ChaCha

http://www.chacha.com/

ChaCha, advertised by the company as "ur mobile bff", is an on-the-go mobile question answering service for our wireless on-the-go society. Its target audience is anyone that has a cell phone and texting capabilities with a question they would like to have answered. Since it is free and easy it is popular amongst many groups, but none moreso than the under-25 crowd. ChaCha's popularity amongst this group is not only important in being a Web-2.0 service but also as a method of advertising for businesses. Since teens and young adults have their phones on them at nearly all times the cell phone is the easiest and most effective way for businesses to reach this audience, even better than television or the internet. When someone texts ChaCha a question they respond quickly and accurately, just what this generation loves, and does so with advertising within the text message. Hollywood has used ChaCha to reach teens, one example being the 2009 summer blockbuster Transformers: Revenge of the Fallen, which saw its awareness rise 27% after a ChaCha ad campaign. The ease, accuracy, and the fact that ChaCha is a free service makes it a convenient and fun application, a reason why I use the service and decided to do my Web-2.0 presentation on it.

ChaCha functions simply as a way to get an accurate answer to a question you have even if you do not have access to the internet. Once you text a question to "chacha" (242242), your question is directed to a guide knowledgable on the subject who provides you with an accurate answer usually within three minutes. It is available on 98% of U.S. phones, available 24/7, and is free (standard text messaging rates apply). This collaboration of users to find an efficient means of providing users with an answer is what makes ChaCha a Web-2.0 product, a simple yet effective one at that. The fact that answers to questions that pop into your head are available at your fingertips at any time makes it a wonderful application for the under-25 audience that is a text-crazed group.

ChaCha has many testimonials about its simplicity and effectiveness and has won numerous awards, the largest of which, in my opinion, was AT&T Mobile's Best Application of 2008. Also, ChaCha's website (listed above) is the fastest growing website in the Quantcast Top 100. On their website you can find numerous awards, press releases, and testimonials. However, their website is also significant in providing you with previous answers that have been given out to similar questions to your own in the past, thereby being an online search engine as well.

I am a huge fan and avid user of ChaCha because of its ease, convenience, and fun. Many times I have used the application to settle disputes about random things from sports statistics to whether or not a certain actor was in a particular movie. ChaCha always has the answer and they always have it quickly. I would without hesitation recommend this service to anyone because its there for you wirelessly when the internet might not be (especially if you have a cell phone that does not have internet yet like mine). Hey, it's free, why not give it a shot!

Week Nine

This week I continued my cost-cutting measures. First, I cut manager wages $25 a week (from $650 to $625) and cut server wages $.25 per hour (from $9.25 to $9.00). Also, I completely eliminated all advertising we had, feeling that the Chandler name had gotten out well enough since I had aggressive advertising campaigns every week previous.
I was pleased with one minor decision I made this week when I raised the price of a small cup by $.25 (from $2.75 to $3.00) and cut the price of a large cup $.25 (from $4.00 to $3.75). Thus, there was no total price hike, but it did encourage patrons to order larger, more-expensive cups of coffee. It worked, as for the first time small cups were not the most purchased variety. Also, this led to the highest earnings I have had since I closed weekends.
The effect of customer satisfaction, however, was negative. I am not disappointed because when I had the highest comparative satisfaction level I had a net revenue in the red on the balance sheet. I have turned that tide and am now making some money, which is very pleasing.

Week Eight

I continued to pull back the reins so to speak with my coffee shop in attempt to lower the high input costs that were leading to red numbers on the balance sheet. However, I did add one server because one did quit. I wanted to remain steady at 16 servers (because I want two servers available per hour).
I did cut back on advertising as I eliminated the $.50 off coupons that I had been running since the start of simulation. This is because not only does it cost money to advertise but now with small cups being the most popular $2 is not enough to receive for a cup of premium organic coffee.
Other than these minor details all decisions remained constant, as I do not wish to be too drastic in cutbacks (which would decrease customer satisfaction) and did not wish to add costs.

Week Seven

Thanks to new ways of showing productivity that were not originally provided by Biz Cafe but instead were posted on Moodle, I realized just how inefficient my coffee shop was. Basically, I was making customers happy, but in doing so was spending way too much and receiving way too little and was sinking deeper and deeper into the red every week.
This week came with the most drastic changes of any week thus far. I felt that not enough revenue was being made on weekends to justify the extra labor hours that were needed, so I closed weekends. I fired the weekend manager and seven servers, bringing me down to two managers and 16 servers. I felt 16 was an appropriate number of servers because I wanted two available per hour and the shop is open 80 hours a week now, with each working 10 hours per week. I also lowered wages of managers from $700 to $650 and the servers from $9.75 to $9.25. This is a decrease but is still significantly above average according to the labor report.
I was unsure how this would affect the amount of coffee since this was such a drastic change in hours and service potential. I ordered 60lbs of organic coffee and 7lbs went to waste. Also, small and large cups are now available along with the medium, so I ordered 5,000 of each of these cups and priced them at $2.50 for small, $3.25 for medium, and $4.00 for a large.

Week Six

After looking over my first monthly statement I found that my revenue was not doing nearly as well as I thought I had been. Although my gross statistics that show up in comparative results (cups sold, total sales, customer satisfaction) they do not factor in just how much I have paid in to get those results. Basically I have bought my great comparative results as I have taken the most expensive route (high wages, new furniture/espresso-maker, organic coffee, many ads) yet am charging a below-average cost for a cup of coffee (just $3.25). So the comparative results mask an overall problem at Chandler's.
For this week I decided to begin cost-cutting, not wanting to make drastic or immediate changes that may drive customers away. I simply cut ad space and radio spots this week, as I do not want to raise prices or reduce wages. In the future weeks I may begin to eliminate some servers or slowly reduce wages until I get the shop going back in the right direction. I am optimistic since Chandler's has gained such a large customer base and has done so well in terms of gross sales that if I make gradual changes then revenue will surely follow.

Week Five

After making drastic changes in the previous week I decided to slow things down this week and play things a little more conservatively and not push my luck.
Since I was disappointed with weekend sales I decided to slash two hours off of both Saturday (opens at 10 a.m. instead of 8 a.m.) and Sunday (closes at 6 p.m. instead of 8 p.m.) store hours. I did not hire or fire any servers though, instead I felt that this would just help my server to hour ratio (since four hours of the week were cut) and hopefully in turn help raise customer satisfaction.
I also decided to lower costs in that I decreased the amount of advertising from 10 spots per day on the radio down to 5, feeling that I don't need such an aggressive campaign now that our name is out there.
Yet again this week I did not order enough coffee, falling 5 lbs short of the 75 lbs that were used.
I am very happy with the results of the week since we sold more coffee this week despite having less hours and spending less money in advertising. Also, the customer satisfaction rating rose a few points. I cannot comment on the comparative results since I was the first one to complete session 5, since today is only Monday but I feel that I will remain among the top few in every category unless radical changes occur.

Week Four

This week was one of extreme changes in response to my slippage from the top of the customer satisfaction and total revenue rankings. I still sold lots and lots of coffee last week but I am not content to remain in third, so I decided drastic changes were necessary.
First off, I changed the hours so that Chandler's is open as often as possible on weekdays (from 7 a.m. to 11 p.m.) to allow for maximum sales. On the weekends I extended Saturday hours from 8 a.m. to 10 p.m. (the old weekday hours), and on Sundays from 8 to 8. This meant that Chandler's is open 106 hours per week. My goal was to have a better than 2:1 server:hour ratio, assuming that each server worked 10 hours. To meet this goal I added 10 servers, bringing me to 22 overall to meet and slightly exceed this goal.
Another important aspect in improving customer satisfaction I thought would be worker satisfaction to then make the customers happy. So I decided to raise manager wages from $650 to $700 a week ($100 better than the average). Server wages were raised from $9.50 to $9.75 an hour ($1 better than the average). I felt that this was more than fair compensation for a good attitude and work ethic.
Also, I decided to keep up the advertisement and actually exceed what I spent the previous week, going from 5 spots a day on the radio to 10. I kept the $.50 off coupon in the paper, despite the fact that I lowered the cost of a cup of medium organic coffee from $3.50 to $3.25. So my expenses went up but I still decided to lower the price because I am expecting so much volume of sales this week.
In the end I was right. This all did lead to an amazing week of sales that put me back on top (for the time being) in each of the three comparative categories. Last week 55 pounds of coffee were used, so this week I ordered 65 lbs and ended up being 10 pounds short of what was needed. That's not a bad thing though as the volume of sales even exceeded expectations.

Week Three

On this week I decided to make rather large changes, which in retrospect might not have been the best idea since I had such a good thing going. These changes included extending hours on weekend and hiring more servers not just for these additional hours, but also to make my server per hour ratio higher in hopes of increasing customer satisfaction ratings. Along with that in anticipation of a huge week of sales I ordered 60 lbs of our premium organic coffee and kept the $.50 coupons in the paper.
All of this did lead to a huge week in total sales, but due to the higher costs revenue was somewhat stagnant. The percentage of potential achieved remained around 60 to 65% depending on the day of the week, that being actual sales divided by capacity. Everything rose, however comparatively I slipped out of the number one spot in each of the three categories. I was really disappointed that customer satisfaction did not go up higher, since my high-cost moves were to gain more satisfaction as opposed to simply gaining revenue.

Week Two

In week two I wanted to continue the success I had in the first week, but make just a few slight alterations that I thought would enhance production. The only changes in decisions from week one was that I decided to cut back on advertising and add weekend hours.
The cutback on advertising was slight, keeping the newspaper ad but dropping the number of radio spots from 5/day to 2/day. The more dramatic change was the addition of weekend store openings. I decided to have the store open from 10 am to 8 pm because the weekend sales are not expected to be as great as weekday sales. Also, because of this move I added two more servers, still for the $9.50/hour wage.
I figured that this would definitely increase the volume of sales but I was unsure if this would actually lead to better revenue. I found that it did. It was worth having the extra manager shift and hiring two more employees to be open on the weekends.
Heading into week three I am very proud to have the highest customer satisfaction, and have the most sales in the class. Because of this success I do not plan to change a whole lot in the immediate future, except maybe cutting back on some costs like advertising since I really like the direction Chandler's is heading in.

Week One

Following the success of the first week, I decided to go with the same decisions as the practice week, with the exception of adding more coffee. The results were nearly the same but with slightly better revenue since an adequate amount of coffee was ordered this time. This means that we did not have to run to the store and pay extra for the coffee that we were short. So, this was an expected result that came as no surprise since I used the almost the same procedure for success just a week earlier.

Practice Week

For my startup decisions in the practice week I decided to get new furniture and a new espresso-maker. These were expensive decisions but investments that I believed would pay off in the future to enhance both ambiance and efficiency. I also decided to use advertising to get the word out about Chandler's and give a $.50 discount, as well as get 5 spots on the radio for the week. As for operations I decided on a 8 am to 10 pm daily schedule to include crowds throughout the day (from morning to studying to after-dinner). Thus, I concluded I needed 7 servers ans would pay them the above average wage of $9.50/hour to help improve worker satisfaction and hopefully efficiency as well. This is also why I am paying my managers $650/week, above the $600 average. I also decided to buy 10 pounds of organic coffee and 20,000 cups. I didn't want to buy too much coffee since it is perishable so I went with a very conservative estimate, and cups are not perishable so I decided to stock up on those.
In the end my customer satisfaction and units sold were very high. I was pleased with all the decisions I made except for the amount of coffee I initially purchased. I was about 25 pounds short of what I really needed. I feel like the advertising brought people in and the high pay of the workers led to the high customer satisfaction relative to the other people in the class. I was surprised by just how well the shop did, and how well it was in line with my view. I plan on keeping everything the same with my decisions on the real week one, except for ordering more coffee.

Hiring Decisions

Chandler's is open 14 hours on weekdays (8 am to 10 pm) in attempt to appeal to both the morning rush and those going to grab a cup of coffee after a movie or dinner, as well as those looking to relax or study throughout the day. This means that 70 hours during the course of a five day week must be filled. Biz Cafe stated that each employee works about 10 hours/week, this means that 7 servers need to be hired as well as the two managers.
I wanted the servers at Chandler's to be experienced in the food/service industry and to have an upbeat attitude. The servers need to do their job well to keep the brand and mission of the coffee shop--good coffee with good service. To ensure server efficiency I made wages $9.50/hour to servers, well above the $8.75 average at other coffee shops. Also, the managers overseeing the servers need to have experience as well, and good people skills. I trump the average of $600/week for manager pay with $650/week. At Chandler's we're willing to pay well to ensure the job gets done right.

Advertising

I decided to run an advertising spot in the local paper, advertising 50 cents off a cup of coffee. This both rases awareness of Chandler's existance and gives people an incentive to come by the shop--a discount. In the advertisement the logo of the cafe and the discount are labelled, as well as a limit to the coupon. This advertisement cost $1,400 to run for the week, as did 5 spots on the radio per day for the week, so advertising in total was $2,800 for the week. This cost, however, is a necessary one since we are such a new company needing to get awareness of our grand opening out to the public so we can have a profitable business from day one.

Logo

My logo pays testament to the name of the coffee shop (Chandler's) and the local university--whose students are the main customer base--by the color scheme being comprised of purple and gold. Just like the name of the coffee shop, I decided to keep the logo simple and to the point. The goal is for the Chandler's name to be simple and easy to remember, and let the customer base know that we support the local university!

Name Selection

I wanted my coffee shop to have a local feel and name to it. When I go around Baton Rouge to some of the local favorites they include places such as Louie's, Raoul's and Sammy's. All of these are simple names that are easy to remember, relying off of good food and good location to do business. My name is Josh which would sound a little odd as a coffee shop name, so I decided to go with Chandler's as the name of the shop because as my last name it sounds much more appropriate than my first name would.
The feedback I got on this name was positive, everyone believed it did sound like a local favorite of a coffee house which is what we strive to be. We intend on serving all of those in the campus community who are on-the-go people--people who need their coffee. We also intend upon providing the highest of quality coffee, even organic, still at reasonable prices to attract the multiple markets that exist within the area. A name like Chandler's is simple and easy to remember, allowing our coffee and service do the talking for us.

Preparations

This case is set up so that the coffee house (to be named Chandler's) will be set up in a prime location on Main St. in a college town. This makes it a prime location for visibility due to pedestrian traffic as many college students simply walk or bike to get around. Also nearby is a mall and the business school, along with an upscale women's clothing store, trendy restaraunt and bookstore. This all lead me to believe that a more upscale coffee house would suit the surrounding area, one with a nice ambiance and better quality--maybe even organic--coffee.
The initial start-up costs will include the furniture and espresso-maker which will shrink my $25,000 account down to $15,000. The fixed costs will include rent and utilities which are estimated at around $2,500/month.
The award for ambiance will most likely be due to the furniture and general upkeep of the shop with nice furniture and high quality coffee, while customer satisfaction will probably center around low prices and not waiting in line very long.