Operational Overhaul for Tim's Coffee Shoppe
Tim’s Coffee Shoppe, is a business entity in need of an operational overhaul to improve its performance. Whereas the business is doing relatively well and is profitable, it faces various challenges relating to low uptake of technology, employee motivation, and high operating expenses. One potential solution lies in the adoption of modern technology in HR record keeping, which will enable Tim to improve operational effectiveness. Adopting technology will also enable a reduction in operational costs, which is key to survival in the tough economic environments. Another solution to the challenges is to provide customer service training to enable the provision of consistent service levels and thus the development of customer loyalty. Finally, as an established business, Tim’s can explore the possibility of opening another branch, which will solve the problem of career progression while allowing the business to grab a greater market share.
AB299: Final Project
Regulations and Management
Summary
Tim’s Coffee Shoppe, which is a business entity conducting its operations in Illinois is, as far as is observable, highly compliant with the wide variety of both federal and state regulations that govern the operations of restaurants within the state. One state law affecting the establishment’s operations is the Food Handling Regulation Enforcement Act, which necessitates that the operational supervisor of any establishment dealing in food service be an individual trained and certified in food service sanitation. This requirement means that Tim, who supervises operations at the Shoppe, must possess these qualifications or else he may be stopped from doing business.
Federal laws
The OSHA may affect the entity’s operations through provisions like the one barring the operation of heavy machinery like forklifts by individuals aged below 18, which would necessitate careful recruitment to avoid the occurrence of such an issue. Another relevant federal law is the Fair Labor Standards Act, which relates to the employee’s financial working conditions like tips, overtimes, and minimum wages. The third federal legislation is the FICA, which relates to the reporting of tax obligations for tipped staff. Tim may need to be conversant with the provisions of this law since accurate following of reporting rules may entitle him to claim Tax Credits for tips. Finally, the RICO Act is also relevant since can be used to sue Tim if he hires illegal immigrants, a practice common in the hospitality industry.
Management Area
Management is a term used to refer to the process that facilitates the achievement of organizational objectives through the performance of the planning, staffing, controlling, and organizing functions (Cole & Kelly, 2015). The managerial structure of Tim’s Shoppe is highly simplified with overall authority being in the hands of the owner, Tim and an assistant named Darryl alongside with supervisor, Elena.
Tim’s Shoppe’s lean structure enables faster decision-making because there is less bureaucracy. The faster decision-making also makes it much easier to implement changes in the organization thus making the entity highly flexible in this regard. Another strength of Tim’s is that the entity provides its clients with live entertainment, which helps to draw clients to the place and create a competitive advantage.
However, the business has some significant weaknesses with perhaps the most apparent being the low uptake of technology, which makes the entity less efficient. The second weakness is that there is the absence of alternative payment options for the clients, thus potentially discouraging clients who prefer not to carry cash.
Action items
The introduction of a vision statement for the entity is a necessary measure for the entity. A vision statement usually provides a description of the entity’s future goals and states where the organization seeks to be in the future. A suggested vision statement for Tim’s should be “To establish ourselves as the coffee shop of choice in Illinois, offering a place to connect while enjoying premium service.”
Short-term goals
1. Adopt technology in both the management and operations segments of the workplace
2. Conduct employee training to improve performance
3. Introduction of free Wi-Fi as an additional benefit for customers that they enjoy their coffee
Long-term goals
1. Expand operations by opening up new branches
2. Improving the environmental friendliness of the entity by going completely paperless
HR Analysis
Summary
From the observations and employee feedback, it is evident that the work environment at Tim’s Shoppe is generally satisfying but improvements are possible. One of such improvement is in employee motivation where potential problems may arise as evidenced by the complaint raised by one staff member about opportunities for career advancement. The management of HR records, which is done manually at present, is another key area of concern that may require an improvement.
Action Items
Digitization of HR functions- Digitization, which refers to the conversion of information from manual records to digital forms, is a critical function in any modern entity. Currently, Tim’s Shoppe employs manual record keeping with regard to HR functions such as clocking in of employees and maintenance of employee records. However, keeping manual records is very expensive and time consuming, which is why it is imperative for Tim to digitize the process. HR digitization enables faster data processing and quicker retrieval of records thus boosting operational effectiveness (Larkin, 2017). Adopting digitized record keeping will make the café more efficient and improve organizational performance. Besides this, digitization will reduce storage costs for HR data thus reducing organizational expenses.
Employee motivation- Work environments that offer opportunities for upward mobility are integral to the maintenance of employee motivation (Lipman, 2014). When employees feel that their chances for growth are stifled, they may lack the drive to work and this is evident from the complaint by one employee who is looking to leave. To address this, Tim should look to open another outlet and inform staff members that performance will be the determinant of who gets to head the new branch.
Job responsibility and customer service training- Feedback from customer surveys suggests that Tim’s Shoppe has an inconsistent service level with ratings varying from terrific to poor. Service quality is integral to the creation of customer loyalty, which is regarded as the key factor in the development of competitive advantage and the achievement of long-term success and profitability (Yap, Ramayah, & Shahidan, 2012). Hence, by investing in customer service training, Tim can ensure the provision of consistently excellent service that will ensure customers keep returning.
Marketing Analysis
Summary
Tim’s primary advertising strategy is via word of mouth, which is characterized by a reliance on satisfied customers to promote the business. However, Tim’s could benefit from internet, radio, and flyer advertising media. Additionally, Tim can offer monthly or daily specials, which would help to complement the external advertisement. The establishment of a monthly talent show advertised using fliers, whereby upcoming artists would be given a chance to perform might also help to draw an audience thus increasing the client base and marketing the entity even further.
Action items
Strengths: The business is quite popular in the community and is thus established. Their partnership with other local businesses like Jenna’s bakery from which it sources freshly baked products also boosts Tim’s popularity. Another strength is the provision of live entertainment, which helps to distinguish Tim’s from the competitors.
Weaknesses: Outdated technology is the biggest weakness as evidenced by the use of obsolete computers and the absence of Wi-Fi, electronic cash registers, and alterative payment platforms. Sticking to traditional methods reduces organizational effectiveness and drives away potential clients who do not prefer cash payments.
Opportunities: The availability of a coffee shop that has been put up for sale provides a chance for expansion, which could help to boost market share.
Threats: The low entry barriers in this industry mean that large franchises, food stores, and even internet cafés may prove to be potential competitors. Increased rivalry would eat into Tim’s market share thus reducing profitability.
Economic Environment
Summary
At present, Tim’s is doing quite well and is operating profitably albeit with very high operating expenses, which eat significantly into business profits. From the customer surveys, it is evident that Tim’s pricing is fair, which is vital to survival in the prevailing economic downturn.
Action Items
The reduction of the operating expenses through the implementation of technology is the first measure Tim should take. The reduction of expenses would enable Tim to offer lower prices for his products thus giving him an advantage over his rivals.
The company balance sheet shows that Tim’s is holding a large cash balance that he should use to settle the long-term loan and eliminate costly loan interest payments.
Problem Solving/Recommendations
Summary
It is evident that one of Tim’s primary problems is the poor uptake of technology and thus the first recommendation is to introduce Wi-Fi, coupled with alternative payment methods for example credit and debit cards, which will help to lure more customers. Secondly, Tim needs to digitize the HR records since this improve the accuracy of HR reporting for activities such as clock-ins. Digitization will also eliminate the need to keep large manual files, which eat up space and are costly to maintain. Thirdly, Tim should adopt other marketing strategies such as radio and flyers, which will boost his reach. Fourth, Tim should expand operations with another branch, which will facilitate greater market share and provide career growth opportunities for existing staff thus keeping them motivated. Finally, Tim should invest in customer service training for his staff to ensure the maintenance of consistently excellent service levels.
References
Associates Capstone in Management. (2012). Retrieved from Tim's Coffee Shoppe simulation: https://kapextmediassl-a.akamaihd.net/business/Media/AB299/Tims_Coffee_Shop/index.html
Cole, G. A., " Kelly, P. (2015). Management: Theory and Practice (8th ed.). Hampshire, UK: Cengage Learning.
Larkin, J. (2017). HR Digital Disruption: The biggest wave of transformation in decades. Strategic HR Review, 16(2), 55-59.
Lipman, V. (2014, January 24). Want Motivated Employees? Offer Ample Opportunities For Growth. Retrieved from Forbes: https://www.forbes.com/sites/victorlipman/2014/01/24/want-motivated-employees-offer-ample-opportunities-for-growth/#63f72c3852c6
Yap, B. W., Ramayah, T., " Shahidan, W. N. (2012). Satisfaction and Trust on Customer Loyalty: a PLS Approach. Business Strategy Series, 13(4), 154-167.
