AD 715 Temple University Fusion Brewpub Case Study I have already upload one word document, please write a conclusion about the case report.According to th

AD 715 Temple University Fusion Brewpub Case Study I have already upload one word document, please write a conclusion about the case report.According to the report and those chart.APA style, no plagiarism and need reference. Executive Summary
Fusion Brewpub is a high end restaurant that is located in the East of Fenway neighborhood in Boston,
Massachusetts. The restaurant is in the vicinity around Prudential Center and competes with a mix of dining
options. Fusion Brewpub aims to attract more customers through providing a sophisticated setting where
shoppers, diners, and working professionals can enjoy a meal and/or a locally crafted beer. Through providing
superior customer service and offering the experience of craft beer brewed in house, we intend to capitalize
on the regional skyrocketing customer demand for craft beer.
This section of the proposal comprehensively takes into consideration: Operations Management,
Innovation and Technology, and HR Management through models and analysis to determine if Fusion
Brewpub will successfully increase competition and revenue in the vicinity of the Prudential Center. For
Operations Management we focused on maximizing revenue through managing all activities that are relevant
to the production of the beer by controlling the inputs and outputs to reduce the wastage and keeping it to 10%,
ultimately reducing costs to increase overall profit. Our Innovation and Technology analysis focused on
ensuring that the Fusion Brewpub will be able to continue to adapt and remain competitive as new ever
evolving technologies are created. While our HR management focused on adequate staffing and salaries to
ensure our employees are satisfied and will not leave to work for other potential competitors and reduce costs
associated with training new employees.
Through our extensive analysis, we expect the investment in a new system (BrewPub), Fusion
Brewpub will break even in approximately 2 months. The investment in a Brewpub would increase overall
profit by _____ in the first year. However, in order to attain this breakeven and profit it is necessary that the
departments work cohesively together and follow the recommendations of our extensive research.
Introduction
Expanding a business is one of the strategies managers use to increase the competitiveness
of their existing business. In restaurant and beer industries, entrepreneurs grow their business by
acquiring new operations that would ensure the business provides services to as many customers
as possible. Investing in new business opportunities needs the analysis of both quantitative and
qualitative factors of the business. Considering a restaurant and Tavern owner interested in
investing in a new Brewpub, the decisions the owner makes on the proposal they adapt have to be
supported by both the quantitative and qualitative analysis of the preferred brewpub. The owner
wishes to concentrate the operations at national and regional levels since they have established
markets for craft and established beers. The owner makes the capital according to the barrels the
brewpub system will handle.
The quantitative analysis identifies the quantity of the barrels considered since the owner wishes
to distribute the beer to both the existing restaurant /Tavern and the wholesalers. The quantity is
also significant to the owner in determining the space needed and the costs of the new business.
The quantity also guides the owner in determining the role of the production personnel. Qualitative
analysis of the new Brew Pub is determined through the ingredients used in the beers. Qualitative
analysis will determine the taste and the influence of the brewpub on the customers. The
quantitative and qualitative analysis of the business will aid in deciding whether the preferred
investment in a new brewpub is supporting the overall goals and objectives of the business.
Decisions made when investing in new business operations need to be supported by the qualitative
and quantitative factors that affect the new and existing business operations.
Competition & Problem Statement
Fusion restaurant has noticed a demand decrease over the past six months. There has been fierce
competition for customers, as our main competitor Earls Kitchen, added a Cocktail Lab & Bar to their
restaurant. To remain competitive for new customers and keep repeat customers, Fusion is contemplating
adding a BrewPub. Fusion BrewPub will provide craft beer made in house and satisfy the market for the
expanding demand for specialty beers. Fusion Brewpub will be unique in that it would be the only restaurant
BrewPub/MicroBrewery in the Prudential center.
Mission Statement
Fusion BrewPub is committed to building a legacy of brewing exceptional beer and creating globally
inspired meals for proud hard working Bostonians. Everyday should be a celebration, best enjoyed with a
Fusion craft Beer.
Goals & Objectives
Operation Management
Operation Management (OM) involves the plan to control and manage all activities relevant to the
production or creation of goods and services through its inputs and outputs. One function that a company
performs to determine the level of production for goods is market research. Then based on the market
demand analyzed, they set the capacity for the production of goods equivalent to the demand and adjust the
finances to support the entire operation of production. In our study, we primarily emphasized on the
sufficient availability of our beer products.
First, we performed research on the market size and used marketing analytics to forecast the
demand. Our analysis was based on the market size for each and every product along with the planned sales
projection over the next 3 years. One challenge we faced when working through our marketing analysis
was the rapid growth of the Pandemic COVID -19, which impacted the daily life of potential customers
due to social distancing. Social distancing has negatively affected the restaurant industry, specifically
Massachusetts “issued an emergency order limiting gatherings to 25 individuals and prohibiting onpremises consumption of food or drink at bars and restaurants, beginning on March 17 and effective until
April 6”( mass.gov). We included this impact on our forecast analysis to help us design our operation
strategy. Based on the marketing research, we determined it was important to track periodic inventory due
to the pandemic in order to avoid wastage that is caused by demand variation.
In the introductory phase, we started by labelling all our beer types produced with specific identification
numbers. Then based on the type of beer produced, we allocated the production cost which was a variable
cost. The variable cost included: the cost of raw material, labor, and other associated costs such as bottling
and labelling. Then we set the parameters for our inventory management by monitoring the cut-off points
for each and every beer type.
The parameters for our inventory management were based on the anticipated sales projection for
each type of beer. This ensured that the supply always met our customer demands. The cut-off points
signaled the present demand of each products based on the consumption rate. This allowed us to understand
the new timeline for the production of our next batch of beer type to order so that we could avoid shortages.
The cut-off point allowed us to understand the demand of all the beer types which helped us strategize our
operations management decisions. For instance, we acknowledge that out of all our 9 products, products 4
& 5 had lesser demand compare to other products. This recognition would allow us to divert less time and
cost in our operation of this particular product which would help us reduce the variable costs of these two
products.
Decision Support Tools: Operation Management
Break-Even Analysis
To further justify our decisions with regards to operation management, we used the Break-even
analysis tool. This application helped us to analyze and identify the point where the initial investment of
the business owner is expected to be recovered from a timeline perspective. When determining the break-
even point we included the consideration of the ongoing pandemic (COVID-19). We used marketing
analysis while running the simulation and ultimately determined that the microbrewery brewpub is expected
to reach its break-even point once the achieved sales reached $392,900. We expect it to achieve this breakeven point in approximately 2.20 months as mentioned in the Appendix (1.1)
Efficiency Ratios
The primary purpose of using efficiency ratios is to ensure that the initial investment of business
owner is recovered within the indicated timeline of the break-even point (BEP). Though the strategy is to
recover the initial investment at the earliest time, it is also important to do it in a way that efficiently avoids
the discrepancies for under stock and over stock. Hence, as per the industry rule, the efficiency of the
business plan is best appreciated if the excess demand is 10% (negative or positive) less than of the total
demand. To initiate with, the cut -off points for BR01, BR02, BR04, BR06, BR07, BR08 were set to 0.8
whereas for product BR03 and BR05 where set to 0.7. The result was the excess demand for BR01, BR03
and BR05 exceeded beyond 10% of total demand but the BEP was still at 2.25 months.
To overcome the excess demand percentage, we initiated the new cycle and amended changes in
the cut-off points as well the demand rate. The amended changes resulted into an increase in total revenue
of 2.12%, whereas, the BEP revenue still remained at the same 2.20 months. The changes that were made
to the Cut-off point for BR01, BR03 and BR05 were restricted to 0.6. Whereas for BR02, BR04, BR06,
BR07 and BR08 were kept to 0.8. Hence we were able to manage the excess demand of every one of our
products to remain below 10% of total demand for all the three years. The discrepancy of understock and
overstock was overcome whilst increasing the total revenue and keeping the BEP to be the same with a net
increase in profit as well.
As demonstrated in appendix (1.2), the percent ratio for product BR01, BR03, and BR05 are
relative to rest of the other products. Which makes sense because lowering the cut-off rate indicates that as
we increase the supply of particular beer types these beer types then make up a larger percentage of our
profits. Also, as indicated in the Appendix (1.3) the percentage of fixed cost has also tended to decrease.
Maintaining the excess demand to less than 10% of total demand rule caters to all the aspect of the proposed
business plan.
Appendix
(1.1)
(1.2)
(1.3)
https://www.mass.gov/news/baker-polito-administration-announces-emergency-actions-to-address-covid19
Marginal decision for Organizational and HR Management
Human resource management is how to reasonably allocate the number of employees in the
enterprise’s internal control to balance the long-term development interests between the
enterprise and employees. There are three main areas that a company manager should consider:
staffing, employee compensation and benefits, and job definition. In addition, good human
resource management can affect employees’ positive work attitude, performance improvement
and unity of the collective, which is of great significance to the internal development of the
company.
The most important thing to the human resource department is to hire high quality
because the success of a start-up company is quality rather than quantity, so that the company
can attract more customers and earn more money. Having a professional brew master is the key
to Fusion BrewPub, because it will directly affect the quality of products, and indirectly affect
the sales of products. A good manager is also very important to Fusion BrewPub, because it has
to develop and adjust feasible sales strategies, just like the brain of the whole team. In addition,
Fusion BrewPub is going to hire one critical salesman in the first year due to the impact of
COVID-19, one point five in the second year and decrease to one critical salesman in the third
year. To own experienced salesmen is essential for a BrewPub because it will directly impact
sales volume of the products. The sale volume can effectively spread word of mouth. Word-of-
mouth marketing is the cheapest most effective marketing and word-of-mouth as communicators
are usually conscious of the spread and spread the process does not produce any cost. We plan to
assign excellent salesmen and raise their salary every year. Giving them suitable salaries of
$30,000 and promising them an increased salary each year are the ways to increase their working
motivation and have passions to seriously treat this job. After the first year of initial
establishment, we think the second year will be unstable and abustle, so we assign more
salesmen this year. Decreasing the salesmen number will also save money for the company and
can use the extra money hiring more workers based on company becomes stable and increasing
customers require more laborers add in to provide better service. Except for the critical salesmen,
we also decide to hire one normal salesman in the first year and 1.5 in second and third years to
help critical salesmen share the work.
Application of Decision Support Tools Organizational and HR Management
SWOT ANALYSIS:
SWOT analysis originally came from the marketing field and is usually used by market strategy
analysts to analyze the internal and external environment of an enterprise and formulate the
enterprise development strategy. However, the technical method itself is not professional, so we
can also use SWOT analysis method to serve the human resource planning which is closely
related to the enterprise strategy. From the perspective of the SWOT analysis method, it is
feasible to use SWOT analysis method in human resource planning. Originally to the enterprise
internal environment analysis of the advantages and disadvantages, in human resource planning
can be converted into enterprise’s current human resources situation analysis of the advantages
and disadvantages, and enterprise external environment analysis of the opportunities and threats,
is equivalent to the selection of the influence factors of the labor market, the prospect of
personnel analysis and the threat of competitors. By combining their own advantages and
disadvantages and recognizing the surrounding labor market environment and prospect,
enterprises can reduce the difficulty of decision-making and make more accurate human resource
planning. analysis is an effective tool that combines internal and external factors to analyze the
strengths, weaknesses, opportunities and threats of human resource management, enabling
enterprises to make appropriate adjustments to human resources and salary distribution.
•
Strength:
o
Fusion BrewPub plans to hire experienced sales staff and brew masters.
o
Owner of Fusion BrewPub saves money on outsourcing for craft beer beverages
because they are made in house.
•
Weakness:
o
The experienced staff and brew master could leave if offered better
wages/opportunity at another company.
o
The experienced staff may ask for a high salary which may increase the budget of
the fixed cost for Fusion BrewPub.
o
•
Disgruntled employee who ruins customer relationships.
Opportunity:
o
Growth and opportunity for the sales personnel to expand Fusion exposure in the
MicroBrewPub industry.
o
As the business continues to grow Sales personnel are incentivized as their raises
are tied to sales.
o
To keep personnel hired during the Pandemic COVID-19 the BrewPub materials
can be used to produce hand sanitizer.
•
Threats
o
Other Organizations may attract our human resources by offering higher salary
and better perks.
o
Our staff may not be able to perform up to full potential due to pandemic COVID19.
o
Lowe customer retention due to COVID-19.
PESTLE ANALYSIS:
PESTLE analysis is a framework for external analysis of key factors affecting an organization
(political, economic, social, technical, legal, and environmental). It gives employee professionals
insight into external factors affecting their organization. Analysis is flexible, so organizations can
use it in a range of different scenarios. Human resource professionals and senior managers can
use these results to guide strategic decisions. By analyzing these factors, an organization can gain
insight into the external influences that may affect its strategic and business decisions. It allows
human resources and senior managers to assess any risks specific to their industry and
organization and to use this knowledge to inform their decisions.
•
Political:
o
Due to the Tax cuts and Jobs Act it reduced effective income tax rate to 20%.
This savings can be passed through to our employees as a bonus for their hard
work.
•
o
Operating licenses for Liquor
o
Sale restriction
Economic:
o
Due to the Covid -19 pandemic, unemployment rate is increasing which could
decrease customers spending money on beer. With less money being spent we
may not need a large sales force.
•
Social
o
Due to Covid-19 the lifestyle trends may change. Employees may expect
protective gear Protective Personal Equipment to be provided.
o
Occupational Safety and Health Administration (OSHA) may increase standards
of restaurants and brewpubs.
•
Technology
o
Technology development taking over workers jobs.
o
Other businesses might purchase our BrewPub technology and attempt to produce
similar craft Beers.
•
Legal
o
Ensuring that customers are 21+ otherwise we may lose liquor licenses.
o
Restaurants & BrewPub may be required to reduce potential occupation due to
COVID-19 restrictions.
•
Environment
o
Properly disposing of beer to avoid pollution.
o
Weather conditions in Boston could shut down businesses.
o
Weather conditions could affect supply chain and the decline of raw material.
o
Following corporate responsibility guidelines.
Methodology for Applying Decision Tools for Organizational and HR Management
These two cycles are selected by business simulation, namely cycles 6 and 7. In the seventh
cycle, the number of employees and the distribution of wages on the payroll are shown in
appendix 1. Key sales and general sales are paid in positive Numbers, which means that based on
current operations and the next two years, the company can afford to pay that much. In addition,
in appendix 2, the salary cost from FY-1 to FY-3 increases steadily, which means that the
company is in a good position and does not overpay or employ too many employees. In order to
maintain the status quo, companies should use value-added wages to retain talent. In case of
additional costs due to the loss of staff. Key staff such as breweries are key to beer production, so
they will be seen as talent, so the company has decided to raise wage growth to 10 per cent over
the next two years to keep them motivated. Once the company’s business is stable and more
customers are willing to come to the restaurant, the company can hire more ordinary workers and
provide better service in the future. The results of the sixth cycle are shown in appendix 3.
Although the earnings in the first and third years are positive for the salesperson, the earnings in
the second year are negative. At the same time, in appendix 4, after using this tool, the salary
cost of FY-1 to FY-3 increases steadily, and the decline of salary cost directly affects the
reduction of fixed cost, so that it can obtain more benefits in other fields. Internal employee pay
adjustment has less impact on the whole enterprise, but it is also very important for the enterprise
to retain talent in beer production and innovation.
Appendix 1
Appendix 2
Appendix 3
Appendix 4
Purpose of the Report
The purpose of the report is that the owners of an existing restaurant/tavern operation is thinking
about some possibilities to promote the competitiveness of their company by investing in a new
technology for in-house brewing (BrewPub) of high quality non-pasteurized beer (craft beer).
This report described t…
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