Introduction:
Joe Costanzo is owner of a growing chain of grocery stores in the Richmond, Virginia and the Washington, D.C. area. Joe's stores specialize in organic and other specialty foods and other specialty products, which have attracted a strong following. As his business matures, Joe is now more interested in understanding how he can better manage the profitability of his stores. In particular, he is interested in understanding what drives the costs in his business.
Problem:
As a potential consultant to Joe, develop a proposal for a consulting engagement which would focus on the profitability and cost driver issues Joe is concerned about. The proposal should address which types of cost drivers should be studied and why. Also, the proposal should identify what are likely to be the important cost drivers in this business.