Sweet Mandy B’s Sweet Success

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Most students at DePaul University have encountered the delicacy of Sweet Mandy B’s at some point during their college education, whether directly or indirectly. There are the die hards (as often as they can get there, they do), the excuse makers (I don’t want to write this paper anyways, so lets go get cupcakes), the “I earned it” girls (who can justify the indulgence since they worked out), the special occasions (birthdays, weddings, the works), and the rest have either simply tried Mandy B’s or heard other students discuss it.

The number of students that Sweet Mandy B’s draws in on a daily basis is astounding; and students are only a portion of their customer base. There are people all over Chicago who are willing to make the trip to Lincoln Park in order to get Mandy B’s. In food and confection related industries, the quality is top priority since that is what consumers are truly after when they go in for a treat. In order to sustain such high quality management and fresh cupcakes, cookies, and specialty foods, just in time inventory is a must. Nobody wants to walk all the way there to spend money on a cookie that is stale or doesn’t satisfy that sweet tooth. Managing the way that baked goods are created, decorated, and stored in order for maximum freshness for the maximum amount of time appears to be something that Sweet Mandy B’s management has mastered, from my experience at least.

Another aspect of operations that is essential to consider in this industry is capacity. When people place orders for cakes, it is typically for a special occasion, in which case they need the cake at a specific time on a specific day. Cake orders and order patterns must be closely analyzed in order to increase staff during busy ordering times such as holidays or time of large events like graduation. Space and oven scheduling is another consideration, for only so many cakes can be baked as there are ovens. Sweet Mandy B’s seems to have this under control as well, for the entire second half of their store is available should they need to utilize that space, yet the don’t waste money keeping it lit or stocked when they are able to limit baking to the main kitchen.

Location strategy is interesting in this case, for Sweet Mandy B’s does not follow the typical “Location is everything” mantra. Rather it makes a product that is too good to resist, and people have no problem travelling from all over the city to pick up their pre-ordered cakes or stop by for a snack. However, their location is, in fact, intelligently placed because many college students do not drive, and the proximity to campus is a major plus. Its convenience also encourages students to stop by when they probably would not have made the trip if they had to actually plan for it and catch a train. With its thriving success, is there anything that could drastically hurt Sweet Mandy B’s sales?

 

Starbucks: Getting Big but Staying Small

“How do you get big but stay small?” Starbucks CEO, Howard Schultz, recently discussed the keys to the immense success and growth of the company. Focusing on operating with the goals of the small, 100 employee company that Starbucks began as is essential, no matter how large the scope of the company gets. Sometimes success can come from the simplest of goals; Schultz discloses that the secret to “getting big while staying small” is focusing on customers as individuals, one cup of coffee at a time.

When it comes to strategy and operations decisions, Starbucks is obviously not competing for cost leadership. Every time I grab a latte and see that my total is $5.14, I flinch a little at the cost. Then when my coffee is handed to me, I breathe it in, take a sip, and say, “Oh, but it’s so worth it.” Hence, their success, for the quality and product differentiation of  a Starbucks cup of coffee is what keeps loyal customers coming back day after day. With suppliers of the highest grade coffee from 30 different countries, Schultz provides that Starbucks’ greatest goal is “to stay committed to our coffee core.” Not only do they maintain the best quality coffee by doing this, but they also ensure that their each and every action is sensitive to the needs of both the environment and the farmers. Treating the farmers as partners supports one of Starbucks’ most fundamental missions, to maintain the importance of every employee as an asset to the company. Further considering the environment, the recycling efforts and introduction of reusable cups are constantly improving.

With companies that have such continued success as Starbucks, I often assume that they got big and then just stayed that way. But, in reality, a commitment to innovation as well as social perception is essential to truly growing as a company. Starbucks has no shortage of either; with more product lines, global expansion, and ethical efforts than virtually any other coffee supplier, the company ensures that they provide they next best thing before anyone else. From K-cups to the newly released Vismo system, VIA ready brew coffee to the new Veranda blend, customers always have a fresh taste to try. In addition to trying these coffees, thousands of customers also tried a new way to purchase it. The Starbucks mobile app allows for purchases and account management.

Whether the motivation is impeccable quality or the convenience of a store being located on every corner, the numbers prove that customers think very highly of Starbucks. With global revenues of $13.3 billion in 2012, reflecting a 14% increase from the prior year, Starbucks is hitting record highs in sales.

If you are a Starbucks addict, do you take into consideration the ease of mobile technology or the benefits of the loyalty program when buying coffee? Or do you remain loyal simply because the coffee tastes that good? If you steer clear of Starbucks, would the environmental or social efforts have the ability to make you reconsider?

 

Sources:

Starbucks CEO Schultz on Digital Innovation: http://www.usatoday.com/story/money/business/2013/04/24/starbucks-howard-schultz-innovators/2047655/

Starbucks: FY 12 Annual Report: http://investor.starbucks.com/phoenix.zhtml?c=99518&p=irol-irhome