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Cafe Vien
Cafe Vien has decided to establish a relationship with another…
Cafe Vien
Cafe Vien has decided to establish a relationship with another supplier for cheaper materials
Managers
Managers will be able to make the change successful and implement it in the business' operations.
Positive
The change will enable managers to reach profit goals more efficiently and effectively, as costs are reduced
Negative
The managers may be faced with negative responses from the community, as the change of purchasing cheaper products may give the impression of providing lower quality products
Employees
Good
Employees may receive higher pay as a result of cheaper materials
Bad
Employees may need to put in more effort to the product in order to get it to the standard that it was at before as it is now cheaper materials
Employees might need to undergo training to see how to use the new materials
Employees might need to work more hours now as they need to put more effort into the product
Shareholders
As the materials sourced are being cheaper, this can mean increased profits for the Cafe, thus higher share values for each holder
This can have a negative impact as if the materials supplied were found to decrease quality or be sourced unethically, a negative reputation will be established, meaning shares will lose its value, effecting shareholders directly as they will lose money and share value.
Community
Good
The products that have been acquired might better meet the ethical standards
The products could also be locally sourced which means helping out local businesses and impacting the economy in a positive way
Bad
Maybe be bad for the environment as the products that are sourced could be from overseas and produced unethically which is a breach in the CSR of the company
If they are getting the products overseas for cheaper they will not be supporting local businesses and the Australian community
Competitors
Negative
Competitors may respond by also adopting a cost leadership strategy, should Cafe Vien have a positive financial response to their change.
Positive
However, if the market is not predominantly 'price sensitive' employees, competitors will be able to have a competitive advantage, as Cafe Vien's change will not be successful
Old Supplier
This has a negative effect on the old supplier as their supplies are no longer needed for Cafe Vien. This means that they have lost a customer which leads to negative financial effects and also extra costs for advertising to replace this customer and their loss
This however could have a positive impact on the old supplier as it relieves them of the stress and workload that Cafe Vien would have previously given them
New Supplier
Positive
The new supplier will have another customer, hence helping them financially. They may also have a higher degree of supplier power.
Negative
Being recognised as a supplier which provides cheaper goods (Which is perceived as lower quality) can have a negative impact on the supplier's social image.
Customers
At the expense of using cheaper materials it may effect the quality of their final products (coffee etc.) which can result in establishing a bad reputation and loss of loyal customers
These cheaper materials may have been sourced ethically which gives the business a good 'green' reputation which is appealing to customers when purchasing at Vien's Cafe
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