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£89 1. How are customers’ tastes changing in the fast food industry? What impact do these changes have on McDonald’s sales and net income?
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The following Assignments should be completed and submitted to the course faculty via the learning platform for evaluation and grading. Submit your responses to these questions in one WORD document. List the question first, and then your response.
For each question below, try to find at least one related outside scholarly reference using the university’s online library resources available to you from the main online learning platform home page. Be sure to properly cite your sources, both in-text and with a reference list at the conclusion. If you use an online source to support your answers, you must provide a properly formatted link to the source. You may use APA citation formats, but be consistent and make sure your sources are credible.
In most cases, your responses should not exceed
Lesson 1 Strategic Planning and the Marketing Process
1. Explain what is meant by the term “the marketing concept”. Under this concept, what is the principal aim of marketing?
2. How is the concept of strategic planning related to marketing? Provide a practical example to depict this relationship.
3. What is a mission statement? Provide a practical example. What are the basic questions that must be answered in a mission statement? Can you think of any others that should be addressed?
4. Describe several strategies that firms can choose among. What do you think the strategy should be for McDonald’s if it wants to grow in the U.S.?
5. What are the basic elements of a situation analysis? How can this approach to strategy lead to increased competitiveness? Provide a practical example.
Lesson 2 – Marketing Research and Consumer Behavior
(Case Study: McDonald’s Corporation)
This case discusses McDonald’s Corporation and the situation it faced in 2001. After many years of double-digit growth in sales and net revenue, the company’s sales grew only 1.12 percent and net revenue dropped 17.2 percent from 2000 to 2001. The company is the market leader in the burger segment of the fast food industry and is closely identified with burgers and fries, foods that are no longer considered healthy.
1. How are customers’ tastes changing in the fast food industry? What impact do these changes have on McDonald’s sales and net income?
2. How well are these changes in customer tastes and preferences being reflected in competitive strategies in the industry?
3. What are McDonald’s strengths and weaknesses and what conclusions do you draw about its future?
4. Should McDonald’s develop a separate strategy for the heavy user segment of the fast-food industry?
5. What should Jack Greenberg do to grow sales, profits, and market share at McDonald’s?
(Case Study: Harley Davidson Inc.)
This case demonstrates how sound strategy formulation and implementation can turnaround a company on the brink of bankruptcy back to be a successful business and even compete effectively against powerful Japanese firms like Honda, Kawasaki, Suzuki and Yamaha. If you have the DVD that accompanies the text you can also watch the 10-minute video.
1. Summarize Harley-Davidson Motorcycle Division’s marketing mix. Are all of the elements consistent with the overall marketing strategy?
2. List the changes made by the company in manufacturing, human resources, marketing and finance during the initial turnaround. What was the relative importance of each of these for achieving the turnaround of the Harley-Davidson company?
3. What should the company do to continue to grow in market value, market share, sales, and revenues?
Lesson 3 – Business, Government and Institutional Buying and Market Segmentation
(Case Study: Coach Inc.)
This case provides an excellent example of a best-cost strategy. The coupling of Coach’s differentiating features such as product quality, prestigious image, outstanding customer service, lifetime guarantee, and attractive stores with a cost-based pricing advantage has yielded a strong competitive advantage for Coach. The case also contains ample information for conducting an industry analysis and company situation analysis.
1. What are the defining characteristics of the luxury goods industry? What is the industry like?
2. What is competition like in the luxury goods industry? What competitive forces seem to have the greatest effect on industry attractiveness? What are the competitive weapons that rivals are using to try to outmaneuver one another in the marketplace? Is the pace of rivalry quickening and becoming more intense? Why or why not?
3. How is the market for luxury handbags and leather accessories changing? What are the underlying drivers of change and how might those driving forces change the industry?
4. What key factors determine the success of makers of fine ladies handbags and leather accessories?
5. What is Coach’s strategy to compete in the ladies handbag and leather accessories industry? Has the company’s competitive strategy yielded a sustainable competitive advantage? If so, has that advantage translated into superior financial and market performance?
6. What are the resource strengths and weaknesses of Coach Inc.? What competencies and capabilities does it have that its chief rivals don’t have? What new market opportunities does Coach have? What threats do you see to the company’s future well-being?
7. What recommendations would you make to Lew Frankfort to improve the company’s competitive position in the industry and its financial and market performance?
(Case Study: Panera Bread Company)
As Panera Bread Company headed into 2007, it was continuing to swiftly expand its market presence. The company’s strategic intent was to make great bread broadly available to consumers across the United States. It had opened 155 new company-owned and franchised bakery-cafes in 2006, bringing its total to 1,027 units in 36 states.
This case provides a practical vehicle to identify a company’s strategy and evaluate its pros and cons. There is plenty of information in the case to conduct a full-blown SWOT and strategy analysis. If you have the DVD that accompanies the text you can also watch the 10-minute video.
1. From a market segmentation perspective, provide an analysis of Panera Bread’s strategy. Which of the competitive strategies discussed in Chapter 1 most closely fit the competitive approach that Panera Bread is taking? What type of competitive advantage is Panera Bread trying to achieve?
2. What does a SWOT analysis of Panera Bread reveal about the overall attractiveness of its situation? Does the company have any core competencies or distinctive competencies?
Lesson 4 – Product and Brand Strategy, New Product Planning and Development
(Case Study: Starbucks: Early 2008)
Starbucks was started in 1971 and grew to become a leader in the specialty coffee industry. Howard Schultz, chairman and CEO of Starbucks Corporation, attributes the company’s success to the experience created within the stores and the unsurpassed quality of its coffee. Schultz also attributes the success to the 172,000 employees working worldwide. The Starbucks employee training program churns out “baristas” by educating 300 to 400 hires per month in courses such as “Brewing the Perfect Cup at Home” and “Coffee Knowledge.”
The purpose of this case is to expand understanding of the positioning of a “product” defined as the sum of the benefits the buyer derives from purchase, ownership and consumption. Starbucks coffee isn’t necessarily much different than that sold at other coffeehouses and its success depends on providing a quality coffee-drinking experience. If you have the DVD that accompanies the text you can also watch the 11-minute video.
1. What is Starbucks’ product?
2. What advantages does McDonald’s have in competing with Starbucks for coffee sales?
3. What changes in society have helped Starbucks be successful?
4. What strategic factors account for Starbucks’ long-term success in developing brand equity?
5. What opportunities and threats face Starbucks?
6. What recommendations do you have to improve Starbucks’ competitive position?
(Case Study: Dell Inc. in 2008)
In 1984, at the age of 19, Michael Dell invested $1,000 of his own money and founded Dell Computer with a simple vision and business concept—that personal computers (PCs) could be built to order and sold directly to customers.
During 2004-2005, Dell overtook Hewlett-Packard (HP) to become the global market leader in PCs. But Dell’s global leadership proved short-lived; Hewlett-Packard, energized by a new CEO who engineered a revitalized strategy, dramatically closed the gap on Dell in 2006 and regained the global market share lead by a fairly wide margin in 2007—winning an 18.8 percent global share versus Dell’s 14.9 percent.
In 2008, it was unclear whether Dell’s strategy, while powerful enough to make Dell a major player in the global IT market, would be up to the task of overtaking Hewlett-Packard.30
The case contains two big lessons. One is “how to do it right”, how to build competencies and capabilities that translate into sustainable competitive advantage, and how to conduct a battle for global market leadership. The second is that even a very successful company with a very successful strategy doesn’t always have smooth sailing—Dell has suffered some setbacks, has lost its cost advantage in laptop PCs (now the most popular type of PC), and is all of a sudden facing an energized and well-known competitor which has gotten its act together under a new CEO.
Recent developments in HP strategy provide an interesting twist:
1. What is your evaluation of Michael Dell’s performance in his roles as Dell’s CEO and Chairman? How well has he performed the tasks of crafting and executing strategy?
2. What are the elements of Dell’s strategy? Which one of the generic competitive strategies is Dell employing? How well do the different pieces of Dell’s strategy fit together? In what ways is Dell’s strategy evolving?
3. Does Dell’s expansion into other IT products and services make good strategic sense? Why or why not?
Lesson 5 – Communication, Relationship Building and Sales Management
(Case Study: Red Bull)
The Red Bull case describes the history of the Red Bull brand with an emphasis on how the brand had stimulated and harnessed word-of-mouth to build a new category (functional energy drinks) and a brand franchise.
1. What created Red Bull’s success? Where is the core franchise and benefit? Has the product’s positioning changed over time? What is the role of alcohol mixing to Red Bull’s success?
2. What is Red Bull’s success formula? For which kind of product/beverage categories will this formula work? How does Red Bull know when to turn on the advertising? What metrics would you use to make this judgment?
3. Assume tough competition is coming. How can Red Bull protect its franchise? What actions would you recommend?
(Case Study: EMR Innovations)
Eric and Mary Reynolds operate an RV repair shop and are avid RVers themselves. Because of their familiarity with RVs, they have developed the Lock-Awn Anti-Billowing Device, which they believe is a superior alternative to other existing fixes for a common problem with RVs. In addition to the Lock-Awn, they would like to develop and sell other new products that address additional RV problems on a regular basis through their new company, EMR Innovations. Eric and Mary believe they have a sure winner in the Lock-Awn product, but they must decide on a marketing strategy as the next step in the process to consider whether or not the Lock-Awn and EMR Innovations, for that matter, are viable. In order to make this decision, Eric and Mary review their information about potential customers, competitors, and possible distribution strategies to identify potential target markets and positioning strategies.
1. Evaluate the market attractiveness for EMR Innovations using industry analysis tools.
2. Identify potential target markets for the Lock-Awn Anti-Billowing Device, using a five-step process of determining segment (1) needs; (2) identification; (3) attractiveness; (4) profitability; and (5) positioning.
3. Determine the sales of the Lock-Awn (in units and revenue) needed to break even and the payback period for the initial capital investments, for both the “more-for-more” and “more-for-less” niche. (Hint: Assume the Reynolds borrow $200,000 at 8 percent interest to be paid back in two annual payments. Further assume that the Reynolds incur maximum marketing expenses. For breakeven analysis, use straight-line depreciation method over 3, 5, and 7 years, respectively, for mold and tooling, office equipment, and assembly and packing equipment.)
What is the impact on break-even if sales are higher than expected by 25 percent? Lower by 25 percent? What is the impact on break-even if sales are higher than expected by 50 percent? Lower by 50 percent? How likely is it that EMR Innovations can break even and recover its investment costs?
Lesson 6 – Distribution Strategy and Pricing Strategy
(Case Study: Wal-Mart Stores, Inc.)
The case lays out Wal-Mart’s corporate history and phenomenal growth record, its strategy to become the largest discount retailer in the world, the company’s approaches to strategy execution, and the transformative initiatives that CEO Lee Scott launched to curtail media bashing of Wal-Mart. There’s a detailed rundown of all the things that Wal-Mart has done to implement its strategy in near-perfect textbook fashion. And there’s a portrayal of Sam Walton’s leadership style, why he was the driving force behind Wal-Mart’s success, and how his beliefs, philosophies, and values were instrumental in creating a strategy-supportive corporate culture at Wal-Mart.
1. What impresses you about this company? What aspects of Wal-Mart do you find unimpressive? What accounts for Wal-Mart’s success? Is it a great strategy, superb strategy implementation and execution, or great leadership?
2. How would you characterize Wal-Mart’s strategy? What are the chief components of its strategy?
3. Can the company continue to be successful? What issues does management need to address? What needs to be on Lee Scott’s “worry list”?
(Case Study: Schwinn Bicycles.)
This case discusses the situation facing the management of Schwinn Bicycles in 1995. The company has a product line with a broad price range and an image that appeals to the older market but less so to younger, high-tech oriented mountain bikers. The challenge in the case is to evaluate the situation, the pricing strategy and the decision to invest $50 million in the company.
1. Evaluate Schwinn’s strategy of selling bikes for prices from $100 to 2,500.
2. Evaluate Zell/Chilmark’s decision to invest $50 million in Schwinn. What did it get for its money? Calculate the breakeven and payback period for this investment given the following assumptions: Schwinn has 4 percent of the retail bike market: Schwinn bikes are marked up an average of 20 percent at retail: Schwinn has a 25 percent profit margin on its bikes.
Shortly after this case was written, Schwinn merged with GT Bicycles and formed the Schwinn/GT Corporation. A force in bike technology, innovation and production development, Schwinn/GT Corporation became the dominant force in bikes and accessories through the independent bicycle dealer channel. However, the company eventually filed for bankruptcy in 2001. On September 11, 2001, Pacific Cycle, the nation’s largest importer of quality bicycles, purchased the Schwinn/GT Corporation out of bankruptcy court and united it with the company’s other bike lines like Mongoose, Mongoose Pro, Roadmaster and Pacific. Schwinn moved into mass retailers in 2002. In 2004, Dorel Industries, Inc., a global consumer products company, purchased Pacific Cycles. Pacific Cycles now operates as a division of Dorel and is headquartered in Madison, Wisconsin. In the same year, Schwinn introduced an updated Sting Ray Series and sold 600,000 of them in less than a year’s time. In May 2005, Schwinn introduced a motorized version of the Sting Ray with a suggested retail price of $399. This bike has an electric motor in the rear hub and can reach speeds of 14 miles per hour. The brand that Ignaz Schwinn founded in 1895 continues to survive. For more on Schwinn, go to www.schwinnbike.com
Lesson 7 – Marketing of Services and Global Marketing
(Case Study: Abercrombie & Fitch)
A&F has undergone several unique transformations since its formation over 100 years ago. It began as a sporting goods store selling expensive and exotic merchandise to adventurers, presidents, businessmen, writers and movie stars. Its assets were acquired by Oshman’s Sporting Goods, where the Abercrombie brand had floundered for several years. A&F stores were acquired by the Limited Incorporated in 1988. The business experienced a period of rejuvenation and rebirth. A&F was spun off in 1996 and became a successful teen retailer selling casual apparel and accessories with a cool “preppy” look. It took a leading role in the creation of a new store format -- one that other retailers were eager to imitate. The format was intended to provide an entire experience for young shoppers with trendy music, appealing visuals, and perfumed interiors. This encouraged teenagers to “hang out” and “browse.” They wanted to act and look just like the models they saw in the stores.
A&F engaged in many controversial strategies and was the target of several lawsuits. Despite A&F’s experiences with recessions, war-time troubles, bankruptcy, changing ownership, and legal battles, it has survived. In recent years, it has benefited from significant financial success as well.
1. A&F paid $50 million to settle three lawsuits charging it with racial discrimination. Do you think the lawsuits were justified? Did A&F’s marketing strategies which apparently insulted certain minority groups encourage a corporate culture that was intolerant of diversity? Does A&F, as well as other retailers, have the right to market itself to any ethnic group it wants? Should retailers be free to hire employees with personal appearances that match the image they are trying to project – even if it means not hiring African-Americans and Latinos?
2. Consumers today are following two tracks: necessity shopping when convenience and price are important and recreational shopping when an individual shops for fun. Many retailers are trying to attract the latter consumer by providing an extraordinary shopping experience. According to a retail marketing expert, Pam Danziger, stores that rock -- or “pop” -- have the following distinctive features:
• high levels of customer involvement and interaction
• a contagious, electric quality
• an ability to evoke a shopper’s curiosity to explore and experience the space
• atmosphere, store design and merchandise that contribute to a comprehensive vision with tangible and intangible elements
3. Do you think that A&F has implemented these features in its stores? Why or why not? Can you identify other retailers who are using emotional branding or appealing to the “experiential” buyer?
(Case Study: Respironics, Inc.)
The case describes some of the competitive dynamics in the sleep and respiratory markets, with special emphasis on the OSA segment of the home medical equipment industry.
1. Identify the major driving forces in the OSA market segment. What are the key success factors (KSFs) for competing in this segment?
2. Evaluate the competitive environment for manufacturers of OSA devices, using Michael Porter’s (2008) “five-forces analysis.” Is this an attractive industry segment?
3. Analyze Respironics’, ResMed’s, and F&P Healthcare’s recent financial performance. How do these rivals stack up in terms of market share and financial health?
4. Describe Respironics’, ResMed’s, and F&P Healthcare’s current strategies, considering both generic strategy and time-to-market entry. How well are these working? What are these rivals’ competitive advantages and disadvantages? Perform a SWOT analysis to support your evaluation.
5. Based on your responses to the previous questions, identify some strategic options for Respironics. Should it expand geographic markets, invest in and apply new technology, identify and serve a market niche, pursue selective mergers and acquisitions, or agree to be acquired by a larger medical device manufacturer? What are the pros and cons of each strategic option? Which option would you recommend?