Operation Management

Operation Management Explain the challenge Elizabeth faced In meeting her capacity needs and what she should have considered before moving into the larger facility. The challenge that Elizabeth faced was market penetration. She did not do any type of market analysis or research to gain a better understanding of what the customer want or need. According to The US Small Business Administration Information about your target market would have allowed Elizabeth to narrow her target market to a manageable size.

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This could have been the true test to see if she really needed the additional alluding or to shift her products to the customer need. Many businesses make the mistake of trying to appeal to too many target markets. Research and Include the following information about your market Distinguishing characteristics, Size of the primary target market, how much market share can you gain and Pricing and gross margin targets (SABA). If these entire step had been taken that Elizabeth would have known If the growth would have continued and the new location would support It.

In a sense she forecasted her business to high and did not see the growth that she had planned for. Often business wait until they have outgrown a building or they cannot keep up with the demand before they seek a larger facility. Elizabeth did the opposite and thought that her business would pick up. She did not receive a return on her Investment as she wanted had she put together the market analysis or simply a business plan than she would have been in a different situation. Determine what Is wrong with the proposal made by the team of the business students and why.

The proposal that was made by the students did not support the vision of Biddy’s Bakery. According to the case study Biddy’s Bakery was started tit the thought of it being a home-style bakery as an alternative to commercially available bake goods. When Elizabeth sought out help from the students she should have considered that a business proposal is a partnership, a joint venture of some sort. It is not a business plan, although the terms are sometimes used interchangeably. It’s a way of saying, “l have an Idea or I can solve your problem.

Let’s make It happen together. (Ralph, C. J) It was like the students wanted to change her business completely too just focus on one type of product. Granted this may have en their best seller but Elizabeth was running a bakery and not a McDougal pie company. It was as if the students Just wanted to take the best seller and make it the face of her company. This strategy could work for Burger King with their Whopper but that Is not the bases of their business. It does make up a large portion of what they are known for but is not the sole product of this business.

With the students proposal this would limit her products that she could produce and even a loss of profits. Explain how the business would be different if Elizabeth accepts the proposal made by the students. If Elizabeth followed this proposal she would be sacrificing the I OFF repeat customers. When the company changes gears, as such the proposal would have it due, customer may change as well. There are some advantages to this. The simple fact that her business could ship beyond Ohio because they are focused on just this one product would increase her profits.

She would gain new customer because of the mass production of this. The disadvantage is the loss of other products that may have been driving customer to her. The inventory would be heavier on Just the material need to make the pies and no other material to possible ill customer special needs. The business would go from a bakery too pie manufacturing company. The perception of the company would change as well because they bake goods that the customers have come to expect would not be readily available. Discuss the advice you would give Elizabeth on how to proceed.

The advice that I would give Elizabeth is simply to develop a business plan. According to Plans a business plan is any plan that works for a business to look ahead, allocate resources, focus on key points, and prepare for problems and opportunities. Unfortunately, which may have been the case for Elizabeth, many people think of business plans only for starting a new business or applying for business loans? But they are also vital for running a business, whether or not the business needs new loans or new investments.

Businesses need plans to optimize growth and development according to priorities. This could provide the answer to the question of Elizabeth not knowing what to do for her business. She could have taken the necessary step to solve her own dilemma for her business. Another step that she could have ten was to forecast her business 30-60-90 days out. This would have en helpful to see if she was hitting her targets and asset what would be need to assure she would. She had no structure to her forecast which leads to her disappointment when she did not reach the goal.

In a sense she was playing catch up to her business. Elizabeth had plenty of space and the material for a larger business she Just lacked the customers that was need. According to microgravity Business forecasting is a process used to estimate or predict future patterns using business data. She could have used her past sales and estimating quarterly sales, reduce demand, customer lifetime value and churn potential, inventory and supply- chain reorder timing, workforce attrition, website traffic, and predicting exposure to fraud and risk.