Vincent's Cappuccino Express Case Study

Vincent’s Cappuccino Express Case Study.

a) What factors can be expected to have major impact on the future success of the Cappuccino Express? Classify these factors in the categories of quality, cost, and time.

Quality factors

Thinking about quality factors, I’d like to break them down into several categories. I don’t know if there are generally accepted definitions for them, so I will call them: appearance factors, product factors and customer experience factors. Let’s talk about them in details.

Appearance quality factors are the factors that can attract the customers to your business (or push away), make the overall experience with your business more pleasant, and perhaps, even differentiate your business from competition. I include in this category such factors as external and internal appearance of the business, its cleanness inside and outside (especially when it comes to food chains), location of the business, convenience of the access (parking lot vs. off-street parking for example), and very well thought-out service process of the business. These are the factors that make me go to Wawa instead of mostly dirty 7-elevens, drive to Street Rd. when I want a Big Mac instead of going to the near-by McDonalds and recognize the food chain White Castle before I even see the sign for it (all White Castles built in the shape of small castles).

When it comes to Cappuccino Express, it’s strictly drive-through business that automatically eliminates the hassle of dealing with in-store design, maintenance and customers activities. So, main issue in this situation, in my opinion, is location if Vincent Chow decide to expend his business by opening new coffee shop(s), but this and some other things related to business development I will discuss later answering the question “C”. Right now, I will just say that it is important to maintain the building and its surroundings neat and clean because dirty surroundings will influence the perception of food quality as unhealthy, stale and perhaps even dangerous (who knows what’s in that sandwich of coffee).

Product factors would include quality of the coffee beans, quality and reliability of brewing equipment (directly influence the product taste and quality), extensiveness of product line, uniqueness of product line, taste and flavor balance differentiation and constant product configurations (same product every time, when customers know what they will get tomorrow, next week or year from now). Personally, I think Cappuccino Express, despite its profitability, has done a poor job in this aspect of doing business (except of making cappuccino). Its product line is next to nothing, there was no consideration for the time of the day or season and its opportunity cost is tremendous. It’s like opening a snow plowing or tax preparation business.

Customer experience factors include both appearance and product factors plus customer service experience. What people want is fast and courteous service and employees that will make that cup of cappuccino for them as they would make it for themselves (without eating nuts off my muffin as I’ve seen it happened in 7-eleven).

Cost factors

Cost factors that can impact the future success of the Cappuccino Express are pretty much straight forward and don’t need much explanations, so I will just list them:

1. Vincent’s and his employees (if any) salaries.

2. Cost of coffee beans.

3. Cost of supplies necessary to run the business.

4. Equipment (cappuccino making and office equipment).

5. Cost of utilities.

6. Business license and insurance.

7. Lease of the property.

8. Cost of promotions or advertisement (if any).

Time factors

As I mentioned earlier, Cappuccino Express has done a poor job balancing the product line with the time frames of the day and seasons. You don’t need the MBA to understand that hot drinks will not be that “hot” in a 100 degree weather, or that you won’t do much business selling water ice on the ski slopes. It’s also obvious that when people are at work they can’t be in your shop at the same time. I believe that these two major issues should have been addressed (by offering products for other categories of customers, for example) before the coffee shop was opened to maximize the profits. In my opinion, Vincent has been pretty successful so far because of the very high product profit margin and lack of competition. It cost only about 6 cents to