5 Boroughs Bagels

1. 5 Boroughs Bagels Kristen Svenconis, Julia Angelos, William Gerber, & Harrison Baker

2. Mission Statement “To bring our customers a convenient, consistent, and quality-driven New York style bagel experience outside of the five boroughs. Offering a unique selection of delicious options catered to a college student’s hours”

3. Organization Strategy • Environmental Scanning: • Main Bagel/Breakfast Competitors: Bruegger’s Bagels, The Bagel Factory, and Dunkin’ Donuts • Wealthy area • Lots of college students, many of whom are from NY & NJ

4. Organization Strategy • Organization Strategy: • Cater to students with Lunch/Dinner/Late Night hours and food variety • Cater to the tri-state area students’ expectations of bagel quality with an authentic New York style of preparation • Core Processes: • Importation of NYC tap water • Overnight fermentation of dough • “Poach” bagels in boiling water

5. Market Analysis • Location: • The Corner of Summit Grove and W. Lancaster Avenue • Nearby Colleges: • Villanova University, Haverford College, Bryn Mawr College, & Harcum College

6. Market Analysis • Broad Target Market: • College-Aged Consumers • Support: • There are 14,000 college-aged consumers in the immediate proximity (FactFinder 2010) • A study shows college students spend 36% of their disposable income on food (E-Marketer 2013) • Market Segments: • “New York Style” segment • “Late Night” segment • “Early Crowd” segment

7. Market Analysis • Competition: • Direct Breakfast Competition • 1) The Bagel Factory • 2) Bruegger’s • Indirect Breakfast Competition • 1) Starbuck’s Coffee • 2) Dunkin Donuts

8. Market Analysis • Competition: • Direct Late-Night Competition • 1) Main-Line Bistro • Indirect Late-Night Competition • 1) Campus Corner • 2) Wingers • 3) Domino’s Pizza

9. Market Analysis • Order Winners of College-Aged Consumers: • 1) Accessibility • 2) Wide range of operating hours • 3) Unique product offerings • 5 Boroughs Bagels has aligned it’s competitive priorities with these order winners

10. Product & Service Offerings • Signature bagels: • Asiago Cheese, Blueberry, Cinnamon Raisin, Chocolate Chip, Everything, French Toast, Garlic, Gluten-free, Jalapeno Cheddar, Onion, Plain, Potato, Poppy Seed, Rosemary Olive Oil, Sesame, Sundried Tomato, Vegetable, and Whole Grain. • Specialty bagels: • Pizza Bagels, Bagel Deli Sandwiches, Peanut Butter and Jelly Bagel Sandwiches, Cheese-steak Bagel Sandwiches, Pretzel Bagels, and Cheese-y Bagel Knots • Cream Cheese Spreads: • Plain, Light Plain, Veggie, Jalapeno, Herb Garlic, Onion and Chive, Smoked Salmon, Strawberry, Raspberry, Blueberry, Banana, Nutella, Peanut Butter and Hazelnut. • For refreshments, various juices, sodas, and teas will be available for consumers.  In addition, fruit smoothies will be available for purchase. Freshly brewed coffee will also be sold at 5 Boroughs Bagels, both hot and iced.

12. Operations Strategy • External Customers: • 5 Boroughs Bagels customers, end product consumers. • Internal Customers: • 5 Boroughs Bagels bakers. • Internal Suppliers: • 5 Boroughs Bagels bakers, employees, and equipment.

13. Operations Strategy • Process Structure: • Late night/Early morning option • Seating for customers, however no wait-service

14. Operations Strategy • Customer Involvement: • Cream Cheese selection • Mix and Match option

15. Operations Strategy • Resource Flexibility: • Mixture of specialized and enlarged • Bakers, cooks, cashiers

16. Operations Strategy • Capital Intensity • High Automation

17. Service Customer-Contact Matrix Topic 2 Presentation: Process Stategy VSB 3008 - Myers

18. Quality Strategy Six Sigma “Bench mark” measurements Quality of service, environment, production Training of employee Quality management skills

19. Quality Strategy • Quality Management Skills: • Reporting of customer dissatisfaction incidents • Immediate attention to fixing issues with equipment • Elimination of less than “top notch” quality bagels

20. Quality Strategy • Top Quality Management: • Continuous Improvement • Efficiency • Timeliness • Pricing • Customer Satisfaction • Flat organizational structure

21. Quality Strategy • Six Sigma Quality Control • Bagel quality recording by bagel maker • Using quality standard guidelines http://maaw.info/SixSigmaSummary.htm

22. Quality Strategy Loyalty programs

23. Quality Control Imported water from New York “Use By” date methods Defective bagels will be analyzed Service quality – customer surveys & feedback options Employee training

24. Supply Chain Inventory Management • Low inventory levels • Monthly supplies: • to-go bags, coffee cups, juice cups, straws, lids (both coffee and juice), plastic utensils, napkins, and paper towels, cleaning supplies, bathroom supplies, light bulbs, and sweeteners • Daily/Weekly supplies: • fruit for the smoothies and cream cheeses (strawberries, raisins, apples, blueberries, bananas, kiwis, raspberries, mango, oranges), all types of milk (soy, almond, skim, 1%, 2%, whole, half and half, and buttermilk), barley malt, kosher salt, eggs, water, unbleached flour, baking soda, liquid rennet, sea salt, lox, scallions, peppers, carrots, cinnamon, marinara sauce, shredded cheese, bacon, sausage, ham, peanut butter, jelly, and butter. • Primary Suppliers: • US Food, Foods Galore, Coke, Naked Juice, Metropolitan Bakery, and New York City Water Board.

25. Supply Chain Inventory Management • New Company Goals: • Keep inventory costs low, but stay up with demand • EOQ: Economic Order Quantity

26. Supply Chain Inventory Management • Lean Inventory Management System • Assess Inventory Levels: • each day and on a weekly basis

27. Demand Management • Expect 300-400 transactions per day • Forecasting: • Early reliance on Judgment methods of forecasting • Existing and original market research • Shift to weighted moving avg. with emphasis on recent demand • As amount of historical data grows, shift to more complex, qualitative methods (exponential smoothing, trend regression)

28. Pricing Decision • Start up Budget • Total Capital Equipment: • Furniture: $3,040 • Equipment/Machinery: $34,158 • Non-depreciable equipment: $6,655 • Business License: $200

29. Pricing Decision • Annual Fixed Costs: • Buildings/Real Estate: $2,900 per month ($34,800 annually) • Legal/Accounting fees: $1,700 • Worker’s Compensation Insurance: $160 per month ($1,920 annually) • General Business Insurance: $8,000 annually • Interest expense: $3,600 annually

30. Pricing Decision • Relevant Variable Costs (monthly): • Payroll: $1,531 • Supplies: $244 • Repairs/maintenance: $286 • Advertising: $500 • Car delivery/travel: $325 • Utilities: $100 • Taxes: $1,060

31. Pricing Decision • Inventory Costs Per Month: • $231 (coffee/tea) • $1,260 (bottled juice/soda) • $348 (signature bagels) • $450 (specialty bagels) • $520 (breakfast sides/sandwiches) • $720 (fruit smoothies) • $170 (cream cheese)

32. Pricing Decision • Approximate Menu Costs: • Breakfast sandwiches (egg on a bagel with either bacon or sausage): $3.50 • Breakfast sides (sausage, bacon, hash browns): $2.00 each • Signature bagels: $0.95 each • Specialty bagels: $1.10 each • Cream cheese: additional $1.10 each • Bottled juice/soda: $1.75 each • Coffee/tea: $1.20 (small), $1.80 (medium), $2.00 (large) • Iced coffee: $1.75 (medium), $2.30 (large) • Fruit Smoothies (one size only): $3.75 each