ACC 3511 DECISION MAKING AND CONTROL CASE STUDY 1: SYIFA KOPI O MOHD SUFIAN B SHUKRI MUHAMMAD SAFIUDDIN

B SAMSIR MOHD AMIRUL ASYRAF BIN MOHD BAKARI

SECTION 3

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In the case related to Syifa Kopi-O, firstly it can be stated that the main issue that the owner want to solve is about finding the best way to compete with other giant business with the establishment of his new coffee service division. In order to compete with other businesses especially in coffee service business, the owner has problem to identify what is the best approach of pricing the coffee that it sold in kits. Under current approach, the company mainly uses the cost of producing coffee kits on specific customer as basis for price margin by totaling the costs consist of cost of coffee per kit and operating cost. This kind of approach can ensure that Syifa Kopi-O can guarantee the company to generate profit from every single of its customer irrespective of the amount of kits demanded by the customer. However, the companies still facing a problem using this pricing approach as it unable to maintain its targeted return on sales which 15% for every sale. In certain cases, the company can charge high profit margin on its customer but sometimes it need to give discount to certain customer in order to compete with market price which make this company had to charge lower profit margin. Below are some information related to Syifa Kopi-O: Services offered o Rented coffee brewing equipment o Free maintenance of the equipment o Packaged coffee ready for use o Delivery to the customers location o Allied products such as tea, hot chocolate, cups etc. Competitors Maxwell House (giant roasters) Nescafe (giant roasters) Hang Tuah Coffee (national coffee service firm) Kopi-O Asli (national coffee service firm)

Swot Analysis

Strengths 1) En Solihin had worked in both large and small firms 2) En Solihin experienced in all process from roasting the beans to selling the finished products (whosale & retail) 3) Syifa Kopi-O operated its own roasting plant. 4) The company sold approximately RM 1 m to some 1,000 customers. Opportunity 1) High demand from customers

Weaknesses 1) Do not know the best pricing approach. 2) Unstable profit margin gained. 3) The company could not afford to buy a full shipload of green coffee. 4) Weight of coffee will disappear in the roasting process, combustible material loss etc.

Threats 1) Competitors (giant roasters and national coffee service firms) 2) Different prices charged by different suppliers.