Quality Assurance

1.The concept of quality can be described as anything that meets costumer's expectations and therefore, makes him satisfied with a particular product. Besides the customer's requirements, quality also depends on product's price. To be more specific, product of high quality does not necessarily have to be expensive as long as it satisfies the customer. To conclude, rather than considering quality as absolute, a relative concept would be more accurate.

2. Quality control can be defined as a control "based on inspection of the product or a sample of products."

3.Quality control has three stages that help make it effective. The stages are the following: prevention, inspection and correction and improvement.
a) prevention: the main role of the first stage is to improve products and fix or remove imperfections. It makes sure that design of the product makes customer's expectations.
b) inspection: it used to be the most expensive stage as it requires high costs. Therefore, instead of hiring inspectors, many companies started to use total quality management.
c) correction and improvements: in the last stage correcting the faulty products as well as the actual process takes place. The main idea is to avoid these problems in the future.

4. One of the possible weaknesses of inspecting for quality is bias. In other words, the main focus of the inspectors on the work of workers is find their mistakes or problems. Hence, it already has a negative and biased approach. Another weakness is that since it is inspectors' responsibility to control the quality of a specific product, the work often do not try as hard to make quality product because they it is going be checked again anyway. Finally, it might be very time consuming to not only identify the fault of a product, but to also fix it. Especially, when the product passes through several stages of production.

Coke and the Numbers!

Production costs of Coke could be divided into two categories: fixed costs and variable costs. Fixed production cost of one small can of coke is approximately 6 cents while the variable production costs that include shipping and handling often rise to 19 cents.

The price for which the coke is sold in stores is somewhere between 45 to 60 cents per small can of coke.

Therefore, the revenue, which retailers get from selling one small can of coke is around 30 cents. 

This suggests that the profit the retailers make is in a range of 15 - 30 cents.

                  

Production Methods

Job Production 
-motivates the workers

• Wedding rings: The possible strength is that it meets the customer's exact requirements.
• Made-to-measure suits or dresses: Since the suit or dress were made only for this customer, it fits him/her perfectly. The product is unique and customized.
• Aston Martin car: each engine is hand built and carries a plate with engineer's name on it, which makes it look unique.

Batch Production

-allows the firm to use division labor

• School uniforms or jerseys: Since Batch production produces a limited number of identical products, it is very beneficial for sport teams or schools where all members should look alike. The product can be altered depending on customer needs.
• Production of identical bread rolls: It creates an image of precision and therefore it attracts many consumers.
• Designing and implementing an advertising campaign: There are several stages of batch production that allow costumers to alter the advertisement. Once again, it makes the advertisement to look unique.

Growth Strategy in Dispute at Traffic Clothing PLC

1. Use the case study to explain the difference between 'internal' and 'external' growth.

The main difference between internal and external growth is that internal growth is done within a business or a company while external growth is described as marging of two or more different companies. Therefore, it's done outside of a particular business. Using the case study, an example of internal growth would be the opening of low-cost factories in developing countries. On the contrary, taking over another clothing producer or material supplier would be an example of external growth. To be more specific, an example of the external growth would be a merger of the company with a prestige clothing retailer.

2. Explain how the business increased sales revenue, yet gained no increase in profits for the last three years.

Opening low-cost factories in developing countries helped to increase sale reveneu. However, there was no increase in profits for the last 3 years, This was due to several factors. For example: new competitors entered the industry and drove down prices. Another reason for no increase in profit was the rapid increase in prices of raw materials. Lastly, there was an increase in ther bargaining power that was done by the number of mergers between retailers.

Questions number 3 and 4 are higher level questions!

Ansoff's Matrix

Market Penetration:
Market Penetration is one of the objectives used in Ansoff's matrix. The potential gain of using this strategy is achieving higher market shares, possible increase in sales as well as improvements in  marketing. This can be done by selling existing product in an existing market, which obviously lowers the risk. However, even though market penetration is the least risky of the four strategies, companies using this strategy should still be careful. Since low prices are a method used to penetrate a market, it could eventually lead to a damaging price war that reduces overall profit of all firms in the particular industry.

Product Development:
This strategy is a bit more risky than market penetration. In order to develop and sell new products or new developments of already existing products in existing  markets, innovation of the product often must take place. This can be done by altering existing products to create something new and unique. Another possibility is to create completely new products. However, innovation of the product might lead to a distinctive identity of a business, which might be both positive and negative.

Market Development:
Market Development can be explained as a strategy used for selling existing products in new markets. This can be done by using geographic or demographic changes as well as by re-packaging for different market. To be more specific, this might include exporting goods to overseas markets. Even though that market development might be often a very successful strategy, it definitely contains a certain amount of risk too. Selling products in new markets might not always be appealing to a new range of customers. Therefore, it is recommended to do some research about a new market and its customers first.

Diversification:
Diversification is the process of selling different, unrelated goods or services in new markets by either looking for new markets for these new products or by diversifying into different products or services. This strategy is the most risky of the four strategies because it involves new challenges. A firm might later find out that it does not have enough competencies to survive in the particular industry. However, this strategy has several advantages too such as the possible reduction of overall business portfolio risk or the potential gain in an expanding industry.

The Analysis of the Starbucks' Article

"Starbucks Aims To Move Beyond Beans"

 Starbucks has been using several methods for growth of the company. They mostly have been using the internal or organic growth. One of the methods that Starbucks has been performing is expansion. By opening new stores in different parts of the world, Starbucks has become even more popular among the customers and they have increased their availability. They are also ready to open a string of stores that will be dedicated to the brand. Another method is diversification. Even though their main product making the most profit is still coffee, Starbucks has acquired three new business: Evolution Fresh Juices, La Boulange Cafe and Bakery, and lastly Teavana. The huge investment that Starbucks had to make will lead to an expansion of  the range of products Starbucks offers as well as it will give Starbucks an opportunity to compete in a different field of products. However, there are several obstacles that Starbucks should overcome in order to remain a successful company. One of the problems is that Starbucks stores were built to sell and offer coffee and not food and therefore, they are much smaller. Starbucks might start to thing about expanding their stores which would also cost them a lot of money. It doesn't have to be that much of an obstacle anymore, since lately they found how to squeeze freezers into all the Starbucks stores. On the contrary, Starbucks' primary business concentrating on coffee is most successful in the morning and by offering other new products such as healthy snacks, fresh juices and candies Starbucks might attract new customers and increase profit, which would balance their loss from the investment. In order to overcome obstacles, Starbucks started to pay lots of attention to detail. For example: Starbucks has been criticized by many consumers that the food they offer is not a good quality. Therefore, Starbucks had made sure  that one employee in each store is responsible for serving well baked and warm goods such as a chocolate croissant. The three related businesses, Evolution Fresh Juices, La Boulange Cafe and Bakery, and lastly Teavana, should make sure and be careful about not getting into a shadow by Starbucks dominant brand. They need to make sure they are being viewed as a brand instead of being viewed as an additional product line. Starbucks has had to invest lots of money into their expansion and diversification, and therefore they should keep being careful about what they are doing. The new range of products that they started to sell might affect (not necessarily in a positive way) their popular brand and a good image. 

  

Internal Growth (Articles)

1. How dukawallah family built top supermarket brand 
(http://www.businessdailyafrica.com/How-dukawallah-family-built-top-supermarket-brand/-/1248928/2031994/-/fqmaqwz/-/index.html)

Chandarana Food Plus supermaket has shown a clear example of the internal growth. In 1964, the founder of the supermaket, Shantilal Mulji Thakkar, opened his first grocery store. Shantilal was known as a seller who offered his costumers mainly spices, powders and brown paper packets of grains which later created a synonymom "Indian food and Spices" for his company. After Shantilal's death, his sons (Anil, Sanjay and Dipin) took the family business under control. By expanding the grocery that originally targeted only Asian community changed into a "Kenya's most affluent and niche supermarket brand." In the last 50 years, Chandarana Food Plus supermarket has grown from one branch to eight. Even the number of employees rapidly increased. From 12 employees to 500. Fifty years ago, Chandarana had been selling approximately 500 products. Now, they have been offering customers more than 20,000. Chandarana even managed to change their logo "Chandarana Supermarkets" to "Chandarana Food Plus". Internal growth that has been this family brand performing built one of the top supermarket brands!

2. Growing business by developing products and markets -  A Beiersdorf case study
(http://businesscasestudies.co.uk/beiersdorf/growing-a-business-by-developing-products-and-markets/growth.html#axzz2hotAZZ2m)

Beiersdorf is a skincare company behind many famous brands such as NIVEA, ELASTOPLAX, ATRIXO and EUCERIN. The company was first found in 1911 by German phermacist, Paul Beiersdorf. The first product they developed was NIVEA cream. This was the beginning of NIVEA, which is now considered to be one of the world's largest skincare brands. Their huge success is probably a result of a very good marketing strategy. For example: They have been regularly expanding their portfolio in line with changing consumer demand. To be more specific, in 1980s the company started to offer new products such as sun protection, soaps or bath and shower products. Another example of the company's internal growth is introduction of the first mass market male skincare brand called NIVEA FOR MEN. As NIVEA FOR MEN entered the market back in 1998, the company became even more successful among the costumers. It started to target not only women who like to pamper themselves but men too. Therefore, their target population increased and so did the sales. Beiersdorf has also expanded into many European economies which made the company and its products more available.