Professional Documents
Culture Documents
Submitted by:
MINA, ALLIQUE PENN R.
2014102602
"Bo's Coffee" is a registered trademark of the business name of a chain of specialty coffee shops
that serves espresso beverages, specialty coffee beverages and others, in an ambiance that has been
created to cater to a lifestyle market with discriminating taste. It all started with a bean bursting
with the life-force of personal passion and entrepreneurial energy.
In 1994, Mr. Steve D. Benitez, President and CEO of Bo's Coffee, dreamt of sharing his coffee
experience in the United States and Europe to the local market. It was in June 1996, that the first
store of Bo's Coffee at Ayala Center Cebu, Cebu City, Philippines started operating.
It has since grown branching out into major urban areas of the Philippines. Bo's Coffee now
operates 85 branches strategically located in across the Philippines
Vision
Bo's Coffee envisions itself to be the premier specialty coffee bar in the Philippines, roasting high-
quality Philippine origin coffee beans, serving world class coffee beverages and the most
delectable selection of cakes and pastries, delivering an excellent branded customer service in a
friendly and cozy ambiance.
Mission
We believe that the relationships we build with others are what make our days full of life. It is
therefore our mission to create an atmosphere where people can come and nurture relationships,
make new ones, or simply flourish by themselves.
Our role is to provide that perfect cup of coffee, which has become the ideal medium to enjoy life
together with others or in the comfort of one's solitude, and deliver it with warm and friendly
customer service. It's all about human experience with Bo's Coffee being a big part of it.
This branch has been running for over 7 years. It employs a team of 6 members. Since it is
located inside the mall, it has a room with tables and chairs for smoking. Bos Coffee operates
from 10:00 am to 9:00 pm during Sunday to Thursday, and 10:00 am to 10:00 pm during Friday
and Saturday. It has a capacity of 65 people.
Regular customers during weekdays include office employees, and come at around 12:30
to 2:00 pm. During weekends, people who attend mass at the Victory church, card players, and
networkers are there usual customers. Unlike the other Bos Coffee branches, its branch at
Robinsons Galleria has less occurrence where people pass by the store.
Every branch of Bos Coffee has a standard target Operating Profit to hit, or better, exceed.
This is set by the Main Office of Bos Coffee. For this branch, along the other branches across the
country, except for the ones in the airport, is set to earn an operating income of 40% of the sales.
However, there are some branches unable to hit the specific target.
January February March April May June July August September October November December Total
Sales 519,485.00 394,690.00 406,120.00 421,635.00 451,515.00 416,595.00 477,850.00 468,781.00 430,286.00 434,250.00 417,265.00 427,500.00 5,265,972.00
Cost of
Goods 132,871.25 102,672.50 105,530.00 108,408.75 115,878.75 107,148.75 124,270.00 120,195.25 111,071.50 111,562.50 107,316.25 109,875.00 1,356,800.50
Sold
Gross 386,613.75 292,017.50 300,590.00 313,226.25 335,636.25 309,446.25 353,580.00 348,585.75 319,214.50 322,687.50 309,948.75 317,625.00 3,909,171.50
Profit
Operating
Expense
Salary 100,000.00 100,000.00 100,000.00 100,000.00 100,000.00 100,000.00 100,000.00 100,000.00 100,000.00 100,000.00 100,000.00 100,000.00 1,200,000.00
Rent (With 75,000.00 75,000.00 75,000.00 75,000.00 75,000.00 75,000.00 75,000.00 75,000.00 75,000.00 75,000.00 75,000.00 75,000.00 900,000.00
Water)
Electricity 20,000.00 20,000.00 20,000.00 20,000.00 20,000.00 20,000.00 20,000.00 20,000.00 20,000.00 20,000.00 20,000.00 20,000.00 240,000.00
Wifi 5,000.00 5,000.00 5,000.00 5,000.00 5,000.00 5,000.00 5,000.00 5,000.00 5,000.00 5,000.00 5,000.00 5,000.00 60,000.00
Total
200,000.00 200,000.00 200,000.00 200,000.00 200,000.00 200,000.00 200,000.00 200,000.00 200,000.00 200,000.00 200,000.00 200,000.00 2,400,000.00
OpEx
Operating 186,613.75 92,017.50 100,590.00 113,226.25 135,636.25 109,446.25 153,580.00 148,585.75 119,214.50 122,687.50 109,948.75 117,625.00 1,509,171.50
Income
Tax 41,055.03 20,243.85 22,129.80 24,909.78 29,839.98 24,078.18 33,787.60 32,688.87 26,227.19 26,991.25 24,188.73 25,877.50 332,017.73
Expense
Net
Income 145,558.73 71,773.65 78,460.20 88,316.48 105,796.28 85,368.08 119,792.40 115,896.89 92,987.31 95,696.25 85,760.03 91,747.50 1,177,153.77
After Tax
Table 1 Bo's Coffee Income Statement 2016
PROBLEM STATEMENT
11.34% below target 40% Operating Profit Margin of Bos Coffee Robinsons Galleria for the year
2016
OPERATING PROFIT
MONTH ACTUAL TARGET
January 186,613.75 207,794.00
February 92,017.50 157,876.00
March 100,590.00 162,448.00
April 113,226.25 168,654.00
May 135,636.25 180,606.00
June 109,446.25 166,638.00
July 153,580.00 191,140.00
August 148,585.75 187,512.40
September 119,214.50 172,114.40
October 122,687.50 173,700.00
November 109,948.75 166,906.00
December 117,625.00 171,000.00
Total 1,509,171.50 2,106,388.80
Table 2 Operating Profit
ACTUAL
Figure TARGET
1 Operating Profit
MENU ENGINEERING
SELLING GROSS
PRODUCT QTY. SALES COSTING POPULARITY
PRICE PROFIT
BEVERAGE
ESPRESSO
Espresso 120.00 254 30,480.00 7,620.00 22,860.00 0.69%
Beverage
CUMMULATIVE CUMMULATIVE
BEVERAGE GROSS PROFIT PERCENTAGE
GROSS PROFIT PERCENTAGE
Caffe Americano 492,986.25 492,986.25 15.25% 15.25%
Drip Coffee 474,172.50 967,158.75 14.67% 29.93%
Caffe Latte 350,175.00 1,317,333.75 10.83% 40.76%
Cappuccino 279,335.00 1,596,668.75 8.64% 49.40%
Mocha 226,215.00 1,822,883.75 7.00% 56.40%
White Chocolate
145,987.50 1,968,871.25 4.52% 60.92%
Mocha
White Chocolate
130,702.50 2,099,573.75 4.04% 64.96%
Mocha (Fp)
Caramel Latte 94,627.50 2,194,201.25 2.93% 67.89%
Coffee Jelly 91,713.75 2,285,915.00 2.84% 70.73%
Caramelo 78,705.00 2,364,620.00 2.44% 73.16%
Matcha Green Tea 58,691.25 2,423,311.25 1.82% 74.98%
Tea Bag 56,062.50 2,479,373.75 1.73% 76.71%
Hot Signature
53,437.50 2,532,811.25 1.65% 78.37%
Chocolate
Choco Chip 52,290.00 2,585,101.25 1.62% 79.99%
Crumble 51,877.50 2,636,978.75 1.61% 81.59%
Cookies N' Cream
51,450.00 2,688,428.75 1.59% 83.18%
(Fp)
Cookies N' Cream 48,322.50 2,736,751.25 1.50% 84.68%
Apple Chia Black
44,756.25 2,781,507.50 1.38% 86.06%
Tea
Mixed Berry 42,873.75 2,824,381.25 1.33% 87.39%
Strawberry 41,208.75 2,865,590.00 1.28% 88.66%
Matutum 41,062.50 2,906,652.50 1.27% 89.94%
Artisinal Chocolate 38,138.25 2,944,790.75 1.18% 91.12%
Mango 34,800.00 2,979,590.75 1.08% 92.19%
Matcha Green Tea
33,750.00 3,013,340.75 1.04% 93.24%
Latte
Bai Nature Spring 31,466.25 3,044,807.00 0.97% 94.21%
Peach Mangga
29,812.50 3,074,619.50 0.92% 95.13%
Berry
Cold White Brew 26,325.00 3,100,944.50 0.81% 95.95%
LOOSE LEAF TEA 25,290.00 3,126,234.50 0.78% 96.73%
ESPRESSO 22,860.00 3,149,094.50 0.71% 97.44%
VANILLA 20,171.25 3,169,265.75 0.62% 98.06%
Iced Signature
16,087.50 3,185,353.25 0.50% 98.56%
Chocolate
Espresso Macchiato 14,220.00 3,199,573.25 0.44% 99.00%
Sagada 11,812.50 3,211,385.75 0.37% 99.36%
Tropical Breeze Tea 9,678.75 3,221,064.50 0.30% 99.66%
Benguet 4,218.75 3,225,283.25 0.13% 99.79%
Mt. Apo 3,750.00 3,229,033.25 0.12% 99.91%
Kitanglad 2,906.25 3,231,939.50 0.09% 100.00%
Table 4 Pareto Analysis for Beverage
Based on the Pareto Analysis for beverage, Bos Coffee should focus on improving and increasing
beverage sales of the following products:
Caffe Americano
Drip Coffee
Caffe Latte
Cappuccino
Mocha
White Chocolate Mocha
White Chocolate Mocha (Fp)
Caramel Latte
Coffee Jelly
Caramelo
Matcha Green Tea
Tea Bag
Hot Signature Chocolate
Choco Chip
Crumble
Food
CUMMULATIVE CUMMULATIVE
FOOD GROSS PROFIT PERCENTAGE
GROSS PROFIT PERCENTAGE
Carrot Bar 60,243.75 60,243.75 8.35% 8.35%
According to Jeon (2015) shops offering Wi-Fi has become a means of increasing
customer retention and loyalty. Specifically, the pressure has trickled down to restaurants as
customers' demand Wi-Fi is increasing. It is also said that customers use and prefer WiFi service
more in coffee shops than restaurants.
It is located at level 1 of
It is not near the
the mall, while mall
entrance/exit doors
entrance is at level 2
11.34% Below People only pass by that area (East
Target 40% Compared to East Wing area primarily
Wing) usually because they need
consists of gadget stores
Operating Profit the other to gadget stores
Margin of Bos branches, its
Coffee Robinsons traffic rate is
Galleria for the lower Potential Other coffee Seeing the
Coffee shops
Year 2016 Only regular customers do shops are located physical
usually
customers tend to not know a at a different location
should be
know the location coffee shop level (level 2) attracts
easily
of Bo's Coffee exists in that near mall customer to a
accessed
area entrance shop
Figure 2 Why-Why Analysis
HOW-HOW ANALYSIS
Bos Coffee is one of the leading coffee shops here in the Philippines. As it continues to
improve financial growth and stability, by increasing the number customers and transactions, it is
also set that every branch, except in the airports, are bound to hit or exceed 40% Operating Profit
Margin. Even though Bos Coffee Robinsons Galleria branch has regular customers, its number is
not enough to hit the target every month. In the year 2016, the branch was 11.34% below the target.
In this study, the researcher used different analytical tools to determine the underlying cause as to
why the branch did not hit the target, and to provide ways for this branch to be able to meet the set
Operating Profit Margin.
Based on the researchers Why-Why Analysis, the root cause why this branch of Bos
Coffee did not meet the target, is because potential customers do not see the physical store. The
customer tends to go inside the shop whenever he/she sees the physical store as per HandGrounds
Research Team. Furthermore, according to He, Wang & Xu (2013), 88% of the respondents go to
coffee shops to meet their family and friends. These statements may be considered to improve
Bos Coffee traffic rate.
To provide possible solutions for the challenge Bos Coffee Robinsons Galleria encounters,
How-How Analysis is used in this paper. The following are the ways to attract customers into
going to Bos Coffee. (1) Make regular customers encourage their friends and family to visit and
purchase at this branch, by wearing t-shirts and sing mugs in their homes that are all souvenir items
from Bos Coffee. These items may be earned by collecting specific number of stamps in their
loyalty cards, which are given to regular customers. (2) Increase traffic rate by means of digital
marketing, social media, discount coupons and mall signage that lead towards the store.
RECOMMENDATION
To further improve the services of Bos coffee, the researcher used Service Quality Metrics
to determine if customers expectations toward a coffee shop is being met by Bos Coffee.
Customers expect that a coffee shop should have a fast and stable WiFi connection. This may be
a reason why should Bos Coffee upgrade its WiFi speed connection. Evaluation of employees
performances and customer survey may be used to determine if their services are delivered as
promised.
COST-BENEFIT ANALYSIS
30-day Promo
Discounts applies to the following products only and within promo period:
Pour Over and French Press: Sagada, Benguet, Kitanglad, Mt. Apo, and Matutum
Out of 10,000 flyers distributed, 2000 pax will avail the promo.
Computation:
Promo Item cost PhP 125.00
Less:
Discount 12.50
Variable Cost 31.25
Gross Margin/Item 81.25
REFERENCES
He, B., Wang S., Xu , J. (2013). Customer Loyalty to Coffee Shops: A study of Swedish
Generation Y.
Retrieved from: https://mdh.diva-portal.org/smash/get/diva2:628355/FULLTEXT01.pdf
Pearso, B. (2017). Whats the Secret to a Successful Coffee Shop. Retrieved from:
https://www.forbes.com/sites/quora/2012/12/20/whats-the-secret-to-a-successful-coffee-shop/
Team HandGround. (2017). 6 Coffee Shop Marketing Strategies That Cost Less Than $100 A
Month. Retrieved from: https://handground.com/grind/6-coffee-shop-marketing-strategies-that-
cost-less-than-100-a-month
Jeon, J. (2015). Examining How Wi-Fi A ects Customers Loyalty at Different Restaurants: An
Examination from South Korea
Retrieved from: http://digitalcommons.fiu.edu/cgi/viewcontent.cgi?article=3149&context=etd