Case Study

Evergreen Landscaping and Maintenance Co. Inc.

(see Figure 1-1 for Evergreens

history) is a fu -service residentia andscaping fir! offering a"n# garden# and patio andscaping services and supp ies to ho!eo"ners in the su$ur$s of a arge city. In addition# Evergreen runs a retai nursery and gardening center that se s trees# shru$s# seeds# seed ings# and f o"ers to custo!ers on a cash-and-carry $asis. %s a specia service to custo!ers# the co!pany ta&es orders for rare p ants and trees fro! ho!eo"ners and professiona andscapers. 'uring the "inter# Evergreen "or&s "ith oca and nationa andscapers to create sa!p e p ans for residentia gardens and patios# order supp ies# and custo!ers# "ith $usiness increasing throughout the su!!er unti ear y autu!n. Evergreens annua sa es are a$out ()) !i ion. It e!p oys *+ peop e year-round# !ost y on the retai side (Christ!as is a $ig season) and in p anning# $ut the nu!$er increases to )++ during the su!!er !onths. Evergreens p anning cyc e $egins in 'ece!$er "hen it p aces orders for p ants for the co!ing year. Ironica y# "hi e everyone &no"s ho" ,uic& y or s o" y !ost trees or shru$s gro"# it is a !ost i!possi$ e to p ace orders !ore than three !onths in advance. -iven the recent unusua "eather a over .orth %!erica# !ay$e thats good. /n the other hand# the Ca ifornia gro"ers "ho supp y !ost of Evergreens 0unipers# for instance# p ay their cards very c ose to their vests. Mean"hi e# Evergreen has to accurate y predict "hat it "ants to or can se each season. /ne year# a frea& stor! destroyed a its poinsettias three "ee&s $efore Christ!as# and no$ody "ithin 1#+++ !i es had any to spare. Figure 1.1 Evergreens Corporate Genealogy

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1age 1 of )2

Case Study

Pettys Garden Supply (1962) Mike Petty

Greenwood Nurseries (1973) Lu ien !ou ette

"illia# $arnwell Lands ape %r &ite t (196')

Greenwood $arnwell Lands apin( (19)3) Lily !ou ette* "illia# $arnwell

Stern Lawn are +n , (19)6) -.erett Stern

G$L, +n , (1993) Lily !ou ette

-.er(reen Gardens (199/) Lily !ou ette* -.erett Stern

-.er(reen Lands apin( and Maintenan e (1996) Lily !ou ette

Evergreens History and Structure % re ative y young co!pany "ith o d roots# Evergreens current !anage!ent structure "as the resu t of the a!a ga!ation of t"o fir!s. /ne# -reen"ood .urseries# "as esta$ ished in 1345 as a co!!ercia tree far!ing operation $y Lucien 'oucette# a Canadian u!$er0ac&. .earing retire!ent# 'oucette decided that gro"ing trees# rather than hac&ing the! do"n# "ou d $e a re ative y pain ess "ay to spend his retire!ent years. %fter his death in 1365# contro of the $usiness passed to his daughter Li y. %t a$out the sa!e ti!e# 7i ia! 8arn"e # a andscape architect# "as oo&ing for a partner for his practice. 8aving "or&ed e9tensive y "ith -reen"ood# 8arn"e entered into a

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1age ) of )2

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partnership "ith Li y 'oucette to for! -reen"ood 8arn"e

Landscaping (-8L).

:nder this agree!ent# -8L "ou d act as a vertica y integrated andscape architectura fir!# providing a the services fro! design through insta ation and pro0ect !anage!ent. For ten years# -8L prospered and $ui t a so id reputation in the co!!ercia andscaping co!!unity for ,ua ity products and services. -8L e9panded into residentia and andscaping and $egan carrying a nu!$er of non-nursery products such as ferti i;er and pesticides. In addition# it $egan providing grounds care services# $ut this service "as discontinued $ecause of high a$our costs and a sha&e-up in !anage!ent precipitated $y 7i ia! 8arn"e s retire!ent in <anuary of 1335# "hen Li y $ought hi! out. %t that ti!e# -8L e!p oyed severa contract andscape architects# $ut none "as "i ing to ta&e over the andscaping side. Mean"hi e# Li y "as finding it $urdenso!e to hand e increasing y heavy paper"or&. She then hired Sha"na Eggert as sa es director and =o! 'avidoff to run the tree far!. >ut it c ear y "as ti!e for -8L to gro" or to evo ve into so!ething different. =he opportunity ca!e in the su!!er of 1332# "ith the chance to $uy 1ettys -arden Supp y. Mi&e 1etty had run the fa!i y $usiness for three decades and had $ui t up a trusting# oya c iente e of !ost y "ee&end gardeners. 1ettys "as oca y "e &no"n as the p ace to find everything and anything for gardens. 7hi e Li y had itt e e9perience in the retai side# she "as convinced that she "asnt seeing the forest for the trees and $ought the contro ing interest in 1ettys. 8er partner in this ac,uisition "as Everett Stern# a far!er "ho operated a a"n care and !aintenance service fro! his rura ho!e. Everett and his $rother he d severa i!portant patents in i,uid ferti i;er and her$icide distri$ution. For years the Stern fa!i y had produced i,uid ferti i;ers for area far!ers. % $rief 0oint venture "ith the oca agricu tura co ege produced p ans for a revo utionary !ethod to get the ferti i;ers into the ground ,uic& y and !ore safe y than traditiona !ethods and to far! !ore efficient y "ith ess e9pensive !ateria s. %dditiona y# Everett had $een !a&ing good !oney since 133) $y se ing ferti i;ing services for ho!eo"ners through a co!pany ca ed Stern La"ncare. %s a ucrative side ine# Stern La"ncare continued to se i,uid ferti i;er to agri$usiness. Everett fe t the dea "ith

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1age 5 of )2

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-8L "as good $ecause retai garden custo!ers "ou d a so $e good a"ncare custo!ers. =he ne" 0oint venture "as ca ed Evergreen -ardens# Inc. >y 133*# it "as c ear that the organi;ationa u!$re a (Stern La"ncare# -8L and Evergreen -ardens) "as rea y one $ig concern? Everett fe t it "as !ore i&e a $ig headache. 8e approached Li y "ith the idea of retiring fro! active participation in Stern La"ncare# a o"ing the $usiness to !erge "ith -8L into Evergreen -ardens# and $eco!ing si ent partner. Li y thought that $ringing together the egacies of four fir!s into a sing e a"n# garden# and andscaping services co!pany "ith 15+ e!p oyees and (1) !i ion in annua sa es "as good idea. In 133*# Li y so d the nursery $usiness to a young entrepreneur and !oved Evergreen a"ay fro! its roots and into retai and service. In addition# there "as the agri$usiness# "ith its i!portant non-financia $enefit of c ose re ations "ith agricu tura researchers# inc uding $iotechno ogy specia ists and the near$y university. >y the spring of 1334# Evergreen Landscaping and Maintenance opened its doors# and since then $usiness has $een gro"ing. 1ro0ections for ne9t year are around ()2.5 !i ion in sa es "ith a net profit of ().6 !i ion# (1 !i ion of "hich is intended for e9pansion to a second retai site.

Structure and Competition Evergreen en0oys the egacy of four different $usinesses (see Figure 1-)) and in a "ay co!petes in four different# though re ated# !ar&ets@ gardening# a"ns# trees# and andscaping. =he e!p oyees co!e fro! four different cu tures. First# there is the egacy of 1ettys -arden Supp y A a pure y retai operation $ased on Mi&e 1ettys ove of

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1age 2 of )2

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gardens. =he there is the a"n !aintenance operation# "hich is sti

very !uch the

inheritance of Stern La"ncare and Everett Sterns no-nonsense approach to far!ing as a $usiness. =he andscaping heritage fro! 7i ia! 8arn"e Landscape %rchitecture is artistic# ,uir&y# idiosyncratic# and very hands-on. 7hi e andscaping and a"n care have $een fo ded together into contract services under Sid Cavenaugh# they sti dont "or& c ose y together. Fina y# there are Li y# Sha"na# and =o!# "ho have $een together for a ong ti!e# running Evergreen "ith the !e!ory of Lucien 'oucettes tree far! never far fro! their !inds. Figure 1.2 Evergreen Landscaping and Maintenance Co. Organisational Structure

Lily !ou ette* President

S&awna -((ert* 2i e President Sales

$eat&er 5ariad* 2i e President* 4inan e

4ran es $ar#on* 2i e President* %d#inistration

0&o#as !a.ido11* 2i e President* 3perations

5onnie So#erset* Sales Mana(er

0ulley 4o6* Pur &asin( Mana(er

9yron 0odd* 9uildin(s Super.isor

5andi e 7o88ins* Se urity Super.isor

Sid 5a.enau(&* %ssistant Mana(er* 5ontra ts

S.en $aroldson* %ssistant Mana(er* 7etail

9ill Porter* 0ransportation Super.isor

%l La#pert* %ssistant 3perations Mana(er

Pris illa 5&an* 5ontroller

Nan y M Na88* % ounts 7e ei.a8le Mana(er

Peter Nunn* ounts Paya8le Mana(er

In the garden supp y $usiness# Evergreen has at east a do;en oca strong co!petitors that offer genera gardening supp ies@ seeds# too s# ferti i;er# $asic andscaping !ateria s# pesticides# and so forth. Most of the oca hard"are stores# !a0or depart!ent stress# and !a0or grocery stores a so se at east so!e of the products that Evergreen hand es. 8o"ever# none of the! offer the range and ,ua ity of products that Evergreen has. =hese non-gardening stores rare y have staff avai a$ e to ans"er ,uestions# even during pri!e

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1age B of )2

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gro"ing seasons in the spring and su!!er. Late y# ho"ever# the !a0or discount stores have $een se ing gardening too s# seeds# hoses and other high-vo u!e ite!s at very o" prices. Li y is certain that custo!ers shop at Evergreen for infor!ation and then $uy the products at o"er prices at discount stores. Fro! Li ys point of vie" the andscaping $usiness is a CprestigeD service# a though cu tura y the practitioners of ground art are "or ds apart fro! the !eat and potatoes of Evergreen. 7hi e there are a !ost t"o do;en fir!s in to"n that offer at east so!e andscaping services# Li y and Sha"na agree that there are on y three co!petitors that provide ,ua ity service# and even then they have on y i!ited re ationships "ith oca supp iers to ensure avai a$i ity and range of reasona$ y priced supp ies. Eoc&s# pe$$ es# rai road ties# and iners for ponds are not avai a$ e at a ti!e every"here# and andscape architects try to for! strategic a iances "ith supp iers so that they arent fou ed up $y de ays that !a&e custo!ers angry. Evergreen# of course# has that sort of re ationship $ui t in. =he a"n care $usiness co!petes "ith on y one !a0or a ternative in to"n# a though there are do;ens of CstudentD a"n services that spring up "ith the passage of each verna e,uino9# on y to "ither and die "ith the second frost# never to $ oo! again. La"n !aintenance is a tric&y $usiness $ecause# i&e dentistry# it thrives on the threat of rot and decay and regu ar reca . Custo!ers are oya # a though they dont understand the If they did# they cou d !aintain their a"ns che!ica s and app ication re,uire!ents. successfu y $y $eing re ia$ e.

the!se ves. Evergreen entered this $usiness through the Stern $rothers and has operated %s noted# hea thy a"ns !a&e for increased retai $usiness# and a"n contacts create andscaping $usiness. Fina y# there is the tree $usiness. % though Evergreen no onger operates a nursery# it does a $ris& $usiness in trees and shru$s. =hey are te!pera!enta # ta&e up a ot of rea estate# and have to $e &ept a ive a year round if they arent so d. 7hi e the ive !ateria $usiness has $een neat y fo ded into the garden supp y activity# $oth Li y and Sha"na rea i;e that this is rea y the heart of Evergreen. -ro"ing things A not a"ns# hoses# or

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1age * of )2

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even andscaping A is the core $usiness of Evergreen.

Evergreens ogo is a tree.

Mar&eting trees and shru$s is sti the !ain "ay that Evergreen !a&es sa es. udgets In the !ost recent co!p eted fisca year# Evergreen has sa es of ()) !i ion# distri$uted as fo o"s (in thousands of do ars)@ !ivision Sales E"penses #ro$it Eetai ()+#+++ (14#2B+ ()#BB+ Landscaping 1#2++ 1#)B+ 1B+ La"n care B++ 5++ )++ /ther 1B+ B+ 1++ EF' 4B (4B) %d!inistration )4B ()4B) =ota ())#+B+ (13#2++ ()#*B+ .otes@ EF' inc udes research grants to the agricu tura co ege@ ad!inistration inc udes undistri$uted e9penses for !anage!ent. 7arehousing costs are charged to retai . Co!puter costs are distri$uted according to e9penses.

Esti!ated $udget su!!ary for the current year@ !ivision Sales E"penses #ro$it Eetai ())#+++ (13#B++ ()#B++ Landscaping 1#4B+ 1#)B+ B++ La"n care 2B+ )B+ )++ /ther 14B B+ 1)B EF' 1)B (1)B) %d!inistration )B+ ()B+) =ota ()2#54B ()1#2)B ()#3B+ .otes@ Evergreen foresees a s!a oss of $usiness in a"n care o"ing to pro$ e!s "ith one of its annua pro!otions. It "i $e ta&ing on an additiona EF' contract# "hich accounts for the increased costs. Eetai inco!e is e9pected to rise 1+G percent# $ut profit !argins "ont

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1age 4 of )2

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change !uch. >ecause of increased attention to overhead costs# the change to ad!inistration shou d increase $y a$out )+G this year.

1ro0ections for the fo o"ing year@ !ivision Sales E"penses #ro$it Eetai (5+#+++ ()*#+++ (2#+++ Landscaping 1#3++ 1#B++ 2++ La"n care B++ 5B+ 1B+ /ther B+ + B+ EF' 5++ (5++) %d!inistration 2B+ (2B+) =ota (5)#2B+ ()6#*++ (5#6B+ .otes@ %dditiona EF' contacts "i dou$ e costs. /pening the second retai store !id-year "i dra!atica y increase sa es.

Evergreen Landscaping and Maintenance% Connie Somerset& Sales Manager %s the sa es !anager for Evergreen Landscaping and Maintenance Co.# Connie So!erset !anages retai sa es and contract services. She is he ped $y t"o assistant !anagers# one for the retai side and the other for hand ing the professiona Connie. andscape and a"n !aintenance trade. Each depart!ent presents uni,ue cha enges $oth to staff and to Eetai custo!ers range fro! "ee&end seed-stuffers to pri;e-"inning rose raisers. =he custo!er services side is the !ost cha enging# $ecause it dea s "ith services rather than products. Connie has noticed that custo!er re ations differ $et"een the t"o sides i&e night and day. Eetai custo!ers are in and out A they !a&e repeat visits during the gro"ing season# $ut they are pri!ari y face ess. -ood custo!er service therefore !eans !a&ing the! fee i&e va ued patrons. Contract service custo!ers are instant y identified and thin& of the!se ves as uni,ue. =heir patronage is $y su$scription or contract and they i!!ediate y notice any decrease in attention.

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1age 6 of )2

Case Study

Connie is facing a difficu t pro$ e! "ith contract services. Sid Cavenaugh is the assistant !anager of contract services. ="o seasons ago# after considera$ e !ar&et research# Sid introduced additiona a"n-care services# inc uding a guaranteed a"n green-up (ra&ing# aerating# ti ing# ferti i;ing# and seeding). =he service proved to $e popu ar a!ong !any su$ur$an ho!eo"ners intent on out-greening their neigh$ours. :nfortunate y# in order to !a&e good on the guarantees# Sid had to hire e9tra "or&ers in the spring# and !any of the! "ere co ege students "ho &en itt e a$out a"ns other than ho" to operate a a"n!o"er. =he guarantee "as e9pensive# $ut the "or& "as difficu t# too# re,uiring severa e9tra visits to each custo!er during the spring. Many properties proved especia y difficu t $ecause if de" "or!s# fairy ring# roa!ing neigh$ourhood dogs# and a very dry ear y su!!er. % though the guaranteed green-up progra! ost a !ost (5+#+++ ast year# a progra! that popu ar isnt easi y dis!issed A custo!ers had $een phoning a "inter re,uesting it for this year. Connie is not sure that Evergreen can afford to offer this service again# $ut she is sure that they cannot afford not to offer so!ething si!i ar. Shes certain# too# that the sa!e service "ou d cost a custo!er a !ost B+G !ore e se"here. % though fe"er custo!ers "ou d !ean ess chance of a oss# !ore custo!ers "ou d !ean higher retai sa es. 1art of the pro$ e! "ith the green-up progra! "as the "eather# $ut another aspect "as !anageria . Connie and Sid "ere $usy "ith other progra!s and products and didnt have ti!e to p an the guaranteed green-up "e . Connie has noted that there are pro$ e!s "ith !ar&eting and operating this progra!# especia y "ith regard to a$our and avoiding se ing the progra! to peop e "ith pro$ e! a"ns. 8er $oss# Sha"na Eggert# vice president of sa es# is concerned a$out Evergreens i!age shou d it fai to offer a si!i ar service again. Sha"na a so recogni;es that a proper y priced and e9ecuted service "ou d provide a $oost to retai sa es. .ot surprising y# hea thy a"ns generate !ore sa es than unhea thy ones# and it is not inconceiva$ e that satisfied custo!er !ay "ant to get so!e !ore professiona andscaping done# too. >ecause she sees a ot of pro!ise in Sids ideas# Sha"na is prepared to put so!e resources $ehind $ui ding a $etter service and integrating it $etter "ith Evergreens product and service ine.

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1age 3 of )2

Case Study

Ee-designing and re-offering the guaranteed green-up service "i re,uire spending a ot of ti!e "ith ast years data# this years pro0ections and staffing avai a$i ity forecasts# and inco!e and e9pense targets deve oped $y the !anage!ent e9ecutive co!!ittee. Connie isnt sure she has the ti!e and energy to put into this# $ut she doesnt "ant to !iss a good thing "hen co!petition in a"n care is so intense. Much of the infor!ation is avai a$ e fro! the co!panys s!a data-processing staff# $ut other data "i $e gathered "ith great care and at great e9pense $efore any decision can $e !ade. Evergreen Landscaping and Maintenance% 'ssisting Strategic 'dvantage >ecause of Connies e9perience as sa es !anager "ith the guaranteed green-up progra!# she has $eco!e concerned a$out the "ay Eevergreen deve ops and !ar&ets ne" contract services. In the past# Evergreen cou d re y on its custo!ers needs for a"ns# trees# shru$s# "a s# gardens# and so forth# to drive the co!panys offerings. %nd $ecause it "as fair y o$vious "hat constituted a a"n or a tree# Evergreen cou d afford to $e fair y a;y in this area. >esides# the retai side of the $usiness# a cash co"# generated the over"he !ing $u & of inco!e and profit? services "ere seen !ain y as necessary to !aintain an i!age. .o one rea y too& services very serious y unti the guaranteed greenup progra! ost (5+#+++ ast year servicing its !ost aff uent custo!ers. .o" everyone is ta&ing these services serious y and !any are as&ing Connie to discontinue a services# not 0ust the guaranteed green-up progra!# and get $ac& to Cour $read and $utterD# the retai side and "hat Sid (assistant contract !anager) irreverent y ca s Cthe ho!e far!ing $usiness.D Connie has this to say in private to her $oss# Sha"na Eggert@ Sha"na# I! not sure I have the courage to say this in front of the other !e!$ers of MEC# so!e of "ho! have $een "or&ing for Evergreen since I "as a$ e to spe the "ord# $ut I dont see "hy they are so service-shy. Its not as if "e "ere $etting the store on our services# and even osing (5+#+++ in one year "ont $rea&

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1age 1+ of )2

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us. I can understand their desire not to stray far fro! our rea $usiness in retai sa es# $ut "hat rea y gets !y goat is that they dont see that the ne" va ues# i&e environ!enta is!# re,uire us to $e innovative and# "hats !ore i!portant# stay c oser to our custo!er. May$e "e A and they A "i earn "hat se s fro! cash register tapes and ,uestions they as& our sa espeop e in the store# $ut as I see it# "e A and our custo!ers A get !uch !ore out of a service re ationship. 7e find out "hat they need# "hat their a"ns or gardens are rea y i&e# ho" they thin& "hen theyre not in the store. Custo!ers# on the other hand# can earn ho" to contro "eeds "ithout da!aging the environ!ent# the $est "ay to co!post# e9act y "hat can $e recyc ed fro! their gardens# ho" to use "ater# and so forth. 7ithout these services# Sha"na# "ere f ying $ ind# or at east in fog. Sha"nas rep y start ed Connie@ Connie# its too $ad that you dont see things the "ay the others in MEC do. =heyre not service shy at a . =hey 0ust dont see the va ue in putting effort into ris&y ventures "hen there is a perfect y good retai $usiness going on. %fter a # not everyone has your $ac&ground in operations and accounting. %nd "hi e they say environ!enta is! "ith their !ouths# they are rea y saying not our $usiness "ith their hearts. For the !ost part# they dont understand it and they fear it# especia y the po itica side. =heyve seen to9ic "aste regu ations decrease our sa es of pest contro products for years. =hey "orry a$out finding peop e "i ing to "or& "ith ferti i;ers and ta&e the ris& of app ying so!e che!ica to a !others a"n that "i !a&e her &ids sic& and "e get sued. .o# theyre not service-shy# 0ust ris& averse. =o the!# a $ ade of grass is a $ ade of grass# not a chance to teach so!eone so!ething. =hey "ant Evergreen to continue to $e &no"n as the re ia$ e p ace to go for gardening and a"n needs# "here the custo!er counts# and prices are reasona$ e. May$e you shou d invest a itt e in seeing things their "ay# Connie.

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1age 11 of )2

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Connie "asnt satisfied "ith this response. It see!s to her that $usiness opportunities e9ist# if on y Evergreen "ere ready for the!. >ut Evergreen isnt ready for her !essage A yet. =hree years ago# Evergreen got rid of its o d cash registers and insta ed a co!puteri;ed point-of-sa e (1/S) syste!. Connie is 0ust $eing dra!atic here. She &no"s that having this syste! has !ade her 0o$ !uch# !uch easier $ecause no" she &no"s e9act y "hich stoc& is !oving ho" fast and can even re ate sa es to ads# the "eather# and ne"spaper features. Connies $ig fear is that retai gardening centers are under assau t fro! at east t"o sides# and the edge that Evergreen ac,uired fro! its corporate history# the good"i of 8arn"e and 1etty# is a pretty thin insu ator against the co d co!petitive "inds co!ing fro! !ass !ar&eters and discounters. Connie sti thin&s of the MEC as $eing anti-innovative# s!ug# and not rea y for"ard- oo&ing# Connie has $een oo&ing at the possi$i ities posed $y the point Aof-sa e ter!ina s and "onders if there are ne" products there# even ne" "ays of doing $usiness $y direct !ar&eting or "or&ing "ith discounters. Evergreen# she &no"s# has its roots in the nursery $usiness. She "onders if it can create ne" products as "e as ne" services $ased on the enor!ous a!ount of retai data it gets fro! custo!ers as "e as so!e good pro0ections of trends fro! its contract c ients. If Evergreen doesnt $eco!e !ore co!petitive# it !ight 0ust find its corporate $ranches pruned significant y $y the co!petition. Evergreen Landscaping and Maintenance% Supporting Connie Connie So!erset# sa es !anager# her !anager Sha"na Eggert# vice president of sa es# and Sid Cavenaugh and Sven 8aro dson# assistant !anagers of contract and retai services# respective y# are p aying out a dra!a at Evergreen. Connie has noticed a pattern and has $een dra"ing Sha"nas attention to it for a "hi e# $ut Sha"na isnt convinced a pattern e9ists or there us !uch to $e e9cited a$out. =he pattern sho"s up in ho" Evergreen p ans and# !ore specifica y# ho" it reaches conc usions a$out ho" it shou d

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1age 1) of )2

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i!p e!ent p ans. Connie has a so ta &ed this out "ith Frances 8ar!on# vice president of ad!inistration# "ho see!s ess convinced than Sha"na. =he pattern is that ne" ideas "or&ers and supervisors originate tend to $e ignored# $ut ideas that co!e fro! the vice presidents or other !e!$ers of the !anage!ent e9ecutive co!!ittee (MEC) (see Figure 1-5) tend to $e serious y considered and "e supported. .either source of ideas has an i!pressive trac& record. Connie is a"are of on y one grassroots ideas that caught the attention of the MEC in the past three years# the guaranteed green-up service. =his service ost a $und e ast year. =he e9ecutive co!!ittee started a ,ua ity !anage!ent progra! that see!ed pro!ising# $ut their suggestion for a unified reporting sche!e hit a snag "hen the consu ting fir! hired to i!p e!ent it discovered that the paper"or& $urden "ou d &i contract services and ha!per custo!er re ations. Evergreens reputation for rapid response to custo!ers "hi e !aintaining focus on the environ!ent "as endangered $y this !ove to syste!ati;e reporting patterns.

Figure 1.( Evergreens Management E"ecutive Committee

Lily !ou ette* President

S&awna -((ert* 2i e President Sales

4ran es $ar#on* 2i e President* %d#inistration

$eat&er 5ariad* 2i e President* 4inan e

0&o#as !a.ido11* 2i e President* 3perations

5onnie So#erset* Sales Mana(er

Pris illa 5&an* 5ontroller

0eddy "is&art* Plant Mana(er

Case Study

1age 15 of )2

Case Study

Connies o$servations e9tend to ho" the MEC "or&s in genera . %s the !ost 0unior !e!$er of the MEC# Connie finds it difficu t to trans ate ideas fro! a$ove into actions for her "or&ers? at the sa!e ti!e# she doesnt have a "ay to convince MEC to ta&e action on "hat her staff sees as threats fro! co!petitors# the environ!ent# and socia trends. Connie thin&s this is $ecause MEC focuses on ong-range p anning (t"o years or !ore) and reasons $ased on finances. Connie has noticed that data are scarce in !ost MEC discussions and that severa peop e# particu ar y Frances 8ar!on and Sha"na Eggert# shy a"ay fro! data-$ase discussions. /n the other hand# 8eather Cariad reve s in nu!$ers. >ecause of these various persona ities# the MEC is not effective and tends to retrace steps repeated y# co!ing $ac& to things ong after Connie is sure they have $een hand ed. =hus# "hi e i!portant (to Connie) pro$ e!s are ignored# pet pro0ects and peeves are revisited over and over. =he MEC# "hich !eets "ee& y# doesnt see! to $e an effective voice# ear# or ar! of Evergreen. % though it specifica y hand es $usiness proposa s that arise "ithin MEC or fro! e!p oyees or custo!ers it doesnt see! to $e a$ e to create an effective p an to respond to "hat Connie sees as i!peratives for re ative y s!a and vu nera$ e retai fir!s such as Evergreen. It see!s especia y incapa$ e of hand ing crises i&e the guaranteed green-up service deficit it see!s !ore a$ e to respond to p anned pro$ e!s such as $udgeting or seasona hiring po icies than to rea crises that threaten the co!panys i!age or a$i ity to stay in $usiness. 7hi e everyone see!s co!!itted to certain dea s (for e9a!p e# everyone is &een to advance environ!enta causes "ithout the usua corporate $otto!- ine argu!ent# pri!ari y# of course# $ecause Evergreen is in the environ!ent $usiness)# the process doesnt see! to $e professiona # syste!atic# or re ia$ e. In the face of these pro$ e!s# Connie finds that going to the MEC !eetings is increasing y frustrating. 8er re ative youth (shes )3) that "or&ed for her "hen she "as an energetic# environ!enta y conscious M>%# see!s to $e i!pe ing !ore i!patience than "isdo! at these !eetings. Connie is "ondering "hat &ind of support shes going to need to !eet the cha enges she faces "or&ing "ith upper !anage!ent and especia y

Case Study

1age 12 of )2

Case Study

"hat she shou d $e doing a$out the guaranteed green-up pro$ e! to hand e it not and prevent pro$ e!s i&e this fro! happening in the future. Evergreen Landscaping and Maintenance% usiness #rocesses Connie So!erset# sa es !anager# "or&ed for Sha"na Eggert# vice president for sa es# for five years and in that ti!e !ade Evergreens !ar&eting syste! hu!. =u ey Fi9 is the purchasing !anager "ho hand es the paper"or& and does so!e $uying. =u eys $een in the $usiness for !ore than )+ years and rea y &no"s gro"ing things. 8is contacts in the industry have &ept costs and de ivery ti!es do"n. =u ey runs his o"n shop and considers Connie to $e a good custo!er. Sid Cavenaugh# assistant !anager of contract services# and Sven 8aro dson# assistant !anager of retai # are $oth recent university graduates "ith itt e e9perience in the a"n# andscaping# or gardening $usiness# $ut they are co!petent organi;ers and face cha enges head-on. So!eti!es they have good ideas# $ut as the guaranteed green-up progra! de!onstrated# good ideas arent a "ays enough. Connie has had to &eep c ose ta$s on their innovations. Evergreen "or&s very !uch i&e a hy$rid retai Hconsu ting organi;ation. /n the retai side# Connie !a&es pro0ections of "hat "i se and =u ey oo&s around the "or d to find these ite!s. Connie runs pro!otions and set prices# $oth of "hich she fre,uent y ad0usts as inventory eve s and the need to !eet sa es and profit targets $eco!e !ore i!portant at different ti!es of the year. Svens staff "or&s to attractive y and efficient y fi the retai space "ith the products. Most products are ordered through "ho esa e dea ers and gro"ers are contracted $y =u ey. So!eti!es an opportunity arises "hen a vendor is pro!oting a ne" product# and Connie !a&es additiona she f space avai a$ e if she thin&s the product "i $oost sa es of re ated ite!s or $ring in ne" custo!ers. Custo!ers genera y oo& at the she ves or "ander through the greenhouse to find ite!s they "ant. >ut often custo!ers re,uest ite!s that are !isp aced# out of stoc&# or 0ust invisi$ e in a that greenery. C er&s consu t printed inventory ists that are updated "ee& y during the year and every other day# in theory# during the $usy seasons. In fact# ho"ever# these updates are perfor!ed far ess fre,uent y. =his is a pro$ e! Connie is

Case Study

1age 1B of )2

Case Study

a"are of $ut is not hand ing right no". She &no"s that &eeping inventory up-to-date "i re,uire and on ine syste! integrated "ith the cash registers. >ut Evergreen has on y 0ust insta ed point-of-sa es (1/S) ter!ina s to hand e sa es. 7henever a retai sa e is !ade# sa es infor!ation is generated a$out the ite!# date# vo u!e# and price. 1risci a Chan# the contro er# hand es the !oney accounting# and % La!pert !a&es sure the ive p ants inventory is &ept a ive and avai a$ e. In Sids operation# things are ess vo ati e# a though a ot of paper"or& !ust $e done. Custo!ers are found through advertise!ents in oca ne"spapers# ne"spaper Sid usua y supp e!ents# !aga;ines# the ye o" pages# or through "ord of !outh.

negotiates the contracts hi!se f# a though "hen $usiness increases he gets he p fro! one of the architects he e!p oys. 1art of each $id is an esti!ate of !ateria s. 7hen Evergreen "ins a $id# a copy of this esti!ate is passed to =u ey# "ho verifies avai a$i ity# prepares the necessary order for!s# and a erts the operations !anager to prepare for stoc&ing ite!s. % doesnt have space to store arge ite!s such as fountains# $ig trees# and $ou ders# so he "ants to !a&e sure these ite!s are de ivered to the site instead of to Evergreens "arehouses and greenhouses. 8o"ever# de ivery dates are a "ays appro9i!ate# and "eather can pose pro$ e!s. S!a er ite!s are ess of a pro$ e!# $ut finding space and# !ore i!portant# putting ite!s "here they can $e retrieved are concerns % has. 8is assistants !ove a the stoc& using truc&s that >i 1orter# transportation supervisor# contro s# so there is a potentia for friction "hen there is a rush or a de ay $ecause of "eather or custo!er "avering. >i needs his truc&s to !ove stoc& to custo!ers# not to !ore trees around the greenhouse. /perationa difficu ties "ith stoc&# transportation# and disposa are constant cha enges that =ho!as 'avidoff# vice president of operations# has faced since his days "ith the tree far!. <ugg ing the si!u taneous de!ands of contact custo!ers "ith the !ore steady C$ac&groundD needs of retai ing re,uires the tact of So o!on and the speed of and / y!pic hurd er. 7hi e a this is going on in retai # Li y 'oucette# president# does !ediu! and ong-ter! p anning "ith the !anage!ent e9ecutive co!!ittee (MEC). =he MEC hand es po icy !atters and is co!prised of a core of vice presidents and their assistants. 8eather Cariad

Case Study

1age 1* of )2

Case Study

hand es !oney and Frances 8ar!on hand es everything e se. 8eathers operation is a traditiona accounting function invo ving accounts receiva$ es (!ost y fro! contracts and credit card $uyers)# accounts paya$ e# and cash f o" and invest!ent !anage!ent. Evergreen has a ot of !oney tied up in inventory at crucia ti!es of the year# and its p an to upgrade and e9pand the retai store# inc uding opening a second store this year# has given 8eather and 1risci a a ot to thin& a$out. Frances 8ar!on# on the other hand is concerned "ith the e!p oyees. =here is a high turnover a!ong the seasona staff# and she !ust hand e e!p oyee $enefits and a great dea of interna co!!unication. 'uring the spring and ear y su!!er# ife is frantic at Evergreen# and Frances has responsi$i ity for &eeping e!p oyees on trac&# !otivated# and fee ing re"arded. She a so "or&s c ose y "ith 1risci a and Connie on pu$ ic and co!!unity re ations. >ecause Evergreen is rea y three $usinesses ( andscaping# a"ns# and retai gardening)# there is a need to integrate the e!p oyees# the "or&# and the products# and responsi$i ity for this fa s to Frances. Fina y# Frances is concerned "ith e!p oyee deve op!ent# so she conducts an annua perfor!ance appraisa e9ercise ai!ed at updating s&i profi es (she stresses the i!portance of !aintaining this data) and Frances puts on a nu!$er of in-house training sessions# reco!!ending training.

especia y for seasona "or&ers# and she send a nu!$er of !anagers and supervisors to !anage!ent training courses each year as appropriate to their 0o$ descriptions. 1erfor!ance in these courses is noted in e!p oyee fi es a ong "ith 0o$ perfor!ance appraisa data. =he fina !e!$er of the MEC is =ho!as 'avidoff. =o! has $een "ith Li y since the ear y days of the co!pany and hand es anything to do "ith operations and the physica p ant. >yron =odd is the supervisor of a $ui dings# a of "hich re,uire constant !aintenance and p anning. 8igh hu!idity re,uired for the p ants !a&es !aintenance a night!are# and the g ass greenhouses are fragi e and targets for vanda is!. Candice Eo$$ins hand es security. She has four security guards "ho patro the $ui dings )2 hours a day? they a so prevent pi ferage and try to &eep p ants fro! $eing crushed. Carts used

Case Study

1age 14 of )2

Case Study

$y custo!ers are so!eti!es sto en# and hard y a "ee& goes $y "ithout a chi d getting ost a!ong the annua s or a custo!er getting scratched $y a cactus. Evergreen is a co!p e9 operation si!u taneous y engaged in !any processes. Connie &no"s she cant se "ithout &no"ing "hats happening "ith inventory# in the Everything see!s tight y greenhouses# in the par&ing ots# in the $an& accounts.

interconnected to her and a ot !ore cha enging than the hard"are store she "as used to.

Evergreen Landscaping and Maintenance% !istri)uting #rocessing Evergreen is physica y distri$uted across severa sites (see Figure 1-2). =he !a0or retai ocation "as opened in 1334 and contains the sa es area (the CstoreD)# the head,uarters offices of the vice presidents# and the ad!inistrative functions. %s sa es !anager# Connies office is ocated c ose to the store on the ground f oor? Svens office is ne9t to Connies. Located i!!ediate y ad0acent to the store is the greenhouse# "hich is open to custo!ers during the spring and su!!er. 1 ants to $e so d ive at the $ac& of the greenhouse and are ca ed the C ive !ateria inventory.D -reenhouse "or&ers tend these p ants# giving the! oving care and p aying ne" age !usic over the 1% syste! (for sensitive# ne"-age p ants). %$out a five-!inute "a & a"ay is the "arehouse# "here retai ite!s other than p ants are stored. Its essentia y a Iuonset hut# purpose y unattractive and re!oved fro! the retai areas $ecause !any of the ite!s &ept there are corrosive or poisonous. =his $ui ding is carefu y guarded $y security supervisor Candice Eo$$ins and her Cpo iceD force. Located on the second f oor of the "arehouse# for po itica as "e as practica reasons# are the andscaping offices. =hey are &ept near the andscaping !ateria s for the $enefit of the c ients. >ecause the andscape architects e!p oyed or contracted $y Evergreen thin& of the!se ves as a$ove the co!!ercia fray# they i&e $eing apart fro! the $usiness office and the store. Sid Cavenaugh has his office there.

Case Study

1age 16 of )2

Case Study

=ransportation vehic es are house in the ot $eyond the "arehouse and >i

1orter

(transportation supervisor) par&s hi!se f there. ="o for&- ift truc&s# t"o pic&up truc&s# three vans# a arge tree transporter# and seven specia y outfitted a"n !aintenance vehic es are par&ed there. % e9cept the a"n !aintenance vehic es ("hich are converted pic&ups) are used to !ove stoc& to and fro! the "arehouse and greenhouse and to and fro! contract custo!er sites.

Figure 1.* !istri)ution o$ Evergreen Functions

-.er(reen $: 311i es 7etail 2

Lands apin( 311i e "are&ouse 2

Sales %rea 7etail 1

+n.entory Stora(e "are&ouse 1

Li.e Material +n.entory Green&ouse

Li.e Material Sales Green&ouse

0ransportation Lot

7esear & %G 5olle(e

/ne other office is four !i es a"ay at the %gricu tura Co ege. garden !ateria s such as trees and shru$s to cut osses.

8ere# Evergreen

sponsors a research pro0ect on "ays to increase the over-"inter surviva rate of co!!on

Case Study

1age 13 of )2

Case Study

Li y has p ans for three i!portant changes at Evergreen (see Figure 1-B). First# she "ants to increase her research activity $y starting t"o !ore pro0ects. /ne "i $e financing a pro0ect in the $otany depart!ent at the oca university. Evergreen sponsors a graduate student to e9a!ine the co!!ercia i;ation possi$i ities of a nu!$er of "eed contro techni,ues that "i significant y reduce the ,uantities of her$icides no" used. Evergreen is a so interested in setting up a strategic a iance "ith a $iotech fir! to deve op diseaseresistant strains of shru$s and trees. So!e !e!$ers of MEC thin& this is a "aster of good !oney# $ut Li y &no"s that the Evergreen sta!p "i !ean e9c usive o"nership of procedures and genes. If the students and the a$ are successfu # these rights "i !a&e Evergreen !oney in icense fees even during the s o" $usiness !onths. Figure 1.+ #lanned !istri)ution o$ Evergreen Functions

-.er(reen $: 311i es 7etail 2

Lands apin( 311i e "are&ouse 2

Sales %rea 7etail 1

+n.entory Stora(e "are&ouse 1

Li.e Material +n.entory Green&ouse

Li.e Material Sales Green&ouse

;ni.ersity 0ransportation Lot %G 5olle(e 7esear & La8

Se ond 7etail Site

9rokers 311i e

Case Study

1age )+ of )2

Case Study

Second# =u ey Fo9 (purchasing !anager) is nearing retire!ent# and Li y has $een e9p oring strategic a iances "ith a $otanica $ro&er# 1indar -opa of 1ort and# /regon. 1indar has pro!ised his custo!ers that he can get the $est possi$ e prices and !ore certain de ivery ti!es through his Internet-$ased infor!ation too s. =u ey has re ied on "it and contacts. 1indar has co!pi ed an up-to-date isting of !ore than 5#+++ gro"ers of ive !ateria s and 6#+++ supp iers of gardening# andscaping# and horticu tura !ateria s and too s across the "or d. 8e is direct y connected "ith !any of the! via the Internet. 1indar charges a fi9ed !onth y fee p us a percentage of the order guarantees the de ivery ti!e and conditions and the o"est prices. Fina y# after 5+ years and severa incarnations# Evergreen is ready to open up a second store. Li y has found a suita$ e $ui ding site on the other side of to"n# "here a ot of ne" housing is going in and there "i o$vious y $e a good !ar&et for e9isting products and services. Evergreen "i $e the on y such store in that part of to"n# $ut Li y &no"s that "ont ast for ong. =he second retai store "i $e constructed during the autu!n and "inter at a cost of c ose to (1 !i ion# $ut Li y has oo&ed at the figures and is confident that the e9pansion "i pay off "ithin t"o years. % though Li y hasnt considered this yet in great detai # a critica co!ponent of the e9pansion p ants "i $e the !oderni;ation of Evergreens infor!ation syste!s. Current y# there are four !a0or syste!s "ith itt e connection $et"een the!. /n the retai side# si9 1/S ter!ina s act as cash registers and are connected through a L%. to a !inico!puter. =he retai syste! &eeps trac& of the hard goods inventory and produces dai y reports for Connie on sa es $y category. =he accounting syste!# separate fro! the

Case Study

1age )1 of )2

Case Study

retai syste!# is used $y 1risci a Chan to &eep the $oo&s. 1risci a has a !icroco!puter syste! for accounting "or& and to do forecasts. =his syste! is tied into the !ini so that she can get access to the retai date# $ut she finds this c u!sy. Specia orders are hand ed through the retai syste!. >oth of these syste!s run on the I>M EISC *+++ co!puter housed in the 8I offices on the second f oor and are run $y a staff of four (see Figure 1*). =he $u & of the rest of the ad!inistrative data processing is hand ed on a !icroco!puter in Frances 8ar!ons office $y her ad!inistrative assistant# Ji! >ac&er. Frances uses severa off-the-she f pac&ages to &eep personne infor!ation# to create and fi e !e!os# and to do so!e graphics. Most of the e9ecutives and their assistants a so have !icroco!puters# a !ost e9c usive y devoted to "ord processing. =he e9ecutives do not access operating data direct y $ut have their assistants trac& do"n the facts !anua y "hen needed. =he vice president of finance# 8eather Cariad# "ho so!ething thin&s she shou d $e !ore p ugged into the financia data# uses her co!puter !ost y to do spreadsheet pro0ections using data copied $y 1risci a onto a dis&ette. %!ong the !anagers# Connie is the !ost adventurous. She has $een investigating a variety of pac&ages# especia y e9pert syste!s for product deve op!ent and sa es !anage!ent. =he fourth syste! is a andscaping C%' syste! $used $y the CartistsD on the second f oor of the "arehouse. =hey use a s!a net"or& of three S1%EC stations connected into a po"erfu !inico!puter that !aintains e ectronic dra"ings for c ients. =his architectura data$ase has proven usefu in the past. Its a ot faster than s&etching dra"ings $y hand for proposa s and !a0or $ids and the designs can $e revie"ed and reused if si!i arities are discovered $et"een pro0ects. /ne of the !a0or advantages of this sort of syste!# $ui t around a co!!ercia y avai a$ e pac&age# is that it can produce a $i of !ateria s than can $e printed out and inc uded "ith a proposa . % "ea&ness in the current architecture is that this $i cannot $e auto!atica y for"arded to the "arehouse or the greenhouse to get avai a$i ity and pricing infor!ation. =he C%' syste! a so cannot $e used to dra" up contacts# so a standa one !icroco!puter is used to $oi erp ate proposa s and contracts and print the! out on specia for!s.

Case Study

1age )) of )2

Case Study

=he focus of the rationa isation is to integrate the data $etter# to provide a $roader range of app ications to !ore !anagers# to support p anning !ore thorough y and further do"n the !anage!ent chain# to give everyone "ho need it access to a the operating data# and to integrate the contract and retai sides $ut sti provide f e9i$i ity and freedo! to the operating divisions.

Figure 1., Systems 'rc-itecture at Evergreen

7etail syste# 7+S5 6<<< Mini o#puter % ountin( syste#

Mi ro o#puter 3t&er syste#s= Li.e Material +n.entory* Se urity* 0ransport* Maintenan e* Pur &asin(* so#e o1 t&ese are run on #i ro o#puters usin( standard pa ka(es %d#inistration syste#

Mi ro o#puter Lands apin( 5%! Syste# Mini o#puter

Stand>alone #i ros used 8y e6e uti.es and #ana(ers (#ostly 1or word pro essin(* spreads&eets* and (rap&i s),

SP%75 Stations

Case Study

1age )5 of )2

Case Study

Case study adapted from: Managing Small and Medium Sized Enterprises (1998), University of in!olns"ire and #um$erside%

Case Study

1age )2 of )2