Case Study Part 2: Finagle A Bagel: A Fast Growing Small Business
The part 2 of this case study provides an overview of the main concept that Finagle A Bagel has struck to, that is to provide fresh food to their customers. For this reason they prepare fresh bagels each hour at each of their 20 locations (Pride, Hughes & Kapoor, 2015). Finagle A Bagel administration also wants to increase the number of their store. There are different options available that will be discussed in the answers to the questions posed towards the end of the case study.
- Why would Finagle A Bagel maintain a business-to-customer (B2C) website even though it is not yet set up to process online orders from individuals?
There are many reasons that Finagle A Bagel would maintain a B2C website. These website have multiple dimensions like integrating information and services that could prove vital in the customer’s purchasing decisions. These websites can prove vital in communicating to customers and providing them information about a business. Before a customer makes a decision about opting a store for bagels, they might want to do an internet search and compare different bagel providers. Therefore, Finagle A Bagel can use their website to provide all the information about the freshness and customer centeredness to their customers to make a decision in their favor.
The B2C website would also help them in assessing the interest of their customers in their products. Tools like Google Analytics can help in gathering in depth information about who visit your website and what they visit. Hence Finagle A Bagel can plan on starting a delivery service to their customers once they go online with offering delivery service based on orders based online. They can ask their customers for their suggestions with this website and their customers can fill out the contact forms to ask questions from Finagle A Bagel. B2C websites can serve multiple purposes apart from offering a shopping cart for products or services.
- Do you agree with Finagle A Bagel’s plan to franchise its fresh-food concept and brand name? Support your answer.
I do agree to the concept of franchising Finagle A Bagel fresh-food. We have first to look at why there is a need to franchise instead of opening a company owned store. Franchising provides the opportunity to expand the existing volume of the network of a business. This also offers an opportunity to earn a franchising fee and a share in the profit depending on the agreement made. Research has indicated that franchisees put more effort in making an outlet better than if the same outlet was owned by the company and run by its employees (Kaufmann & Dant, 1996). The reason is that the new owners invest money in the franchise and want to earn profits from it. The management of an excessive number of outlets owned by Finagle A Bagel would become an issue in the long run as the management may not be able to reach out to each and every outlet.
Having argued in favor of franchising, I would also stress to the fact that the franchising should not be exponential but one by one. This way Finagle A Bagel can supervise the establishment of the outlet and help the new owners adopt to the standards which Finagle A Bagel has been known for. There should also be an agreement on what the quality of the food would be. I mean the new outlets should be legally bound to offer fresh bagels in accordance to the fresh-food policy of Finagle A Bagel. All these legal arrangements must be made prior to an agreement so that there are no anomalies after the contracts have been signed and the financial transaction has been made.
- Although opening new stores is costly, the co-presidents have chosen not to raise money through an IPO. Do you agree with this decision? Discuss the advantages and disadvantages.
IPO or Initial Public Offering refers to the first sales of the shares of a company in the stock market to other investors. I do not agree to this decision because in my opinion IPO is a great source to generate the needed capital for a company. In the Case of Finagle A Bagel, I do think that they would benefit from the financial push of offering their shares in the open market. This would help them in better management of their new stores that they are planning to make.
Finagle A Bagel is a trusted company by its customers. In my opinion, the shares of the company would rise in its worth due to the continuous trust of their customers. This would help in getting more out of the future shares sold out in the market.
IPO may always not be a good practice as it comes with a demand for more openness by the shareholders. The shareholders might prove to be interrupting factors in the functioning of Finagle A Bagel which would need extra resource to manage. IPO may also put pressure on them to look for short term goals of maximizing profits due to shareholders pressure. This could mean a compromise on quality or an increase in price or their products which could prove costly in the long run.
- If you were writing the executive summary of Finagle A Bagel’s business plan to show to lenders, what key points would you stress?
Finagle A Bagel is a success story. I believe that I would stress on the positive aspects as there are multiple to point out as part of a business plan. Firstly I would stress the way customer relations are successfully dealt with and how these customers have become loyal customers over time. Secondly I would stress on the fresh-food offered and how this has proven to be a successful strategy. I would also make “Finagler” which is a free gift for regular customers a part of my executive summary. This has heled the business reward loyal customers.
Kaufmann, P. J., & Dant, R. P. (1996). Multi-unit franchising: Growth and management issues. Journal of Business Venturing, 11(5), 343-358.
Pride, W., Hughes, R. and Kapoor, J. (2015). Foundations of Business, 4th Edition. Independence, KY: Cengage Publishing.
Webb, H., & Webb, L. (2001). Business to consumer electronic commerce Website quality: integrating information and service dimensions. AMCIS 2001 Proceedings, 111.