LIVORIA SANDWICHES
November 14, 2013
STRATEGIC AND OPERATIONAL OPPORTUNITIES
FORECASTED YEARS: 2013 -2015
Prepared by Dev Das, CMA
Memorandum
November 14, 2013
TO: Paul and Sam Livoria
From: Dev Das, CMA
Subject: Strategic and Operational opportunities
Livoria Sandwiches faces major changes within the food industry in Dawkins. The city is in continuing growth and expansion, being ranked as the fastest growing number of vegetarians in the country.
Currently Livoria faces a cash shortfall due to a lawsuit. The menu has to be adapted to the market demand fast to keep up with the changes. The owners expressed the desire of having 1.1M in net profit by 2015. The goal can be reached ONLY by changing and
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Direct material is cheaper therefore a higher contribution margin can be generated.
Appendix 4 - changing the sale mix in favor of the sandwiches that bring more profitability per limited resource, Livoria is going to be able not only to meet demand but it will meet owners preference of minimum 1.1M by 2015 and increased cash flow. Changing the sales mix there are some aspects that must be considered: contribution margin per limited resource and popularity of the products.
No capital investment is required.
Cons:
Sandwiches for which Livoria is well known for might disappear from the menu by 2015, (losses in loyal customers). Veal cutlet sandwiches demand can be satisfied in proportion of 77% in 2013 [67,028/86,333 units], 90% in 2014 [78,710/87,283 units] and disappear completely in 2015 from the menu (app.4)
Limitation in number of employees Livoria can hire is a constraint against more growth possibility. Livoria can satisfy only 83% of demand in 2013, 87% in 2014 and 70% in 2015. (app.4)
Livoria will change its current business success core (meat sandwiches) in favor of vegetarian one.
Risk: Direct material is more perishable and as main ingredients, quality is a key risk for business.
Alternative (c) - Franchise
Livoria could expand its business if it follows Paul
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...................................................10 Alternative 3 – Review Existing Locations..........................................................................................11 Alternative 4 – Expansion through Franchise Operations.....................................................................11 Alternative 5 – Expand Catering Segment ...........................................................................................12 Recommendations and Action Plans .......................................................................................................12 Recommendations ..............................................................................................................................12 Action Plans .......................................................................................................................................13 Contingency Plan ...................................................................................................................................14 Attachments ...........................................................................................................................................15 Exhibit 1.............................................................................................................................................15 Exhibit 2.............................................................................................................................................16
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