Business Management

Question 1

Q.1 How operations processes differ based on the ‘4 Vs of Operation

output

According to Erasmus, Rudansky-Kloppers, & Strydom (2019) different operations

contain different characteristics. The four Vs are simply there to help with the
operations of the business, it is very important that every business looks at the 4Vs to
run the business accordingly. The 4 Vs are Volume, Variety, Variation in demand and
Visibility, Delightful Desserts being a bakery that is mainly focused on offering the best
cupcakes. We see that they make high volumes of cupcakes, and they also offer variety
of flavors which is hand-decorated by their artistic in detail, their variation of output is
that they the demand for cupcakes fluctuates during holidays and special events, and
the bakery’s visibility is good because they have customers who frequently visit the
bakery to view the expert backers in action, which has become an in-demand
experience which is something good for the business , below is a full explanation on the
4 Vs based on the Delightful Desserts bakery.

Volume of Output

The volume output is based on the amount of products produced , at Delightful

Desserts Bakey they know that during holidays and specaial events the demand for
cupcakes inceases so it pushes the to work more and produce enough cupcakes
At Delightful Desserts Bakey the owner ensures that they offer differen variety of
cupcakes

, the business offers multiple unqiue flavours and sesoanal, this is something that
attracts more custiomers because i belive that change is good and people prefer having
options when buying something

This is based on demand of the product being sold , At Delightful Desserts Bakey they
know that demand noramlly fkactuartes during holidays , which is why there is a
flexibility in scheduling and resource allocation

Q.2 Quality characteristic used in Operations quality planning and control

According to Erasmus, Rudansky-Kloppers, & Strydom (2019) quality planning is one of

the most important aspects in every business , quality is one of the main things that
helps with adding value to the business or product and it helps with maintaining the
business’s growth because the more you sell quality things , the more you get more
customers. Delightful Desserts Bakey being a food business

, the owner ensures that they produce good cupcakes hence why the business get more
customers and also, they ensure that they give their customers options by offering
multiple unique flavours and seasonal options. (Erasmus, 2019) give us the quality
charateristics used in opeartion quality planning and control namely;

functionality (performance ability)

The functionality is based on how well the products or services are performing , at
Delightful Desserts Bakey we see that the business is doing well and that it has its
potential customers. As we see that the bakery ensures that it delivers nothing but the
best and also offering multiple unique flavours and seasonal options which brings them
more customers and during the holidays most people prefer going to the store and other
customers visit the bakery just to experience bakers in action.

Appearance (aesthetic attractiveness)

Delightful Desserts Bakey ensures that they offer good cupcakes that are artistically
decorated , and the store has automated some aspect to produce hand- decorated
cupcakes , this shows that the business understands that appearance is important, and
it plays a very important role in the business.

Reliability (continuous performance capability)

When running a business being reliable is very important , Delightful Desserts Bakey
makes sure that even in peak season they cater for everyone , the bakery noticed that
during holidays and special occasions the demand fluctuates so they have a flexibility
in scheduling and resource allocation, this helps them to meet customer’s needs and
ensure that everyone is happy.

Durability (total life expectancy)

Durability is based on lifetime expectancy , Delightful Desserts Bakey cupcakes are

designed and maintained in a way that they last in the fridge , the store ensured that the
shelf life of their cupcakes and packaging preserves freshness at

all times , in that way the customers are not rushed to eat everything at once if they
bought from Delightful Desserts Bakery

Serviceability (reparability)

The stores make sure that any issues that needs to be addressed are solved. Delightful
Desserts Bakery makes sure that their customers are assisted whenever they have any
issues.

Contact (convenience of interaction

Delightful Desserts Bakery knows and understands that there might be complaints from
customers and to makes sure that is resolved quickly , the store makes sure that any
customer issues are resolved immediately through responsive customer services , the
business has friendly staff dedicated to that department to ensure that any issues that
might arise are resolved and that the customer is happy.

Q.3 Key Concepts in Vroom expectancy theory of Motivation

According to Erasmus, Rudansky-Kloppers, & Strydom (2019) the Victor Vroom’s

motivation is based the main two things , which is how much we want something and
what are the chances or how likely we think we can get that specific thing and in order to
get those things as an individual.
Key Concept Description Example from the scenario

Expectancy According to Erasmus, Rudansky- Kloppers, & Strydom (2019) Expectancy

is based on the individual’s belief that if they put some effect when doing , it will lead to
a particular level of performance , this is derived from factors such as self-esteem ,
previous achievement or support from people around the Individual. 1. Since the
cup cakes are hand decorated, the decorators ensure they make sure that the cup
cakes and nice an appealing to customers, so they put extra efforts when decorating the
cupcakes.

2. Delightful Desserts bakery ensures that they offer multiple unique flavours to
attract customers, this helps with bringing more customers because we see that the
demand fluctuates during the holidays and

special events.

3. Customers always visit the bakery to view the expert backers in action,
which is has become an in-demand experience which customers enjoy.

Instrumentality In reference to Erasmus, Rudansky- Kloppers, & Strydom (2019)

This key Concept is based on the strength if the individual’s belief that if they act a
certain way it will lead to specific results 1. Employees at Delightful Desserts
know that their performance affects their chances of getting monthly bonus, so they
ensure that they work well and serve the customers.

2. They also understand bonus are achievable if they ensure that they meet a
certain production and quality standards.

3. Employees understand they if they put extra hours they bound to get rewards,
which is something that motivates them to work more.

Valence According to Erasmus, Rudansky- Kloppers, & Strydom (2019) valence

refers to how an individual feel towards the attractiveness or anticipated satisfaction,
this is identified by the next person’s perception on how the outcomes will achieve or
interfere with his or her needs 1. Delightful Desserts bakery employees
understand that behaving and ensuring that customer service is done properly it will
bring more customers to the store

2. The bakery makes sure that they maintain quality cupcakes and ensuring that
customer service is important, they do this by ensuring that their cupcakes are
consistently moist and flavorful to meet the customer’s expectations
3. The business also has a friendly dedicated team that is there to assist if there are
any complaints from customers, and just to make sure that the customers are happy

and they always come back to the bakery.

Q.4 Mind Map – Types of employee compensation

According to Erasmus, Rudansky-Kloppers, & Strydom (2019) compensation is what the

employee gets in exchange of their services they put in the organization and there are
three types of compensation which is direct compensation, indirect compensation and
reward.

Direct Compensation

A direct compensation is the monthly salary that is paid into the employees nominated
account, these would be a monthly fixed contract, bonus, overtime payment. Delight
Dessert bakery has a fair structure for its employees whereas they pay their employees
a fair salary and they are also entitled to leaves while the part- time statff is being paid
based on the hours they work which is fair.

Indirect compensation

Based on Erasmus, Rudansky-Kloppers, & Strydom (2019) direct compensation is

payment that is paid indirectly to employees based on their performance. These
benefits include paid leave, medical aid, bursaries for employee’s kids and there is also
another way of compensating employees. Indirect benefits help with motivating staff
and helps with staff retention, but then again indirect compensation is benefits that are
normal and they do not push or motivate employees because it’s normal benefits that
most companies offer to its employees.

Reward

Rewards is something that each company needs to ensure that the offer to its
employees, Delight Dessert bakery can use this to improve the overall compensation
package , According to Erasmus, Rudansky-Kloppers, & Strydom (2019) rewards can be
offered through performance based which is something that the bakery can consider in
order to ensure that its staff is happy and motivation , this will also show that their hard
word is recognized and that they are valued , the business can also offer paid holidays
or they can also offer bursaries to employees who would like to further their studies and
also to the employees kids , in that way the employees will be happy which will also
benefit the business, because if the business has happy staff then best granted that the
business will run smoothly.
Mind Map- Types of Compensation

The bakery offers Full employees are retirement packages and the top management has
access to car allowance

Employees are given monthly bonuses when they put more effort in their work

Example of direct compensation

• Salary

• Bonuses

The compensation used at Delight Dessert bakery is fair on the employees but what the
HR department can do to improve it is to add more benefits that will make the staff
more happy and retain, at the ,moment what they are offering car allowance to top
management ,but that shouldn’t not be only be limited to management the company
can also go by offering staff transport for all employees which is something that will also
benefit the business.

Q.5 Three forms of Packaging

Packaging in a business is very important , the packaging of a product in the business is

also one of the factors that attracts customers .According to (Erasmus, et al., 2019)
packaging is described as a activities that is based designing, manufacturing and filling
of a product so that it can be protected and stored in a way that it can be transported
the stores for customers to buy. Delight Dessert bakery being one of the known bakeries
they ensure that their packaging caters for eating later as well, they ensure that their
packaging preserves freshness and also has a long-life shelf. There are three different
types of packing that business can follow namely

Family packaging.

This type of packing when items are packed identically hence why it is called family
packaging, Delight Dessert bakery can come up with a standard packaging for all the
cupcakes , this can include the name of store , flavor and they can use it for all the
cupcakes just and just change the flavors on the box, this help the store to have one
standard package that will be known but the customers.

Speciality Packaging

According to (Erasmus, et al., 2019) speciality packaging gives an exclusive imagine to

the product , these type of packaging are used on specialised products could be
chocolates that limited edition , Delight Dessert bakery can use this type of packing
when doing events or during holidays when they know that it is peak season , this will
show that they are celebrating holidays with the customers , this will attract more
customers during holidays and it make the cupcakes feel like an exclusive gift.

Reusable Packaging

Reusable Packaging is packing that can be used even after one is done using the
product , it could be a plastic packaging , for example the bakery can use this type of
packaging, which is good for the environment , one customer is done eating the
cupcakes they can reuse the box for something else in the house.

Delight Dessert bakery can use the reusable packaging because this is one of the
packages that are not only useable but also good to the environment ,this type of
packaging customers will be able to reuse it for other things in the house, for example if
they using plastic storage for their cupcakes ones the customer is done

with the cupcakes they can use it to store sugar or any other things in the house and
also it hold a memory that it was made or bought at their favorite bakery.

Q.6 The four phases of price determination to the new product0

Deli Delicious cupcakes

Deli Delicious cupcakes are cupcakes that are made with passion and love, these
cupcakes are made with special secrete receipt that makes them soft and favorable for
our customers, we cater different flavors so that we can accommodate all our
customers and give them options and we know that customers love having choice when
it comes to food. Since Deli Delicious cupcakes are exclusive and new in the market,
finding the right price for the cupcakes is very important, which is why the price
determination process is important.

(Designs, 2018)

Our Special recipe

• All-purpose flour

• Sugar

• Baking powder (NOT baking soda)

• Salt

• Milk

• Vegetable oil

• Vanilla extract ( Depends on the flavour made)

• Large eggs

• Water
According to Erasmus, Rudansky-Kloppers, & Strydom (2023) the price determination
process consists of four phases, this help a business to get the price for a new product
in the market, which is something that we must look at since we have a product at hand.

Phase 1 – Determination of the cost price

To determine the cost of any product or service it is very important to look at the how
much it will cost you to produce that product or service, According to Erasmus,
Rudansky-Kloppers, & Strydom (2019) the first step in the getting the price of the
product is to make sure that you calculate the total cost that the production of the
product.

• Ingredients for 20 cupcakes = R2000

• Labour =R1000

• Reuseable packaging= R500

• Our cupcakes price is= R15

Since as a business needs to make some profit our cost for each cupcake is [Link] we
also offer specials that if you order from 10 and above you will be getting 5% discount.

Phase 2- Determination of the market price

According to Erasmus, Rudansky-Kloppers, & Strydom (2019) it is very important to

make sure that before setting prices , you need to make sure that you do your research
in the market , which is something that Deli Delicious , normally price checking in the
market can be done through going to different stores and searching how much they are
charging for the product, this ca also be done by conducting market research projects
which involves customers, Since Deli Delicious Bakery is new in the market our price
marketing will done through research , we check in the market and our prices are based
on what we got in the market and obviously we made our prices cheaper and also we
invented some discounts on our products.

Phase 3-Determination of the target price

As we know that there are a lot of bakeries in the market , Deli Delicious cupcakes being
one the special ones , for my product to sell I have to make sure that my prices are lower
than the other competitors m which is why discount is given even when our prices are
low and also as business , I ensure that we offer the best cupcakes that will attract the
customers.

Phase 4-determination of the final price

Determination of the final price is based on finding the final price for the product , which
Deli Delicious cupcakes are R25 each , to conclude the final price , I checked how much
it cost to get the ingredients , getting the price in the market of other business and
ensuring that the product I am offering is attractable to consumers and it affordable
based on what we have in the market

As a business by using the four phases of price determination, this will help Deli
Delicious cupcakes to be the best in the market, and this will ensure that the business
makes its profit and attracts new customers.

Bibliography

Erasmus, B., Rudansky-Kloppers, S. & Strydom, J. W., 2019. Introduction to Business

Management. 11th edition ed. Cape Town: Oxford University Press

Erasmus, B., Rudansky-Kloppers, S. & Strydom, J. W., 2023. Introduction to Business

Management. 12th edition ed. Cape Town: Oxford University Press.

Designs, J. B., 2018. Chocolate Cupcake With White and Red Toppings. [Art] (Pexel).