The Broadway Café was first established in 1952 by my grandfather. The Broadway Café immediately became the hotspot, but over time lost business due to its lack of ability to compete with competitors in the 21st century. I have recently inherited the Broadway Café and have transformed it into the business it should be in the 21st century. I started the café off with a competitive advantage where it can level with competitors around the area. The café has affordable and reasonable prices for the customers which puts the café at a cost leadership advantage and as well as a differentiation advantage with its unforgettable recipes that my grandfather has kept all these years.
The Broadway Café has managed to stay at a competitive advantage by implementing IT into the café.
There’s available entertainment on certain nights, Wi-Fi and a Kiosk accessible to the customers, a customer loyalty program in which the café offers prepaid gift cards, and a Broadway Café website which suits the customers and prospective customers’ needs and expectations in every way possible.
Broadway Café has made changes in the way it operates and stores its most vital information to where it more convenient, secured, assured, and equipped. The café has also granted its customers and future customers with the chance to experience the cafe outside of the café at any time convenient for them. Broadway Café has emerged out of the Stone Age into the Neo Age with the proper measures, Information Age innovations, and technology.
I just inherited a local coffee shop, The Broadway Café from my grandfather that is located on Broad Street downtown in Augusta, Georgia. For a long time it was the spot to be, but now it is losing attraction due to its failure to keep up with the 21st century. This being said, The Broadway Café needs to be renovated from the 1950s era to the now, the 21st century. And the first action that needs to be in place is to implement a competitive advantage for the café.
The coffee/tea industry is extremely competitive and the Broadway Café should be up to date with customer taste & preferences. If the Broadway Café can begin and maintain profits that top the average for the coffee industry, then the café will have a competitive advantage over our rivals such as Starbucks, Dunkin’ Donuts and other coffee/tea shops around the area such as the New Moon Café and Aroma Coffee and Café. The goal and strategy here is to maintain a competitive advantage atmosphere. There are two types of competitive advantages which are cost advantage and differentiation advantage (QuickMBA.com, 1998). A competitive advantage is a cost advantage when the company or business is able to carry out the same benefits as competitors, but at a lower cost while a differentiation advantage is when they are able to carry out benefits that surpass those of competing products (Baltzan, & Phillips, 2009). Here, the Broadway Café will strive to obtain both advantages.
Now, there are five competitive forces which shape every business and industry. These competitive forces are the threat of power of suppliers, new entrants, competitive rivalry, power of buyers, and availability of substitute which all will help the café sustain a competitive advantage (Baltzan, & Phillips, 2009). The power of the supplier is low for the café due to the fact that there are many suppliers that the café can buy from. So, if the café is not satisfied with one supplier we can always switch to another supplier with no problems or issues as long they meet the café’s standards and expectations. Having a low supplier power to begin with brings a high threat of new entrants to the café in that it is easy for the new entrants to come across what they will need to launch a business in this industry. However, it is tough to come into the restaurant industry and at the same time hard to establish a distinct brand name (McDonald, 2010).
Large, well established coffee/tea businesses such as Starbucks have well-built brand identities. This being it does make it a lot harder for competitors like the Broadway café to enter and succeed within the industry. Also, “new entrants find that they are faced with price competition from existing chain restaurants (McDonald, 2010)”. But, the Broadway Café will keep its prices “artificially low as a strategy to prevent potential entrants from entering the market, such entry-deterring pricing establishes a barrier (QuickMBA.com, 1998)”. A differentiation advantage that the Broadway Café possesses, that would make it hard for prospective entrants to open such a café, is established, unforgettable recipes that my grandfather has kept all these years. Because of this the café also has a confident customer loyalty. The Broadway Café in addition has a high rivalry due to the existing competitors it already has in the area such as Starbucks, Dunkin’ Donuts, and other cafes and coffee/tea spots. Competition is not perfect and firms strive for a competitive advantage over their rivals (Baltzan, & Phillips, 2009).
However, in pursuing an advantage over our contenders, the cafe have chosen to change our prices by lowering them to gain a temporary advantage and improve our product/service differentiation by serving select meals that contain secret recipes of the family and providing entertainment. In addition, the Broadway Café has customer service that is up to par being that the café is run by my family such as my grandfather, who has been known around the community and area for years. And as stated in the above section, the café serves unforgettable dishes that only my family knows and aren’t served in the competitors’ restaurants. If so, it definitely does not have the same great taste as the café. In addition, the café will be at a cost advantage in that its prices are very competitive in that it’s affordable in comparison to Starbucks and the other competitors. Also, providing entertainment Thursday thru Sunday nights such as bands, karaoke, and movie night will bring in a young group of eager customers. And the charge in interest of coffee drinking and other available beverages among young people guarantees a diverse, friendly, stylish customer base in both the present and the future.
When it comes to entertainment as such, Information technology is very important and plays vital role. Such as the movies which has been made possible because of information technology. One of the stumbling blocks for the Broadway café is to rise above the high force of the power of buyers. The power of buyers is the impact that customers have on a producing industry (Baltzan, & Phillips, 2009). In Augusta, Georgia there are 7 cafes, 18 coffee and tea shops including the Broadway Café’s biggest competitor Starbucks, and over 70 restaurants total serving a population of 194,343 (Citydata.com, 2009). Now this being fact and all, a great way to lower the buyer power force is to establish a customer loyalty program which may be a bit costly for the café being that it isn’t that large, but this will give the café an opportunity to implement an IT system. In addition to the customer loyalty program, the café can offer prepaid gift cards which could possibly reduce credit card transaction charges and draw new customers to the café along with them being able to purchase online with the prepaid gift cards. Also, the Broadway Café already serves meals that the competitors do not serve. This is where our differentiation advantage comes in.
The threat of substitute products or services is high for the Broadway Café in that there are many substitutes in this industry. There is a broad selection of products that people can choose from such as other competitors like the beverage industries can suit the customer’s need for a drink which may reduce the amount of coffee sales while competitors like the food industries can suit the customer’s want to eat. There are obviously good substitutes to Broadway Café’s products. However, the café does serve special dishes that require certain recipes that once again only the family knows so this could possibly lower the threat of substitute products.
The Broadway Café in order to separate ourselves from competitors and maintain a competitive advantage will focus on the cost leadership and differentiation strategies. As discussed throughout this section, Broadway Café intends on changing our prices by lowering them to gain a temporary advantage and the café will maintain that its prices are very competitive in that it’s affordable in comparison to Starbucks and the other competitors (Baltzan, & Phillips, 2009). This cost leadership strategy will help us in that because our prices are affordable and reasonable, we would earn the highest profits in the event when the competitors are undifferentiated from one another by selling a traditional market price (Baltzan, & Phillips, 2009). The Broadway Café implements the Differentiation strategy by differentiating our products and services.
The meals that the café differentiates from much of our competitors in that they require specialized recipes that only the family knows and we offer variety of entertainment throughout the end of the week at nights. In addition, as discussed in the next section, the customer will be able to view the café’s different promotions, information on the café’s latest products and offers, as well as purchase party packs, mugs, brew items, clothing w/ the café’s logo, and cd’s on the café’s website. Broadway Café offers customers the opportunity to bring The Broadway Café Lifestyle back to their homes.
E-business is what another component in which the Broadway Café is lacking in order to sustain its competitive advantage. E-business or electronic business refers to commercial activities performed over computers and related technologies mainly through networks such as intranets, extranets, and the Internet to streamline, improve, and extend business operations (Baltzan, & Phillips, 2009). E-business will give the Broadway Café the ability to process orders quicker through electronics, improve its customer service, and combine forces with suppliers. The Broadway Café needs to take advantage of e-business strategies if it’s going to maintain competitive. Having the internet will give the café a chance to intensify the playing field with its competitors as well as compete with all sizes of businesses within the industry around the globe. In addition, Broadway Café could employ some software packages which would allow the café to complete its management, accounting, and other functions without having to hire additional workers. It actually would save the café a good amount of money and not to forget, time.
One system that is necessary for the café is an Inventory management system such as Inventory Pro. This system is most helpful in that it will warn the café when inventory levels are low so that the personnel can order more as well as the ability to view data needed to forecast future sales and monitor trends. Also, this system will allow the personnel at the café to add new products or modify existing ones such as changing the price (Inventory Management, 2011). In addition to the Inventory management system, the café will be equipped with an ordering management system being that the café provides services and purchases online. This system is used by customers to place their orders online.
This system contains every bit of information that is needed for online transactions such as the café and customer’s personal information (i.e. products and quantity ordered, price paid, and the date the order was placed). For this, the café will need to develop a storefront which is essential for these online sales. When opening the café’s homepage, the customer will be able to see information regarding sales and other promotions it offers. The storefront makes the customer feel as though they’re looking into the café’s windows as if they were walking by the café itself. And of course, in order for the café to accept card payments online, it will open up a merchant account with Wells Fargo financial institution (E-Business Strategies). For accounting purposes, the café will have some type of accounting software program.
Of course, the Broadway Café intends on being customer service first and with that being said, the café must implement a system that keeps track of its loyal customers and their preferred tasted and preferences. This would be a profile management system which would help the café implement technology into the café. With this system the customers would be allowed to become a registered user on the café’s website (E-Business Strategies). They will be asked for certain personal information which will then be stored into the café’s database. The benefit for both the café and customer is that the next time the customer decide to order something, they won’t have to fill out the form again. The customers will also have the ability to update or change any of their personal information as needed or wanted.
To protect the customer, Broadway Café will implement a biometric security system like that of Seenex (biometric security system, 2006) that will have the customer’s payment information and other personal information stored in the café’s database secured, encrypted.
As stated in the previous section, the Broadway Café having a website that gives customers the opportunity to explore and shop with the café outside the café will give Broadway Café a differentiation advantage as well as stay competitive among its competitors. The café’s website allows customers to be able to order and purchase party packs, mugs, brew items, clothing w/ the café’s logo, and cd’s online without having to come inside the café if not desired or needed. The ability for them to order online actually gives busy workers the benefits of not having to wait in long lines when in a rush or during a short lunch break.
The café’s website will contain promotions, specials, Thursday thru Sunday nights’ events, as well as the current menu. The website will also give the customers the opportunity to provide their thoughts and suggestions thru the café suggestion box. E-business will increase the café’s profits and the quality of their service. Being that there are a lot of internet users today, this gives the café an opportunity to attract new prospective customers since the site will be available globally.
Broadway Café will also have a Wi-Fi connection for customers to use while they’re on their laptops, IPads, IPods, etc. The Wi-Fi will be unsecured. The café wants to give its customers an atmosphere where they can socialize, listen to music and other available entertainment provided at the café as well as surf the web at their convenience. The café providing Wi-Fi is a great reason and motivation for customers and prospective customers to come into the Broadway Café.
For tracking purposes, such as to tricking visitors and to get detailed statistics Broadway Café will use Statistix 9. Statistix 9 is an analytical software that will basically create detailed statistics about the usage patterns of the visitor on the café’s website. The Broadway Café would benefit from Statistix 9 and its tracking metrics by the café using this software the it could view trends and reports of its products and services.
Broadway Café could use E-business to partner with suppliers through B2B e-commerce. Being that the Broadway Café is a business that requires various supplies that is not grown in Augusta, GA; the café is obligated to purchasing these supplies from other companies. E-commerce would make it much easier for both the café and supplier in that transaction costs will be minimized and both parties would be able to focus more on the customer.
Broadway Café will also have a portal accessible to the employees. The portal provides the employees with the capability of checking their schedules, upcoming meetings, specials at the café, any notices from the café management, and even the opportunity to double check on an ingredient in a recipe if forgotten. Any business in this industry could not go wrong with a Kiosk. A Kiosk in the Broadway café would actually keep the café at a competitive advantage. During my time at undergraduate school, I recall the business our café had because of the Kiosk it provided to the students who were also their customers. There were times when I went there and didn’t have my laptop with me because I didn’t want to have to carry my books and a laptop at the same, but because there were computers available there it made it a lot easier for me to enjoy my meal and get a little bit of work or web surfing completed when needed.
The only problem with having a Kiosk at the café is that it would be costly and it would require time sessions so that everyone will be able to enjoy the incentives of having the Kiosk at the Broadway Café. The Kiosk at Broadway Café will also provide touch-screen kiosks at the front of the cafe so that customers can order their coffees, lattes, meals, and other products the café offers so that all they have to do is pick them up at the register 10 minutes later in the café’s express line without having to wait in a line full of customers that are placing their orders regularly. Despite the cost and time sessions, the Kiosk will be a great asset to the Broadway Café and would be sure to bring profits to the café.
Today, there are millions and billions of mobile users globally and nationally, so the number of individuals that are mobile in the state of Georgia then Augusta, GA itself is way up there in the thousands. It seems like nearly every face in this world you see walking are carrying the most up to date mobile technology such as iphones, blackberries, phones equipped with Droid, IPads, and IPods. Let’s face it being mobile is the “It” of today. With the 21st century being so mobile, there are numerous of restaurants already mobile along with their customers. Broadway Café tends to becoming mobile like our customers and potential customers. With telecommunications system, we can transmit data over wireless networks now that there are billions of individuals sending SMS and MMS to one another (Baltzan, & Phillips, 2009); this is where mobile coupons (m-coupons) step into the picture with the café. To inform its customers and potential customers about our new service of providing m-coupons the café will make sure to advertise the new service through the café’s website as well through email, postal mail, in-store signs, posters, and flyers.
There will be barcodes on the m-coupons where employees will be able to enter into their screens manually from the customers’ phone screens. M-coupons are better than traditional paper coupons in that they are more convenient, have better redemption rate compared to paper coupons, and cheaper (Dickinger & Kleijnen, 2008). With m-coupons it saves both the customer and café the hassle of having to find the paper coupon, cutting it, and placing it in the cash register versus with the m-coupon all that is needed to do is for the customer to display the m-coupon on their phone screens, the employee to enter the barcode number, and collect the payment for the purchase if necessary. Also, the customer probably will be more satisfied with using m-coupons being that they don’t have to worry about searching on their body and in their belongings for the coupon, wasting time, and misplacing it. Nowadays, your mobile device is your way of communicating and keeping up with everything. They will definitely save the café and customer time, making the lines a lot shorter.
M-coupons will also help the Broadway Café establish new customers, keep their same loyal customers, and generate profit. As customers walk past the café within a 25 foot radius of the café they will receive a m-coupon for a dollar off a latte or a 15 percent discount on an order on their mobile device. Of course, the customer’s personal information such as their mobile device’s number would have to already be in the café’s database in order to receive this offer. There are risks and privacy issues involved in mobile marketing and m-coupons because there are specific state, federal and regulatory standards that apply to mobile marketing. For example, the federal CAN-SPAM Act and/or the Telephone Consumer Protection Act (“TCPA”) serve to limit the capability of businesses to promote marketing materials to a consumer’s mobile device. The only way it isn’t limited or restricted for businesses to do this is if the customer gives their consent (Lillig, 2011).
Other concerns involve state Do-Not-Call and commercial e-mail statutes, as well as state and federal consumer and child protection laws, such as the Children’s Online Privacy Protection Act. CAN-SPAM contains requirements that businesses must follow when transmitting unsolicited commercial e-mail. Thus, if an SMS message goes to the wireless domain, CAN-SPAM applies (no private right of action), otherwise, the TCPA applies (provides for a private right of action). As a result, a mobile marketer that sends unsolicited text messages could potentially face investigations from regulators at both the FTC and the FCC ((Lillig, 2011). The privacy issue became even more significant because concerns surfaced mainly coming from the fact that mobile devices are very well personal and are always with the user concerning them with mobile spam, personal identification, location information and wireless security.
The Broadway Café can benefit from collecting and tacking response rates of these m-coupons by the customers in that it will tell the café exactly how effectively are the customers using the system. Are they taking full advantage of them or do they find it to be aggravating as many other mobile messages sent from other businesses. Also, it will tell the café how many customers we have established and how many times they are using the m-coupons. Now, if the m-coupon is forwarded to another cell phone it could benefit Broadway Café by bringing prospective and new customers. They will have the opportunity to try out the café’s products and services, giving them a choice of leaving their current café or restaurant for the Broadway Café. This will indeed keep the café at a competitive advantage within a differentiation and cost leadership strategy/advantage. If there are new customers added to the already established customers that equals higher profits and business.
Customer Relationship Management: Second Life for Broadway Café The Broadway Café’s main concern has always been and still is its customers. Without customers there would not be any business and without any business that means no profits. If you do not have the right business and profits in this industry than there’s no way you can maintain a competitive advantage within the industry. Therefore, Broadway Café will make certain that customers are guaranteed and satisfied of their needs, wants, and expectations of a business in this industry. The Broadway Café cannot keep up with competitors in this department if it remains in the 1950 era and not in the 21st century. The Broadway Café’s strategy is to maintain a competitive advantage and in order for the café to keep its customers and future customers satisfied in the 21st century it must implement a customer relationship management (CRM) strategy that’s customer-centric.
When customers come into the café, the first people they will see and be greeted by are the café’s employees. Whenever a customer comes to the counter purchase they order(s), the employees of course will greet and ask the customer for the needed information in order to complete the transaction. One bit of information that will be collected from the customer is their zip code which will tell the café where their customers are coming from and also, inform the café where future businesses can be located to better the customer distance wise. As mentioned in the previous section, customers will also have the ability to explore the café’s website to purchase items, make comments and suggestions, view the café’s sales and promotions, and have the ability to contact the café through a means of email, telephone, mail, in store, and maybe even Skype, a form of video chat. Speaking of video, Broadway Café will provide advertisements in addition to flyers, posters, and emails through sites such as YouTube and Facebook. Broadway Café will use these sights to promote its products and services as well as specials and location to reach current and future customers who use the web a great deal.
All these things are great incentives to the café, but another CRM strategy that will benefit the café is Second Life. Second Life is a 3-D online virtual world where avatars do the kind of stuff real people do in real life. They are able to do things such as purchase and sell products or services, gamble, listen to music, watch movies, play various games, and purchase property. They are even able to have a social life such as flirt, go on dates, have conversations with others, and even have sex. Singers, Fashion Designers, and Architects have their profiles on second life for their fans and customers. Also companies like American Apparel, Toyota and Sony corporations have already setup their shops. With Second Life, the café can give their customers the chance of having the café at their access 24/7, 365 days out the year whenever the café closes for the night. They can remain on Second Life for 2 days straight without going to sleep if they would like. The Broadway Café in second life is their little virtual world. Another benefit that Second Life offers to its customers is that it is global, international, and national, however you want to put it and absolutely free to join so therefore they can interact with others in a whole different continent or country if they choose.
The Second Life Broadway Café will like in the real word café have concerts, movie nights, and other entertainment which would be amazing for Second Life inhabitants that are not located in Augusta, Georgia to visit the Broadway Café in reality. Second Life Broadway Café of course will offer the same products and services it does in the real world café such as coffee, meals, clothing, mugs, party packs for coffee parties, etc, but of course all this will be virtual. The coffee, beverages, and meals will look so good that the Second Life residents will wish that it was real. This would have some affect on the customer in wanting to visit Broadway Café in the real world. The Second Life location will also be a great spot for the residents to hang out individually, in groups, or on a date. However, with Second Life the café could come across some customer security issues such as customer loyalty to the real world café.
The Broadway Café can easily lose profit if customers stop coming to the real world café because of the Second Life café. Because it is at their access at any time, they might find more accessible than the real world café and stop coming to the real world café as they regularly do. This would hinder the Broadway Café’s profit and business putting them out of the competitive advantage. There are also some customer ethical issues that could be happen in Second Life. Some authors have noted that users of Second Life are in fear of consequences in the “real world,” such as illegal file-sharing, spamming, multiple identities, identity deception, and illicit materials (Botterbusch & Talab, 2009). Some other ethical issues are a breach in privacy, monitoring and eavesdropping, exploitation, professional ethics, confidentiality and proprietary information, as well as crimes like harassment, vandalism and unauthorized use of computer information (passwords), intellectual property and trademark infringements (Botterbusch & Talab, 2009).
Being that my grandfather started the Broadway Café in 1952, he didn’t have the technology to keep up with the entire sale, recipe, and any other important information. He only could use paper and his memory which was the main means of tracking important information and data, but now that it is the 21st century it is essential to have some sort of computer base management system or IT to keep with all the information that is needed and required of the café. An IT system of some sort is much more equipped, accurate, safer, and equipped than using only your memory and paper. It benefits both the customer and business. This would also keep the café in the industry and at a competitive advantage. That being said the café has decided to replace the manual employee tracking system that my grandfather implemented in 1952. At this point, the café has a highly-technical employee, Nick Zele, who has offered to build the system for me. He says that it is easy to build and that he can work around the café’s budget being that I can only purchase one COTS application like Timetrex (Time and Attendance, 2011). With Nick Zele, the employee, building the café’s custom system there are also some pros and cons. Some of the pros are that it will save the café a great deal of money.
If the café were to hire an additional help to install or build a custom system for the café it would cost the café more money. The café would have to pay for the extra employee as well as for the labor it took to build the system. Being that Mr. Zele is already an employee of the café and highly technical it is very beneficial for the café. It also will save the time it would take to located and hire an additional employee who is capable of building a custom system that is needed by the café. Time is money. Another pro can be that Mr. Zele is mentally equipped for the job. He knows the information that is needed in order to build the custom system. At the same time, it seems like the cons might outweigh the pros. This being that I do not know if Mr. Zele is really qualified for the job for I have never seen any of his other technical related projects. Whether he has worked on a project such as this one required for the café‘s custom system.
Other cons would be will Mr. Zele hold accountability for anything that will need special technical support from the system since he was the one who built it or will he leave the café stuck with an extra bill, that will probably cost the café a good amount of money being that the café will have to hire additional help to come fix whatever problems there are. The café cannot afford to lose viable information that could hinder the process or operation of the business. Because Mr. Zele built the system no one else will be able to be in control of that system, but him; which he could easily change something in the system without my awareness. When it comes to the purchasing of a COTS time and attendance application and outsourcing custom development there are also pros and cons for the café. An obvious advantage of this is that all the employees at the café are equal when facing the application. This is definitely a plus and benefit for the café since no one really knows how to swindle with it. Employees and I are able to track their time, scheduling, attendance, and even payroll (Time and Attendance, 2011).
In contrast, the con of purchasing a COTS time and attendance application and outsourcing custom development is that it may require the café to spend a lot of additional money to get it. Another con is that it would definitely take a long time for everyone to become accustomed to the application. The Broadway Café is very diverse among its employees. The café have employees of different ages ranging from 17 to 65 because of the older family members in the family who have been around the café since grandfather opened it in the 1950’s. This may cause problems with the older employees and the new system where they may feel it’s hard to accept and a troublesome process. This being that the older employees most likely are computer illiterate and lack experience with computers which of course will cause them to stress dealing with the new system.
The older employees may feel hard to accept and will take it as a troublesome process. To make the transition easier for the older employees, I and other management will make sure to inform the older employees about the benefits and advantages of this new application versus the old one they were accustomed to. Another way to help the older employees with the new application is have myself and other employees who have experience with such applications teach them how to use the new application and give them tutorials where they can get as much practice on the new application as possible.
The Broadway Café does not have to lose business or profit if it would only move into the 21st century. Broadway café can be successful if it levels with competitors in its information technology and systems. The Broadway café using the differentiation and cost leadership strategy can level with its competitors and remain at a competitive advantage. Using certain software and systems such as an inventory management system, ordering management system, profile management system, and accounting software the café can keep with important information such as its family recipes, sales information, customer information, and many other vital data. Having Wi-Fi and a website will surely enhance the café’s business through its customer service, profits, and so on. Customer service is very important at the Broadway Café and that is what keeps this business running or any other business running at that. So the implementation of a customer relationships management strategy is definitely a plus for the café. Using M-coupons benefits both the customer and café in that it is a great incentive for customers and even future customers to keep coming back to the café. It helps lines at the café move faster and it is a lot easier on both the customer and employee of the café.
No more hassle with paper coupons if m-coupons are in place and taken advantage of. Next, the café has stepped up into the information age by taking on Second Life. Second Life, even though virtual, gives the customer and other potential customers locally, nationally, and globally the opportunity to enjoy and experience the café outside of the real world café at any time convenient for them. People can the community, social, and relaxation atmosphere at both the real world café and in Second Life. With the implementation of a COTS time and attendance application, Broadway Café can help serve the customers better through the employee. This will help employees keep track of important information that is needed in order to run the café daily. It is indeed much more equipped, safer, assured, and manageable than storing everything on paper or in your mind.
No worry to the older employees with having a problem with the new application because they will be assured of its advantages and benefits over the old way and will be professionally trained about the new application with much practice. At the Broadway Café, the customers and employees are the most important components to the business and they are well taken care of. With all these new IT implementations and improvements within the Café, Broadway Café is sure to stay in business many years to come and maybe even spread across the nation. Information technology has given Broadway Café the opportunity to sustain at a competitive advantage using variety of strategies to view the aspects of this industry and its business.