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TC The Value Chain Analysis of the Cut Bow Coffee Shop Discussion

TC The Value Chain Analysis of the Cut Bow Coffee Shop Discussion


Analyze the value chain analysis of your favorite company and describe the strengths and how they achieve economies of scale in their industry.

Please avoid big names like Amazon, Walmart, Apple, Starbucks, etc., and concentrate more on your favorite shop in your neighborhood, a small business you really like, your family business or your favorite restaurant, etc.

Post an initial 200-word response and at least two responses to other students‘ postings 

student 1 (ashley):

Economies of Scale occurs when the average cost per unit decreases as its output increases (Rothaermel, 2020). I’ve experienced this recently in my own business that I just started. I’ve only had about three orders. It’s been my dream to own a coffee shop/bakery and so while I’m doing my MBA, I’m also enrolled in culinary school, pursuing a pastry arts degree. When doing my pricing, I found it very hard to match the market because my costs were too high, even without rent and employees. It was because of labor, which is a fixed cost. Although I pay myself the Hawaii State minimum wage, the cost per unit still exceeded the cost at other bakeries. I realized that I could make more products in the same amount of time because most of the time was proofing, chilling, and watching the oven. While I chilled crusts, I could start on another batch or another product. Proofing takes the same amount of time even if the dough was doubled. So, I started to apply this to my baking days so that I could increase output and profit in the same amount of time.

Since I just registered my company a month ago and I am the sole employee, I don’t have value chain activities. I am doing everything from receiving orders, ordering and picking up materials, fulfilling orders, managing the inflow and outflow of cash, and online marketing. Once everything picks up, I will probably have to do the customer support and deal with any problems the company may face. Overall, this value chain strategy is terrible and unsustainable in the long run. Hopefully business will pick up over time and I’ll be able to rent a kitchen and hire staff.

Rothaermel, F. (2020). Strategic Management (5th ed.). McGraw-Hill Higher Education (US). 

student 2 (robert):

According to Pro (2020), Cold Stone Creamery’s value chain analysis

encompasses its inbound logistics and operations logistics. In inbound

logistics, the company has established very close contacts with its

suppliers, a move that allows it to source high-quality ingredients for

making its ice cream and mix-ins. For instance, the company works

closely with local dairies and daily cooperatives to ensure they get

high-quality milk for their ice cream products (Kahala, 2020). Secondly,

regarding operations, the company’s “mix-in” concept makes it unique in

the market, hence allowing it the capacity to overcome competition

(Study Lib, 2016). It is through the mix-in concept that the Cold Stone

Creamery can mix its ice cream with several toppings and flavors such as

fruits, nuts, and candies thus meeting each of their clients’

individualized tastes and flavors.

About strengths, Cold Stone Creamery enjoys customized and differentiated products (Kahala, 2020). For instance, through its mix-in concept, the company offers creamery products with different flavors such as fruits and nuts, a move that allows it to deliver customized ice cream products to consumers (Study Lib, 2016). Through this, the company has earned massive consumer loyalty. Additionally, Stone Cold Creamery’s strength is its brand image. It is globally known for its high-quality ice creams including Strawberry ice cream and French Vanilla ice cream, all of which have earned it the premium ice cream brand company tag (Kahala, 2020). This has allowed it the opportunity to charge premium prices.

Lastly, when it comes to economies of scale, Stone Cold Creamery leverages bulk purchasing, whereby, it buys milk from daily cooperatives in bulk (Pro, 2020). Through bulk buying, the company enjoys the opportunity of negotiating favorable prices for its raw materials, thus reducing its unit costs.


Kahala. (2020, September 17). Why cold stone creamery is the best ice cream franchise to buy. Open an Ice Cream Franchise with Cold Stone Creamery.

Pro, E. (2020, June 4). Solved porter value chain : Cold stone creamery analysis. EMBA.

Study Lib. (2016, February 5). Cold stone creamery marketing plan. 

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