BU111 Lecture Notes - Lecture 3: Starbucks, Force-Field Analysis, Market Segmentation
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The immediate issue of the case is the lack of growth of joe"s coffee shop in terms of profit. Java"s profit has remained steady in the last three years of its operation. Joe"s coffee shop is lacking in terms of product offering and doesn"t introduce new products such as espressos and cappuccinos despite the high demand from customers. Firstly, the problem of lack of growth in terms of profit may be constrained due to the increase in wages and benefits of the employees. Secondly, the net income of the shop remains low due to the revenue being used to cover the cost of other expenses of the business. I"ve noticed that the shop"s total expenses have increased significantly from the year 2013 to 2014 by several thousand dollars, and this was a result of the increase in other expenses. Cost of other expenses should be cut off for joe to be able to generate higher profit.
