Case Study Coffee Shop

Beans N Cream

Organizational Background

The focus of this case study revolves around the small company Beans n Cream. This is a small coffee shop outlet located in Sun Prarie Wisconsin. The company is owned by two women, Beth M. And Caroline M. The shop was established in 2002 after Caroline and Beth became partners and ivested their time and effort into providing a local coffee shop to the patrons of Sun Praire.

Beans N Cream offers high quality coffee, teas, breakfast, pastries and other treats for its customers. The establishment attracts many people including workers, stay at home moms and telecommuters. Beans N Cream markets their product mainly through word of mouth and has a product that many have enjoyed and has proven to be profitable through the right demonstration of strategy.

Beans N Cream recently shut down one of their expansion stores in Madison WI due to a lack of interest. The Sun Prairie Store is managed by Jeff, and is stocked with several part time employees. Beth and Carol encourage a business model that is customer-centric and caters to their whims. Beans N Cream's competition comes in the form of a McDonalds and a Starbucks, but neither of these places fill the niche that Carol and Beth feel their store is equipped to handle.

Situation

Beth and Carol have been experiencing much success and failure throughout the existence of their enterprise. The recent expansion failure in Madison has deliveireed nearly $50,000 in losses over the past years and has left these investors slightly gun-shy about how to continue their growth. Their product is strong in the area and they definitely have a business model that can realize success when proper balances are achieved. Customer service, being a highly important factor in the Beans N Cream approach, is the lifeblood of how this company operates and any threat to customer satisfaction is seen as dangerous by these owners.

Problem

Like any business, Beans N Cream has both short- and long-term issues with maintaining a competitive edge within their business industry. The most glaring problem that this establishment is experiencing is that there is too much demand for their product and that wait times are too long for many customers. In a recent exchange with one of their customers the owners became worried when one of their regulars revealed that the wait was no longer worth the product.

The problem is not if they should expand their business, but how to expand their business. The recent failures in Madison suggest that that approach is not likely to work again and that new information and data is needed in order to help reveal the best mode of expansion for the organization to maximize their profits and keep a competitive advantage over their competition

Alternatives

The first alternative is to do nothing and let the market sort itself out. Patience and restraint are helpful in businesses looking to make leaps forward. The business itself is rather new so the market is not fully established. The overflow of customers at the Sun Prairie location may just be temporary and prudence is an alternative in this case.

Another option would be for these people to expand their business in a new location. While it appears Madison can provide a new outlet, it is important that a more suitable location is chosen in order for the move to make the most sense. More research on location may be needed in order for this alternative to work.

A third option would be to expand the current business at its current location. This alternative addresses the customer service issues and continues to maximize a source of profit that appears to be reliable and steady. Hiring more workers and adding new capital and shop space are necessary components of this alternative.