Case studies and applications

Coop has a number of strengths. The company has strong historic growth, including increases in revenue and profits the past few years. The company has strong control over its labor costs and prices, which allows it to manage profitability. The Coop also a high sales lever per restaurant for the industry. There are a number of weaknesses as well. These include declining sales at key restaurants, performance deviation in both food and service, and marketing weaknesses. The opportunities that the company has include co-branding, breakfast service, home delivery and focused marketing. There are threats as well. Competitors are a serious threat. Changing consumer tastes are another major threat. The economy is not a threat -- the company has historically performed well even in down markets.

The managers are seeking different types of reports. The pros of these reports are that they will shed light on the problems facing the company. At present, senior management does not know why the major stores are witnessing revenue declines. Because of that, the problem could lie in quality, in marketing or both. The reports will uncover where some of the areas of concern are and provide information as to how to fix the problem. The reports will also help to formalize some of the company's marketing and operating procedures. By defining performance standards, in particular in marketing, the company will be more formalized and better prepared to address such situations proactively in the future. There are two main drawbacks to these reports. The first is that they cost a lot of money. None of the reports suggested is cheap or easy to implement, so considerable investment would have to be made. The second drawback is that there is no guarantee of success. The company has not used such reports before, which means that the value of the reports is unknown but it also means that the company is more likely to implement the reports poorly, making them less useful.

There are a number of alternatives flowing from this analysis. The company could implement the reports, either set or both, in order to better determine where its troubles lie. These options would take time while key branches are bleeding sales, but the information would likely be valuable. The second main alternative is to ignore the sales woes and pursue a new opportunity -- there are several to choose from.

It is recommended that the company attack the declining sales on multiple fronts. The first is on the marketing side. If the consumer perceives quality to be an issue, it will be revealed and the marketing surveys will reveal other issues as well, such as whether the brand is perceived as being tired or not. The company already knows that there are performance deviations in its kitchens -- these should be addressed regardless of what the survey says.