Chapter II

REVIEW OF LITERATURE

Cafe

Cafe businesses especially sell refreshment drinks, snacks, and light meals, with

espresso being their flagship product. These businesses need to employ modern

strategies, such as diversification of menu offerings, to expand income and continue to be

competitive. The industry’s increase prospects are dictated by issues such as availability

of disposable income in households and changes in customers’ preferences for foods and

drinks (Ingait, 2017).

According to Euromonitor (2018), similar to bars/pubs, cafes are additionally

predominantly independent brands. However, chained cafes continued to be sustained by

bubble tea brands in 2017. What was once thought to be a fad sooner or later grew to

become a trend, as bubble tea continues to be an attraction within the Philippines and

such premises have quickly advanced from easy bubble tea retailers into full cafes.

Because the strengths of cafes and bars include keeping appearance, ambiance,

and the variety of services and products being offered, these retailers rapidly adapt

to altering client tastes and practices. The food service industry recognizes millennials as

a rising purchaser group and cafes and bars have been addressing their needs for some

time.
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To similarly serve the wants of millennials, cafés and bars are addressing their

increasing number of on-the-go lifestyles. Around eight Starbucks

branches provided drive-through amenities at the end of the assessment period.

With growing discretionary spending, customers have come to be greater discerning and

adventurous when it comes to meals choices. This is a possibility that cafés and bars

will proceed to take benefit of over the forecast period. Similar to bars/pubs, cafés

are also predominantly unbiased brands; however chained cafés endured to be

sustained by way of bubble tea manufacturers in 2017. What was once thought to be a

fad finally became a trend, as bubble tea continues to enchantment inside the Philippines

and such premises have quickly advanced from simple bubble tea shops into full cafés.

According to Wikipedia.com (2010), cafe is restaurant that does not offer the

service. Customers order their food from a counter and serve themselves. A cafe menu

traditionally offers things such as coffee, espresso, pastries, and sandwiches. Cafes

originated in Europe and strongly associated with France. They are known for their

casual, unhurried atmosphere. Outdoor setting is another trademark of cafe.

Short for public house, pubs date back hundred years to Europe, especially Great

Britain. Pubs have a timeless appeal for their laid back atmosphere. Brewpubs offer beer

made in house, as well selection of other beers and ales. Pubs can offer full menus, as

well as appetizers. Many casual style restaurants have a nh separate pub side to their

establishment.
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Core Competencies

Prahalad and Hamel (2012) defined core competence as the collective learning in

the organization, especially the capacity to coordinate diverse manufacturing

skills and integrate streams of technologies. It is also a dedication to working across

organizational boundaries. Organizing round core competencies requires a radical

alternate in company organization. The first step requires figuring out core competencies,

which meet these three requirements: to provide potential access to a wide variety of

markets, to contribute to the customer benefits of the product, and to make it are difficult

for competitors to imitate. The next step is to redesign the architecture of the company

and provide an impetus for learning from alliances and a focus for internal development.

According to the study of Ccsenet Org. (2018), core competencies tend to be

complex and intangible so that it is necessary to explore the nature of resources and

competences which underpin them before exploring the concept further. The purpose of

such analysis is to permit managers to distinguish that resources and competencies act

due to the foundation of existing or potential core competencies. It is important to note

that not all the competitors in an industry will possess core competencies or distinctive

capabilities.

Core competencies Hanson et al. (2018) are capabilities that serve as a source of

competitive advantage for a firm over its rivals. Core competencies distinguish a

company competitively and reflect its personality. It emerges over time through a
 11

structure method of accumulating and learning a way to deploy completely different

resources and capabilities. Core competencies are ‘crown jewels of a company’, the

activities the company performs particularly well compared with competitors and through

which the firm adds distinctive price to the products or services it sells to customers.

Core competencies could be a deep proficiency that permits a corporation to

deliver distinctive price to customers (Bain and Company, 2018). It embodies associate

organization’s collective learning, notably of a way to coordinate various production

skills and integrate multiple technologies. Such a core ability creates property

competitive advantage for a corporation and helps it branch into a large form of

connected markets. Core competencies additionally contribute considerably to the

advantages a company’s merchandise provide customers. It is arduous for competitors to

repeat or procure. Understanding core competencies permits firms to speculate within the

strengths that differentiate them and set methods that unify their entire organization.

Hamel and Prahalad (2012) suggested three tests for identifying core

competencies. The first is it should provide access to broad range of market, second is

they should help differentiate core products and services, and lastly they should be hard

to imitate because they represent multiple skills, technologies, and organization elements.

Mostly, the development of core competencies ought to specialize in long run flat form

capable of adapting to new market circumstances; on distinctive sources of leverage

within the worth chain wherever the firm thinks it will dominate; on components that are

vital to customers within the long run; and on key skills and data, not on products.
 12

According to Pratt, Gutierrez, and Rouse (2017), core competency is an

organization's defining strength, imparting the foundation from which the business will

grow, trap upon new opportunities, and deliver value to customers. A company's core

competency is now not easily replicated by means of other organizations, whether

present rivals or new entries into its market.

 A corporation can have more than one core competency. Core competencies,

which are every now and then known as core capabilities or special competencies, assist

in creating a sustained competitive advantage for organizations. The thought of figuring

out and nurturing core potential to drive competitive advantages and

future growth applies to groups throughout industries.

The core competence must be a primary factor for strategy formulation as it is an

important source of profitability (Kay, 2018). Many have acknowledged the importance

of the core competence concept by suggesting core competence models to sustain

competitive advantage. One stream of research suggests core competencies to be at the

base of all competitive advantage. A core competence is concerning the information on

successes or failures in recommending information resources. It is conjointly outlined

because of the ability to control expeditiously among the business environment and to

respond to challenges linking its definition directly with performance. Companies are

likely to be different in terms of their abilities to select, build, deploy, and protect these

core competencies. The concept of core competence has been developed to support more

efficient identification and utilization of an organization's strength.

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According to Agha, Alrubaiee, and Jamhour (2018), core competence was

measured through three dimensions: shared vision, cooperation, and empowerment.

Competitive benefit was once also measured thru flexibility and responsiveness. The

proposed model was used to examine the context of Paint Industry in the UAE. The

survey was administered electronically to a total of seventy seven managers. Results

pointed out that it appears to be consistent and reliable scale. Finding indicates that while

core competence has a strong and wonderful effect on competitive advantage and

organizational performance, competitive advantage has also significant effect on

organizational performance. Results verify the various importance of core competence

dimensions on competitive advantage and organizational performance. It has additionally

been determined that flexibility has greater impact on organizational performance than

responsiveness. To remain competitive and obtain competitive advantages, managers can

try to increase organizational performance with the aid of managing each dimension of

core competence i.e., shared vision, cooperation, and empowerment.

Competencies are attributes like skills, knowledge, and technology associated

relationships that are common among the competitors in a business (Husher 2014).

Competencies are additional typically developed forever however may additionally be

non-heritable outwardly or by collaboration with suppliers’ distributors or customers.

Competences are distinguished from core competencies by the fact that they do

not produce superior performance and that they are not distinctive when compared to the

competencies possessed by other companies in the industry. On the other hand,

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competencies are essential for survival in a particular line of business. Competencies also

have potential to be developed into core competencies.

Importance of Core Competencies

Core competencies are the collective learning of the organization, particularly

how to coordinate the varied production ability and integrate multiple stream of

technologies. A company, if it is known for its core competencies, is capable of making

additional price. Core competencies should coalesce around people operating within the

organization. These people ought to acknowledge their effort in building and

strengthening these core competencies.

The most important advantage of having core competencies is having a long term

competitive advantage. These competencies help in bridging the gap between

performance and opportunity, thus helping a company in being a potential leader in the

industry. By linking traditional business to products and service of the future, the

company acquires greater opportunity for success. This also helps in activation of the

company by acting as a guideline for diversification.

Core competencies also are associate indicator that resources are being employed

within the right places within the correct quantity. A business ought to target outsourcing

all non-core activities which is able to contour the operations to encourage learning

atmosphere congruent to their competencies.

Core competencies also help in the development of core products. They should

have access to all the primary component of a complex product which can help in long
 15

term foothold in that particular industry. This complex product can then be used to create

a pipeline of products.

Core competencies are meaningful if they are related to an attribute valued by the

market. Customers need to perceive a consistent difference in important attributes

between the producer’s products or services and those of its competitors. Intel

particularly uses this. Their core competence lies in developing an array of

microprocessors in very short time. With the proven attribute of speed and quality against

other competitors, this core competency provides a distinctive competitive advantage.

Last but not least, core competencies make a company focus on extensive R&D

(Cleverism, 2014).

Classification of Core Competencies

Taylor (2012) indicated that there is a need for an organization to analyze and

build core competencies around the following areas: leadership effectiveness, workforce

capability, organizational structure, operational performance, customer satisfaction, and

innovation.

Competitive Advantage

Competitive advantage is often seen as the overall purpose of strategy (Husher,

2014). Some texts use the phrase superior performance to mean the same thing.

Essentially, a business can be said to possess competitive advantage if it is able to return

higher profits as a proportion of sales than5 its competitors.

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The higher profit means it will be ready to commit additional maintained profit to

reinvestment its strategy, so maintaining its lead over its competitors in associate

business. Once this superiority is maintained with success over time, a property

competitive advantage has been achieved. Competitive advantage is often lost once

management fails to reinvest the superior profits in such the way that the advantage is not

maintained.

A power is gained by an organization when it can provide the same value as its

competitors but at a lower price, or can charge higher prices by providing greater value

through differentiation. Competitive advantage results from matching core competencies

to the opportunities (BusinessDictionary, 2018).

A competitive advantage is an advantage over competitors gained by offering

consumers greater value, either by means of lower prices or by providing greater benefits

and service that justifies higher prices.

Porter (2018) suggested four "generic" business strategies that could be adopted

in order to gain competitive advantage. The strategies relate to the extent to which the

scope of a business' activities are narrow versus broad and the extent to which a business

seeks to differentiate its products (tutor2u.com, 2018).

Any person or entity (competitor) could be a rival against another. In business, it

is a corporation within the same business or an analogous business that offers an

analogous product or service. The presence of one or additional competitors will cut back

the costs of products and services because the firms try to gain a bigger market share.

Competition additionally needs firms to become additional economical so as to scale

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back prices. Fastfood restaurants McDonald's and Burger King are competitors, as are

Coca-Cola and Cola, and Wal-Mart and Target (BusinessDictionary, 2018).

Leadership Effectiveness

Leadership effectiveness is “the successful exercise of personal influence by one

or greater people that results in engaging in shared targets in a way that is for my

part gratifying to these involved” (Cooper and Nirenberg, 2012). This definition arouses

controversy when examined from perspectives based on behavior in different contexts.

Although this definition most comfortably applies to the interpersonal, small-group, and

community levels determined within normal work environments, in almost all political

arenas and in some huge organizations, leadership effectiveness will

be defined differently. For organizations in which participants or employees

are significantly affected by decisions and actions that take place at a distance with only

representative participation at best, leadership effectiveness is

the successful workout of personal impact tries by way of one or more

people that outcome in accomplishing organizational objectives congruent with a

mission while earning the prevalent approval of their constituencies (in the case of

political leadership) or stakeholders (in the case of business and civil society

organizations). Stakeholders are people who have an interest in an outcome.

In both cases, the definition's countless conceptual elements require similar

explanation because each has inspired a literature of its own to assist in making

clear its meaning and to help recognize how to use it appropriately.

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Effective leadership consists of strong character. Leaders show off honesty,

integrity, trustworthiness, and ethics. Leaders act in line with how they speak, and earn

the proper to be accountable for others’ success in the company.

Strong management involves clear verbal exchange skills. Leaders speak with and listen

to workforce members, reply to questions and concerns, and are empathetic.

Effective leaders require competency in core skills (Duggan, Tara 2018).

Expertise in core competencies related with leadership roles usually enable a person to

lead others, enhance personnel, create a productive environment and get results.

Successful businesses enhance a competency model that suggests the skills, behaviors,

and know-how required for their leaders and provide training that helps personnel further

their careers. Additionally, senior leaders commonly impart teaching and mentoring to

less-experienced personnel to ensure leadership succession.

Effective leaders communicate certainly in all situations, such as in person, in

writing, and over the telephone. They use lively listening skills, such as paraphrasing and

asking questions to exchange thoughts with peers, superiors, and subordinates. Successful

leaders show off a passion for developing their subordinates by providing coaching and

motivation. They cope with complaints, get to the bottom of conflicts, and negotiate

deals. Expertise in these areas allows them to lead their subordinates to attain strategic

goals.

Effective leaders create a productive work environment for their subordinates.

They foster creativity and innovation through encouraging employees to solve problems

using new approaches. They recognize when modifications are required and take

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calculated risks when necessary. Developing know-how in this core competency

enable a leader to successfully enhance a vision, talk a plan, and construct a long-range

strategy.

Workforce Capability

The term “workforce capability” refers to the organization’s ability to

accomplish its work processes through the knowledge, skills, abilities, and

competencies of its people (Steel, 2012). Capability may include the ability to build

and sustain relationships with customers; to innovate and transition to new

technologies; to develop new products and work processes; and to meet changing

business, market, and regulatory demands.

Workforce capability is defined as the skills, knowledge, and capabilities required

by all major job roles across the sector (Carecareers, 2018). It is a robust, consistent, and

transparent framework that can be used to underpin people management strategies and

enhance organizational culture. 

The framework will assist the organization to draw in, retain, and interact a

talented, capable, and actuated work force to fulfill the long run wants of individuals

through designing/redesigning jobs to fulfill future wants, orienting worker performance

with structure strategy, and characterizing work force development priorities.

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Organizational Structure

Organizational structure according to SHRM. Org (2015) is

the method through which work flows through an organization. It allows groups to work

collectively within their individual functions to control tasks. Traditional organizational

structures tend to be more formalized—with employees grouped by characteristic (such

as finance or operations), location, or product line. Less traditional structures are greater

loosely woven and flexible, with the ability to respond rapidly to changing business

environments.

Organizational structures have evolved in the 1800s. In the Industrial Revolution,

individuals had been organized to add components to the manufacture of the product

transferring down the assembly line. Frederick Taylor's scientific management

theory optimized the way tasks had been performed, so employees carried out

only one task in the most efficient way. In the 20th century, General Motors pioneered

a revolutionary organizational design in which each foremost division made

its personal cars.

Today, organizational structures are changing swiftly—from virtual organizations

to different flexible structures. The future will in all likelihood bring functional, product,

and matrix organizational structures. However, as corporations proceed to evolve

and enlarge their international presence, future organizations can also embody a fluid,

free-forming organization, member ownership, and an entrepreneurial method among all

members. Organizational structures have advanced from rigid, vertically integrated,

hierarchical, autocratic structures to particularly boundary-less, empowered, networked

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groups designed to respond quickly to customer needs with customized merchandise and

services.

Organizational structure developed from the historic instances of hunters and

collectors in tribal businesses through relatively royal and clerical strength structures to

industrial buildings and modern post-industrial structures. As pointed out by way

of Lawrence B. Mohr (2009) the early theorists of organizational structure, Taylor and

Fayol (2012) assumed without the slightest question that whatever structure used to be

needed, people ought to fashion accordingly. Organizational structure was

once regarded to be counted of choice.

In the 1930s, the rebellion commenced that came to be recognized as

human members of the family theory, there used to be nonetheless now not a denial of

the thinking of shape as an artifact, but as an alternative an advocacy of the advent of

a one-of-a-kind type of structure, one in which the needs, knowledge, and opinions

of employees would possibly be given greater recognition. However, a distinctive view

arose in the 1960’s suggesting that the organizational shape is "an externally brought

about phenomenon, an effect instead than an artifact". In the 21st century, organizational

theorists such as Lim, Griffiths, and Sambrook (2010) are as soon as again proposing that

organizational shape development is very plenty structured on the expression of the

techniques and behavior of the management and the employees as restrained by way

of the energy distribution between them, and influenced via their environment and the

outcome. Organizational shape is a device used to define a hierarchy of the organization.

It identifies and directs every job and its function. Organizational structure designed

 22

outlines how various work roles and duties are delegated, managed, and coordinated.

The factors of the organizational shape are work specialization, departmentalization,

chain of command, span of control, centralization/decentralization, and formalization. It

is a framework that helps employees achieve their desires and do their jobs and the

employee’s satisfaction.

Job satisfaction or worker pleasure has been described in many distinctive ways.

Employee satisfaction is the terminology used to describe whether or not personnel are

pleased and contented and fulfilling their desires and needs at work. Many measures

purport that employee satisfaction is an aspect in employee motivation, employee goal

achievement, and advantageous employee morale in the workplace. Each and every

difficulty is needed to be preserved with the following factors considered as

most important in employee delight; job security, relationship with immediate supervisor,

benefits, communication between employees and senior management, opportunities to

use competencies and abilities, management recognition of employee job performance,

job-specific training, feeling safe in the work environment, compensation/pay,

and overall corporate culture. Satisfaction researcher have a tendency to differentiate

between affective pleasure and cognitive job delight – affective pride is the sum complete

of pleasurable feelings and feelings associated with the job and its vicinity in the

individual’s life, whereas cognitive delight refers to rational satisfaction over particular

aspects of the job e.g., pay and everyday responsibilities. Job satisfaction

or employee satisfaction is majorly influenced by way of organizational structure. The

level of job satisfaction and effectiveness of each human depends upon an appropriate

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company structure; as organization structure is the prescribed sample of work-related

behavior that are deliberately hooked up for the accomplishment of organizational goals

(Revathy & Sankar, 2018).

Organizational structure is described as a framework for the relationship of

extraordinary jobs, structures and operational techniques, and persons and corporations

who attempt to gain the aim. Organizational structure displays the levels within the

reliable hierarchy and determines the control area of managers and supervisors (Shoghi &

Nazari, 2012). It ought to be referred that an organizational

structure is considered an important capital for the corporation (Irannezhad, 2008).

According to company studies, conducting any organizational method needs considering

its requirements. One of the most important dimensions of every business is

organizational structure which needs to be considered as the second major section of the

organization after the organizational aim. The formal relations between persons,

the area of organization jobs and posts, the degree of gaining access to facts framing,

to provide an explanation for duties, to provide an explanation for jobs, how to allocate

resources, rules and regulations, mechanisms of following and performing the

rules, developing cooperation between activities are some results of creating and

designing the organizational structure (Cyert & March, 2012).

Organizations have different structures which are applied primarily based on

the conditions of every organization. To Burns and Stalker (2010), the

most effective structure adjusts itself with the requirements of environment.

Organizational structure has some dimensions. Baldrige and Adstein (2012) thought

 24

about university’s organizational structure as a management tool and agreed that in

a university setting, organizational structure-which includes management, leadership, and

regulation sets is a managerial tool which both provides an integral ground for creating

educational initiatives and is a tool for matching university with educational initiatives

according to the study of Baldrige and Deal (2012). In order to prevent chaos in the

organization, the structure be designed in such a way that it can coordinate

staff’s capabilities so it cannot achieve the aim without a suitable organization. It

is necessary to consider the sort of organization and structure for

having efficient organizations. Since those working in organizations with appropriate

structure are more efficient and more satisfied, the importance of organization and

its design strategies grow to be more obvious (Rezaeeian, 2018).

Organizational structure helps a company assign a hierarchy that defines roles,

responsibility, and supervision (Shopify, 2018). It is the plan that outlines who reports to

whom and who is responsible for what. It is usually recorded and shared as an

organizational chart that includes job titles and the reporting structure.

The organizational structure of a small business is most likely functional – one

based on job duties. While small businesses are often casual with their hierarchy, some

type of organizational structure is required so that employees know who is supervising

their work and can help with problem-solving and other issues. That structure also helps

them understand growth potential in their jobs. That structure additionally helps them

perceive growth potential in their jobs. Additionally, associate increasing business will
 25

minimize growing pains through its associate structure or hierarchy throughout growth

periods.

An organizational structure is a system that outlines how certain activities are

directed in order to achieve the goals of an organization (Investopedia, 2018). These

activities will embody rules, roles, and responsibilities. The organizational structure also

determines how information flows from level to level within the company. For example,

in a centralized structure, decisions flow from the top down, while in a decentralized

structure, the decisions are made at various levels.

Organizational structure defines a specific hierarchy within an organization, and

businesses of all shapes and sizes use it heavily. A successful organizational structure

defines each employee's job and how it fits within the overall system. This structuring

provides a business with a visible illustration of however it is formed and the way it will

best move forward in achieving its goals. Organizational structures are normally

illustrated in some sort of chart or diagram.

Operational Performance 

Operational performance management is the alignment of all business

devices within an organization to ensure that they are working collectively to achieve

core business goals (Techtarget, 2009). In manufacturing, OPM software integrates and

analyzes information from a range of plant sources and translates raw data feeds into

actionable information. The data is packaged as exception reviews and key performance

indicator dashboards, so that the facts can be considered in context.

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OPM software program allows manufacturers to set up links between operations

KPIs and critical business metrics. As a result, they acquire insight into everything from

asset utilization to laptop uptime and plant-floor productivity

while additionally monitoring energy usage, uncovering the cause of exceptional

problems, and ensuring consistent production across multiple lines.

Operational performance management is referred to by Morris (2009) as business

performance management, corporate performance management, and enterprise

performance management, the combination of a set of procedures and

an enhancement methodology that together assist organizations optimize

their business performance. It is a framework for organizing, automating, and

analyzing business methodologies, metrics, procedures, and systems that force business

performance.

Operating performance are ratio tools which measure the function of certain core

operations for an organization or business (Investopedia, 2018). Particularly, these ratios

reveal information about how efficiently an organization is using resources to generate

sales and cash. A company with strong performance ratios is able to utilize a minimum

resource pool to generate high levels of sales, as well as a significant cash inflow.

Firm's performance is measured against standard or prescribed indicators of

effectiveness, efficiency, and environmental responsibility such as, cycle time,

productivity, waste reduction, and regulatory compliance (BusinessDictionary, 2018).

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Customer Satisfaction

Customer satisfaction is the general essence of the affect about the supplier

through the customers (Juneja, 2018). This impression which a patron makes involving

supplier is the sum total of all the technique he goes through, right from communicating

supplier before doing any advertising and marketing to post-

delivery alternatives and services and managing queries or complaints post-delivery.

During this process, the consumer comes throughout working environment of more than

a few departments and the type of strategies involved in the organization. This helps the

consumer to make strong opinion about the supplier which eventually effects in

satisfaction or dissatisfaction.

Customer’s perception on supplier helps the consumer choose among the supplier

on basis of cash value and how well the delivered merchandise goes well with all the

requirements. The supplier’s services in no way diminished after the transport as patron

seek excessive values publish advertising offerings which could assist them to use

and personalize the delivered product greater and efficiently. If he is comfortable with

the submitted advertising and marketing service, then there are exact chances for supplier

to preserve the clients to beautify repeated purchases and make excellent commercial

enterprise profits.

Customer satisfaction indicates the fulfillment that customers derive from doing

business with a firm (Myaccountingcourse, 2018). In other words, it is how completely

satisfied the customers are with their transaction and overall experience with the

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company. Customers derive pleasure from a product or a service primarily

based on whether or not their need is met effortlessly, in a convenient way that makes

them loyal to the firm. Hence, customer satisfaction is an essential step to gain customer

loyalty. Organizations calculate the customer satisfaction rating(CSAT) which is

the common rating of a customer’s responses, the net promoter score (NPS)

which indicates the probability that a purchaser refers a brand to some other person, and

the customer effort score (CES) which suggests how convenient it is for a customer to

do commercial enterprise with a firm. The customer satisfaction metrics are then used to

estimate customer behavior.

According to Chambers (2017), teams that measure consumer satisfaction can

easily calculate the expected danger of unhappy customers. By putting a variety to

the significance of customer satisfaction, one can have more meaningful conversations

with the boss and company about investing in the team. The entire group may be

committed improving consumer satisfaction day in and day out. When progress is

measured, benefits can be experienced. Satisfied customers will suggest to their

network. Customer advocacy is a very efficient form of marketing. Small

businesses estimate that 85% of their new business comes from word of mouth.

Innovation

To Hobcraft Paul (2018) innovation is frequently too intangible, full of unknowns

as the very nature of anything new and different. Innovation risk leaves many executives

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very uncomfortable. Organizations get uncomfortable with the words “radical”,

“intangible”, “unknowns” and different phrases like these when they form part of the

conversation. It often begins to result in that “risk twitch”, the place that careful

administration for short-term performance might emerge as threatened, or

the manager feels any decision is ‘going out on a limb’ and perhaps career threatening.

That growing uncomfortable feeling that innovation places their bonus at “risk” so they

like to ring-fence innovation as plenty as possible. Now some of that ring-fencing is

fine, risk should be contained to hold it manageable but most innovation now does

not represent organization risk, yet it receives caught up in that volatile concern that

innovation appears to induce.

Actually, innovation had been managed at the core, the risk management for it

would be very heightened and managed differently, however there are only few

companies with innovation as their core. So discussion on danger and innovation is

usually welcomed. The more it is spoken about, the better of what is coming toward.

Speaking about managing risk and innovation can become more comfortable, yet when

frequently heard on the discussions on this innovation

risk, where they hold overemphasizing “risk-appetite, risk-attitude, risk-adversity,

broader risk, even risk-contagion,” it may begin to make saomeone nervous.

Reality sincerely is, when most of the innovation is exploring the unknown

to alternate the regarded for something better, then groups seem to go into

a certain “lock-down” when it manages the innovation-risk equation.

Innovation stays uncomfortable for many senior executives.

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Recently, there is latest PwC report on “managing risks and enabling boom in the

age of innovation” as they continued to periodically provide threat an innovation focus.

Greater reviews are needed on innovation and risk. Two or three reviews have been

produced around this ‘risk and innovation’ theme over the years, usually beneficial to

refer to. This contemporary one had an opening theme about innovation being described

in more progressive terms such as section of the fourth industrial revolution,

the second machine age, the cognitive age, and this is adding more pressure to innovate

or search for “greater innovation within companies”. Of course, the more investments in

innovation made, the likely the risks will increase. So the record polled 1,500 executives,

focusing on managing innovation risk and how advantageous they are in managing this

risk-reward balance needed for innovation. It used to be

appropriate to strive to locate some new ways to seem to be at the changes going on in

innovation. Innovation and altering threat panorama is making people assume differently.

This is the “new innovation era”, the place technology is underpinning so there is a good

deal of innovation’s activity and outcomes.

Innovation according to Phillips (2018) must declare war on the “status quo”.

Innovation and efficiency are itching for a fight.  One of them will win.  Either efficiency

will defeat innovation, and leave innovation as a nice to have, valuable at the fringe, or

innovation will win, but do so graciously, recognizing the importance of efficiency and

demanding only a return to balance between efficiency and innovation. The final

argument is that irrespective of what wins in the organization – innovation or efficiency –

the market has already determined. The market has indicated that efficiency is vital,
 31

however innovation is significant. Innovation is vital because of the increasing pace of

change, the fast acceptance and adoption of latest merchandise and services, and the

falling barriers to market entry. The clock speed of the market is accelerating, and one

cannot compete by becoming more efficient.  This thinking is akin to having a car with

ever increasing gas mileage in a drag racing competition.  The car may be more efficient,

but that is not the competitive advantage any more. Innovation, like many of the other

corporate strategic waves, will simply enter the business model as a “must have” core

competency, and take its rightful place alongside quality and Six Sigma and a lot of other

management strategies. 

The difference is that innovation is a growth strategy and a differentiation strategy

rather than a consolidation or efficiency strategy, so its entry into the lexicon may require

a different style of thinking and attitudes from senior executives.  The model cannot

change until it needs to, and until there are people to shepherd its change.  One day, ten

years or so from now, people will look back and wonder what all the fuss was about. 

Innovation competencies and core capabilities were inevitable for competitive

differentiation.  Innovation as a core competency is inevitable. The question is: Will the

organization shift quickly enough to adopt innovation as a core competence? To not bend

innovation to the company can, however bend the company to innovation. People who do

can gain long run success. People who ignore or taunt innovation currently can fight a

way tougher fight later – making an attempt to adopt innovation whereas fighting for

market share with competitors that created the transition earlier.

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Sales Performance

Sales performance management (SPM) is the practice of monitoring and guiding

personnel to improve their ability to sell products or services. Software programs are

available to enhance the sales performance management process. These applications

typically streamline various activities in the corporate performance management process

and encourage behavior that drives sales. A key objective of the sales performance

management process is to educate and motivate salespeople to set goals and satisfy

customers. SPM software typically includes components  for goal setting and planning,

feedback, skill development, and performance review. SPM software can also be used to

track information about such things as sales quotas, territories, incentive compensation,

job evaluation, and forecasting. (Rawson, 2018).

A sales performance analysis is a way to measure sales progress over a period of

time. The analysis allows the sales team to identify weaknesses in the sales strategy and

make changes so that the results can be improved over the next period. The data can also

be used to set realistic sales performance goals for the business.

When a company neglects to accurately analyze sales performance, it can put the

business at a disadvantage compared with the competition. A vulnerability or defect in

the sales pipeline, strategy, or team will continue to go unnoticed if the owner does not do

a regular analysis of the situation. Over time, even a small issue could turn into a

catastrophe that is hard for business to recover from. It is wise to uncover issues as early

as possible so that proper steps can be taken to resolve the issue in the sales process

(Balle, 2018).
 33

Variety of Product

According to Amaldoss and He (2010), firms offer a variety of product to satisfy

various client desires. The competition among firms that provide such product usually is

non-local as a result of consumers purchasing the product simply on the world wide web.

Even if sufficiently large variety of product is accessible, the preferred product of some

consumers still is also out of stock. It is also conceivable that a consumer’s most well-

liked product is also on the market, however the buyer might not be informed regarding

them.

When a large range of companies compete, prices area unit strictly increase with

informative advertising for moderately valued products, whereas the opposite finding

holds when the merchandise products are extremely valued. Intuitively, if the base

valuation of products is moderate, some informed consumers will purchase only one

product at the best. Consequently, the price sensitivity of demand varies across

consumers and becomes a very important driving force for the results. Informative

advertising increases the relative importance of consumers with area unit less sensitive to

value and thereby encourages companies to charge the next value. However, when client

valuation is sufficiently high, all informed consumers will gain surplus by shopping for

any product in their thought set. Therefore, firms cut costs to attract marginal consumers.

What is the effect of diversity in consumers’ tastes on equilibrium price? In

market during which consumers’ taste area unit is a lot of numerous equilibrium prices
 34

area unit is lower if consumer valuations area unit is moderate. This result reverses if

consumer valuations area unit is high. If the number of products out there in an exceeding

market remains constant however consumers’ tastes become a lot of numerous, fewer

consumers can have the chance to buy the product that matches their preferences. This

scenario greats two opposing forces. On the one hand, firms should inspire shoppers to

purchase their less well-liked product and therefore vie on value. On the other hand, firms

face fewer direct competitors in the market, because market coverage declines, which

softens value competition. Overall, when client valuations area unit is moderate, prices

area unit is lower if there is bigger diversity in consumers’ tastes. The opposite result

prevails if consumer valuations area unit is high.

The number and range of brand or product offered by a supplier vary. How many

variants of a product a supplier markets will depend on the degree to which the market is

segmented and the number of product variants offered by competitors. In making product

variety decisions, the firm must consider how to position its brands so as to serve its

target market segments without excessive duplication of brands in any segment,

and the additional costs of producing small volumes of many varieties with consequent

loss of standardization economies (Afferson, 2005).

Customer

A customer is a person or enterprise that purchases the items or services

produced by way of a business. Attracting customers is the foremost intention of most

 35

public-facing businesses because consumers create the demand for goods and services.

Businesses often compete through advertisements or diminished prices to appeal to an

ever-larger consumer base. Businesses regularly observe the adage "the consumer

is always right" because pleased customers are predicted to continue

buying items and offerings from businesses that meet their needs. Many organizations

closely monitor the relationships they have with customers, often asking for comments

to learn whether new products have to be created or changes to be made to what is

presently offered. Virtually everybody in a modern-day financial system buys products or

services from companies, and so nearly every body at least now and again acts as a

customer. Several features mark a purchaser as opposed to a customer or vendor.

Customers are additionally in all likelihood to make purchases with

their own money, or the cash given to them by means of others who understand them

personally. Unlike a purchasing agent, who can also be shopping for goods wholesale for

use in a commercial or industrial setting, proper customers are almost usually

people who purchase products with cash or savings that belong to them, as an

alternative than to a company entity employing them.

Businesses regularly take eager interest in understanding the kind of person who

buys their products as an aid to focusing their advertising and marketing method and

tailoring their stock to enchantment to the most rewarding viable consumer base.

Customers are frequently grouped according to their demographics. Age, race, sex,

ethnicity, profits degree, and geographic location all go into a customer's demographic

profile. Knowing these matters about the humans who store with a commercial

 36

enterprise builds up a photo of the "ideal customer" or "customer persona".

This information helps corporations strategize the demographics where they are

already strong and deepen ties with loyal customers, as well as attain out

to absolutely new demographics to cultivate a public in the place where sales are

weak, therefore growing a new base of customers for similar expansion.

Customer service, the manner of ensuring consumer pleasure with a accurate or

service, is one of the most important elements of the seller/customer relationship. Loyalty

in the structure of desirable reviews, referrals, and future commercial enterprise can be

misplaced or received based on appropriate or bad purchaser service. Customer carrier

has moved in current years to real-time interactions that utilize automation, chats, social

media, textual content, and different potential of communication (Investopedia, 2018).

According to Market Business News (2018), a customer is a person or agency that

receives, consumes, or buys a product or service and can pick out between exclusive

items and suppliers. The main goal of all commercial enterprises is to entice clients or

clients, and make them buy what they have on sale. They also attempt to inspire them to

maintain coming back. At the core of advertising is having a properly understanding of

what the consumer desires and values. Clients are those who have a relationship with the

provider. Also, people who rent the services of an expert are clients, not customers. For

example, an attorney has clients. When a purchaser buys something, the seller right now

focuses on the next one. However, with a client, the goal is to cultivate the relationship.

In many cases, the client-supplier relationship will become comparable to a partnership.

This does not tend to occur with customers.

 37

Related Studies

In the study entitled “Core Competencies of Mang Inasal in Lucena City” by

Medieta, Ramirez, and Tutor (2016), it was found out that Mang Inasal in Pacific Mall

and in Lucena Centro both have the same number of employees, in Pacific Mall aged 18-

22 while in Lucena Centro commonly from 23-37 years old, and most of them are males.

Leadership effectiveness is the key that makes their management strong and competitive

among the others. They give importance to their employees by giving rewards and

incentives. They know how to satisfy their customers by providing them good food and

services. Organizational system and structures of Mang Inasal is really good because they

concentrate in their day-to-day operations. They are highly competent in customer

satisfaction and relationship. Problems they have encountered more about store design

like it never undergoes any renovation according to the employees and has poor

ventilation that affects the ambience of the store. They also encounter problems in the

employees regarding their attitude because some of them do not value and practices

teamwork.
Conceptual Framework

INPUT PROCESS OUTPUT

To determine the business

profile of Butter and Coffee
Cafe ; the demographic profile
of employees and customers;
the core competencies as
perceived by the employees in
terms of leadership Interview Proposed
effectiveness, workforce
enhancement on
capability, and organizational Questionnaire core competencies
structure; the core
Interpretation and and management
competencies as perceived by
growth of Butter
the customers in terms of
data analysis and Coffee Cafe
operational performance,
customer satisfaction, and
innovation; and the growth of
Butter and Coffee Cafe in
terms of sales performance,
variety of product offerings,
and number of customer
 Figure 1. Research Paradigm on Core Competencies and Management Growth of
Butter and Coffee Cafe

The paradigm above illustrates how the researchers conceptualized the study. This

framework shows the relationship between the input, process, and output. The input

consists of the business profile of Butter and Coffee Café in terms of historical

background, organizational structure, and technical structure; the respondents’ profile in

terms of employees’ demographic nd customers’ demographic; the core competencies of

Butter and Coffee Cafe in Lucena City perceived by the employees in terms of leadership

effectiveness, workforce capability, and organizational structure; the core competencies

of Butter and Coffee Cafe in Lucena City perceived by the customers in terms of

operational performance, customer satisfaction and innovation; and the management

growth of Butter and Coffee Cafe in terms of sales performance, variety of product

offerings, and number of customer. The process that the researchers did includes

interview, questionnaires, and statistical treatment. The output is the proposed

enhancement on core competencies and management growth of Butter and Coffee café.
40