Key Aspects of Operations
To launch the production of soft drinks, it will be necessary to rent the missing equipment. This includes the filters for initial water cleaning ($650/ month), sterilizing and dechlorinating equipment (for adding chlorine to water for sterilization and then filtering it; $850/month), and syrup pasteurizing equipment ($600/month; “Soft Drinks,” n.d.). It will also be necessary to rent premises (nearly $2,000/month), and the equipment for quality control of the product ($600/month). Equipment maintenance will cost another $400/month.
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Cost and Time Efficiencies
The listed equipment and premises will cost nearly $5,100/month. According to the NAB company portfolio, the labeling machinery and printers will cost another $1,000/month. This means that at least $6,100 will be needed to pay for all the production equipment and facilities.
The supplies (inventory) needed to produce drinks (bottles, caps, cardboard cartons, drinks ingredients) will cost $4,400 for 24,000 bottles, or 0.18333 per bottle.
If one bottle of drink is sold to retailers for $1.2, it is possible to consider that roughly $1.0 will be gained on each bottle once the cost of the supplies (inventory) is subtracted. Thus, it will be necessary to sell at least 6,100 bottles per month to only cover the rent costs.
On average, it should be possible to produce up to 10 bottles/minute (600 bottles/hour) at first. Initially, delivery can be done using the panel vans.
The competitive advantage will be gained via the differentiation and cost leadership strategy at the business level; the beverages will be cheap, to attract lower- and middle-class customers, and will come in different flavors to capture their attention and meet their desires, allowing the company to stay ahead of competitors.
At the functional level, the marketing, PR, and information management will be aimed at promoting the drinks while focusing on their attractive price and assortment of flavors.
Problems Addressed and Overcome
Research and Development: it will be needed to create the syrups that would produce tasty beverages. This is paramount for the company to stay competitive.
To manage personnel, it is possible to use specialized software such as “Namely” (Peterson, 2017), which is on-premise software that allows for personnel management, time tracking, employee data recording, etc.
To take, fulfill and track orders, as well as to manage inventory in the process of beverage production, it will be possible to use the Cin7 software (Cin7, n.d.), which can be either installed on-premise or used from the cloud.
To communicate with clients, it will be possible to use the Five9 software (Five9, n.d.). It will be stored in the cloud.
It will be necessary to purchase some hardware such as laptops or PCs in order to conduct operations necessary for stable beverage production. In addition, it will be needed to buy data storage equipment such as storage arrays, so that the company would not have to depend on other organizations for data storage and processing.
It will be needed to establish a LAN to enable communication between the computers in the office. This can be done with Ethernet. The IT personnel will help to deal with potential conflicts in software or to switch to more appropriate software if needed. Also, it will be pivotal to create a phone line, as well as a website for outside communication, advertisement, etc.
In-house personnel will have to include workers maintaining and regulating the machinery, as well as financial officers, information officers, HR department staff, quality control specialists, and IT department. This will be needed for such functional level strategies as financial, HR, and information management strategies.
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Outsourced personnel will include advertisement and PR specialists to develop and fulfill marketing and PR strategies.
Key Management and Employees
Melinda Gates, the creator of the beverage and master mixer; the key investor. President. Compensation is $90,000/year initially.
I, the second key investor and CEO of the company. MBA. Compensation is $75,000 initially.
Stephen Job, computer assistant: $11,000 annually for part-time job ($10/hour, 20 hours/week).
Ian Glass, production line foreman: $55,000 yearly.
Mary Cates, the experience of working for the federal government on legal issues: Chief Operating Officer, $70,000/year.
Chief Financial Officer, Chief Marketing Officer, Chief Information Officer: $70,000/year each.
Board Members and Advisors
The Board will consist of all the chief officers; the President will be the Board’s chairperson. The large shareholders will be considered members of the Board as well. In addition, smaller shareholders and heads of various departments of the company will be included as Board advisors.
Management Structure and Style
The top manager of the company will be its President, Melinda Cates; the next in the hierarchy will be the CEO. The rest of the executive officers will be subordinate to the CEO and will be heads of various departments within the company. The Board of Directors will be able to override the decisions of the chief officers, including the CEO (for this, a large percentage of votes will be necessary), but not the President. The structure of the management is demonstrated in Appendix.
On the whole, the democratic style of management will be adopted (Inman, O’Sullivan, & Murton, 2014). This will allow employees to show incentives and make offers pertaining to the decisions made in the organization, enhancing the effectiveness of the company’s management (Inman et al., 2014).
Cin7. (n.d.). Integrated inventory software. Web.
Five9. (n.d.). Call center software. Web.
Inman, M., O’Sullivan, N., & Murton, A. (2014). Unlocking human resource management. New York, NY: Routledge.
Peterson, A. (2017). Best HR software for small business [Blog post]. Web.
Soft drinks. (n.d.). Web.