A complex formal planning process adopted by a multibillion-dollar, diversified corporation headquartered in Europe involved a three-cycle system. The first cycle involved corporate executives and division managers and served two purposes: 1) to develop a tentative set of agreements between corporate and division managers about overall strategy and goals, and 2) to provide for more detailed planning in the next cycle. The second cycle, involving functional managers, served a dual purpose: it allowed tentative agreements to be reached on action programs to be implemented over the next few years, and it expanded the strategic focus of the business. The third cycle dealt with resource allocation decisions and budgeting at the functional level.
A new product, contact lenses for chickens, is to be introduced by a small firm formed to market the product. An entry strategy must be planned including price, sales force, size, and location. Allows data for computation of economic benefit to farmers. Includes state-by-state chicken population data for planning a rollout sales program. Software for this case is available (9-588-539).
Southwest Airlines, a small intrastate carrier serving Dallas, Houston and San Antonio, begins service in 1971 in the face of competition by two larger, entrenched airlines. Improved quality service, lower prices, and innovative advertising and promotional strategy bring Southwest to the brink of profitability in early 1973, when its major competitor halves fares on Southwest's major route. Management wonders what response to make. Exhibits include cost and revenue data. Southwest Airlines (C), which may be used as an alternative to the (A) case, focuses on advertising and promotional strategy through June 1971.
Describes Southwest's response to a competitive fare cut and the results, bringing the action up to late March 1973, when management must make additional decisions on marketing strategy with both short- and long-range implications. Southwest Airlines (C) should not be used with this case.
The president of a medium-sized electronics company is evaluating the financial forecasts and proposed financing program submitted by the chief financial officer. The forecasts are prepared in constant dollars, on which basis the proposed financing plan seems reasonable. However, when inflation is incorporated into the forecasts, the financing need far exceeds available sources of funds, and adjustment on the operating side is necessary. The danger of relying on a single set of forecasts based on the most likely outcome is also demonstrated.
Describes the efforts of the director of Job Corps to stave off the destruction of his agency by the Nixon administration. In this process, the director built extensive power bases which he mobilized in support of Job Corps. The end result was that Job Corps was not totally destroyed.
At the conclusion of a small-scale pilot survey, management must decide whether to invest in a larger survey or terminate the project. The objective of the study is to use psychographic measurement techniques to study the alternative positions of cranberry sauce. Illustrates the methods and abilities of multivariate statistical procedures in survey data analysis and product positioning studies. A major question is whether the findings of the pilot work justify further expense and analysis. No special competence in statistics is required for discussion of the case.
A consumer attitude survey involving more than 1,000 cranberry users has been conducted. Multivariate statistical procedures including factor analysis, cluster analysis and multiple discriminant analysis have been employed to suggest four attitude segments in the marketplace. The research team has suggested changes in product and advertising strategy. What should management do next? Provides an example of psychographic research procedures applied to a commodity grocery product. No special statistical competence is assumed on the part of the student.
Midwest Ice Cream (a disguised name) serves as an example to examine a planning and control system. Useful management information, which otherwise would not be apparent, is derived by preparing a basic profit variance analysis. This illustrates how the company is doing many things "wrong," which are covered up by a growth in the overall ice cream market.
It is important for managers to realize that they cannot receive the benefits or cost reduction provided by a steep learning-curve projection and at the same time accomplish rapid rates of product innovation and improvement in product performance. Managers need to exercise care in choosing between the learning curve approach, which shows that manufacturing costs fall as volume rises, and the experience curve approach, which traces declines in the total costs of a product line over extended periods of time as a volume grows. When selecting a strategy, management investigates: the practical limit to volume/cost reduction, the pattern of changes in the organization which accompany progress along the learning curve, and the expected results when the practiced limits of cost reduction are reached.
New England Telephone has developed an "upward communications program" based on the theory that communications operate up-and-down like gravity; downward communications flow more quickly and efficiently than communications upward, which require special incentives to be effective. The upward communications program at New England Telephone started with "private lines" that permitted all employees to discuss anonymously any matter with any responsible official. The program may adapt to any business. It is a management tool, introduced gradually, and adapted to different individual and group needs. Methods for success of the program are outlined.
Effective administration depends upon three basic personal skills which, for analytical purposes, can be classified as technical, human, and conceptual. Technical skills include a proficiency in methods, processes, procedures, or techniques. Human skill is an ability to lead and work effectively in a group. Conceptual skill, critical for policy decision-making, involves the ability to see the organization as a whole, recognize how various functions interrelate, and understand how the organization is related to the industry, community, and nation. This three-skill approach emphasizes that good administrators can be developed.
Effective sales management achieves a balance among four key areas: defining the role of personal selling, deploying the sales force, managing the accounts, and understanding the selling costs. Because sales depend on the customer, management's overall concern should be managing the customer, not the sales force.
Although internationally recognized for quality design, the collaborative's billings have been on a plateau for four years and they are losing jobs to architects with sophisticated marketing practices. The main issue is how marketing can be integrated into a design partnership believing that formalized strategy and promotion interfere with creativity. Other issues include the problems of marketing a professional service, whether efficiency and quality can coexist, how architects are selected, and defining an architect's product.