The Commerce Tavern Harvard Case Solution & Analysis

The Commerce Tavern Case Study Solution

Factors that Influence the Decision:

There are four factors that can influence the decision of accepting the credit cards at the Commerce Tavern, which are described below as well, and are shown in the Diagram 1.1.

1. The usage of the credit cards for the purpose of paying the bills.
2. The errors that might occur when filling out the sale receipts.
3. Growth in the credit cards’ sale in a year.
4. What will be the penalty if Nilson wants to back out from the agreement.

Usage of Credit Cards for the Purpose to Paid Bills:

The most important factor that can influence the decision of accepting the credit cards at the Commerce Tavern is to get the best knowledge regarding the usage of credit cards for the enabling the client to pay bills via credit cards.Mr. Franklin Nilson is reviewing the data of the hotel’s competitors, which is provided to him by Anne Hamle. Mr. Franklin Nilson is familiar with all the available lists and the price ranges that are coated by each restaurant, which are comparable to the prices of the Commerce Tavern along with the pattern of their distinctive cuisines and décor that are also similar with the Commerce Tavern.

The percentage of credit card usage in the hotel is assumed to be the perecentage rate at which eight of the Commerce Traven rivals use the credit card transaction to charge the guests, as shown in figure 1. But unfortunately the pattern of the usage data in the three consecutive years is not consistent and has ranged between 25 percent and 69 percent, with the median usage rate of 43 percent.(Makio, 2006).

Errors that might be occur during the Filling out the Sales Receipt:

The other important factors that can influence the decision of the acceptance of credit cards at the Commerce Tavern are related to the occurrence of different errors at the time of filling the sales receipt. These errors can be the acceptance of expired cards or having errors while charging the guests, which tends to the guests being more or less charged than the actual amount. These errors might occur due to the negligence of the third paragraph of the VBM contract or agreement.(Suroso, 2018).

Growth in the Credit Card Sales in a Year:

The another important factor that can influence the decision to accept the credit cards at the Commerce Tavern is related to the growth in the credit cards within a year. For this purpose, Nilson has started to analyze the growth of its competitors. In the wake of pondering those encounters and assessing their menu and wine list, Nilson accepted that the expansion in the dollar measure of bills paid with master cards or visa cards are charges with additional 5 % charges in contrast to the bills paid with money.

Additionally, Nilson chose the expansion in the annual deal of the credit card deals over the expenditure of the clients by utilizing cash, which would be required to have an additional 1 percent charges at least.. However it was incomprehensible that the expansion would ever achieve 15 percent.(Lockert, 2018).

Moving towards a better gauge, Nilson believed that that the annual increment would be under 8 percent as in excess of 8 percent, and multiple times as liable to be more than 3 percent as under. Having seen annual consistency in visa cards’ usage in Hamlet's information, Nilson felt that the expanded spending experienced in the main year would be hold for quite a long while.

What will be the Penalty if Nilson Wants to Back Out of the Arrangement?

The last important factor that can influence the decision of accepting the credit cards at the Commerce Tavern is related to the fear that what will be the penalty if Nilson wants to back out of the arrangements. According to the Hamlet, the penalty will be not more than handling the confused and angry customers, which are offered the credit card services but then those services are cancelled, leaving the customers angry at the management of the hotel.(Carbajo).

Diagram 1.1

Figure 1.1

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