Small Business Considerations
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Christina Poole owns two pizza restaurants in a city with a population of 150,000 and is studying her company's operations to be sure they are functioning as efficiently as possible. About 70 percent of the venture's sales represent dine-in business, and 30 percent come from deliveries.
Poole has always attempted to produce a good-quality product and minimize the waiting time of customers both on- and off-premises.
Poole recently read a magazine article suggesting that quality is now generally abundant and that quality differences between businesses are narrowing. The writer advocated placing emphasis on saving time for customers rather than producing a high-quality product. Poole is contemplating the implications of this article for her pizza business. Realizing that her attention should be focused, she wonders whether to concentrate primary managerial emphasis on delivery time.
• Is the writer of the article correct in believing that quality levels now are generally higher and that quality differences among businesses are minimal?
• What are the benefits and drawbacks of placing the firm's primary emphasis on minimizing customer
waiting time?
• If you were advising Poole, what would you recommend?
• How would your answers to the previous questions be different if Poole sold a $6 pizza? What if it
were a $40 pizza?
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Solution Summary
This solution of 1,458 words provides a discussion of the options available to a small business and the factors to consider when making product related decisions
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Let's first understand the role of pizza in our current society. It represents one of the most desired foods, both on the fast food front, as well as a dining experience. In addition, it is the number one cause of obesity in our country for both adults and children (reported by the US Food Industry). Also, it is one of the most affordable dining options currently available within an industry that is constantly raising prices, thereby creating competition for the resulting disposable expenditures by consumers today.
Now having established this baseline for discussing the above, we can continue to critique the article, make recommendations, and provide options. While not a large pizza consumer, nevertheless the writers of the article are probably correct in noting that quality has improved. Just note the varying levels of pizza available, in size, in flavors, and in price. But what is important to note about the industry is that the emphasis has moved from price to providing flavor alternatives as a MEANS TO RAISE PRICE.
For example, note the emphasis on different combinations of pizza:
* re-introduction of the deep dish pizza - this was a huge trend in the pizza business approximately 25 years ago
* lining the deep dish pizza with bacon as a flavor differentiator
* availability of and ease of ordering as a sign of consumer related service
* emphasis on tenure within the industry of the pizza maker --- Papa John's, Pizza Hut, etc.
* emphasis on the quality and freshness of the product
NOTE THAT MOST ADS TODAY REALLY DO NOT EMPHASIZE DELIVERY TIMES, RATHER THE EMPHASIS IS ON FLAVOR, VARIETY OF SERVING SIZES, FRESHNESS, AND CONSISTENCY.
So as a general observation, the sense that delivery times should be enhanced may prove to be an unproven event. Simple marketing suggests that some sort of survey or feedback among existing and potential customers should be conducted in order to validate this need for improving the business. Otherwise there may be an emphasis and drive toward solving something that isn't broken. Furthermore, when we discuss improving delivery times, are we focused on the dine in ...
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