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Current Challenges

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11 views2 pages

Current Challenges

Uploaded by

leran97013
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Current Challenges

 The company is facing the following challenges:


1. Competition among other coffee brands.
The current coffee market is very crowded with the presence of many large brands and
independent coffee shops. To stand out in the crowd, The Coffee House needs to develop
unique products and enhance the customer experience. Organizing events, offering loyalty
programs, and creating a cozy café atmosphere can help attract and retain customers
2. Rising transportation costs
Rising transportation costs may force The Coffee House to adjust product prices. If
transportation costs are high, they might need to increase the prices of beverages and food
to offset these expenses, which could impact customer satisfaction and their
competitiveness in the market.
Rising transportation costs may lead suppliers to increase the prices of raw materials. This
can disrupt the supply chain, making it difficult and unstable to source the necessary
ingredients.
Rising transportation costs not only affect the prices of raw materials but also increase the
overall operating costs.
Rising transportation costs can reduce the supply capacity of suppliers. If transportation
costs are too high, some suppliers may be forced to scale back production or temporarily
halt supplies, leading to difficulties for The Coffee House in securing a stable source of
necessary ingredients.
3. Stockouts in high-demand regions
Suppliers may decide to prioritize deliveries to larger customers or those with higher
profit potential, which could make it difficult for The Coffee House to secure the
necessary inventory. As a result, the company may need to seek out new suppliers, which
can be time-consuming and resource-intensive
Disruptions in the supply chain, due to natural disasters, crises, or high transportation
costs, can delay the delivery of goods to stores, especially in high-demand areas
Seasonal changes, holidays, or local events can lead to sudden spikes in demand. If The
Coffee House does not prepare adequately for these fluctuations, they may find
themselves unable to meet customer needs

Frequent stockouts can disrupt store operations. Employees may need to spend time
handling customer complaints or searching for alternative products, which reduces their
ability to provide high-quality service.
When stockouts occur, the store may have to place urgent orders with suppliers at a higher
cost. Additionally, managing customer complaints and searching for substitute products
also consumes time and resources.
4. Inefficient delivery routes causing delays and unhappy customers
If the delivery plan is not optimized, drivers may spend excessive time traveling between
delivery points. This not only increases delivery times but also reduces the ability to meet
customer demand.
When delivery times are extended, customers may feel frustrated and disappointed. This
not only affects their in-store experience but can also lead to them not returning for future
purchases.
Suboptimal Routes: Often, delivery planning does not adequately account for traffic
congestion or other factors such as weather. This can result in drivers taking longer and
unnecessary routes.
Last-Minute Order Changes: When customers request last-minute changes to their
orders, it can disrupt the entire delivery schedule, causing delays for other deliveries.
5. Increased lead times due to supplier distances
Supplier Capacity and Reliability: Suppliers may also face difficulties in managing
production and shipping timelines, especially if they are located in remote areas or have
limited resources. If a supplier experiences production delays, this can directly impact The
Coffee House's ability to source goods.
Inconsistent Transit Times: Different suppliers may have varying shipping methods and
schedules, leading to unpredictable transit times. This variability can complicate inventory
planning and make it difficult for The Coffee House to maintain a steady supply of
essential ingredients.
Challenges in Marketing Campaigns: Inconsistent delivery schedules can hinder The
Coffee House's ability to plan and execute promotional campaigns effectively. If the
necessary ingredients for promotional items are delayed, it can lead to last-minute changes
in the marketing plan, reducing the effectiveness of the promotional programs.
Exp: If The Coffee House plans a seasonal promotion, such as a pumpkin spice latte for
fall, and the delivery of pumpkin ingredients is delayed, they may have to cancel or adjust
the promotion. This could lead to lost revenue and disappoint customers who are looking
forward to their seasonal favorite.
If The Coffee House needs expedited shipping to obtain necessary ingredients on time,
this could raise costs by 20-30%. If the standard shipping cost for ingredients is $1,000,
then expedited shipping could add an additional $200-$300, reducing profit margins for
seasonal products.

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