Tea and More: The Case Analysis Research Paper

Major Facts

Customer Service

When it comes to consumer service facts, Tea and More utilizes three permanent salespersons. These representatives are usually accountable for the events within a market of numerous locations. In essence, the sales agents characterize a varied range of products to the small markets, including private restaurants and grocery stores. The employment of full-time marketing representatives has enabled the company to grow its operations within the local market. Therefore, regarding the information on consumer service, Tea and More has been leading in ensuring improved consumer experience despite facing various challenges.

Payment Conditions

The Tea and More (TAM) consumers are generally given a 30-day window period from when the product has left the inventory before their payment is considered. Furthermore, the company relies on regular mail to send its invoices despite several clients preferring the use of fax to send invoices. To maintain good consumer relations, the organization does not charge interest proportions on balances less than 90 days in arrears. Conversely, clients with bad credit standards and absent credit information are expected to pay for the products using their credit cards. In such cases, TAM allocates a 4 percent surcharge or cash managed by external sales representatives before they are presented to the company. However, the control of such finances has been problematic over the years as various personnel deducts their commissions before presenting the remaining cash to the finance department. From the facts, payment operations of the company have played a vital role in its operations, including the supply chain.

Product Variety

Another significant fact that can be assessed from the TAM’s case is the account of the aspect of product variety. Considering the growing demand for products by the leading cafeteria businesses, TAM has adjusted its production operations to focus on introducing new kinds of teas. On the contrary, the wholesale and retail sectors are inclined to six traditional tea types manufactured by the company. According to previous data from the company, the efforts to create a vast product line have been limited by the enormous capital required to realize the objective. Therefore, conclusions from the aspect of product variety are critical to the firm’s supply chain.

Major Problem

From the assessment of the case study, the main problem TMA is currently facing is the increased production costs. The company’s TMA operation expenses have surged over the years due to the growing demand for various products, inventory management procedures, and supplier deficiency. First, the aspect of a diversified commodity line requires that the company source more raw materials from other suppliers as their current partners are overwhelmed by the required quantities. Similarly, on the element of inventory management, the consumers prefer having their invoices faxed compared to regular mailing. Such guidelines will require more resources in establishing an electronic payment system, which is costly to maintain. Therefore, the issue of production cost is vital in this case; thus, the paper will present various mitigation strategies.

Possible Solutions

The challenge of increased production costs has impacted the company’s success. However, the issue can be resolved through the implementation of various approaches. To begin, TMA should assess its manufacturing operations by understanding how the tea varieties are produced and eliminating any activities that are redundant and expensive (Arhin et al., 2022). The strategy will involve streamlining each stage of the creation cycle and monitoring the capital needed to complete the step. Furthermore, it will necessitate understanding each target market and preference, thus introducing tea brands that satisfy their specific needs. Second, TMA’s managers should make an effort to cut the direct price of materials. The organization can effect this resolution by identifying competitive vendors for their raw materials (Kumarihami & Song, 2018). As a result, if the firm does not acquire a cheap supplier, it should concentrate on negotiating a long-standing partnership that will drive reduced unit costs. Finally, TMA should redesign its products by using inexpensive and fewer foundation materials without affecting quality (Du Toit et al., 2018). In this case, the corporation should streamline its goods by eliminating features that do not influence its overall marketplace appeal.

Rationale

From the analysis of the solutions to the challenge of increased production costs, the effective approach for mitigating the problem is the examination of manufacturing procedures. The strategy will be effective in the case of TMA since the company intends to introduce different varieties of tea (Arhin et al., 2022). Usually, this will improve the comprehension of the product creation activities and identify those that require significant funding. Additionally, the solution is effective as it will help the firm managers know the appropriate funding for each process, hence effective budgeting.

Implementation

To begin, the TMA managers will commence the process by communicating the objectives of the solution, which is to understand the cost of each manufacturing stage. Second, the administrators should outline the plan’s timeline in the execution design. At this stage, the executive will determine the time frame for the successful introduction of the strategy. Third, the company is expected to apportion adequate resources. In this case, the leaders will collect information on the production time for each tea and its cost and determine how they will acquire the absent materials. Fourth, the managers should allocate group staff duties by establishing an overall team schedule with general responsibilities for each member to engage. The move will help boost the knowledge of each tea brand, its requirement, and its production period. The final step is assessing success, which entails deciding how regularly TMA will examine its progress. Therefore, the challenge of increased production cost is a vital component in the tea production sector and can be effectively mitigated through understanding the production processes.

Appendix

What can we do about lost sales due to poor customer service by outside “contract” sales staff?

The issue of lost sales can be mitigated by introducing online payment systems. The e-payment services will enable the consumer to pay for the goods before or after receiving them, hence minimizing the case on cash held by contract sales personnel.

How can we restore the attractiveness and power of the TAM brand for major customers, so they aren’t lured away by low-cost, low-quality competitors?

The managers can uphold the influence and attractiveness of the company in the beverage sector by making subtle transformations to their product lines. These changes should, however, be compatible with eliminating confusion.

How can we minimize “stock outages” and other inventory problems caused by unpredictable customer ordering patterns and the continuing difficulty of getting faster production and delivery from EML in London?

Automating duties with the inventory monitoring software can address stock outages and inventory challenges. The innovation will enable TMA to monitor reduced inventory levels and swiftly detect the resupply stages for each tea varieties, hence evading the incidence of stock-outs.

How can we reduce collection time from 54 days to less than 40 days without alienating the very customer base TAM is trying to attract and retain?

The managers should introduce an installment payment policy that covers 30 days from the time of order.

What decisions should we make regarding experimentation with new tea varieties, such as the “Christmas Mint” tea that fell flat last season? Can we afford to continue such experiments? Can TAM afford to stick only to its basic teas and not compete in the “new and improved” tea market so heavily advertised by competitors?

Instead of focusing on experimentation with new brands, the company should assess and determine the demands of each target market. This approach will enable it to produce tea varieties specific to each consumer. Furthermore, the company should eliminate experimentation plans since they overwhelm the TAM’s manufacturing budget. Finally, the company should stick to its basic teas while also introducing new brands to compete effectively with its competitors.

What haven’t we thought of? Where else can financial advantages and process efficiencies be achieved?

The TAM Company has not invested in technological innovation production, distribution, and marketing. The organization uses traditional procedures to deliver, manufacture and advertise its products. However, technological innovations in the three domains will present financial and operations advantages since they will streamline and smoothen the processes involved in these stages.

References

Arhin, I., Li, J., Mei, H., Amoah, M., Chen, X., Jeyaraj, A., Li, X., & Liu, A. (2022). Looking into the future of organic tea production and sustainable farming: A systematic review. International Journal of Agricultural Sustainability, 1–13.

Du Toit, J., Nankhuni, F. J., & Kanyamuka, J. S. (2018). Opportunities to enhance the competitiveness of Malawi’s tea industry: Evidence from an analysis of the tea value chain.

Kumarihami, H. P. C., & Song, K. J. (2018). Review on challenges and opportunities in the global tea industry. 한국차학회지 제, 24(3).