Mrs. Fields Cookies Growth - Case Study Example

?Mrs. Fields’ Cookies Growth Mrs. Fields’ Cookies has been a successful company, growing from a one-retail store firm opened in 1987 to a corporationcontrolling as much as 417 different stores within a period of approximately ten years. Growth and success in Mrs. Fields’ Cookies were attributed to three factors: first it was the entrepreneurial spirit of its founders (Randy and Debbi) and their commitment in leveraging opportunities; second it was the focus on a strategy that could combine expansion (international expansion as well) while maintaining control of the initial concept of the business (expansion on the one hand could mean loss of the control or the identity of the business but essentially Randy and Debbi managed to retain the ‘feel good’ strategy despite the ‘exponential growth’); third it was the effective use of information systems in achieving efficiency in the control of the expanded business and flexibility of the operations. Especially, regarding the information systems Mrs. Fields’ Cookies was able to design a management database that best utilized resources and enabled quicker and strategic decision making, proper allocation of costs and more importantly greater focus of the management on the ‘essence’ of business; the sales. Information Systems at Mrs. Fields’ Cookies The information system configured for Mrs. Fields’ Cookies was actually based on the ‘fit’ between the organizational structure, culture and the organizational goals. It was built distinctively for the operations of Mrs. Field’s Cookies within a give business market (fresh baked cookies) and it addressed the needs and requirements of the firm in forecasting demand, anticipating sales, allocating resources, tracking sales records and measuring the performance of each of the different outlets. Apart from these, the information management system was also equipped with ‘strategic intelligence’ in assisting managers (regional or store managers) making decisions fast without wasting time dealing with paperwork or any bureaucratic procedures. In general the information system management approach undertaken by Mrs. Field’s Cookies was very enhancing and facilitated the growth and expansion of the firm as it enabled Debbi and Randy to maintain control on the one hand through centralization of operations and management. At the same time however, employees were left to do work that was essential for the business growth and which involved primarily the promotion of sales. The Acquisition of La Petite Boulangerie Within the expansion strategy of Mrs. Cookies Fields’, diversification was attempted through the acquisition of La Petite Boulangerie (LPB). Randy and Debbi show that acquisition as an excellent way of leveraging marketing opportunities by capitalizing on their brand name (according to the case study “the Mrs. Fields' name was demographically well established, and Randy believed whatever they put it on would sell”) and by extending the concept of a simple cookie store to diversifying into a ‘combination’ store (sit-down cafe). In undertaking LPB, Randy and Debbi sought to further stimulate growth of the firm by diversifying its initial business and offerings. Their aspirations were basically driven by two factors: the first factor relates to the fact that Mrs. Field’s Cookies was a growth oriented company and therefore opportunities offered were quickly grasped (despite the fact that in the early years Debbi was rather reluctant in growth because of her perceived control loss). In addition to that, Mrs. Fields’ Cookies had already acquired other firms in the past (within the expansion strategy program) and had managed to successfully incorporate them into the business structure, philosophy and culture of the company (as in the case of the Famous Chocolate Chip Company). The second factor relates to the fact that Randy was so confident about the Information Systems’ contribution to the growth and success of Mrs. Fields’ Cookies that assumed that any business project undertaken would be effectively blended with the existing business and would be best served by the existing MIS. The information systems which worked perfectly for Mrs. Cookies were sought to work perfectly for other business even in a diversified market. The first action of Randy in the light of the acquisition was to rationalize the real estate portfolio in order to fund the new acquisition and expansion of the ‘combination stores’. Additionally, Randy proceeded into a downsizing of the Le Petite Boulangerie (LPB) through laying off the majority of the previous administrative employees (maintaining only three from the total of fifty three) and assigned the administrative positions to the managers (store managers) of Mrs. Fields’ Cookies. Debbi placed senior managers at the LPB stores in order to get familiar with the new business concept. These actions undertaken by both Randy and Debbi reveal that their decisions were driven by the assumption that the combination stores would simply be considered as a further expansion of the Mrs. Fields’ Cookies stores. But both failed to take into consideration that the new business was a diversification which called for adaptation of the management style, organizational culture and organizational structure and not adjustment of the LPB to the greater firm. Le Petitte Boulangerie was an already existing organization (with 119 stores), having its own culture, governed by its own distinctive structure and managed in a distinctive style. LPB was not a new store to be opened, but an existing business which had to be carefully managed by Debbi and Randy in order to achieve success in the market. Reducing the administrative staff, centralizing the administrative functions and the decision making to the headquarters of Mrs. Fields’ Cookies, along with incorporating the management and the control of the new acquisition in the existing MIS eventually proved ineffective. This was mainly due to two reasons; first of all, Mrs. Fields’ Cookies was structured and organized in such a way to serve the objectives and the goals of its own stores. LPB was previously also organized and structured for similar purposes. Ignoring the LPB’s organizational structure, management style, business processes and operations was what eventually occurred through Randy’s actions towards absorbing the administrative functions and decision making. Le Petite Boulangerie was not an identical company to Mrs. Fields’ Cookies and its organizational structure, decision making, hierarchical structures and overall management style were deeply rooted in the culture of the firm. In short, the change introduced to the LPB as an organization (new structures, new style of management, new decision making system, centralization and reduced autonomy of the stores) was ineffective in that it did not take into account the previous practices, operations and functions of LPB. LPB’s store managers for example would be found to have less authority and autonomy, less participation in the decision making and little room for creativity. Furthermore, the changes were radical (immediately imposed after the acquisition) and Randy left no time for adjustment. Changes should take place in a strategic manner considering both the objectives of the changes and the previous ways of doing business in order to avoid conflicts (Buono and Bowditch 143). The second reason was that Randy made an explicit assumption that the Information Systems which were designed to fit the needs and requirements of Mrs. Fields’ Cookies would also be appropriate in delivering the objectives and goals of LPB. But he failed to recognize that LPB was in a different market, with different customers, different competitors and different demand. The information systems used at Mrs. Fields’ Cookies were designed in such a way that minimized the ‘human input’ and automated much of the information necessary for decision making. This was very important to Mrs. Fields’ Cookies where forecasting was essential in order to maintain the philosophy of the stores in serving ‘fresh’ baked cookies. However, LPB’s philosophy and strategy was not probably similar to Mrs. Fields’ Cookies. LPB was a bakery/sandwich chain and although forecasting would be essential it did not necessarily meant that the existing information systems would serve its objectives. Neither, it meant that high centralization and automation were necessary for the functioning and operations of LPB. In general, information systems are adapted to the needs of each firm and are designed in such a way to facilitate the functions while at the same time enabling organizational structures to be maintained (Choo 27). This meant that for LPB, a new way of doing business would be imposed (in terms of the IS) although the IS was not designed for the purpose of facilitating and assisting the functions of LPB. Information systems were therefore non-portable to other business configurations because they were built for specific purposes underpinning the strategy of Mrs. Fields’ Cookies. The aftermath of the acquisition The acquisition of Le Petite Boulangerie was eventually marked by losses reported on the part of Mrs. Fields’ Cookies. Randy in explaining the losses made an interesting comment on the fact that growth and dominance of the market needs time and cannot occur at once. This is true, given that a diversification requires a lot of resources, strategic design and strategic decision making which can only be achieved as Randy experiences the new market and not in advance. Regarding the future of LPB and its employees it is very likely that the new changes that are to be imposed by Mrs. Fields’ Cookies (in the case of ‘marrying management structure and information technologies’) will create a confusing environment underpinned by conflicting old management style and new management style, old structure and new structure and generally old ‘ways’ of doing things and ‘new’ ways of doing things. The future of LPB cannot be accurately assessed but it is very probable that Randy’s attempts to apply the managerial styles and information systems of Mrs. Fields’ Cookies to Le Petitite Boulangerie will gradually prove ineffective. Works Cited Buono, Anthony, F. and, Bowditch, James, L. The human side of mergers and acquisitions: managing collisions between people, cultures and organizations. San Francisco: Joey –Bass Publishers, 2003 Choo, Chun W. Information management for the intelligent organization 3rd ed. Medford, NJ: Information Today, Inc, 2002 Read More