instead of its competition (Baltzan & Phillips, 2007). One of the best ways to increase customer loyalty is to offer customers rewards (Baltzan & Phillips, 2007). Customers a rewards card that will earn 2 points for every $5. 00 spent. The points can earn face value and be redeemed when ever it’s convenient for the customer. The rewards card can be used to save on gas at participating gas stations as well as receive up to 20% off your total purchase. The rewards card can be used right at the cafe.
Any points that are not used will have the ability to roll over and continue to roll over for up to six months before expiring. We will have purchase punch cards, where for every 5 you purchase, you would receive a free soft drink of your choice. In order to reduce buyer power, the Cafe must make its self more attractive for customers to buy from it instead of its competition (Baltzan & Phillips, 2007). The Cafes supplier’s power is low due to the various vendors that it uses to purchase supplies from to run the business. The Cafe will continue to search for the finest quality at its lowest cost.
One source that will continue to be used to obtain supplies from vendors would be the internet based service for the business-to-business marketplace. The B2B is where buyers and sellers come together for private exchanges and well as reverse auctions (Baltzan & Phillips, 2007). Broadway Cafe 8 Due to the various competitors, the threat of substitute products or services is high in the coffee shop business. However, the Cafe’ can reduce its threat of substitution by implementing costs switches. Switching costs are cost that can make customers reluctant to switch to another product or service (Baltzan & Phillips, 2007).
The Cafe can implement switching costs by providing all customers with a savings card that calculates point towards a free purchase that can be redeemed at anytime. The threat of new entrants is high since pretty much everyone sells coffee nowadays (Baltzan & Phillips, 2007). Currently, all restaurants and fast food chains that offers a breakfast menu, serves coffee. The pressure would be more on existing businesses to staying a float and meeting the demands of the customer since new businesses are entering with fresh eyes and first to market ideas in order to boost sales.
Rivalry among existing competitors is considered to be high when competition is fierce in a marketplace and low when competition is complacent (Baltzan & Phillips, 2007). In the coffee industry, rivalry among existing competition is high. As stated earlier everyone sells coffee, therefore everyone is trying to impact business by developing a first-mover advantage (which occurs when a business can significantly impact its market share by being first to market with a competitive advantage) and customer loyalty or reward programs are implemented to entice new customers and keep existing ones (Baltzan & Phillips, 2007).
Broadway Cafe 9 First-move advantage: Our cafe will allow customers to place an order and pay for their items with our convenient “quick pay” that is available on our website. This service will allow customers to input a pick-up time and with this service, we guarantee your order will be ready or your items are free. Customers will have the ability to skip the ordering line, walk to the express register with their confirmation number, and pick up their delightful treats. With this service, we envision that the number of customer will rapidly multiply.
Making Business I It is necessary for the cafe to step up to the 21st century. I have determined that it is much needed to utilize the Three Generic Strategies in order to be successful in rebuilding the business for the 21st century. After a close look at the Three Generic Strategies, I have decided to focus on 1) Buyer Power- with this strategy, I will be able to offer lower prices to powerful buyers. 2) Supplier Power-this strategy offers better and more powerful suppliers. I will be able to pass on supplier price while increasing to customers.
In order to reduce buyer power, the Cafe must make its self more attractive for customers to buy from it instead of its competition (Baltzan & Phillips, 2007). The Cafes supplier’s power is low due to the various vendors that it uses to purchase supplies from to run the business. The Cafe will continue to search for the finest quality at its lowest cost. One source that will continue to be used to obtain supplies from vendors would be the internet based service for the business-to-business marketplace. The B2B is where buyers and sellers come together for private exchanges and well as reverse auctions (Baltzan & Phillips, 2007).
Broadway Cafe 10 Making Business II After a closer look at the cafe, I have decided to better suite the customers, it is necessary for me to remodel the building. I have decided to make counters A and B the counters for the customers to order their food and beverages. Opening up more registers will increase the amount of productivity and decrease the amount of time customers have to wait. I have made Counter C the counter for customers to pay for their food and beverages and get their condiments. At Counter D, customers will pick up their food and beverages.
At Counter E, customers that have placed their order using our new web-based program will not have to wait in line. They will go to Counter E and give the cashier his/her customer receipt number and the cashier will grab the items and the customer is out in no time. E-Business I received a comment via email today from a customer that was in disagreement about allowing children in the Cafe for Children Story Hour at the Cafe. I was quite baffled by the comment, but as a business owner and a professional, I thanked the individual for their expression of concern. I found this comment to be quite unethical as well as offensive.
As much as I would like to have suggested to the customer to find another cafe to frequent in, I have to remain professional and business like at all times. If I comment in an unethical way, I would be no better than the person who wrote that comment. I would offer my customers a satisfaction survey as well as space that they can write any suggests that they may have that will help us improve our customer service. Broadway Cafe 11 We value the opinions of our customers. However, The Broadway Cafe was designed to cater to the needs of all people in which include families with children.
Offering Children Story Hour is what makes the Broadway different from any other cafe. Our young folk population is just as important to the cafe as all the other customers. I would offer my customers a satisfaction survey as well as space that they can write any suggests that they may have that will help us improve our customer service. These comments can be placed in a drop box near the exiting doors. For those computer whizzes, I would have an area where customers could log into the computer to place their comments and/or suggestions.
I would also offer Wi-Fi, so that customers can relax or continue with their assignments. An E-business strategy can help the Broadway because most people surf the internet vs. reading the daily newspaper. I would use the metric similar to the Cow Restaurant as this metric offered useful information as it relates to the customers. I like this metric because it not only identified the total of customers, but it also identified the new customers. I can use E-business to partner with suppliers by creating an attractive web page that has an unique catch phrase that will interest the potential partner.
I would offer some television airtime. Having a portal in the cafe would be good for the employees because it would keep them busy while they are on breaks. I would definitely have a kiosk, as this would be extremely a great way to bring more customers. I think with libraries not allowing food, my cafe would draw the attention of many students. They will have the ability to study, surf the internet, and have a nice snack. A website would be created that would include the menu for the Cafe, the location, our operating hours, and a number to call to
Broadway Cafe 12 place your order via telephone or web order. You will have the ability to post any comments and/or suggestions on the webpage. Networks, Telecommunications, and Wireless Computing The internet automatically comes to mind when considering innovating ideas for marketing strategies. Telecommunication systems enable transmission of data over public and private networks. Businesses have the ability to benefit from today’s modern network infrastructures that provide reliable global reach to employees and customers.
All around the world, businesses are moving t network infrastructures solutions that allow greater choice in wireless, voce-over internet protocol, as well as radio-frequency identification. The Cafe would like to broaden its horizons and offer mobile coupons (m-coupons) to its mobile customers. M-coupons are instant redemption coupons that customers receive while walking by the Cafe. The coupon could generate for a dollar off a latte or a 15 percent discount on an order and the customer would receive the offer to his/her cell phone.
To redeem the coupon all the customer has to do is present the cell phone so that the offer can be downloaded (Cohesion Case, 2007). M-coupons are better than traditional coupons because they are readily available for customers to use. The offers are stored on their cell phones and, since the customer always has the phone, the coupon is always handy or available to redeem. This method of marketing increases the customer base and redemptions rate of the m-coupons over the traditional coupons (Cohesion Case, 2007). M-coupons are internet based, therefore the same risks that apply to e-businesses marketing would apply to mobile marketing.
Mobile marketing is relatively new to businesses, protocols, privacy policies, disclosures, Broadway Cafe 13 and SPAM emails blocks and other security features and would have to be revamped to fit mobile devices (Australian Competition and Consumer Commission [ACCC], 2007). The cafe could benefit from collecting and tracking response rates of m-coupons seeing that it generates analysis information about the customer and the business. Analysis information that could be gathered would consist of cluster analysis, association detection, and statistical analysis (Baltzan & Phillips, 2007).
Cluster analysis is the first analysis to be considered to helpful. A cluster analysis is a technique used to divide an information set into mutually exclusive groups. These groups have members that are as close together possible. Cluster analysis is used to segment customer information. It helps identify customers with similar behavioral traits, such as clusters of best customer or one-time customer. Custer analysis would be beneficial for m-coupons because it would market to regular customer items that they normally buy and one-time customer specials of the day.
Second, is association detection. Association detection reveals the degree to which variables are related and the nature and frequency of these relationships in the information (Baltzan & Phillips, 2007). Association detection for m-coupons would record the frequencies of how often or how quickly customers respond to the advertisement and if other items are normally purchase with them. Additionally, association detection would track the habits and the patterns of the customer. Third is statistical analysis.
Statistical analysis performs such functions as information correlations, distributions, calculations, and variance analysis, just to name a few (Baltzan & Phillips, 2007). Analyzed m-coupons would generate information on Broadway Cafe 14 how well the products are doing. The information collected could consist of what the customer did/didn’t like or when to promote various specials. Tracking m-coupons would prove beneficial no matter who receives them or act on them because m-coupons forwarded to other people can only increase our customer base.
Customer Relation Management Customer relationship management (CRM) involves managing all aspects of a customer’s relationship with an organization to increase customer loyalty and retention and an organization’s profitability (Baltzan & Phillips, 2007). CRM is a business philosophy based on the premise that those organizations that understand the needs of individual customers are best positioned to achieve sustainable competitive advantage in the future (Baltzan & Phillips, 2007). The behaviors of customers have changed the way businesses compete.
Customers will leave if companies fail to meet the expectations of the customer. They are more demanding because they have information readily available, they know exactly what they want, and they know when and how they want it (Baltzan & Phillips, 2007). Customer behaviors can also help businesses. An organization can find its most valuable customers by using a formula that industry insiders call RFM-Recency, Frequency, and Monetary value. When a company has collected the initial CRM information, it can then be compiled to identify patterns and create marketing campaigns, sales promotions and services to increase business.
Broadway Cafe 15 Employees are developing the idea that customers are the most important part of business. Through various incentive programs, employees are seeing that by practicing good business ethics they are creating new customers, retaining old customers, and earning bonuses for a job well done (Baltzan & Phillips, 2007). The Broadway Cafe plans to offer reward programs to its employees also to boost morale and reiterate to its employees that customer satisfaction has to be the primary goal.
Some of the programs that are being considered are bonuses for employees. These bonuses would be for employees with perfect attendance, get the most sales in one month, and for those who get the most positive feedback form the customers. Additionally, we will offer promotions and pay raises for these outstanding employees. It is important to reward the hard working employees. It keeps the employees happy along with the customers and ultimately affects the overall daily operation of the company. Systems Development Life Cycle
The systems development life cycle is a project management technique that divides complex projects into smaller, more easily managed segments or phases. Segmenting projects gives managers the ability to verify the successful completion of project phases before allocating resources to subsequent phases. Software development projects typically include several phases: initiation, planning, design, development, testing, implementation, and maintenance phases. The phases may be divided differently depending on the organization that involved.
For example, initial project activities might be designated as request, requirements-definition, and planning phases, or Broadway Cafe 16 initiation, concept-development, as well as planning phases. End users of the system under development should be involved in reviewing the output of each phase to ensure the system is being built to deliver the needed functionality. It is required to have careful oversight ensure projects support strategic business objectives and resources are effectively implemented into an organization’s enterprise architecture.
The initiation phase begins when an opportunity to add, improve, or correct a system is identified. Also, it is formally requested through the presentation of a business case. The business case should describe a proposal’s purpose, identify expected benefits, as well as explain how the proposed system supports one of the organization’s business strategies. The business case should identify alternative solutions and detail as many informational, functional, and network requirements as possible.
Presentation of a business case provides a point for managers to reject a proposal before they allocate resources to a formal feasibility study. When evaluating software development requests as well as during subsequent feasibility and design analysis, management should consider input from all parties that will be affected. It is important that management closely evaluate the necessity of each requested functional requirement. A single software feature approved during the initiation phase can require several design documents. It increases testing, documentation, and support requirements.
Therefore, the initial rejection of unnecessary features will significantly reduce the resources required to complete a project. Broadway Cafe 17 Conclusion The Broadway Cafe has the potential to stay in business and improve business success by leveraging information systems into its daily operation. Pursuing a focused differentiation strategy, promote the outstanding establish menu items and services that only the Broadway Cafe has to offer, the long time business will mitigate the various obstacles presented by the restaurants competitors.
Knowledge, customer relationship, and Business Intelligence Management systems will be important attributes to the business. Including a kiosk, developing a website, installing computers with free Wi-Fi services enhances the business service and increases its visibility. Overall, this project along with the exercise of evaluating various technical information possibilities has been enlightening and informative. Exploring the various resources of business aspects offers a variety of strategies for business improvements. References Australian Competition and Consumer Commission (2007).
M-commerce. Retrieved November 26, 2010, from http://www. accc. gov. au/content. index. phtml Baltzan, P. , & Phillips, A. (2007). CIS 500 Information Systems for Decision Making (4th Custom ed. ). New York: McGraw-Hill. Cohesion Case (2007). Networks, Telecomunications, and Wireless Computing. Retrieved December 9, 2007, from http://www. cohesioncase. com/networks Panera Bread (2007). . Retrieved December 1, 2010, from http://www. panerabread. com/ Starbucks (2007). . Retrieved December 1, 2010, from http://www. starbucks. com