case-study-cc-music-you-are-a-consultant-who-has-been-employed-to-advise-cc-music-on-the-effective-implementation-of-strategic-changes

Chris and Clive are both former music and music technology teachers who have recently taken early retirement. However, they have a long history of playing in bands and being session musicians, therefore they intend to remain busy. A Northern Soul band that they have worked with for many years, touring around the North West of England, will now become their focus. Chris and Clive have always managed all aspects of the band (studio work, playing at events, parties, TV and radio programmes). They publicise the band via a website, deal with all booking arrangements over the phone, and receive contracts and cheque payments through the post. The other six band members simply turn up and play. The band has always played at least twelve gigs a year, but this is likely to increase substantially now that they can commit more time to networking and promotions. As such, they will be required to take a much more professional approach. In addition, several other bands have asked if they will represent them for an agreed fee. As a professional route, this would mean considerable time working as music agents to promote other artists.

Chris and Clive are aware that starting the agency would require a business approach. They would be responsible for; social media marketing, keeping business accounts, providing an updated calendar of events, and keeping track of the communications between themselves, the clients who want to book bands, and the bands who are signed to CC Music.

They realise that technology will play an important part in the business. They have read about Customer Relationship Management software and Enterprise Resource Management software, but just don’t know what kind of information technology support they really need as a small to medium enterprise (SME). They require professional business information technology advice before they can make any final decisions about investing funds in business software. Also, they are very keen on the potential of Open Source Software to keep the cost to a minimum.

Growing CC Music into a full-time small business is also of interest to younger family members who want to be involved. Chris has a daughter and Clive has a niece, both of whom are keen to support the business and potentially manage the business in the future. They have all agreed to run the business in a democratic style and, as such, everyone will have an equal vote on any business decisions. Therefore, CC Music requires a report that can be read and understood by all of them. You are the OIM consultant who is responsible for researching this business and providing a consultancy report.

Question 1 - Discuss how Robert should explicitly consider the customer value currently offered by Frank’s All-American BarBeQue. In your discussion, comment on the five value benefits and the perceived costs.

Question 2: Robert has several possible options for expanding his father’s business—find a larger location in Fairfield, add a takeout option, open more restaurants in surrounding communities, incorporate web marketing concepts, and expand the sales of sauces. Review each in terms of value benefits.

Question 3: In Chapter 2 “Your Business Idea: The Quest for Value”, Robert Rainsford was introduced in the FRANK’S ALL-AMERICAN BARBEQUE case. He has returned to the family business and is very enthusiastic about expanding the business. He has identified four options: (a) expanding the restaurant either at its current site or elsewhere in Fairfield; (b) opening several similar-sized restaurants in nearby towns; (c) using the Internet to expand sales; and (d) expanding the sales of Frank’s sauces from a local store to a regional supermarket chain. Any one of these ideas would represent a change from his father’s business model. Given that he had not expressed any interest in the management of the business, how should he go about approaching his father with these ideas? If the company expands, should Robert approach his sister and her husband about taking a more active role in the business? What should their roles be?

Question 4: Frank Rainsford has been, in effect, the CEO of Frank’s All-American BarBeQue since its inception. His major role has been that of restaurant manager, receiving support from his assistant manager Ed Tobor for the last fourteen years. Frank has two children, a son and daughter, who both worked in the restaurant as teenagers. His daughter has worked periodically at the restaurant since she graduated from high school. Frank’s son, who recently lost his job, has returned to work for his father. The son produced several plans to expand the

business, including the opening of a second restaurant and the extensive use of social media. After careful consideration, Frank has decided to open a second restaurant, but this has presented him with a major problem—how to assign responsibilities to personnel. His son wants to be designated the restaurant manager of the second restaurant and made the vice president of marketing. Ed Tobor also wants to be the manager of the new restaurant. His daughter has expressed an interest in being the manager of either restaurant. How should Frank resolve this problem?

Question 5: One night after the restaurant had closed, Frank Rainsford sat down with his son, Robert. Frank had finished reading his son’s business plan for a third time. Robert sensed that his father had some sort of reservations. “What’s the matter, Dad? Didn’t you like the plan?” Frank paused and said, “Bobby, from a technical standpoint I think you have done a very, very credible job, but you are right. I do have some concerns.” Disappointed, Robert asked his father to lay out his concerns.

Frank told him that opening another restaurant was a huge and expensive undertaking. He knew that Robert understood the financial risks, but he was not sure that his son understood the problems associated with getting people to come to a new restaurant. Frank was straightforward and told his son, “I have been at this for thirty-plus years. It took me years to build up my client base. I really know my customers and what they like. Up until this year the only marketing I did was flyers and a few ads in the local paper and the church bulletin. How are we going to understand our customers at the new location? We are going to have to fill it up quickly if we are to pay the bills. I know I’ve had some good success with selling the sauces during the last few years, but remember that I’m selling them from Harry’s grocery store. His customers already know me and my product. Your plans for ramping up sauce sales are great, but again, how are we going to get people to know who we are and interested enough to by a six dollar bottle of barbecue sauce?” Frank went on to tell his son that he knew that Robert was extremely knowledgeable about marketing and the use of the Internet. He reminded Robert that he had given him a greatly enlarged marketing budget in 2010.

If you were Robert, how would you go about alleviating your father’s concerns? (You may want to consult Chapter 16 “Appendix: A Sample Business Plan” and review Robert’s business plan for a new restaurant.) Answer the question from a marketing perspective.

Question 6: Frank’s All-American BarBeQue is planning to significantly expand its takeout business. Currently, customers come into the restaurant and order from the menu. With the new Darien facility and website, customers will be able to order online or fax an order to the restaurant. Frank and Robert have been arguing over how to structure the takeout portion of their operations. Frank wants to maintain the approach where customers order items from the menu. Robert believes that in today’s world, it would be more convenient for customers to order complete prepackaged meals. Father and son have argued about the nature of these meals. Frank has suggests a limited number of standard meals that could be prepared during the day and sold in the evening when commuters are returning home. However, this might mean that excess inventory would be built up on unwanted items. Robert wants to offer greater variety. These would include a main course, two side dishes, and a dessert. Because there could be a large number of combinations, most would have to be made after the receipt of an order. The “rush” to make these meals would drive up costs. How would you go about pricing these two types of meals?

Question 7: In the Appendix (Chapter 16 “Appendix: A Sample Business Plan”), you will find the business plan advise CC Music for Frank’s All-American BarBeQue. This plan examined several possible locations for a second restaurant. Frank and Robert considered several factors when evaluating alternative towns as possible locations. Some of these included population size, average income, travel times, and percentage of population. Based on the data, they selected Darien, Connecticut. Do you agree with the decision? Why or why not? Do you think other factors should have been considered? If yes, what would you recommend?

Question 8: In the Appendix (Chapter 16 “Appendix: A Sample Business Plan”), you will find the income statements and balance sheets for Frank’s All-American BarBeQue for the years 2006 to 2010. Compute some of the key financial ratios for this business and discuss the meanings of any trends.

Question 9: Locate the average values of these values for the restaurant industry and comment on how well or poorly Frank’s All-American BarBeQue appears to be doing with respect to the industry.

Question 10: Frank’s business plan in the Appendix (Chapter 16 “Appendix: A Sample Business Plan”) provides projected income statements and balance sheets for a five-year forecast horizon. Compute the same ratios as in Exercise 1 and comment on your results.