The Company’s Problem
NationaliTeas is a large international corporation that provides tea to customers across the globe. To attain their B Corp Certification, they seek to increase the value of their quality to customers. This proposal aims to provide two customer-focused ideas to increase the product value to businesses and customers alike, evaluate the potential resources, and provide means of monitoring and evaluating the program’s effectiveness. The chosen propositions include expanding the product line to include instant teas and expanding the assortment with purple and Pu’er tea varieties.
Added Customer Value
For the product to be popular, it has to offer something valuable to the customer. Expansion of the product line with instant teas answers the demand for convenience. Many people do not have the time or the equipment to properly brew a traditional tea pot (Jain, 2019). So, a large customer segment is willing to trade superior taste for convenience, and NationaliTeas could offer that value to them.
Expanding the assortment to include purple and Pu’er tea varieties means increasing the customers’ ability to choose (Jain, 2019). This particularly appeals to loyal customers, but also invites those who could not find their desired tea blend anywhere else.
Added Company Value
Both proposed solutions will likely increase the company’s market share, sales, and revenues over a 1-to-5-year timeline. Instant teas would help tap into a vast market, potentially taking a piece of it away from the company’s existing competitors, and increasing brand awareness (Cherulinam, 2020). Individuals in that sector may recognize and want to try out other products, being introduced to the brand by the widely available low-income product. Such growth would result in increased sales volumes, which would, in turn, increase revenues, adding value to the company.
The second proposition would attract customers interested in less commercially available teas and give more options to customers already loyal to the brand (Cherulinam, 2020). That would result in better market retention versus the competition and additional revenue growth.
Potential Resources
The expansion plans would require funding, time, and personnel dedicated to the subject matter. NationaliTeas can either expand their current production values to include the new flavors and types of tea or outsource both to third parties. Each has a different set of resource requirements. Increasing one’s production base will require additional machinery, new suppliers, extra workers, and oversight officers to ensure the proper functioning of the processes (Cherulinam, 2020).
The second option would require less, since everything from production to oversight will be outsourced. At the same time, logistics will have to accommodate bringing finished products from overseas (Cherulinam, 2020). Still, this solution is estimated to be much cheaper and quicker to implement than the expansion plan.
Monitoring and Evaluation
Monitoring the effectiveness and success of the initiative can be done by recording and analyzing the amount of product sold and utilizing profit per position to see if the initiative pays for itself within the allotted time period. The outsourcing model is predicted to have an easier time paying for itself due to the lower implementation costs (Damanpour et al., 2020). At the same time, it may have a lower revenue stream over the chosen period, due to production quality being outside NationaliTeas’ direct control (Damanpour et al., 2020). On the other hand, the business expansion model will take longer to pay for the overhead costs, but offer superior monitoring and evaluation of the product.
References
Cherunilam, F. (2020). International business. PHI Learning Pvt. Ltd.
Damanpour, F., Magelssen, C., & Walker, R. M. (2020). Outsourcing and insourcing of organizational activities: the role of outsourcing process mechanisms. Public Management Review, 22(6), 767-790.
Jain, M. (2019). A study on consumer behavior-decision making under high and low involvement situations. IJRAR-International Journal of Research and Analytical Reviews, 6(1), 1-10.