KRISTEN’S COOKIE COMPANY (A1) Harvard Case Solution & Analysis

KRISTEN'S COOKIE COMPANY (A1) Case Study Solution

Working Individually

The partners have been supportive in this new business venture. The work load has been equally distributed between the group members. Initially, my time duration would be 8 minutes for the first order but now it will be increased to 12 minutes if I’ll be on my own. My team mates have taken the responsibly of cooling the cookies and packing it. Meanwhile I will receive the next order and can continue with the process of mixing and spooning the cookies. However, when I’ll be on my own, I won’t be able to get the time to work on my next pending order as I’ll be busy with taking out the cookies and putting them for cooling. Then I’ll be packing them into the boxes. This will result in pending sales and my orders may get cancelled. As a result, the students might get dissatisfied from the services and may divert towards the competitors. A good target market would get affected if I’ll work alone on this new business venture. If let’s suppose, I may try to work on two orders simultaneously and starts to work on my second order while the first batch cookies are ready to be packed and sent, they will not be hot as the students would have liked. Again, the business looks to establish itself and maintain a competitive edge over other bakers but I might ruin that chance as the customers would get the freshly baked hot cookies.

Premium Rates

First of all I would cancel all the discount offer for the rush orders. To decide about the order about the premium, I’ll be asking myself I can fulfil this order or not? If yes then only I will proceed to as special rates. If the cookies are already in oven I can work on the rush order. First off all ill quickly have to wash the utensils and mixer and add up all the ingredients before mixing them rapidly. If everything is going on time and there hasn’t been a negative impact on our first order then there is nothing to be worried about, and there is no need to charge an extra amount. Not charging an extra amount for a rush order will only bring positivity as the student will be content by the service and s/he might return back to order more. Hence, to create customer satisfaction, not charging a premium is a good idea but only if the previous order hasn’t been affected.

Though, if the situation is different and I had to stop my initial order and had to postpone it, then I’ll be charging an extra fee or a premium over it. First of all, I’ll have to destroy the ingredient use in the previous order costing me $0.60/dozen. This will be added into the cost of the new rush order. Then, the time taken for mixing of the ingredient and spooning of the first order for 8 minutes and time taken for oven preheating and setting it up was 1 minute hence it will be taken into account. The total cost of labor has increased to $5 and total cost of cookies will be $6.55. The initial selling price of cookies were $12 hence we will add premium on valuable timeless and loss ingredient which will be $12+$2.85=$14.84 our new premium price to be charged on rush order. New premium price has been shown in exhibit 7.

Promising orders

Rushing into the orders will only mess it up and it might get late to be delivered. Although, there has been an estimated time of 26 minutes for initial order and then 10 minutes each for the subsequent orders but the order should only be promised when it is being packed. It should be responsibility of the team mates to notify the buyer via email when the other person is busy packing the order. Informing the buyer before cookies get ready might create dissatisfaction for the buyer. Hence, it is advised only to promise order when it is ready in the box. To determine the time when the pending order will be ready; we first multiply 26 minutes with number of orders in pending and then adding the expected completion time for current order.

estimated time for pending order=(26 min*#of pending orders)+estimated time for current order

For the safety margin, the time when I will be busy with mixing ingredients and spooning the dough over trays will be of 8 minutes as calculated previously. If there is any problem with the order or with the operations, we can inform the buyer in this time.

Factors to consider

The following are the factors to be considered

  1. As it’s a campus based project, we need to be careful about the demand of the product within the campus. If the students really have late night cravings for the cookies this will mean that yes there can be demand for cookies on campus. Otherwise, the business will go down the sink.
  2. The next aspect that has to be mind is if the investment is higher than the return. This would mean that the cookie business’s cost is out of reach. Proper cost analysis have to be conducted before going with the project. The cost of material shouldn’t be high enough which might force us to push the prices up and get failed to attract the customers.
  3. The question need to be answered that how many workers will be needed for the project. A large number of workers would mean a high cost of labor but they would also get the work done in the right time. If the workers are too low then the orders won’t be ready on the specified time and might translate into cancel sales. Therefore, an appropriate number of workers need to be hired.
  4. The business needs money and we have to think from where to finance our business. Would we reach out the bank or an individual investor? A business short on capital doesn’t work out well and may flounder badly.

Standard cookies

The idea behind the customized cookies was to introduce and offer freshly baked cookies to the customers. Plus it would allow them to get whatever toppings they desire. Transforming into standard cookie business would mean no variety and it would be just the same as the other competitors. With the standard cookies, the production will not be before the order and we will have to bake the cookies before the order arrives making them soft and less fresh. The changes will be as following:

  • The ingredient cost will decrease as specific materials will be ordered from the suppliers.
  • There won’t be a need to wash the mixer and the utensils because it wouldn’t affect the taste as it would be the same for all cookies.
  • We can still use email system for orders but now the students will not mention there list of demands for the cookies and will just specify the number of cookies to be baked. The team wouldn’t be consuming much of their time in listening to long calls or reading detailed emails.

Recommendations

Currently, Kirsten has to put her greater efforts as she is giving 8 minutes for her work but other partners are just giving 4 minutes out of 12 minutes. A balanced work load will put less strain on Kirsten and useful time is being wasted as she could use that time in washing bowls and other tools. It is recommended that if the cookies are spooned by the roommates, they will equally divide the time between all of them. The time taken for spooning the dough takes 2 minutes, the time will be divided equally between the two as both of them would work for 6 minutes each. This would allow Kirsten to complete the pending orders which being delayed before.

Secondly, there is a variety of ingredients and flavors that are being offered. Due to this, making each order differently can be tiring and is costly because new ingredients costs more. Hence, cutting down a wide variety of options into smaller ones will shrink down the valuable time and will also reduce down the cost. Predicting the demand would be much easier if the team would know, out of four flavors which one is the most favorite. It won’t take much time to prepare the specific and most favorite cookie if they found or predict the most favorite ingredient............

 

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