2023
MNM3709
ASSESSMENT 03
NAME&SURNAME: SANDISILE XULU
STUDENT NO: 64460819
, QUESTION 1
CASE STUDY: Ocean Basket
Cost drivers and practical application
1. Location Practical application: The choice of location is critical for
Ocean Basket. They need to consider factors like rent
costs, accessibility, visibility, and proximity to target
customer demographics. For example, choosing high-
traffic shopping malls with a mix of retail outlets and
entertainment options can increase foot traffic and
potential customers.
2. Menu Practical application: Ocean Basket's menu consists of a
limited number of seafood dishes. They must carefully
select seafood items based on availability, cost, and
customer preferences. Offering a diverse range of
seafood options while managing procurement costs is
essential. Additionally, they can conduct market
research to understand which items are most popular
among their target audience.
3. Operational Simplicity Practical application: Ocean Basket's operational model
focuses on simplicity, which helps in minimizing labor
costs and training expenses. This involves standardized
processes, efficient workflows, and easy-to-train staff.
Implementing user-friendly POS systems and
streamlined kitchen operations contribute to
operational simplicity.
4. Supplier Negotiations and Relationships Practical application: Establishing strong relationships
with seafood suppliers is crucial for Ocean Basket. They
can negotiate bulk purchasing agreements and explore
options for sourcing seafood sustainably and cost-
effectively. Maintaining good relationships with
suppliers can also lead to favourable terms, discounts,
and timely deliveries.
5. Marketing and Advertising Practical application: Ocean Basket needs to allocate
their marketing budget effectively to reach their target
audience. They can use a mix of traditional advertising,
social media marketing, and local promotions. Analysing
the ROI of different marketing channels and focusing on
cost-effective strategies can help maximize their
marketing budget.
6. Franchise Model Practical application: Ocean Basket can evaluate the
costs associated with their franchise model. This
includes initial investment costs for franchisees, ongoing
royalty fees, and support services provided by the
franchisor. Ensuring that the franchise model is
financially viable for both the franchisor and franchisees
is crucial.
7. Quality Assurance and Control Practical application: Maintaining high-quality standards
for seafood is essential for Ocean Basket's reputation.
They should invest in quality control measures, regular
inspections, and training programs for staff to ensure
1
MNM3709
ASSESSMENT 03
NAME&SURNAME: SANDISILE XULU
STUDENT NO: 64460819
, QUESTION 1
CASE STUDY: Ocean Basket
Cost drivers and practical application
1. Location Practical application: The choice of location is critical for
Ocean Basket. They need to consider factors like rent
costs, accessibility, visibility, and proximity to target
customer demographics. For example, choosing high-
traffic shopping malls with a mix of retail outlets and
entertainment options can increase foot traffic and
potential customers.
2. Menu Practical application: Ocean Basket's menu consists of a
limited number of seafood dishes. They must carefully
select seafood items based on availability, cost, and
customer preferences. Offering a diverse range of
seafood options while managing procurement costs is
essential. Additionally, they can conduct market
research to understand which items are most popular
among their target audience.
3. Operational Simplicity Practical application: Ocean Basket's operational model
focuses on simplicity, which helps in minimizing labor
costs and training expenses. This involves standardized
processes, efficient workflows, and easy-to-train staff.
Implementing user-friendly POS systems and
streamlined kitchen operations contribute to
operational simplicity.
4. Supplier Negotiations and Relationships Practical application: Establishing strong relationships
with seafood suppliers is crucial for Ocean Basket. They
can negotiate bulk purchasing agreements and explore
options for sourcing seafood sustainably and cost-
effectively. Maintaining good relationships with
suppliers can also lead to favourable terms, discounts,
and timely deliveries.
5. Marketing and Advertising Practical application: Ocean Basket needs to allocate
their marketing budget effectively to reach their target
audience. They can use a mix of traditional advertising,
social media marketing, and local promotions. Analysing
the ROI of different marketing channels and focusing on
cost-effective strategies can help maximize their
marketing budget.
6. Franchise Model Practical application: Ocean Basket can evaluate the
costs associated with their franchise model. This
includes initial investment costs for franchisees, ongoing
royalty fees, and support services provided by the
franchisor. Ensuring that the franchise model is
financially viable for both the franchisor and franchisees
is crucial.
7. Quality Assurance and Control Practical application: Maintaining high-quality standards
for seafood is essential for Ocean Basket's reputation.
They should invest in quality control measures, regular
inspections, and training programs for staff to ensure
1
