The year its 2017, five years since John Clarence joined the company. During that period of time much has happened.
Yummy Gelato implemented a mix of strategies to address the seasonality problem. They remodeled the stores to make them more comfortable, including tables and couches, launched a line of hot beverages like chocolates, coffees and teas, as well as a line of chocolate and cakes. They also found a compromise alternative keeping real fruit as raw material, but moving from fresh fruit to frozen fruit.
The hot line of products increased the revenues by 79% with an increase of costs f only 10%, since the winter products are high margin products. And the move to frozen fruit allowed them to materialize 80% of the reduction in costs expected with a change to concentrate.
They started expanding again and at the moment they have 23 stores, having saturated the local cape cod market.
They have plenty of cash on reserves and are looking how to expand.
The employees are for the most part happy, looking for growth opportunities and there is a sense of community between the employees with long tenures and the new workers joining the business.
In terms of competition, there is practically none in the gelato business, with only one store in Provincetown selling gelato called Gelato Italiano La Nonna, but they do not manufacture, they simply buy in bulk and resale the product. The owners are a young ambitious couple.
As far as coffee and the other new products, they compete with the national chains, Starbucks and Dunkin, but their product is differentiated enough to not be perceived as a threat.
Yummy Gelato re gained its sense of urgency in growth and is looking for ways to achieve it.
There are several possibilities, they could expand regionally, nationally or even internationally. They could expand with their own stores, or start a franchise model.
Another opportunity is to sell the cakes and gelato to restaurants in the area, since they all would like to offer those desserts in their locations.
They could offer to buy the competitors, or buy a restaurant chain of 10 locations that is up for sale now in the areas where Yummy Gelato is strongest.
As they decide which growth path (s) to take, the need to consider that if they expand, they will need to expand the head count also, and develop a new org. chart.
As the company has grown, so has the distance between the CEO and owner and the employees, and the CEO is concerned about the impact it may have on the business.
AS things stand, the store managers are responsible for local hiring, with little oversight, but that resulted in the company being sued by a prospective employee claiming he was discriminated against because the store manager only hires females. Looking at the hiring practices of that particular manager it is determined that he did only hire female staff. Which infuriates the CEO since he would never tolerate discrimination?. So he know he need to address the situation and find a way to prevent something like it from happening again.
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