• March 18th, 2016

Luke’s Coffee Cup

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Scenario #6 – Luke’s Coffee Cup
A small chain of coffee shops has sprung up in southern Indiana. Each shop is run off a PC in the back of the shop. These PCs have all the software needed to run a small stand-alone business. The computers are not networked to each other and each coffee shop is run independently. The chain is not able to leverage the purchasing power of a chain and obtain quantity discounts because each shop has its own set of business processes. The decision making is all decentralized even though the shops are all owned by one person. The owner is becoming frustrated with the chain’s problems and remembers how simple life had been when there was only the one shop in Hanover, Indiana.
The owner recently took a tour of all the shops in the chain. The only common element to all the shops was the coffee. Some shops sold donuts, some sold bagels, and some scones. Differing signage and décor made it hard to know if you were in a Luke’s Coffee Shop or in a competing shop. The owner’s tour increased awareness of the individual stores but created doubt and lack of confidence in the local managers.
The shops are located in small towns like Hanover, larger cities like Madison, the Army’s Jefferson Proving Grounds, and at isolated highway service centers. Some of the locations may have somewhat limited Internet access.
The quality of management at the shops vary. Some shops pay a lot of late fees because the local manager has not been able to keep up with invoices. Vendors have been declining orders from some of the shops because other shops have not been paying their bills. The chain’s reputation with vendors and local governments has been suffering,
The owner has been threatening to close shops that have been paying excessive late fees. The owner knows that something needs to be done but has no idea how to integrate and standardize the stores.

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