Coffee Roasters Case Study
Coffee Roasters Case Study
Operations Management
Ohori uses quality over quantity for a more expensive price. Folgers takes their stance in the market place as the cheaper coffee with fewer options and not as high quality. If Folgers wants to compete directly with Ohori, which I recommend they do to increase sales, they have three possible options. The first being, they increase the quality of their coffee and create more options of coffee types. The downside to this is that they will have to price their coffee at a higher rate because of production costs. Alongside the promotion of Folger’s enhanced roasting process for its Classic products, option one will can increase their sales due to customers positively reacting to the different coffee options and the higher quality. However, this option can cause a decrease in sales because customers do not want to pay the new high price.
Option two consists of enhancing their quality of coffee alone. This way their costs do not raise substantially but it gives their company a notch up to compete with Ohori. Option two will also increase sales with less opportunity costs. Option three consists of creating more options of coffee types and putting more focus on Folger’s new roasting process for the Classic products. This option has the least amount of risk but at maximum, will create the lowest amount of results in comparison to options one and two. Option one has the highest risk but the best results if everyone goes to plan and sales reach their highest expectancy. Option two has the possibility to create great results and high sales for the company but not as extreme as option one. Option three has the least risk out of all the options due to such low costs, but at maximum has the least significant results.
There are various important factors that Folger’s needs to supplement into in decision process. Since coffee is no longer considered a commodity product, Folgers needs to keep in constant competition with small
Operations Management
Ohori uses quality over quantity for a more expensive price. Folgers takes their stance in the market place as the cheaper coffee with fewer options and not as high quality. If Folgers wants to compete directly with Ohori, which I recommend they do to increase sales, they have three possible options. The first being, they increase the quality of their coffee and create more options of coffee types. The downside to this is that they will have to price their coffee at a higher rate because of production costs. Alongside the promotion of Folger’s enhanced roasting process for its Classic products, option one will can increase their sales due to customers positively reacting to the different coffee options and the higher quality. However, this option can cause a decrease in sales because customers do not want to pay the new high price.
Option two consists of enhancing their quality of coffee alone. This way their costs do not raise substantially but it gives their company a notch up to compete with Ohori. Option two will also increase sales with less opportunity costs. Option three consists of creating more options of coffee types and putting more focus on Folger’s new roasting process for the Classic products. This option has the least amount of risk but at maximum, will create the lowest amount of results in comparison to options one and two. Option one has the highest risk but the best results if everyone goes to plan and sales reach their highest expectancy. Option two has the possibility to create great results and high sales for the company but not as extreme as option one. Option three has the least risk out of all the options due to such low costs, but at maximum has the least significant results.
There are various important factors that Folger’s needs to supplement into in decision process. Since coffee is no longer considered a commodity product, Folgers needs to keep in constant competition with small