The paper "Nancy’ s Coffee Issues" is a great example of a Management Case Study. This report is an analysis of the case study about Nancy’ s Coffee Café (Arthur M. Blank Centre for Entrepreneurship, 2004). In the analysis, the case method is used to evaluate the situation that Nancy’ s Coffee is facing and what the organization’ s strategic options are. The case method usually entails a systematic evaluation of the situation facing an organization, a description of the problem and the development of several alternatives that are open for use. This is usually followed by a detailed evaluation of the alternatives to determine how well they solve the identified problem as well as the extent to which they are in line with the external and internal environment issues at play. First, a detailed analysis of the factors of the external and internal environment that affect the company is presented.
Secondly, the problem facing the company is described. This is followed by a description of the various alternatives that are open to the business. Next, recommendations on a specific alternative that the business should take are presented in the analysis.
Lastly, details about how the company should implement and monitor the recommendations are provided. Situation Analysis A situation analysis provides a means of understanding how the prevailing condition of an organization is shaped by factors of the external as well as the internal environment (Lamb, Hair & McDaniel, 2011). By considering the impact of the factors of the macro and the microenvironment, a situation analysis process helps to place a case within the context of these factors. Vrontis and Thrassou (2006) note that the situation analysis process looks at the existing factors of the internal and external environment and evaluates how these factors shape the business. Table 1 below is a summary of the “ strengths, weaknesses opportunities, and threats” for Nancy’ s Coffee. Table 1: SWOT analysis for Nancy’ s Coffee Strengths Weaknesses A well-established brand in the niche market High employee turnover A competitive advantage in strategic targeting positioning and segmentation Lack of enough capital for expansion Good managerial capabilities of the CEO Low levels of profitability for some stores Opportunities Threats The possible takeover by well-established companies Changes in the weather, causing fluctuations in demand Expansion by opening new stores Increased competition from well-established players One of the main strengths of Nancy’ s Coffee is a well-established brand name in the niche coffee market.
Since its establishment, the company has been branded as a leading seller of specialty coffee to the largely suburban clientele. As well, the company has successfully managed to develop a competitive advantage from several factors. In theory, a competitive advantage helps a business to perform better than its peers in the market because it helps the organization to reduce its costs or increase its profitability (Hill & Jones, 2009).
Notably, Nancy’ s Coffee has successfully used its business model to target a particular market, position itself within malls, and segment the market into two classes of clients – mall workers and visitors. It should be noted that the factors that give Nancy’ s Coffee a competitive advantage are hard to imitate. In general, it is when certain factors cannot be easily imitated by the competition that they are regarded as sources of competitive advantage for a firm (Blackwell & Eppler, 2014). In this case, many specialty coffee companies cannot easily adopt the mall-based approach because of the costs and marketing processes involved.
In contrast, Nancy’ s Coffee faces weaknesses in the form of a high rate of employee turnover, low profitability, and a lack of capital for expansion. The small size of the business means that the organization cannot access credit from financiers to expand fast. Additionally, low margins mean that Nancy’ s Coffee cannot achieve organic growth.
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