Starting Cookie Business - Assignment Example

Answer When Debbi had met Randy, she was just a passionate cook with excellent bakery skills. Prior to her marriage, she had also served in a departmental store which had provided her with personal experience as how to keep customers satisfied. Randy, on the other hand was a Stanford University graduate and a well qualified economist who had the knowledge and necessary skills to run business successfully. Based on these facts, it can be assumed that the alliance would be able to start new business. Debbi’s cookies were hugely popular amongst her relatives, friends and Randy’s clients and therefore could easily start cookie business. Randy, as an economist was able to calculate the start up cost and could contribute in the management of the business. Hence their skills were complementary which was hugely beneficial for their future business. Answer 2 It was the popularity of Debbi’s cookies amongst Randy’s clients that gave birth to the idea of starting cookie business. Her cookies were in great demand and Debbie believed that she could exploit her expertise in making cookies. Debbi’s goals were to bake great cookies and provide customers with unique experience. Ensuring customer satisfaction through quality goods and caring and make them feel special was important for Debbi. Randy’s goals for the business was to make it successful by using technology to enhance information flow for effective decision making regarding operational efficiency, administration and management of its various stores. He primarily believed that mechanistic work should be delegated to machines and people should use their creativity and skills to augment business productivity through direct input like interacting with customers directly. Answer 3 Debbi faced huge dilemma while opening her second store of Mrs. Fields’ Cookies because she believed to be proactive in business and loved baking cookies and serving to customers. She believed that she should be involved into the business and with second store, she would not be able to be in two place at the same time. She was not comfortable with delegation as she preferred to being hands-on! Her management style fundamentally relied on developing unique customer relationship based on trust and caring. Thus providing customers with quality cookies and making them feel important were key ingredients. Her management style was therefore designed to give importance to employees and ensure that they believed in what they are doing. Whenever possible, she would serve customers through the counters. This became an integral part of Fields when the rapid growth followed. People centric approach became the norm and everyone was expected to sell cookies irrespective of their job description. Answer 4 Randy had played very important role in the organization. He ensured smooth operations of all its stores by developing state of the art management information system. This helped to streamline all business activities and forecast sales of the stores. The information technology hugely facilitated controlling of the operations of the individual stores through daily information exchange which enabled the corporate office to identify trends, assess maturity of the market and review future projection for growth. Randy’s role also involved in arranging financial resources for expansion and supervise accounts and investments, both on corporate level as well as stores. As such, Director of MIS reported directly to Randy. Answer 5 The in-store system of Mrs. Fields’ Cookies is unique in the business because it is totally technology driven. Specific mathematical model for computing daily schedule is distinctive in its approach. It uses work day characteristics like whether it school day or holiday, weather etc to project daily sale. The computer calculates how many cookies are expected to be sold and accordingly informs about the quantity of dough that is to be prepared and number of batches to mix and when to make cookies. Depending about the day and sale, the projection could vary and during low sale, sampling was advised to attract new customers. The store uses the information to make cookies. After two hours, unsold cookies are not sold but given free to charities. The daily routine flow of critical data to corporate office helps the head office to know if particular store is not meeting its sales goals or if it is facing any type of problem and respond quickly. Answer 6 The in-store and corporate mainly rely on control through automation. The information technology and organizational design primarily serve to meet the requirements of Debbi vis-à-vis how to make cookies and how to ensure that projected sales target are met by individual stores. Daily information flow from store to corporate office and vice versa subtly control the operations of the individual stores. The centralized control helps to streamline information flow and communication across its rapidly expanding business. The hierarchical system, though well defined with senior management, middle managers and store level employees, is nevertheless flat because effective MIS connects the higher hierarchy with store employees thus allowing communication between employees irrespective of designation. Answer 7 An ideal Fields store manager is 20-25 years of age with one or two years of college education. He/she needs to be computer savvy and must be people centric. The previous experience is not the major criteria but belief in the business is vital issue in their recruitment. They must be equally enthusiastic about the feel good factor about the cookies and must be able to convince of the same to the customers. There is less hierarchy and therefore they are expected to sell cookies at the counter while meeting their managerial duties. On the other hand, McDonald’s manager has supervisory roles who oversees the smooth operation of the outlet and ensures that customers’ requirements are met. Job hierarchy is integral part of managerial policy. Answer 8 Turnover of employees is an vital issue because it endows companies with high market credibility. The turnover of Fields’ store manager is 100% but it still does not adversely impact its market image and status. The main reason is that store managers are young college graduates and working with Fields motivates them towards acquiring higher education which they can pursue after working with Fields as they are good paymasters. Indeed, it is not a bad thing for Fields or store manager. Fields get young and enthusiastic store managers who are eager to learn and work on their skills to give good results. Fields are also contributing to the society by motivating youngsters to work and later pursue higher study. Store managers, on the other hand, not only gain unique experience of Mrs. Fields’ Cookies but are also able to finance their future scope. Answer 9 Debbie and Randy, both were against franchising mainly because it would entail loss of control over operations and management which was hugely important to them. Debbi’s primary concern was that financial output is the main aim of franchises. This could adversely influence the quality of their products and their principles which were focused on ‘feel good’ concept. Franchises quantify details to make it attractive for franchisees to follow which could significantly compromise quality. Most importantly it would alienate Debbi in getting personally involved with her customers and sell her products in feel good way or as a feel good product. This was consistent with their style because they liked to be personally involved in their stores operations. For such type of business, franchising is preferred because it helps to lower the cost of expansion over wider geographical areas. Franchisor is able to focus on its core activities and develop network activities by facilitating goods and services to the franchisee. The pressures of day today operation fall on franchisee and franchisor is able to target customer who were not previously accessible to him/her. Answer 10 The two most common ways that organizations finance themselves are bank loans and raising private equity by going public. Bank finances are not always cordial and may leave bitter experience. Bank loans are also cumbersome because they promote huge liability in terms of mortgages and exorbitant interest rates that could be crippling for business in long run. Public equity, on the other hand facilitates large amount of money at relatively short time. The onus of return is mainly based on developing credibility amongst its various stakeholders through higher productivity and maintaining high corporate ethics. Answer 11 After the initial fiasco with bank loan, Fields decided to go public with their company shares in London Stock Exchange. The main objective was to raise capital for future growth and pay off the current bank loans. But it met with lukewarm response in London Stock Exchange because the British institutional buyers did not have much knowledge and awareness about the firm as Fields had only one store in London. They believed that growth was not possible without good franchisee network. Hence, initial flak at LSE was expected. But fields’ management style was chiefly based on personal control over its various operations and therefore their decisions to finance their growth through cash flow and debt was in line with their managerial policies and style. The stores functioned as standalone financial units that met their expenses and corporate expenses were not allotted to stores. Answer 12 Fields have an organic organizational structure that thrives on participatory approach and delegation of power. It adaptive and flexible to embrace changes which are people friendly. The horizontal and vertical communication flattens hierarchical control and significantly empowers employees. Most importantly, it inculcates organizational culture that promotes mutual understanding, multiple skills and shared learning. The team work is the backbone of the organization which is committed to organizational goals and objectives. The workforce of Fields at store levels work within a non hierarchal way where the store manager often works alongside salesperson at counter and sells cookies directly to customers. The concept of ‘feel good’ permeates through the stores and makes them inviting and accessible. The organization is warm and fuzzy and therefore does not require formal organizational chart. Reference Case study provided Read More