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Kristen's Cookie Company: An Effective Production Process

Essay by   •  January 13, 2013  •  Research Paper  •  2,312 Words (10 Pages)  •  3,063 Views

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Running Head: KRISTEN'S COOKIE COMPANY 1

Kristen's Cookie Company: An Effective Production Process

ABSTRACT

This paper will explore the Kristen's Cookies business concept and evaluate if the company current status is profitability. We will review the ability to take orders, pricing the product, developing policies.

Kristen's Cookie Company is a business idea thought up by two roommates who are trying to tap into a market which caters to starving college students in the late night hours. The proposed idea is to offer freshly baked made-to-order cookies late at night for students within an hour. Although, the concept is good, the purpose of this analysis is to determine the components that can make or break this company's success. The ultimate goal of the company is to comprise a price that is affordable, yet profitable to the two owners. The key points that need to be evaluated would be the production process along with fees for the services, will they be able to profit based of the cost put into the business, ordering capacity based off the equipment currently owned and times of operations, the amount materials that should be in the inventory, and man-power. The students already own key equipment like the mixers, cookie pans that hold a dozen cookies, and the oven, so no investment is needed in this area. Expenses like electricity are covered by the landlord, so this is another item not necessary for the operational budget to start. The input to consider would be the man-power, ingredients which cost sixty per dozen, and ten cent per box. The value of time which is estimated to be four hours per night limited to 1 dozen at a time, guarantee 100% accuracy with the electronic system that take customer orders.

Analysis

The Kristen's Cookie Company (KCC) business concepts has some areas that reflect some strengths, weaknesses, opportunities, and threats that must be carefully considered, if the business is to move forward. KCC strengths are friendly customer service, customers get to directly deal with the owners, which gives one on one interaction; therefore, the management staff is knowledgeable. Advantages over competitors are freshly baked cookies, uniquely created by the customer in a warm, friendly environment. Thirdly, offering the opportunity for customers to customize their cookies providing them with the choices of adding things like chocolate chips, M&M's, chopped Heath bars, coconut, walnuts, and raisins is also a strength. Another advantage was the company offering a service guarantee, which is a marketing tool designed to provide peace of mind for customers unsure about trying the service is a great (Jacobs & Chase, 2011). Guarantying fresh cookies within an hour to each customer was great, if the business could keep it that promise. Lastly, the students own the capital equipment to start the business and the utilities are paid by the landlord so this is an expense that does not have to affect their operational budget.

Apparent weaknesses of the business to start are it is a start-up company owned by two college students, so they are faced with budget limitation. Budget limitations would further hinder the ability to purchase new equipment along with extra expenditures, which threatens their ability to grow as the demand grows. Secondly, the company only has one oven with no room for to add another one due to the constraints of the apartment space. Thirdly, since the owners are college students too they are faced with time constraints because they are limited to working only 4 hours at night. Lastly, the company has to consider seasonal slowdowns, like spring break, winter break and other holiday breaks.

The first threat of any business is competition; if another college student with a better location layout could output more cookies with a better team that could take from their profits. It would also be fierce competition if the campus cafeteria decided to offer late night baked goods. Although, customizing orders is strength, it also can be a threat for company because developing a price for the service has to be balanced out with the raw materials needed to make the cookies. Their target market is college students, so charging too much would cause fewer customers; however, they can't comprise the quality of the product either. This leads to their brand is being built off the made-to-order fresh cookies only, in any business it is risky when you are dependent on one source. Therefore, if they do not have an order then they do not produce anything, which is means the company is idle, because they do not have a standard cookie for sell. The company is operating out of a confined space, so sanitation would be issue if there were no sanitizing protocols in place. Lastly, if the company cannot keep up with the demand it creates an unsatisfied customer.

Growth by word-of-mouth, once students get the opportunity to partake in the service the quality of the product spreads across campus, which in turns increases demand. The on-campus is easy to get to so a student does not have to leave campus. Since the cookies are already being offered as customized, it could be taken a step further to cater to dieters, gluten-free, and diabetics. In addition, to the students looking at the cultural aspect of the student body. For instance, if there were a 55% make-up of Jewish students it would be wise to address their food by using ingredients that caters to their belief. Although, the cafeteria on campus could be a threat it also could be an opportunity to partner with them and sell the product in the cafeteria eventually targeting local grocery stores.

Now, we will take a closer look at the production process of the product, which is displayed in figure 1, our Production Process Flow diagram. The first step of this production process is to wash the mixing bowl out from previous batch then pouring in the ingredients and mixing them all together, which is done by one of the owners. It has been determined that this mixture is enough to prepare 3 dozen cookies, which will a total of 6 minutes along with scooping the dough on the tray takes 2 minutes totaling about 8 minutes (Jacobs & Chase, 2011). Once, this step has been accomplished then other roommate handles setting the oven which has been estimated to be 1 minute setup time, then 9 minutes to bake. Once done there is an additional 5 minutes needed for cooling

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