Case Study on Mrs.

Fields Cookies
By Group 8

Smriti Khanna
Soumil Vinayak Sreeramula Rajeev Subrata Jadon

11DCP045
11DCP046 11DCP047 11DCP048

Taranpreet Singh Chhabra

Udit Singh Vidit Narang Vishal Zaveri

11DCP049
11DCP050 11DCP051 11DCP052

Garvit Kapoor

11DCP105

Company Overview
Mrs. Fields Cookies was started in 1977 by Debbi Sivyer and Randy Fields The first store was opened in Pal Alto, California After reaching the expected profits, the Company started their second store in San Francisco By 1981, the Company had 14 stores.

International Expansion
In 1982, the Company started expanding internationally The Company targeted Japan, Hong Kong and Australia In Japan it expanded without a partner Sampling is encouraged in International Stores Sampling in a tray is implemented rather than in a pile which worked out effectively

Products And Competition

The cookies came in 14 varieties Quality is maintained by discarding cookies not sold in 2 hours With the increase in competition, the mall managers started accepting the operations with some proven record

Contd..
By 1988, the Company has 416 Cookie Outlets, 122 LPB Stores, 129 Jessicas Cookies and 2 Jenessas retail gift stores
The Company employed 8000 people, 140 in staff positions The Company expanded to 25 states in 5 countries on 4 continents

Management Philosophy
Debbi did not want to delegate authority but later had to.
No formal business school training. Work and fun Store designs closely controlled

Against franchising

Financing Strategy
Decided to go public, pay off the banks and use the rest of the money to finance growth. Unsuccessful, therefore Randy announced that future growth would be funded by cash flow and debt. All the expenses incurred in a store were charged to the store but no corporate expenses were allocated to the stores.

Organization: Less hierarchy making communication easy.

Staff: store clerks, management and district and regional managers Competitive salary and monthly bonus
Corporate: Store controllers reporting to Debbi summarizing sales, monitored unusual conditions, problems and trends as well as under ages and overages

MIS
Objective: To put as much decision making and intelligence into the store level PC as necessary so that the mangers were left free to sell cookies. The staff as small as possible as this kept jobs interesting and helped in implementing decisions faster.

Saw information systems as a way to accommodate growth without having to expand the employee workforce

Cookie Store Operations

Customers were drawn to the store by the openness of the design and by the aroma of hot cookies fresh from the ovens. Mrs Fields also had a sophisticated management information system that tracked the financial performance of each outlet and provided comprehensive scheduling of activities within stores, including marketing support, hourly sales projections, and even candidate interviewing for prospective employees.

Contd..
Communication system at organisation was very organised personal. The store managers did simply read memos from Debbi, often personally heard her voice. the and not but

The system helped Debbi project her influence into more stores than she could ever reach effectively without it.

Diversification
Mrs. Fields Holdings Inc. acquired from PepsiCo a 119 store French bakery/sandwich chain, La Petite Boulangerie (LPB) in April 1987. It presented an opportunity to carve out a niche, and the size of operation constituted an investment barrier to competition. Mrs. Fields had earlier acquired another retail cookie chain, the Famous Chocolate Chip Company, in 1984.

Contd..
The expanded store strategy was an entirely new concept and hence required designing new combination stores.
By the end all the diversification and expansion had precipitated changes in organisational and financial structure. Control over the stores became a problem.

IS Implementation

CUSTOMER
People who work in stores (direct customer of work system) People who buy cookies (indirect customer since they receive benefits of increased customer service)

PRODUCT
Consistent Quality on repetitive operational decisions. Effective communication between headquarters and stores. Attention to customer rather than data processing details.

PARTICIPANTS
Store Managers Headquarters Staff

INFORMATION
Quantity of Each sale Store Inventory Sales History Messages to and from headquarters

TECHNOLOGY
e-mail, v-mail Telecommunications

BUSINESS PROCESS

Major Steps: Record Sales data. Make repetitive operational decision. Communicate with stores.

Rationale:

Maintain consistency and productivity by

enforcing standards and procedures. Help staff focus on pleasing customers

I.S. Implementation
Beneficial for the company : Finance(Financial performance of each company-owned outlet) Marketing (Forecasting sales and promotion techniques per hour)

Human Resources(Candidate Interviewing Purposes)

Production(Scheduling of activities, providing suggestions)

LIVE INFORMATION SYSTEM

Real Time Information regarding Sales RESULTS : Better Analysis Better Inventory Management Better Strategy Better Forecasting

REAL TIME PRODUCTION ADVISE

Input data (work day characteristics) entered by manager such as: Weather Conditions Day of the week Holiday / Working Output : projection for the sales the product mix

Results : Got better with time resulted in profitability.

RECRUITMENT ADVICE
The IS picked Mrs Fields kind of people

Manager takes interview, enters to the system and IS compares with previous recruits.
IS narrows the pool of potential candidates. Promising applicants recalled for computer based interviews. IS picked suitable candidates from which managers could appoint or override the computers decision.

SKILL SET TESTING

Employee skills and attributes tested.

Judged for promotions or salary hikes.

Highlights the wrong answers and provides tutorials for them. Test results evaluated and simultaneously uploaded to the personal databases, which in turn transmitted to the corporate offices.

LABOUR SCHEDULER
Information System highly influential in scheduling the day to day activities of employees. Work hours Work load projections The IS grew into an expert system for labour scheduling and aiding the staff to run the store Even though Debby wasnt present personally but the IS made her virtual presence count.

REAL TIME FINANCING ACTIVITIES

Single database used for every store.

Proper trackking of financial activities.

Daily sales management. Supplies management. Inventory management. Idea about store making profits/loss.

IS ACTING AS COMMUNICATION MEDIA

Managers can get in touch with Debby whenever required. E-mail and V-mail both served the purpose.

Influence of Debby easily felt even when she was not around.

Issues in Implementation

ENTRY IN JAPAN
- Pre-requisite of Japanese partner. - Cookies as per Japanese Palate. - Positive Meeting. - Started their stores on their own.

SAMPLING ISSUE
- Sampling when Business is down in Hong Kong. - Pile arrangement did not create interest. - Change in the arrangement of Cookies.

- Increase in number of passerby willing to sample.

DELEGATION IN AUTHORITY
- Second store of Mrs. Fields new issues. - Debbi resisted delegating authority.

- Management Theory-It is wrong not to delegate authority to those who work for you
- Debbi agreed so that business could grow.

Franchising
The Fields had resisted franchising its stores due to following reason: 1. Against companys ideals - No profit motive. 2. Difficulty in carrying out the feel good feeling of the product. 3. Controling store designs.

Loss of direct control

Regarded each outlet as an extension of her original Palto Alto store. She used to make efforts by combining intense work with spontaneous wackiness. Loss of touch with the customers.

Other Issues
Initial public offering on the London Stock Exchange in 1986 was unsuccessful. Presence of just one store in London.

English institutional buyers doubted the capabalities of the company.

ISSUES ENCOUNTERED DURING EXPANSION.

Acquisition of La Petite Boulangerie Mrs. Fields Holdings Inc. acquired La Petite Boulangerie (LPB) from PepsiCo in April 1987. Reducing subsidiaries administrative staff.

Contd..
The acquisition added real estate to the companys portfolio with upscale and sit down cafes combined with the feel good element of Mrs. Fields.

The focus of the companys Expanded store strategy needed rationalization of the real estate portfolio of the company.

Contd..
The real estate write down of $19.9 million - considered as R&D expense. The overall revenue generated by the company was nullified by the expenses incurred and was reported as record losses in 1988.

MIS related issues

There was abundance of information which was required to be properly managed and modified to address the issues.
As Mr. Fields always mentioned of two masters to be served by MIS in the company 1) Control 2) Information

Hardware issues
The company experienced system failures. One of the remaining two would act as a backup for critical functions.

PCs that had not transmitted their daily work would store the information locally and transmit later.

THANK YOU !!!