case1-cappuccinoexpress1(2)

8/3/2019 case1-cappuccinoexpress1(2)

1/5

1. Develop an organization chart for The Cappuccino Express

2. What factors can be expected to have a major impact on the success of

The Cappuccino Express?

3. What major tasks must Vincent undertake in managing The Cappuccino

Express?

4. What are the major costs of operating The Cappuccino Express?

5. Vincent would like to monitor the performance of each site manager.

What measure(s) of performance should he use?

6. If you suggested more than one measure, which of these should Vincent

select if he he could use only one?

7. Suppose that last year, the original site had yielded total revenues of

$146,000, total cost of $120,000, and hence a profit of $26,000. Vincent

had judged this profit performance to be satisfactory. For the coming

year, Vincent expects that due to factors such as increased name

recognition and demographic changes, the total revenues will increase by

20 percent to $175,200. What amount of profit should he expect from thesite? Discuss the issues involved in developing an estimate of profit.


2/5

QUESTION 1

Develop an organization chart for The Cappuccino Express

The organization chart for The Cappuccino Express

Chief Executive Officer (CEO) / OwnerMr. Vincent Chow

QUESTION 2

1st Outlet 2nd Outlet

Site Site

Employees EmployeesAssistant


3/5

What factors can be expected to have a major impact on the success of

The Cappuccino Express?

The factors that can be a major impact toward the success of The Cappuccino

Express would be the cost. The future success of Cappuccino Express is highly

dependable on the cost factors. For example is the cost of materials, the wages

of their employees and salaries, the cost of equipment and others. This also

includes their overhead cost like rent cost, utilities cost and advertising cost.

Second factors that have major impact towards the success of The Cappuccino

Express would be the quality. The quality that customers perceived from their

products would impact towards their future success.

The quality of the coffee beans would have directly influence towards the taste

of the coffee and the products which would portray their uniqueness of the

product. The quality of what the customer perceived of their products would

impact on their opportunity to expand their business in the future.

This is because of what customer experience by their selfs would be spread to

others. So the services quality and also the quality of the products would becritical factors for the success of The Cappuccino Express in the future.


4/5

QUESTION 3

What major tasks must Vincent undertake in managing The Cappuccino

Express?

The major tasks that Vincent would need to undertake in managing The

Cappuccino Express would be:

a) Develop strategies and perform research for competitors and potential

competitors.

b) Determine the pricing strategies for the products

c) Decides the promotions and advertising to be usedd) Implement cost and inventory controlling

e) Maintain product and service quality

f) Monitors the employees efficiency

g) Evaluate opportunities of product offerings

h) Hire and train employees.

QUESTION 4

What are the major costs of operating The Cappuccino Express?

Major costs of operating for The Cappuccino Express are:

a) Inventory cost which includes cost of raw materials of the products and

other supplies.

b) Wages and salaries of workers

c) Cost of equipment includes properties and machinery.

d) Cost of advertising and promotion of the products

e) Cost of utilities

f) Rent of buildings


5/5

QUESTION 5

Vincent would like to monitor the performance of each site manager.

What measure(s) of performance should he use?

The measure that Vincent can use is by looking at the site manager performance

by looking at their profitability, revenue and also cost incurred in production. The

manager may be able to get high revenue however this also need to be look in

term of their operation cost. The managers ability to control the cost and

manage the inventory well can also have direct impact towards their service of

quality.

Another measure that Vincent can use is the satisfaction of their customer which

Vincent can use post survey on the customer to measure their satisfaction from

the service. The customer satisfaction can directly impact towards the

profitability as well as a happy customer would repeat the purchase of the

products and could be loyal to the service and become loyal customer of the

products.

QUESTION 6

If you suggested more than one measure, which of these should Vincent

select if he could use only one?

The most relevant measure that Vincent can use is the site manager profitability.

This includes the revenue of the site can earn as well as how the manager

control for the cost and manage the inventory well.

Vincent may measure by looking at the cost incurred including the wages, rent,

utilities cost and raw material cost to identify how well the manager are able to

manage for the inventories. Therefore, the profitability measure of the site

manager is suggested as it comprises of both revenue and control of cost.

case1-cappuccinoexpress1(2)

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