MIS Case Study

The Importance of Studying

Cases
• Improve analytical ability through studying,
analyzing, and discussing actual business
scenarios
• Develop the skills of logical thinking,
searching for relevant information,
analyzing and evaluation facts, and drawing
conclusions

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 The Importance of Studying
Cases (Cont)
• A case is a description of an actual
management situation
– Paint a picture of the setting of a business
decision
• A case study is a written story that serves as
the basis for a group discussion
– A written case attempts to provide a synopsis of
past events in the life of an organization
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 The Importance of Studying
Cases (Cont)
• A good case will place you in the position
of facing a managerial challenge and
preparing an action plan
– Financial data
– Statistical information about the employees and
markets
– Organizational structure
– Technological information
– Managerial information
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 The Importance of Studying
Cases (Cont)
• Provide hands-on practice in how to
think inductively within the context of
an actual situation
• Combine theoretical concepts with
real-life experience to provide practical
decision-making experience

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 Case Analysis Outline
1. Issue
2. Environmental Analysis
3. Problems and opportunities
4. Alternatives
5. Recommendation

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 Competitor Analysis Outline
1. Description of the competitor company
2. Financial analysis issue
3. Stock/investment outlook
4. Potential/prospective for growth
5. Competitive structure
6. Role of research and development
7. Technological investment and analysis
8. Recommendation for the future
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 Industry Analysis Outline
1. Description of the industry
2. Financial analysis
3. Stock/investment outlook
4. Potential/prospective for growth
5. Competitive structure
6. Role of research and development
7. Technological investment and analysis
8. Recommendation for the future
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Industry Analysis Outline (Cont)
To complete the industry analysis, the
following steps should be helpful
1. Identify the industry
2. Seek general industry information
3. Identify and search the industry’s trade and consumer
magazines
4. Learn about the consumers of the product or service
5. Examine the patent and trademark situation in the
industry

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Industry Analysis Outline (Cont)
6. Determine the legal issues in the industry
7. Find information about specific companies in the
industry
8. Define the type of competition in the industry
9. Examine the geography of the industry
10. Determine the impact of weather and climate on the
industry
11. Examine the international market
12. Interview people from the industry
13. Fill in the gaps with information from information
providers
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 Fast-Food Industry
• Restaurant franchising(特許經營)
– Provide sales and other support for an agreed
period of time
– Include name, decor, menu, management system,
accounting system, information system
– Supplies are ordered from pre-approved sources
– During the 1970s and 1980s, 25% of restaurant
outlets, 43% of industry sales
– Ex. McDonald sells only Coca-Cola soft drinks

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 Fast-Food Industry (Cont)
• Through franchising, a business can
quickly grow and achieve higher market
penetration than a single-owner business
• The five-year survival rate for franchises is
much higher than that of start-up
businesses (85.7% vs. 23%)

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 Fast-Food Industry (Cont)
• Start-up fees
– Trade name, managerial training and
support, royalties
– McDonald’s $45,000
– Domino’s Pizza $1,000

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 Fast-Food Industry (Cont)
• Additional initial outlays
– Rent, inventory, equipment, insurance,
licenses
– Amount to 10 times the start-up fee
– McDonald’s $500,000

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 Financial Analysis of Franchise
Restaurants Industry
• $800 billion industry
• More than 8 million employees
• 1/3 dollars spent on food services goes to
franchise restaurants
• 1.7% increase in revenues in 1996
• Industry growth (domestic units) decreased
from 7.9% in 1994 to 5.9% in 1995
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 Financial Analysis of Franchise
Restaurants Industry (Cont)
• 14.6 % average profit levels in 1997
• Pizza and chicken chains grew faster than
burger chains

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 Stock/Investment Outlook
• Growth rate: 15% per year
• Investment projections for the largest
franchises are optimistic
• Sales for Wendy’s and McDonald’s will
increase by 17% and 14%
• The national trend toward two-income
households has been beneficial to the
restaurant industry
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Stock/Investment Outlook (Cont)
• In 1996, 51.9% of all spending on food
took place in restaurants, 48.1% in grocery
stores
• In 1972, only 38.2% in restaurants, but
61.8% in grocery stores

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Potential for Growth of Franchise
Industry
• Growth in the entire franchise industry:
from 41% to 50% of all retail sales
• Sales are expected to reach $2.5 trillion by
2010

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Potential for Growth of Franchise
Industry (Cont)
• Fast-food companies are searching for new
areas for growth
– Niche marketing in the US
• Marketing toward children
• Health-conscious and nutritionally balanced meals
• Home meal replacement

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Potential for Growth of Franchise
Industry (Cont)
– International development
• McDonald’s, KFC, and Burger King in Asia and
South America
– Nontraditional operations
• McDonald’s in Wal-Mart stores and gas stations
– Value offerings
• McDonald’s combo menu

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 Competitive Structure of the
Franchise Industry
• The largest 10 chains make up 15% of all
units and account for 23% of all sales
• McDonald’s remains the industry leader
– More than $15.9 billion in sales
– More than 11,000 units in the US

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 Competitive Structure of the
Franchise Industry (Cont)
• Mergers change the competitive structure of
the industry
– Wendy’s merged with Tim Horton’s in 1995
– Wendy’s purchased 40 and 35 restaurants in
1995 and 1996 respectively
– Wendy’s also plans to purchase 37 Rax
restaurants in 1996
– Wendy’s ended 1996 with 6,300 units
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Competitive Structure of the
Franchise Industry (Cont)
– Boston Market focuses on home-style entrees,
vegetables and salads
– Boston Market with sales of $384 million in
1994, 150% increase over 1993
– From 217 units to 534 units
– Over 1,000 units in 1998
– Bankrupt on October 5, 1998

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 Competitive Structure of the
Franchise Industry (Cont)
• A chief competitor to the franchise food
industry is grocery stores
• Target busy students and working parents by
offering more prepared foods, deli counters,
and eat-in dining areas

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 Technological Investment and
Analysis in the Fast-Food
Industry
• Electronic systems track inventories and
sales
• More efficient operations
• Transmit information easily
• EDI, Internet, web site, telecommunication
technology

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 Technological Investment and
Analysis in the Fast-Food
Industry (Cont)
• The role of R&D is limited to the test
marketing of new products and
improvements in food taste, calories, and
consistency
• Cost, taste, texture, shelf life, fat content

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Recommendations for the Future
of the Fast-Food Industry
• Many challenges during the first five years
of 21st century
• Sales will continue to lag in the US
• Companies must focus on nontraditional and
niche markets to increase market share
– Delivery speed, customer service, mergers

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 Questions
• What challenges and opportunities is the
industry facing?
• Does the industry face a change in
government regulation?
• How will technology impact the industry?

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 Why technology management?
• Technology management is the ultimate
battleground that will determine which
companies and owners will be the winners
and losers in the wealth creation game.

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 The Role of Technology
• A key factor in defining competitive
advantage in the modern business world
• A pervasive factor of production in the
future

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 The Role of Technology (Cont)
• Intellectual property mostly relates to
technology, not people
• High tech industries
– Advanced engineering, electronics, biological
sciences, aerospace and aviation
• Not high tech industries
– Three major companies in the tire industry

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 The Role of Technology (Cont)
• Managers’ attention over the past 50 years
has been taken up with “people problems”
• Technology management and innovation are
becoming the ultimate battleground for
leading companies
– Xerox vs. Canon, Toyota vs. GM, Ford vs.
Honda, IBM vs. Apple, Fuji vs. Kodak

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 The Role of Technology (Cont)
• The adoption and implementation of
technology can be thought of as one
important aspect of innovation
• Innovation
– New products, new processes, new managerial
approaches, and combinations of these three

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 The Role of Technology (Cont)
• Technology should be considered with the
following
– How are technological issues recognized by
senior management? As a black box? As an
input to long-range planning? For meeting
short-term objectives?
– How explicit is the recognition of technology in
each of these roles?

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The Role of Technology (Cont)
– How has management used technology to
implement strategic objectives?
– How is technology being monitored?
– How are activities relevant to technology
recognized and organized in the enterprise?

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 The Role of Technology (Cont)
• Determine the success of any technology in
industry
– Functional performance
– Acquisition costs
– Ease of use characteristics
– Operation costs
– Reliability
– Serviceability
– Compatibility
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 The Role of Technology (Cont)
• Another important concept in technology
management is the emergence of dominant
designs
– IBM PC
– Microsoft Windows operating systems for PCs

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 The Role of Technology in HP
• The implementation of SMT at ASMC
• ASMC adopted new SMT technology to
replace old technology in manufacturing
high quality ultrasound imaging products
• From through-hole (TH) technology to
SMT technology
– Reductions in board size, improved system
performance, labor savings

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A General Manager’s Perspective
on Managing Technology
• The introduction of advanced technologies
is more like changing from a car to a
helicopter than changing from an old car to
a newer model of car
– Create new opportunities

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 Technology Forecasting
• R&D management can be characterized into
three phases
1.The first stage, 1950-1975, was input-oriented.
– Setting up of many of modern R&D labs
– Establishment of research teams and processes.

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Technology Forecasting (Cont)
2.The second stage, 1975-1990, involved the
decentralization of R&D.
– Rigid coupling of business needs and development
activities
– Better project management, planning, and
monitoring systems

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Technology Forecasting (Cont)
3.In the third stage, R&D strategy is an integral
and vital element of corporate strategy.
– Balancing basic research and generic technologies
with the needs of business units

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 Technology Forecasting (Cont)
• The new forecasting paradigm for
technology integrates it as a part of
organizational intelligence.

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 The field of Technology
Management
• Technology strategy
• Development of technological capability
• Innovation management
• Technological forecasting
• Technology management, manufacturing strategy,
and business competitiveness interfaces
• Barriers to the adoption of technology
• Technology and manufacturing flexibility
• E-business, a rapidly developing field of new
technology 45