The Broadway Cafe 1

Running head: THE BROADWAY CAFE

The Broadway Cafe

Ursula Wallace

Strayer University

Information Systems for Decision Making

CIS 500

Dr. Jim Dollens

 The Broadway Café

Introduction

The Broadway Café is a family inherited coffee shop located in Atlanta, Georgia. The

business specializes in coffees, teas, a full service bakery, and homemade sandwiches, soups, and

salads. It was once a hotspot for many years but for the past five years the business has been

declining. Although Mr. Wallace had conducted a good business in his time, it appears as

though new and improves methods needed to be in place to keep the business thriving. Mr.

Wallace had acquired a wealth of knowledge about the coffee business and unfortunately before

he passed way he was unable to share the information with us (his heir/successor).

His system for record keeping consisted of a note pad that tracked inventory along with

payroll and coupons. His advertising plan was by word-of-mouth only and since he had an

exceptional memory, he never recorded any family recipes or made a client list. In order to bring

the Café into the 21 Century, quite a few changes need to be made. The business needs to gain a

competitive advantage though technology, deploy a wireless network for customers, use CRM to

implement marketing campaigns and sales strategies, and develop project management activities

for implementing solutions.

Competitive Advantage

A competitive advantage is product or service that an organization’s customers

place a greater value on than similar offerings from a competitor…These advantages are

usually temporary because they are often duplicated by a competitor which in turn

creates a perpetual cycle of improvement strategies (Baltzan & Phillips, 2007).

Business that are developing strategies for improvements, must review their options

before making quick snap decisions (Baltzan & Phillips, 2007). Techniques to consider would
be environmental scanning, first-movers advantage, and Michael Porter’s Five Forces Model

(Baltzan & Phillips, 2007).

Currently the Broadway Café is the only coffee shop in the area. Recently employees

have heard rumors that a Starbucks plans to move in the area. In order to improve business and

create a competitive advantage we first must research the competition through environment

scanning (Baltzan & Phillips, 2007). Environmental scanning is the acquisition and analysis of

events and trends in the environment external to an organization (Baltzan & Phillips). After

reviewing the website of 2 competitors, Starbucks.com (2007) and Panera.com (2007), it appears

as though these businesses are technologically advanced. Therefore the first step this Café needs

to make is to install computer to provide accurate record keeping and store information. We

need to develop a plan for employees that creates an environment of respect and dignity which

also leads by example and gives back to the community (Starbucks, 2007). We need to develop

a menu, create weekly and holiday specials, and offer samples of baked goods or small coffees

with a purchase to stimulate customer loyalty (Panera Bread, 2007). Offering the customer a

Reason to come back with free samples is good business a practice (Panera Bread, 2007).

Scanning the environment to determine that market provides us with a wealth of

information. With this information we are able to develop Michael Porter’s Five Forces Model

to establish a competitive plan.

The Broadway Cafés buyer power would be considered high since its business has been

declining over the past 5 years. If another coffee shop does move into the area it will create an

even more competition while driving buyer’s power higher for customers. To reduce buyer

power the Café must make its self more attractive for customers to buy from it instead of its

competition (Baltzan & Phillips, 2007). One of the best ways to increase customer loyalty is to
offer customers rewards (Baltzan & Phillips, 2007). The Café is considering mincing what its

competitors are doing by offering customer free samples and coupons for retuning customers.

At this point the Cafés supplier’s power is low because there are a variety of vendors that

it uses to purchase supplies from to run the business. The Café will always constantly search for

the finest quality at its lowest cost. One source that will be constantly used to obtain supplies

from vendors would be the internet based service for the business-to-business marketplace

(Baltzan & Phillips, 2007). The B2B is where buyers and sellers come together for private

exchanges and well as reverse auctions (Baltzan & Phillips, 2007).

The threat of substitute products or services is high in the coffee shop business

because of the various competitors. The Café can reduce its threat of substitution by

implementing switching costs. Switching costs are cost that can make customers reluctant to

switch to another product or service (Baltzan & Phillips, 2007). The Café can implement

switching costs by providing all customers with a savings card that calculates point towards a

free purchase that can be redeemed at anytime.

The threat of new entrants is high since pretty much everyone sells coffee nowadays

(Baltzan & Phillips, 2007). Every restaurant and fast food chain that has a breakfast menu serves

coffee. The market is flooded to merchants ready to meet the demands of customers. The

pressure falls more on existing businesses to staying a float and meeting the demands of the

customer since new businesses are entering with fresh eyes and first to market ideas to boost

sales.

Rivalry among existing competitors is considered to be high when competition is fierce

in a marketplace and low when competition is complacent (Baltzan & Phillips, 2007). In the

coffee industry rivalry among existing competition is high. As stated earlier everyone sells
coffee. Therefore everyone is trying to impact business by developing a first-mover advantage

(which occurs when a business can significantly impact its market share by being first to market

with a competitive advantage) and customer loyalty or reward programs are implemented to

entice new customers and keep existing ones (Baltzan & Phillips, 2007).

Networks, Telecommunications, and Wireless Computing

When considering innovate ideas for marketing strategies, the internet

automatically comes to mind. Telecommunication systems enable transmission of data

over public or private networks…Businesses can benefit from today’s modern network

infrastructures that provide reliable global reach to employees and customers…

Businesses around the world are moving to network infrastructure solutions that allow

greater choice in wireless, voice-over internet protocol (VoIP), and radio-frequency

identification (RFID) (Baltzan & Phillips, 2007).

The Café would like to broaden its horizons and offer mobile coupons (m-

coupons) to its mobile customers. M-coupons are instant redemption coupons that

customers receive while either walking by the Café (or within a 25 foot radius of the

café). The coupon could generate for a dollar off a latte or a 15 percent discount on an

order and the customer would receive the offer to his/her cell phone. To redeem the

coupon all the customer has to do is present the cell phone so that the offer can be

downloaded (Cohesion Case, 2007).

M-coupons are better than traditional coupons because they are readily available for

customers to use.

The offers are stored on their cell phones and, since the customer always has the

phone, the coupon is always handy or available to redeem. This method of marketing
 increases the customer base and redemptions rate of the m-coupons over the traditional

coupons (Cohesion Case, 2007).

Since m-coupons are internet based, the same risks that would apply to e-businesses

marketing would apply to mobile marketing. Being the mobile marketing is relatively new to

businesses, protocols, privacy policies, disclosures, and SPAM emails blocks and other security

features would have to be revamped to fit mobile devices (Australian Competition and Consumer

Commission [ACCC], 2007).

The wireless technologies that underlie m-commerce may raise privacy issues.

These include the increased ability to collect individualised and personal information,

the ability to track visits to wireless websites, and the ability to collect locational

information about consumers (ACCC, 2007).

The café could benefit from collecting and tracking response rates of m-coupons seeing

that it generates analysis information about the customer and the business. Analysis information

that could be gathered would consist of cluster analysis, association detection, and statistical

analysis (Baltzan & Phillips, 2007).

The first analysis that is considered helpful is cluster analysis.

A cluster analysis is a technique used to divide an information set into

mutually exclusive groups such that the members of each group are as close together as

possible to one another and the different groups are as far apart as possible. Cluster

analysis is used to segment customer information…to help identify customers with

similar behavioral traits, such as clusters of best customer or one-time customers

(Baltzan & Phillips, 2007).

 Custer analysis would be beneficial for m-coupons since it would market to regular

customers items that they normally buy and one-time customer specials of the day.

Second is association detection. Association detection reveals the degree to which

variables are related and the nature and frequency of these relationships in the information

(Baltzan & Phillips, 2007). Association detection for m-coupons would record for instance the

frequencies of how often or how quickly customers respond to the advertisement and if other

items are normally purchase with them. Association detection would track the habits and the

patterns of the customer.

Third is statistical analysis. Statistical analysis performs such functions as information

correlations, distributions, calculations, and variance analysis, just to name a few (Baltzan &

Phillips, 2007). Analyzed m-coupons in this area would generate information on how well the

products are doing. Information gathered could consist of what the customer did/didn’t like or

when to promote different/seasonal specials. Tracking m-coupons can prove to be beneficial no

matter who receives them or act on them because m-coupons forwarded to other people can only

increase our customer base.

Customer Relation Management

Customer relationship management (CRM) involves managing all aspects of a

customer’s relationship with an organization to increase customer loyalty and retention

and an organization’s profitability...CRM is a business philosophy based on the premise

that those organizations that understand the needs of individual customers are best

positioned to achieve sustainable competitive advantage in the future (Baltzan &

Phillips, 2007).
 The behaviors of customers has changed the way businesses compete. Customers

will leave if a company does not continually meet their expectations. They are more

demanding because they have information readily available, they know exactly what they

want, and they know when and how they want it (Baltzan & Phillips, 2007).

Customer behaviors can also help businesses.

An organization can find its most valuable customers by using a formula that

industry insiders call RFM-Recency, Frequency, and Monetary value…Once a company

has gathered this initial CRM information, it can compile it to identify patterns and

create marketing campaigns, sales promotions, and service to increase business…

Knowing the customer, especially knowing the profitability of individual customers, is

highly lucrative…There are 3 phases in the evolution of CRM: (1) reporting, (2)

analyzing, and (3) predicting. CRM reporting technologies help organizations identify

their customers across other applications. CRM analysis technologies help

organizations segment their customers into categories such as best and worst customers.

CRM predicting technologies help organizations make predictions regarding customer

behavior such as which customers are at risk of leaving (Baltzan & Phillips, 2007).

The Broadway Café can also implement these good business practices by developing on

its website a section for customers to submit feedback and a discussion board where customers

can post questions and respond to comments made by other customers. The feedback section

will be used to compile information of customer reactions and the discussion board will be used

for immediate responses. Managers will post responses on a quarterly basis throughout the day

on the message board and responses will link directly to the customer who is posing the question

to avoid confusion.
 Employees are developing the idea that customers are the most important part of

business. Through various incentive programs, employees are seeing that by practicing good

business ethics they are creating new customers, retaining old customers, and earning bonuses

for a job well done (Baltzan & Phillips, 2007).

The Broadway Café plans to offer reward programs to its employees also to boost morale

and reiterate to its employees that customer satisfaction has to be the main goal. Some of the

programs that are being considered are bonuses for employees who are the most helpful to

customers, who keep the place neat and clean, and who have perfect attendance. These are just a

few of the ideas that are being consider but as time goes on and business increases there will be

opportunities for promotions, to collect stock options, and host of other incentives to let the

employees know that when they doing an excellent job. Employees who conduct themselves in a

manner that is pleasing to the customer need to be sufficiently rewarded.

 References

Australian Competition and Consumer Commission (2007). M-commerce. Retrieved December

9, 2007, from

http://www.accc.gov.au/content/index.phtml/itemId/266899/fromItemId/8135#h2_21

Baltzan, P., & Phillips, A. (2007). CIS 500 Information Systems for Decision Making (4th

Custom ed.). New York: McGraw-Hill.

Cohesion Case (2007). Networks, Telecomunications, and Wireless Computing. Retrieved

December 9, 2007, from http://www.cohesioncase.com/networks

Panera Bread (2007). . Retrieved December 9, 2007, from http://www.panerabread.com/

Starbucks (2007). . Retrieved December 9,2007, from http://www.starbucks.com