INTRODUCTION

Sprinkles is a cupcake business based in Singapore that provides the best quality cupcakes you will ever taste. The mission of the business is to let you bite into one of our moist, divine cupcakes with sumptuous frosting & delicious toppings, such that one would think of Sprinkles when they think of cupcakes.

Sprinkles create memorable cupcakes for special events in life. The business will provide catering service for events such as wedding, baby showers, graduation, birthday parties and more. Customers are able to customise decorations on the cupcakes to make it truly unique.

Sprinkles will be situated at central region of Singapore as there is a huge volume of human traffic flow. Besides purchasing from the store, customers are able to order cupcakes through our online website, www.sprinkles.com.sg

2. Planning

Porter’s Five Competitive Forces: 1) Rivalry Among Existing Firms
This refers to the number of competitors, rate of industry growth, price competition.

The number of competitors available in the market would be fairly low. This is due to the fact that the cupcake business is a relatively new concept in Singapore. The rate of industry growth would affect the business positively, as the cupcake industry is growing rapidly and has lots of potential. New product introduction would be done monthly to attract current and new customers. This would be a good way to assess and create new cupcake flavours to cater to the market. The factors mentioned above are considered opportunities in relation to Sprinkles.

2) Bargaining Power of Customers
This is the extent to which customers are able to force down prices, bargain for higher quality or more service at the same price and play competitors against each other. Customers have high bargaining power when few customers buy high volumes, the standard of goods and services are undifferentiated and customers can easily switch to another seller.

Bargaining would refer to the negotiating of the price of the product. Playing competitors against each other would mean to make the businesses compete against each other to the benefit of the customer.

Few customers buy high volumes and the standard of goods and services are undifferentiated would not affect Sprinkles. This would affect Sprinkles tremendously. Customers can easily switch to other seller, as there are other similar companies in Singapore. This would be a major threat to the business.

3) Bargaining Power of Suppliers
Bargaining power of the suppliers refer to the potential of the suppliers to increase the prices of inputs (labour, raw materials, services, etc). Powerful suppliers are able to increase the price of their raw materials or reduce its quality which will affect the business. There are plenty of alternative numbers of suppliers for cupcake business.

If the supplier for Sprinkles cupcake business were to change due to this factor, customers may realise the change in food quality and might not patronise the business. This will lead to low profits and result as a threat.

4) Threats of New Entrants
It refers to the threat new competitors pose to existing competitors in an industry. If it is easy for new entrants to enter the market, this means that the barriers to entry are low and this poses a threat to the existing firms in that market. Examples for barriers to entry are government policy, capital investments, switching costs, product differentiation etc. Capital investments are needed to stay up with the location of store, attractiveness of facilities, marketing and research and development.

There are possibilities of new bakeries or cupcakes stores opening in the same shopping mall as Sprinkles. If new stores were to operate near Sprinkles and their product are more popular, it will decrease the sales and profits of Sprinkles, thus threatening the business.

5) Threats of Substitute Products
Substitutes are products that provide similar benefits to customers. The availability of close substitute products can make an industry more competitive and decrease profit potential for the firms in the industry. Likewise, the lack of close substitute products makes an industry less competitive and increases profit potential for the firms in the industry.

Consumers have the choice to select from other substitutes such as cakes, breads, donuts and more variety of food rather than Sprinkles cupcakes. Customers may find the price of purchasing bread is more value for money instead of Sprinkles cupcakes. This will lead to low sales profits and act as a threat to the business.

2 Types of Strategies: 1) Cost Leadership Strategy
Sprinkles aim to sell cupcakes at a lower price than other business by maximising efficiency and minimising cost. To maximise efficiency, there is a high efficient procurement and distribution system, and the business would be purchasing supplies in bulk and cutting down on overhead to minimise cost.

The ingredients and materials to make the cupcakes are closely monitored such that the time period between each procurement of ingredient are just right, where the ingredients would still be considered fresh to produce the cupcakes, and yet there would not be excess stock or stock-out situation. When there is no excess stock or stock-out situation, there would not be losses due to the cost of perishable product being disposed or cost of lost sales. Sprinkles would hire students as part time worker to manage the store, as the cost to hire student would be much lower compared to hiring a full time worker. The business intends to set up 1 food outlet and also an online ordering website that would help to save rental and employment cost.

With efficiency and a low-cost position, Sprinkles is able to undercut competitors' prices and to offer comparable quality cupcakes to customers with an affordable selling price. This will help business to earn reasonable profits.

2) Product Development Strategy
Sprinkles could constantly come out with new or improved flavours for our current market, by improving the quality of the cupcakes or enhancing its aesthetic appeal.

Sprinkles could conduct a survey from the customers, to get feedbacks of how to improve the cupcakes to cater to the customer’s taste. For example, as the public are becoming more health conscious, Sprinkles can research and develop a new cupcake recipe, to sell cupcakes that are considered healthier compared to the normal cupcakes. With an improved recipe that is health-conscious, it would help Sprinkles to gain more customers.

To enhance the aesthetic appeal of the cupcakes, there can be new designs that are linked to the happenings in Singapore on them. For example, cupcakes with racecar design which is linked to the Singapore Grand Prix, Formula 1 night race, or cupcakes with the Singapore flag design to be sold during the national day period. This will allow Sprinkles to improve a common good into something special in the market, hence being able to attract more customers.

3. Organising

Functional Approach
Sprinkles is a small enterprise and therefore having functional approach is the most suitable in terms of presenting the organization clearly and concisely.

Figure 1: Organisation Chart of Sprinkles

The advantages of function approach structure:

a) Focused Objectives
The CEO will be able to use one or more approaches to solve a problem or for reaching an end result. Different projects have certain objectives and desired outcomes that lead to ultimate goals. The functional project structure emphasizes the importance of focusing on each component. In order to do this, leadership skills is required by filling in the position with the right person with the right skills. It is structured to show a top-down approach, with employees generally reporting to only one manager. For example in Sprinkles, Shelly the Human Resource Executive will have to report to her manager Abigail, the Human Resource manager.

b) High Efficiency
Focus on the technical aspects of the project to enable the team to work efficiently. Specialized within the areas, team leaders/ managers determine the approach and manage the objectives without delaying or misuse of resources, so operational procedures could be process smoothly and ensuring the outcome in terms of the time needed to reach the end result. In addition, all duties and responsibilities are clearly defined so there will be no replication of work. As Sprinkles is a establishing company, this approach is suitable as it offers a way to centralize decision and provide an unified direction from the top.

4. Leading

2 Leadership Skills: 1) Managing Groups and Group Conflicts
It is crucial for effective leaders to understand group characteristics and processes, as well as of how groups form and mature. When influencing group performance, leaders need to be aware of the factors that affect group output- conformity, size, spatial arrangement, etc.

Conflicts are a norm when there is group work. They can be good or bad for organisations and their members. The leader’s task would be to strive for constructive conflict to facilitate a high performance edge and creativity. They should also strive to avoid the harmful effects of destructive conflict.

Conflicts may be managed through structural approaches involving changes to people, goals, resources and work arrangements. A variety of interpersonal approaches- Avoid, Accommodate, Compromise, Compete and Collaborate. For true conflict resolution, leaders should strive for problem-solving through collaborative approaches.

Managing groups and group conflicts well would be of the utmost importance to our company.This is because our company is a bakery, and we would rely heavily on manpower. Our managers should be competent enough to handle conflicts which will most likely occur among them. As the company relies mostly on manpower to carry out their duties, a destructive conflict may result in poor job performance, which may in turn result in the decrease of quality of Sprinkle’s cupcakes.The company’s reputation may be marred permanently.

As mentioned earlier, constructive conflict would help facilitate a high performance edge and creativity among our employees. This high performance is essential to Sprinkles to ensure the high quality of the cupcakes made. Their creativity is also very much relied upon when attempting to make a new flavour or topping for the cupcakes.

Motivating
Motivating employees is important for any business. It stimulate desire and energy in people to be continually interested and committed to a job, tasks or goals. It is an internal feeling which can be understood only by manager since he keeps a close contact with the employees.

Sprinkles’s managers can adopt the different methods to motivate employees such as appraisal, thank you note, incentives, rewards, recognitions and more. It is important to motivate our employees as they are the ones who spend their time and effort helping to achieve goals for the business. Otherwise, they tend to not carry out additional tasks that may help our company succeed.
Employees want to feel that they are recognised and appreciated for the duties performed and by giving a simple thank you note is a strong employee motivator. When the employees feel more motivated in their job, it enables them to achieve personal goals and job satisfaction.

A well-motivated workforce helps to lower the rate of employees turnover and absenteeism and increase productivity in the company. In addition, business will be successful due to the motivation provided by managers in the company.

5. Controlling

Human Resources control
It includes processes for regulating employee performance and behaviours, intended to improve the capabilities of employees and implementing rewards, bonuses, or training programmes aimed at encouraging employees to focus on improving job scope, hence organisational goals of Sprinkles could be achieved.

The four steps of the controlling process could be used to monitor the procedure of employees tasks at Sprinkles are:

Step 1: Establish Performance Standard
Establishing performance standards would ensure the achievement of Sprinkles’ objectives after having developing the strategic plan. By setting standards, it would help employees to understand what is the organisation expectation, a look out for deficiencies, and also to reduce negative effects of incompatibility of goals of Sprinkles’ employees.

Step 2: Measure Performance
Sprinkles’ management would have to decide on the methods to measure actual performance within a specific time range. This means, monitoring performance of the employees would solely depend on the standard set by the manager, which includes the effort corporated to task, attitude, and the ability to increase profit earned weekly or monthly. In addition, ensuring each employees quantitative and qualitative performance match against standard through collective feedback and supervision from manager.

Step 3: Compare Performance Against Standards
The need to compare actual performance to the standards would be important. Comparison would be met through information provided in reports that summarise plan versus actual results. It is essential as management compare whether the standards set are met, otherwise alternative plan has to be implemented. To ensure that the standards set are met, there will be a electronic rating system to rate the service of Sprinkles’ employee in terms of customer service. Sprinkles’ management have to conduct a monthly survey or service feedback card to ensure that the employees meet the basic customer service standard such as greet, smile and thanked the customer with purchases of cupcakes. Other than that, reviewing of CCTV cameras to ensure employees met the standard that could be used to evaluate employee performance.

Step 4: Take Corrective Action
Lastly, taking corrective action is necessary, It is aimed to bring the organisational up to the level of performance standard. The management however, has to ensure that the standards are realistic, valid and reliable before taking any drastic actions.

At Sprinkles, employees who have met the standards or go the extra mile, will be given recognition such as vouchers for daily necessities for the positive performance. Any employee who has not met the standard of performance, will be sent for retraining until employees are equally capable of fulfilling standard.

6. Corporate Social Responsibility and Business Ethics

One way where Sprinkles can instill and promote good business ethics would be where the business can help to raise environmental awareness by printing messages such as “Save The Earth” on the carrier. Thus, customer would be reminded to be environmentally friendly whenever they make purchases from Sprinkles.

Another way includes having the policy of “For every 10 cupcakes sold, 1 cupcake would be donated to children from the orphanage”. Thus customers can spread the joy to the children whenever they purchase cupcakes from Sprinkles. Also, customers would be more willing to purchase the cupcakes as they would see it as doing a kind deed.

PART B – ARTICLE ANALYSIS

Article 1- New Salary Rules for Hiring Foreign Workers: MOM

Summary
Acting Minister for Manpower Tan Chuan Jin announced a new salary rule for hiring foreign workers in Parliament on Thursday, 14 March 2013, where Firms looking to hire foreigners must now pay their full-time local workers at least $1,000 a month. Tan also revealed new changes to be made to the Employment Act, which will benefit up to 450,000 workers once they come into effect in 2014. Tan added that there would be a second phase of reviewing the Employment Act where his Ministry would try to explore how contract workers, freelancers and self-employed Singaporeans can be better protected. MOM intends to table an amendment bill in the second half of this year, with the changes coming into effect in the first half of 2014.

Legal-Political Dimension:
The legal-political dimension of the general organisational environment is applied in the article. Local laws as well as governmental policies, legislations and rules are affected here. Among other aspects, the Ministry of Manpower looks into the welfare of workers and employees and ensures that they are treated fairly and are allowed to work in a conducive work environment. They are in-charge of the Employment Act and implement it in Singapore. Businesses that deal with foreign workers will have to be aware of the changes in the Act and adhere to them to avoid heavy penalties from the Ministry.

What we learnt from the article:
With the new law of having to pay their full-time local workers at least $1,000 a month to hire foreigners, there would be an increase in operating cost for businesses that hires foreign worker. Thus the business would have to find alternative ways to cut down on their expenses to earn more profit.

Article 2 – Herbalife Receives Corporate Social Responsibility Award for its Support of Taiwanese Little League Baseball Teams

Summary
Herbalife is a global nutrition company that sells personal care products to support healthy lifestyle. Herbalife has recently received the Corporate Social Responsibility (CSR) award for the category of “Care for the Community” category in supporting Taiwanese little league baseball teams. The company has been actively supporting baseball development in Taiwan to help youth baseball teams since 2006. Throughout the years, the company encouraged holistic development of baseball among children for the importance of balanced nutrition.

Community Support/Philanthropy
This refers to actively fulfilling social responsibility by gifting funds, goods or services to the community. Using the management concept for community support, Herbalife support or participate in national events, sponsoring school facilities, fund baseball games and organise educational activities to enhance the children’s knowledge on health and nutrition.

What we learn from the article:
Besides earning profits, Herbalife has successfully established their commitment by encouraging a healthy and active lifestyle by good nutrition. I felt positive about the company as they are doing a good deed for the community and providing opportunities for youth to participate in sports.

References

Elizabeth, S. (2013, March 14). New Salary Rules for Hiring Foreign Workers: MOM. Available from http://sg.news.yahoo.com/450-000-workers-to-benefit-from-employment-act-review-080849476.html Motley, Fool. (12 June 2013). Herbalife Receives Corporate Social Responsibility Award for its Support of Taiwanese Little League Baseball Teams. Available from http://www.dailyfinance.com/2013/06/12/herbalife-receives-corporate-social-responsibility/
Last accessed: 16 July 2013

APPENDICE A

APPENDICE B