MIS Case Study. 2 The Importance of Studying Cases Improve analytical ability through studying, analyzing, and discussing actual business scenarios Develop.

MIS Case Study

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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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• 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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• 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 company2. Financial analysis issue3. Stock/investment outlook4. Potential/prospective for growth5. Competitive structure6. Role of research and development7. Technological investment and analysis8. Recommendation for the future

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Industry Analysis Outline

1. Description of the industry2. Financial analysis3. Stock/investment outlook4. Potential/prospective for growth5. Competitive structure6. Role of research and development7. Technological investment and analysis8. 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 industry7. Find information about specific companies in the

industry8. Define the type of competition in the industry9. Examine the geography of the industry10. Determine the impact of weather and climate on the

industry11. Examine the international market12. Interview people from the industry13. 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 perio

d 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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• Start-up fees– Trade name, managerial training and

support, royalties– McDonald’s $45,000– Domino’s Pizza $1,000

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• 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 19

95 and 1996 respectively– Wendy’s also plans to purchase 37 Rax restaura

nts in 1996– Wendy’s ended 1996 with 6,300 units

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– 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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• 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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• 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 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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• 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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– 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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• 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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• 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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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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• 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

MIS Case Study. 2 The Importance of Studying Cases Improve analytical ability through studying, analyzing, and discussing actual business scenarios Develop.

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