How important is customer loyalty for smiths business

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Reference no: EM131377765

Eating In Having been employed by the same company for more than 20 years, Mary Lou Smith was shocked when she was suddenly terminated along with about 900 of her co-workers. It took Smith a few weeks to recover from the shock, then she finally began focusing her efforts on searching for a new job. Smith was sure her loyal employment history and strong skill set would land her a new job in no time; however, after several months of searching she wasn't having any luck.

With her emergency funds quickly being depleted, Smith knew she had to find a new job soon or else she'd need to start selling her assets or cashing in her retirement. The one positive aspect of having so much free time was that she could focus on her true passion, cooking. She began making a little money by catering lunches and dinners for local businesses and neighbors. Smith overheard a neighbor remark that she was hosting a large party and didn't have enough time to prepare the meal. Almost jokingly, Smith asked her how much she'd be willing to pay for a catered event. Soon Smith was catering for numerous neighbors and small businesses and she knew she had to make a decision if she would go into business for herself or continue searching for other employment.

After a year in the catering business, Smith was earning a good living and building a stellar reputation. She began catering for all types of events, including weddings, and business was so good that she hired several employees to help grow her business. As Smith begins to plan her expansion, she has asked for you help in answering the following questions:

1. How important is customer loyalty for Smith's business? What can she do to ensure her customers remain loyal? How could one disgruntled customer hurt business? What can she do to combat this challenge?

2. Research the business Yelp.com . What service does Yelp.com perform? Would a small business see Yelp.com as an opportunity or a threat? What are the pros and cons a customer should be aware of when using yelp.com?

3. Smith's responsibilities include forecasting, inventory control, scheduling, and ensuring highquality products. What types of forecasts would she require to run her business? What types of inventory would she want to track? What might happen if her inventory tracking tool was off by 50 percent? What types of schedules does Smith need to generate? What things might occur to disrupt schedules and cause her to reschedule? How can a supply chain management system help run the business?

4. Smith wants to create a business based on loyal customers and loyal employees. She offers her employees bonuses for new ideas, recipes, or business referrals. What risks is Smith encountering by offering these bonuses? One employee idea that she has implemented is turning out to be a competitive advantage for her business; however, the employee has quit and is now working for a competitor. Should Smith still pay the employee the bonus? What should she do to ensure she is building strong employee relationships?

5. Smith overheard one of her customers talking about enterprise systems such as CRM, SCM, and ERP. However, she is sure they are available only to big companies that have lots of capital. Research the Internet and find examples of enterprise systems for small business. Do you think she should invest in these types of systems to run her business? Why or why not?

Reference no: EM131377765

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