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Executive Summary

The Transcend business owned by Mark is involved in coffee processing. Mark began the company years ago despite of the fact that friends advised him against such an idea as he had little experience in handling the coffee product. The business was able to pick after a while and allowed him to access even wider markets. His organization is based on growth through production of quality coffee product so that to sustain itself in future through the growing market. (Deol & colleges, 2016).

At the same time, Mark also has values that he intends to follow. He prefers buying the products directly from the farmers who seem to be oppressed by the middlemen. The Pacas Diaz family has been a long-time supplier of quality beans to Mark’s company. Suddenly, the green coffee beans produced by the family drastically declined in quality. To make the matters worse, a disease attacked and destroyed a large quantity of the plantation. On top of that, the climatic conditions were too harsh that the winds destroyed another large chunk of the plantation. The family could not give the right quality and quantity to Mark’s factory.

Mark cannot close the business because of the troubles that the family’s productivity is facing. At the same time, mark has a policy of checking on the welfare of his workers and suppliers. He is at the cross round of either doing away with the supplier or retain him despite of reduced productivity. This report aims at analysing the most appropriate decision that mark can take so that to balance all aspects.

The quality of coffee beans determines the quality of the coffee that will be produced by the Transcend. That is why majority of the companies that deal with the product have tried their best so that to come with the right quality product that will give the most unique and tasty coffee drinks. They have come up with the best way of roasting and combining the Arabica and Robusta so that to come up with a sweet and at the same time a unique tasty coffee. (Deol & colleges, 2016)

However, the coffee is mostly produced by poor farmers who depend on the crop so that to sustain their families. They work so hard to produce high quality and quantity coffee beans yet the buyers exploit them through buying the coffee for extremely cheap prices. Some of the farmers hand pick the berries which means that a lot of labour is required in the production process.

Transcend purchases its raw materials direct from the farmers so that to ensure that the farmers get what they are supposed to get from the sales. However, it is important that the government controls the products being bought from the farmers. There are also other regulations that are meant to govern the products being bought by different organizations.

Considering the market nature

Considering the state of the market, Canada is an exceptionally good example of a platform of how many consumers coffee products have. Research shows that apart from water, coffee is the most consumed drink by the Canadian society. This shows that Transcend and its competitors have a wide market that they can benefit from. This kind of a market can either work on Mark’s advantage or against how he will approach it. This means that his decision must put this factor into consideration.

Considering the Pacas Diaz raw materials

Another key point that should be considered is about the quantity and quality that Fernando’s products contributes to his final products. There are several questions that need to be answered at this point. What if Transcend decides to use Fernando’s green coffee beans despite of the poor quality and quantity of the raw materials? What will be the nature of the final product? What will be the cost of producing the product from such poor product? Will the cost be more or lower than that of the sales that will be made? What impact will the product produced by such raw materials have to the future of the company?

Considering Transcend operating ethics

Mark has based his organization on transparency and minding about the welfare of his suppliers. That is why he decided to deal directly with the farmers so that to make sure that they gets their rightful share from their products. Fernando has been a long time suppler who has always given the right beans to Marks business. But then like any other economic activity, the supplier faces a problem that to a large extent he is not the cause for the misfortune. (Deol & colleges, 2016)

Should Mark cut all ties with the family now that they cannot produce the right quantity? Is there a way that the family can be supported so that to improve its productivity? What will happen to other suppliers and customers who are directly involved with Transcend one they run that mark cut all the ties with the family during the tough period? This are some of the questions that Mark need to answer before making the decision.

Literature Review

Before Mark can take a step on the direction which the decision will take, it is important to consider other details from different readings which entails details on how such an issue can be handled. The first point that needs to be analysed is strategic approach of making decisions. Another key point that should be considered is how Transcend can manage the supplier in case a decision is made to retain him. We will also consider how Transcend can help the farmer improve the coffee product from its current state.

Processes of making decisions in an organization

It is important to make concrete decisions for Transcend especially at this moment that it involves the raw materials supply. It might seem easy for Mark to just change the supplier as there are many other suppliers who would give better quality and quantity. But then this might have implications on the future and values of the organization. In an organization, showing the people who are causally linked to the organization that you can about their welfare is very important when it comes to retaining their confidence for the organization. They will also be motivated to do better since they know that your organization supports them. The following steps can be followed in evaluating the best decision that can be taken.

Understanding the decision that must be made

The decision is either retaining the supplier or seeking for a new supplier. It is important to consider if the supplier can revive the previous supplies or even make them better. The main point is that Fernando did not fail due to mismanagement. It happened due to unavoidable circumstances which can happen to any other farmer.

Collecting all the needed information

Mark understands what led to the failure of Mark’s produce. He also understands that the farmer still can improve on the coffee beans supply if at all he is given a chance to. At the same time, it is important to consider on the final product that Transcend gives to its customers. What will happen if he proceeds to use Mark’s produce despite of its poor quality and quantity? It means that he will be destroying his current market which takes years to build.

Identifying alternatives

The first main alternative is solving the current problem which is getting enough raw materials to make the coffee. Fernando’s plantation cannot produce that in this harvest season. The best thing to do is to look for another supplier who can give quality produce that will keep the coffee shop running. Another alternative is retaining Fernando as a future supplier through helping him to regain his productivity.

Advantages of the strategy

Through this strategy, Mark will be able to access enough raw materials needed for the coffee shop as he will receive enough supply from the alternative supplier. This way, he will keep the customers despite of the decrease of Fernando’s supply. The next advantage is that he will gain Fernando’s trust and any other person that is directly involved with Transcend. They will understand that the business cares for them hence they will be able to develop a positive mind towards the business.

Disadvantage of the strategy

The farm might take some time to recover meaning that Mark might have to incur more costs and efforts as he helps Fernando to regain the produce.

Planning

Mark should make a contract with a new vendor so that the raw materials can keep on coming to the business. At the same time, he should sign an agreement with Fernando so that deductions can be made from his future supplies as Mark helps his farm regain its productivity. This way, it will be a win for Transcend as the customers will continue to get their usual coffee supply, Mark will also have retained the businesses integrity when dealing with farmers. Fernando’s farm shall regain hence helping him benefit from it. Lastly, Mark will recover his funds through deducting some percentage of what should be paid to the farmer. (Wijaya, 2017)

Ways through which Transcend can help Fernando’s production recover

There are ways through which Mark can help the farm regain its productivity. This way will affect the way that he produces the coffee. It is important to note that this step can only be affected if the farmer agrees with all the terms between him and Transcend. He should be willing to accomplish all the agreements that will be indicated in the contract. This will determine if Mark will continue trading with the farmer or not. If they agree on working together, the following can be done.

Selecting a proper quality of coffee crops that will do well under the climate. It is true that climate keeps on changing. Helping the farmer acquire resistant crops will help in reducing the damages. This includes disease resistant plantations. These transplants can withstand the diseases hence will do even better. It is also important to spray the crops regularly for the diseases and pests. (Hamrol, 2017)

There are several types of fertilizers out there. Selecting the right type is particularly important for the growth. After consulting an expert. The farmer should apply only the recommended fertilizer dosages for the selected coffee variety. It is vital to time the harvesting. This will help the crops to produce even better produce. Transcend will also benefit as the farmer will produce quality berries that will be used to make a tasty cup of coffee for the customers.

Reasons why Transcend should in managing the farmer’s productivity

Transcend will have invested its resources in Fernando’s farm. This means that it should be involved in the management if the spent funds and time will be recovered. When Mark puts a task force in the field to manage the activities in the farm, he will be able to achieve the following: (Karray, 2019)

Risk mitigation: Transcend will be able to assess the activities being done in the farm hence will ensure that it is used in the right manner so that to enhance its productivity. This includes assessing the berries being harvested so that to enhance the taste of the final product.

Optimize performance: Mark and the farmer have a contract. This means that he can assess the types of berries being brought into the factory. He will also be able to track different activities so that to help track the recovery of farm which will help in regaining the invested funds.

Create loyal relationships: a business should set all the strategies so that to maximize its productivity. Both suppliers and customers play a particularly important part in the productivity. By supporting the farmer regain, transcend will have created a great relationship with the farmer. This will make the farmer to give more efforts in the production of even better products. Other people attached to the business will also devote their efforts to the business. The decision will be a “Big Win” for Transcend.

Conclusion from the literature review

There are advantages for both the farmer and Transcend if they continue working with each other. Transcend will retain its reputation and its aim which is supporting the farmers who depend on the coffee farms for their everyday lives. It will also improve the future quality of coffee beans being supplied in the factory. This will improve the quality of the coffee that the customers will buy from Transcend.

It is important to note that Mark will have to get another supplier for the time being as the farm recovers. Mark will also have to incur costs as he helps the farmer recover through his current situation. However, transcend will monitor the farm activities directly so that to ensure that any kind of risk that occurs can be mitigated early enough.

The support will include finances which will be recovered gradually through the sales made by the farmer to transcend. Transcend will also be directly involved to some of the direct farming activities to ensure that the right procedures are followed in the production. The farmer will not have to loss the entire farm from the disaster that faced him. He will get an opportunity to recover due to the strategies employed by Transcend under the agreed contract.

• Acquiring alternative raw materials: the first step is ensuring that Transcend does not lose

its customers due to reduced and poor-quality coffee berries supplied by Fernando. He

can still acquire the beans from his other suppliers or even sign a temporary contract with

another farmer. This way, enough raw materials will be available for Transcend.

• Helping Fernando’s farm recover: This will involve spending time and monitory value in

• the recovery.

• Manage the berries quality produced by the farm: Transcend should ensure that it gets

only the best beans from the farm which will help in producing quality coffee products

for customers.

• Recovering the spent finances in the farm: when the farm recovers and becomes

• productive again, Fernando should make the payments as agreed in the initial contract.

Strategy

Over the last few years, Transcend has been doing well hence creating good income for Mark. The company has also maximized on the quality of coffee that it is supplying to the customers through getting the coffee beans supply direct from the farmers. Currently the company uses a small roaster to produce better tasting coffee. However, there are problems that the faces the company such as consistent coffee beans supply. Transcend also spends a lot of funds when it comes to accessing the products direct from the farmers. (Neufeld, 2016)

Just like any other business, Transcend faces a problem of how it will run its operations so that to remain competitive with other companies that are producing similar products. To a large extent, the company should begin making the necessary changes from its management. The management changes should begin from the production stage, then on the processing and lastly on how the company can market its products this way, it will be able to maximise on the sales that will be made and at the same time reduce the amount of money that should be spent of purchasing the raw materials and the production process.

Management strategy at the Raw Materials acquisition stage

The main point of strength the company uses is getting quality beans from the farmers. The main question that should be answered is: How can Transcend ensure that it acquires both quality and quantity from the farmers? This calls for setting up an effective management strategy that will help manage the farm produce so that to ensure that the products being used in the company are of the right quality and at the same time of high quality.

Setting up an effective management strategy will also ensure that the trends are well monitored so that to foretell on how much productive will the farmer be in the coming season. This will help in managing the current situation where by one of the farmers lacks the ability to produce the right quality and quantity coffee beans required for production. Enough supply of quality raw materials will ensure that the company has enough to ensure that the production remains constant. (Neufeld, 2016)

Management strategy at the production stage

Transcend should check on this stage so that to ensure that the cost of production does not exceed the amount of profits that should be earned after making the sales. Currently, the company uses a good approach by roasting the beans so that to getting tasty coffee for its customers. But then it is important to consider using a bigger drum so that to increase the produce that will be sent to the market. At the same time, the cost making the changes should not be more than the profits that be made.

Other techniques such as employing technology in the production process is important so that increase the ability of separating quality coffee beans from the others of less quality. This way, the company will be able to separate the coffee according to its quality hence giving the customers the ability to select their tastes according to their preference. Technology is taking over different operations in different institutions. Transcend will benefit even more through employing more technological strategies to make the production process even more efficient.

Management strategy at the marketing stage

There is a large market around Transcend. But at the same time, there are several competitors competing to gain access to the market. Transcend should employ Business Intelligence techniques so exploit each angle of the market so that to capture as many customers as possible. We cannot ignore employing technology at this stage also. The world has adopted new marketing ways which enables companies to reach to as many clients as possible.

To achieve this, changes on its current marketing management team must be adopted. More creative and innovative personnel should be engaged in transforming the current market so that to ensure that as many customers are made aware of the products. This is also the most important part of the company as it would be pointless for the company to produce large quantities of the end products while at the same time a few products are sold.

To change this, the company should consider its product branding, packaging and the impression that it will give to the potential customers. All this can be achieved through a strategic marketing process that will not only help in selling the products locally but also internationally. It is also a stage that calls for careful and strategic implementation of the first two stages. If quality coffee beans are produced from the farm, the company shall process and separate the end product according to its taste. This will improve the quality of the end product that will reach the customer.

Strategic approach on how Transcend can improve its profits

The main problem that transcend faces is how it can earn maximum profits and at the same time retain integrity when it comes to how it trades with the farmers. It is clear that the production process can lead to failure this has been portrayed by the fact that few years ago, Transcend almost collapsed but was saved by well-wishers due to the issue of obtaining raw materials direct from the farmers which turned out to be more expensive when compared to the profits that the company would make. The following general strategies would be important in helping the organization to run its operations effectively. Areas such as, finance and marketing will be deeper developed further.

1. Disruptive Strategy

2. Marketing Strategy

3. Operational Strategy

4. Financial Strategy

Disruptive strategy

This strategy involves challenging the normal methods of operation being used by a company in its normal production process. Transcend can do this by accessing the current operating environment which also involves the methods of marketing that are being used. The points of weaknesses can then be identified so that to point out what needs to be changed. A good example is opening coffee cafes in the same location where the company rums its operations. It can also completely change the packaging of its products so that to try other methods of packaging. The following can be done so that to come up with the most appropriate change.

1. Evaluating the technology: Transcend can use technology in many ways to make changes in its operations. A good example is trying out new sorting techniques that will be used to separate different qualities of the coffee. This disruptive change will enable the company to create products of better quality.

2. Making changes that will create a difference between Transcend’s products and those of other competing companies: in a business of production, the more the product stands out from other products in the market the better its market. Transcend can give other companies a stiff competition by adopting changes that other companies have not detected yet.

3. Watching out the competitors strategies: Transcend is in the process of competing with other companies. To remain competitive, it should also be ready to take a step further on the innovative techniques which will make it stand out from other competitors.

4. Keep on checking on the needs of the customers: The first strategy is to maintain the current customers. Transcend can maintain them by constantly checking on their needs so that to make the necessary changes that will keep them contented.

Marketing General Strategy

Transcend should focus more on building a strong brand for the company so that to access greater market. The main point worth noting is that a strong brand can only be built if the company produces high-quality coffee. It is worth noting that when determining the best marketing strategy, there is no specific method that can be said to be the most appropriate at this level. The key factor is that through the methods of business intelligence, the marketing department should determine the best techniques of reaching to as many customers as possible. The following strategies can be used to access a wider market.

Use of Social Media

Transcend needs to access a wider market both locally and internationally. The Social Media Platforms have converted the world into a very small village as people can share a lot of information to the entire world within minutes. In the past, television and newspapers were the main form of advertising used by several managers to capture their clients. But the world has changed and more people spend time using the social media platforms more than the way they read the newspapers. (Shankar, 2019)

Transcend should use this methodology to reach to several clients all over the world. A good example of how it can advertise its products is through making videos of the interesting process that the coffee undergoes from its source, through all the processing activities and then to the market. Customers will create more trust to the product as they feel that they are more aware of how it was produced hence considering it as safe. Winning customers’ trust is one of the best ways of retaining them.

Using leverage influencers to reach to customers

Looking at Transcend’s financial ability, it is worth to note that it is supposed to spend the list amount of money so that to reach the maximum number of clients. When using leverage influencers to reach the target market, Transcend should not go for just anyone. I should evaluate two factors: How well will the influencer impact the market and the cost of hiring their services. Through this kind of assessment, Transcend will reach a very large number of new clients hence widening its current market.

There are several ways that transcend can market its products. The key factors that should be given more consideration is how effective is the strategy when it comes to reaching to many clients, the cost of the strategy and the type of clients being targeted by the strategy. After considering all these factors, Transcend can use the marketing strategy to widen its market access.

Financial General Strategy

Transcend failed once when the cost of production went beyond the profits that were made. It is important to take into consideration the factor of financial allocation so that to cut all the unnecessary costs that might be incurred through the production process. Mark should come up with a financial management strategy that will involve giving the management adequate financial information. (Laapo, 2019). The skills that will be used so that to utilize the organization’s financial resources in the right manner which will boast the amount of expected income and at the same time reduce the expenditure of production. The strategy shall involve:

• Effective management of the company’s assets

• Making wise investments

• Provide Transcend with strategies of achieving future growth

• Enable the company to meet the needs of the suppliers, management and customers.

• Compensate any stakeholder for their risk

Being able to manage the five factors, Transcend will be able to sustain its operations in future and also mitigate situations if the company makes losses. The financial management that is responsible of managing the finances in the company should be able to achieve the following. (Huan, 2019)

1. It should be able to raise enough capital that will be required by Transcend it is operations which includes future expansion.

2. It should also be consistent in the amount of Profit that it earns. The profits should also be predictable so that to enable the company to make strategic plans in future.

3. The management should also focus on minimising losses. This includes coming up with back up strategies of substituting raw materials in case a farmer cannot reach the set target.

4. The financial management should be at a position to foretell the financial needs that will be required by Transcend in its future operations. This way, it will plan for the activities that will be conducted during that the difficult time that the company will face.

5. Lastly, the financial management team should ensure that the company’s profit curve remains in a positive trend so that to keep the company’s future secure.

Operational

This strategy will enable Transcend to reducing its operational costs and increase the efficiency. This way, it will earn more profits through using the minimum cost of production. The main point where transcend spends more costs on is the price of transporting good directly from the customers. Transcend can solve this issue by reducing the bulkiness of the raw material before the can get into the organization for final production process. This can be done through establishing a mini-factory which will be located close to the main farms.

The company can then bring in the raw materials so that to complete the production and package the products. But then the main point that is worth noting is that the operation should not lead to reduced quality of the products reaching to the market. Instead, the process should ensure that the raw materials are tastier as the processing begins from the farm.

The main type of operational strategy that can be used is the Customer-driven Strategy: This involves the process of meeting the desires of the target market. It is achieved after the company assess the needs of the changing environment and carrying out the necessary steps so that to use the changes as an advantage for the business. Today, technology creates a changing environment which Transcend can use so that to ensure that it sustains its current market. For example, different customers need different tastes in coffee.

Transcend can use technology to monitor the coffee being processed and grade it according to the needs of the market. At the same time, it will be used to address the needs of different customers so that to give them the best quality products. This changes should not only be used to address the quality of coffee products but also the packaging. Coffee is a perishable commodity that cannot remain in its current state forever. At times climatic factors can affect it hence affecting its taste even before the product reaches the customer. Transcend can make the necessary changes so that to ensure that the customer gets quality end product.