In Section 1.0, this report starts with analysis the current and future market situation at Just Us cafes using the 5C analysis framework. It also highlights ethical trading issues that have faced the company and it postulates some of the remedies that the Industry should adopt to eliminate unethical practices and ensure that all the companies in the Industry are operating on the same playing ground.
In section 2.0, the report also uses the BCG matrix to classify and analysis the competitiveness of Just Us café products and at the same time alluding some of the strengths and limitations of the matrix. Problems of product deletions are also meticulously considered in the light of concentrating on selling only the products which currently have higher margin of profits in comparison to the other products.
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In section 3.0, it also addresses the challenges that the company struggles with in terms of improving its customer services and trying to increase its customer loyal base. In Section 4.0 the report culminates by making recommendations on how the company can improve its outdated marketing plan by using the 4P’s of marketing, using social media such as face book and twitter, usage of free samples of their new products and creating brand value among other measures.
In Section 5.0 the report indicates all the appendices used for the purposes of illustration and elaborating some of the key issues opined here. Financial diagrams are also used repeatedly to try and emphasize on some of the fundamentals of marketing and accounting principles. In Section 6.0, lastly but certainly not least the report shows all the materials that were used for the purposes of compiling it. Among the documents that were used were books, journals and conference papers.
Busacca, Costabile, Ancarani, 2008) insists that the analysis of value for the customer is critical in the management of cross-industry competition from both a defensive and offensive position. From a defensive position that’s prevention of entrance into one’s area of activity) to adopt mobile defense strategies that build on the early coverage of value gaps is fundamental. This implies a systematic monitoring of the consonance between the perceived performance of existing products and customer’s expectation.
From the above analyzed table, we see that the University market sector is lucrative and prefers what Just us Café has to offer. Therefore they should defend their position so as not to lose some customers to small independent customers are mainly in the community and that could easier extend to include the Universities.
And from an offensive position (exploitation of various forms of synergy in order to gain entrance into new markets), to establish critical interactions between different areas of activity by seeking a comprehensive answer to purchase and consumption requirements is very important. Again, a constant focus on the customer is critical to strengthen and supplement the value proposition. Just Us Café could joint venture with Proctor and Gamble as they are an International company, giving instant access to the U.S.A market and they would share the same ideology. Just Us Café could also consider having a strategic alliance with Kicking Horse as they are likely to have the qualified personnel to assist Just Us café to tap the e-based clients and more clients across the globe. But on a closer look Kicking Horse already has a shop in Halifax and is in direct competition with Just Us Café. Moreover they don’t promote the idea of certified fair products and they could be a conflict of management in future.
“A useful tool for assessing competitor strengths and weaknesses is customer value analysis. The aim of customer value analysis is to determine the benefits that target customers value and how customers rate the relative value of various competitors’ offers. In conducting a customer value analysis, the company first identifies the major attributes that customers value and the importance customers place on these attributes. Next, it assesses the company’s and competitor’s performance on the valued attributes”.
“The key to gain competitive advantage is to take each customer segment and examine how the company’s offer compares to that of its major competitors. As shown in Figure 18.2, the company wants to find the “strategic sweet spot”- the place where it meets customers needs in a way that rivals can’t. If the company’s offer delivers greater value by exceeding the competitor’s offer on important attributes, the company can charge a higher price and earn higher profits, or it can charge the same price and gain more market share. But if the company is seen as performing at a lower level than its major competitor on some important attributes, it must invest in strengthening those attributes or finding other important attributes where it can build a lead on the competitor.” Therefore when Just Us Café is selecting competitors, it should find the “sweet spot” where it meets customers’ needs in a way that rivals can’t.
From the above analyzed table, it is clear cut evident that Just Café has several competitors and some of them are International companies with shops across the globe like Proctor Gamble, Starbucks and Kicking Horse among others. (Bergen and Peteraf, 2002), favor a two-step approach to consider competitor analysis. The first step is listing all the competitors, the products they sell and their location. Just Us Café can identify all the direct and potential threats. It can strategize to cope with the new entrants. I would suggest that Just Us Café go into Joint Venture with Proctor gamble as they are in United States and Canada and better still they promote the same ideology of certified fair trade products like Just Us Café.
The second step is evaluation of the competitor’s resources and predicting their next course of action. By looking at how big the competitors are, their financial base and their global trading. Just Us Café can be able strategize, for instance Starbucks has 5 stores in Halifax compared to Just Us Café only 2 stores in Halifax, therefore Starbuck pose a significant threat to Just Us Café, as they have the financial muscle as well.
The second stage of the framework model is concerned with the evaluation of the competition’s resources and the prediction of rivalry. They discuss how by understanding your competitor’s resources you can predict the scale of future threats. Therefore for Just Us cafe they need to understand who they are competing with within the local market and big players entering that market, i.e. Trident only have one shop so Just Us Cafe could in turn be a threat to them, Java factory has one café in Halifax has not a threat to Just Us Cafes but they need to watch them closely.
Just Us Cafes should also watch out on Second Cup which has 6 cafes in Nova Scotia compared to its 4 cafes, it should likewise be worried by the competition posed by Kicking Horse which has cafes across the Globe. Moreover, Second Cup, Kicking Horse and Starbucks have the financial muscle which Just Us Café should strategies itself and deal with the situation.Climate has all to do with the external environment influences and how Just Us Café has to adapt to them. I have used the Pestel framework that was designed by M.E Porter and they stand for: P-Political issues, E-Economical issues, SSocial issues, T-Technological issues, E-Environmental issues, L-legal issues.
At the moment Just Us Café operates only in Canada which is politically stable and has minimum trade restrictions to foreign competitors like Starbucks and Kicking Horse. Another factor is that the government recognizes certified fair trade products and the importance of equality and fairness in the community.
Canada is experiencing recession and some consumers have budgeted incomes, they could consider Just us products as mere substitutes despite their premium quality so that they can save some pennies. However, in the long-term there seem to be a good chance of the economy stabilizing and providing Just us with an opportunity to grow and serve more customers and
Just Us mission to inspire and nurture the human spirits and souls by promoting the community to participate and interact with the company while telling their stories.
Just Us goals are continuous improvement in services and premium quality of their products. They thrive to ensure that customers are offered high levels of customer experience. Just Us wants to raise living standards of third world farmers and ensure direct ethical sourcing from them by eliminating middlemen who exploit the farmers.
To develop relationships among co-operative members, employees, business associates and the broader community based on honesty and respect and to maintain an ongoing commitment to education, innovation and collaboration.
Just Us Café should try to improve their distribution network. The retail outlets are not reliable. They should seek to get a transport and logistics partner to deal with that issue. They should invest in modern high-end brewing machines and other product lines to increase their customer base.
They should introduce membership cards and loyalty reward card by partnering with a credit card provide like Visa or Master. They should also invest in social media and have a person to monitor and maintain it. They should hire a Computer expert to install the software and hardware’s required. Just Us Café uses green sources of energy like solar panels and water.
However, they should introduce key performance indicators in this area and reduce energy consumption further by at least 20%. They should invest in water saving technology in their equipment specifications so as to reduce water consumption.
At Just Us Café they should reduce recycle their waste products like paper etc., use reusable cups and composting more of the coffee and tea grounds. On the brighter side they are beginning to build new company owned stores and will be able to promote further their ideas of certified fair trade which retail outlets often ignore. Employees at Just Us should be paid according to Canadian working laws and adhere to the required working hours, minimum age allowed to work, minimum wage guidelines so as to avoid fines and penalties for non-compliance. Just Us Café should also have health and safety regulations which all employees should be educated and trained on.
A useful framework to analyze the company is the SWOT analysis, which stands for S-Strength, W-Weakness, O-Opportunity, T-Threats. Ideally, the company wants to align its strength with the opportunities in the market, whilst making sure that its weaknesses are not exposed to any potential threat.
Just Us Cafes has a strong brand which is a certified as fair trade and a loyal customer base. The atmosphere in the cafes provides customers with a feeling of knowledge and belonging. This has turned into a Just Us culture. They have attracted employees who are eager to communicate the message of their products and promote equality in society.
Many customers believe that coffee is a substitute product meaning that people will buy substitutes depending on price and availability. Although Just Us thrives to provide excellent customer experience, they do this at a cost. They pay their producers fairly and incur costs of certifying fair trade products. This results in high production costs. Low of sufficient marketing budget. Lack of multi channels of distribution network.
Emerging domestic and International Markets.. Use of social media to attract more customers.
The Canadian economy is in recession meaning customer have less disposable incomes.. There emergence of both International and domestic competitors. A number of coffee distributors had developed their own fair trade offerings.
They include distributors, suppliers and alliances. Baden-Fuller and Stopford (ibid, p16) have pointed out that strategic inertia is in-fact far riskier, since it systematically leads to the decline of the company. Just Us café is in a mature market and can’t afford to remain in status Quo.
They have to get a transport and logistics partner to deliver their goods as
they can’t just rely on retail outlets who don’t promote their products and ethical training. They can team with Proctor and Gamble to gather more customers. On the other hand their suppliers are reliable and supply environmental friendly raw materials for production.
(Adams, 2002,147) postulates that it’s no longer sufficient for leading retailers to provide consumers with superior product value and customer service, they must also demonstrate their role as citizens. In the above diagrams only few producers pay minimum guaranteed price directly to the producer co-operative as a marketing manager, I would push for legislation for all producers to pay. The Canadian government should also compel all producers to be fair trade certified. Members and obtain licenses to prove the same. The government should also enforce a compulsory code of ethics on all companies and penalties and interest introduced for non-compliance of the rules.
(Proctor and Hazard, 1990a) suggest that, it is a basic assumption of the BCG model that there will be close association between sales volume and profitability/cash flow. A product’s market share and growth rate of the market are the two dimensions of the BCG matrix.
According to the current Just Us prevailing portfolio as collected above, the 80% market share was used to calculate the relative market share by dividing all values of the market share of 2007 by 80%. And plotting them on the BCG Matrix, we will get the following results.
Cash cows-coffee, has low market growth but high relative market share. Problem child- tea, has high market growth but low relative market share. Dogs will be Cocoa and Sugar, have both low market growth and relative market share
Stars-none., have high market growth and high relative market share Coffee is the cash cow and it will therefore, under BCG matrix it will create positive cash flow and it will not be developed to grow. The management of Just Us would therefore relax and could miss out on the new opportunities of serving more university students by opening more cafes or attracting the new environmental conscious customers to buy their coffee.
The cash flow that’s created in the cash cow (coffee in this case) would be invested in the problem child (tea) to increase market share and reach a strong competitive position. This would then bring the unit of the tea into the star square and when the market reached saturation point the star would become a cash cow to provide cash flow for other units.
The two products cocoa and sugar have a low relative market share and a low market growth rate hence is in the dog unit. Under the BCG matrix one would harvest the money before the product died. These products would be financially starved off instead of being invested more into therefore Just Us would lose potential growing market. Richard Hammer mesh, who made a study of the disadvantages of the BCG matrix, considered that the portfolio planning was earlier on useful when making decisions such as disposing off business units, but was much less useful in connection with growth and business development therefore Just Us might not launch the new products like Pumpkins and Cinnamon.
The BCG matrix confuses resource allocation with strategy. Planning is not a substitute for visionary leadership, careful attention must be paid by Just Us to the strategy of each business unit and not the strategy of the whole portfolio, which is of course the aim of BCG matrix. Usually products under star have major share in the growth market and relative high market share. Such products may enjoy rapidly growing sales and profits and are likely to generate large cash flows. Just Us has reached the maturity stage and none of their products have such attributes.
(Proctor and Hazard,1990b), posit that the limitations of the BCG model are its reliance on market share and market growth as the only two dimensions to be used in assessing product portfolio health. It’s difficult to classify a product as having high or low market share. Also, the current market share held by a product tells us little about the possibility of increasing or maintaining that market share. Some high growth markets are not necessarily attractive. They may well lack size (current or potential) and stability.
In the ACCA study pack for P5 Advanced Performance Management by Get through guides,pp.463 for exams for 2012 the main characters give additional limitations of the BCG matrix on the next page.
Problems of Product Deletions
According to George J. Avlonitis, the problems of product elimination are: Market reaction, using the BCG matrix Just us would eliminate coffee and sugar and this would have an impact on the company image and could make it lose customers to their rivals.
Financial implications, involving the determination of the product’s contribution to profit centre and the impact of its elimination upon the company’s total sales volume. Eliminating coffee and sugar which have low growth rate could affect the overall profitability of Just Us. (Range policy considerations involving an analysis of the impact of product elimination upon the company’s “full-line” policy. By eliminating products like pastries, pumpkins and Cinnamon will prevent existing purchasers of the coffee brand from purchasing more products in addition to the core line.
Eliminating products would give the management of Just Us a headache on the possibility of exploration of the executive and selling abilities freed by the product in particular to decide which ventures to invest in that give better returns.
Product elimination may prevent management to identify potential new products for instance the introduction of tea and coffee which are not certified fair trade products.(Macaulay and Cook, 1995) give ten ways to become closer to the customer. They say that in serving the customer, teams must learn better ways and sharpen their skills if they are not to be overtaken by smarter competitions who practice continuous improvement here are some ideas to improve customer experience.
Just Us cafes should educate everyone to know their customers and their needs. They carry out systematic customer surveys to gain first hand understanding of their needs the staff should then be empowered to put into action improvements like playing soft music in the background and having sleek, comfortable and decent furniture.
Just us café should keep staff informed through regular communications meeting. They should be short and might be results of customer surveys, letters received from customers on the quality of service costs for the month output from the department. A service notice board should be placed in a visible place with regular performance and formation updates . Set clear service standards and objectives and monitor and jointly review individual and group performance against them. Just as café should involve staff setting standards such as how long it takes to process customers order letters to customers conforming to company style, use of telephone greeting and handling customer complains. Just Us should also draw up a checklist for the teams to use for monitoring performance. ust us café should give regular feedback to each person on how they are performing. This should include managers as well as staff. This would make the managers more focused on the needs of the team.
Encourage suggestions and ideas of procedures day by day. Just us café could also consider buying high end brewing and expresso machines that will allow baristas to act more easily with customers. Occasionally organize out of work events to cement team spirit. A sixmonthly team weekend should be initiated based on outdoor activities which could promote a much stronger sense of team identify and belonging.
In recruiting new staff Just us café should be sensitive to how that person will fit into the team as well as the technical or professional knowledge they bring particular care should be taken to introduce new members by setting clear standards offering appropriate training and coaching them in culture of sharing stories of all stakeholders in the business.
Just us café should encourage a cooperative supportive approach towards one another. A positive climate will be readily picked up by the customer create a first name open environment with the chief executive demonstrating by example.Encourage knowledge and understanding of one another’s job to give the team flexibility. Some job rotation could be introduced. Just us café should hold a “get to know your customer” event by inviting members of staff to be customers for the day. Staff will learn to appreciate different roles their colleagues undertake and expertise could be shared in improving customer experience.
Just us cafe should also keep a close watch on team morale which is prone to dip in pressured service environments and lead to bad temper with colleagues and customers or poor performance. Just us café should introduce a Facebook page and a twitter account to be able to process customer order quickly and get instant feedback on certain services and products offered.
Presently at Just Us Café, print media and the cafes themselves are used for local advertising from Exhibit 8; the current marketing program could be improved through increasing the advertising budget and using student
magazines and discount coupons on a monthly or quarterly basis to tap the student market.
Also Public Relations events and sponsorship should be increased to at least 3 or 4 times a year.
Electronic newsletters could be issued monthly to existing customers and prospective new customers at very low cost and could reach a new market segment and target market.
(Bridges, 1992, p92-123), say that brand equity is of interest to managers because of brand loyalty and brand extensions. Brand equity has a positive relationship with brand loyalty. Brand extensions are areas that are affected by the original brand’s equity.
At Just Us the brand is well recognized at its locations and could be improved, extended to the Major Universities and all the stores and distribution outlets in Canada to start with by offering more products.
(West, Ford & Ibrahim, 2006) describes brand personality as the embodiment of personality traits of the consumer in the brand itself. Just Us Café could leverage its brand through multiple channels of distribution besides the grocery stores. Just Us could set up cafes and carts in hospitals, banks, office, buildings, supermarket and shopping centres.
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