Cafe Cupcake Case Analysis

Getting Deeper Into Cafe Cupcakes Issues

> What Does This Mean?

Directionally Challenged

Inconsistencies

Spreading Themselves Too Thin

Bisset and Davis have trouble keeping their standards high at every location, due to the unstructured manner of their hiring process and poor management structure.

Seemingly, Bisset and Davis both have differing visions for the future of Cafe Cupcake. If they wish to succeed they must decide on what products to add and innovate with. It is also crucial that the innovation that is made does not overshadow what made the company originally successful.

Cafe Cupcake's problems stem from an overloaded menu with 200+ cupcakes and southern comfort food. Davis wants to adhere to a new healthier style and get into a new section of the market, which takes time to implement. But at the same time, Bisset wants to expand, which could inflame the current operational standard issues that the company is facing.

In regards to Operational Inconsistency and Employee Satisfaction, there is much to discuss.

Take a look at part of Exhibit 5, showing clear evidence of Employee Dissatisfaction.

> OPERATIONAL INCONSISTENCY

"Bisset and Davis noticed several red flags by early 2016. Site visits uncovered rigid adherence to procedures at the expense of customer service and employee initiative. The layers of management and formal procedures also made it difficult for cafes to respond quickly to the dynamic market. Many front line employees and assistant managers lacked the flexibility and decision making skills to adjust to the evolving menu and operations." (pg 5, par 3.)

With 200+ Cupcake recipes to be trained on along with the southern cuisine, the employees have trouble keeping up with the menu and the innovation. Snowballing further, the managers feel overloaded, overworked, and unhappy. They are unable to consistently reach the standards the company needs. This trickles down to the front-line employees feeling undervalued and lost, which could have an drastic effect on the quality of their end product- the food.

Bisset, Davis, and Patel all want to see Cafe Cupcake grow, but they have not arrived at a consensus, and are not quite on the same page.

> DIRECTIONALLY CHALLENGED

Patel echoed his concerns about rapid expansion. He felt "the company needed more HR restructure and formal systems, before it could take this next step to national coverage. He believed the company needed to be internally focused to maximize funds raised from the IPO." (pg. 7, par 1)

There was also a debate about what to do with the direct business, should they continue or stop selling to other enterprises as they grow?

Bisset believed that direct business was a core part of the original business and did not want to give up with that option.

Patel however, was rightfully concerned that with the scaling of Café Cupcake, fulfilling the enterprises orders in tandem with the restaurants, could prove too much to handle. He felt that “the direct business requires a different set of skills and a different type of employee. We need to align around the growth of the cafes and stay focused. It's time to let go.” (pg. 7, par 3)

Bisset is focused on rapid expansion. “We need to capitalize on our success. We have spent so much effort getting to this point, and now is the time to reap the rewards” (pg 7, par. 2). Davis held an opposite opinion, calling for more time. “We are just starting to get ‘our house in order’ with the new HR policies, and we need time to refine them”. (pg 7, par. 2).

Davis is focused on "market research, concept testing, and product development to expand the restaurants identity beyond cupcakes and move the menu towards healthier fare" (pg 7, par. 1). This action could take time however, pushing back the plan of national expansion. There is also the challenge of retraining employees on the new menu.

This survey from Exhibit 5 shows clearly the presence of significant employee dissatisfaction.

Because of the debate regarding the companies direction from the CEO's Bisset and Davis, as well as the lack of decision making, the employees feel that they are spread too thin.

As a consequence of the current business structure, employees are unable to keep up, quality standards are dropping, the managing department is struggling, and employee morale is at an overall low.

If there is not some restructuring, and decisions made about the future direction of the company, employees will continue to feel spread too thin.

> SPREADING THEMSELVES TOO THIN

The problems here are quite simple:

200+ cupcake recipes along with southern cuisine is difficult to train & train quickly.

Direct business is a lot to ask of the typical restaurant employee.

Standards are reported as unclear.

Restructure is needed to boost morale, and to ease employee workload.

Decisions must be made for the company to move forward.