1. What is the size of the loss at the Coop? What could have been attributed to this loss? (Be thorough in your analysis) I think that the company incurred a loss of 1.3 Million for the year 1995 (attached excel sheet that shows my calculations). The reasons that could have led to this lost were: * Decline in sales – 6% decrease in sales of 20 out of 76 stores * No proper sales strategy
* No depth knowledge about the market or the competitors
* No proper market segmentation – wide age of customers 18 -45 years male and female * Constant increase in the food, labor and contribution cost * Deteriorating the food quality by expanding the food menu * Change in customers taste with time
* Less spending
* No employee satisfaction
* No. of units sold is the same but the revenue generated is lesser
2. Analyze the dynamics between McMichael and Wallace. Are they looking in the same direction? Why, why not? Anita McMichael and Trevor Wallace both recognize that The Coop needs to grow directionally by investing money in research to address the lack of quality and customer satisfaction issues. But both have a different approach to market research. McMichael believed that the underlying problem was to do with the operations, either customer service or food quality. Whereas, Wallace believed that the problem involved the company’s brand image and marketing activities. Hence, both are thinking and focusing from their narrow functional area. One also needs to note that Anita McMichael, Vice president quality, is deeply rooted in the company’s culture and seems to be a little old school of thought - was hired in 1982 – was unwilling to compromise food quality – instituted policies to control food preparation and delivery process – followed the motto “We are chicken” – her believe: if the chicken doesn’t taste good, people aren’t going to come back to us. Whereas Trevor Wallace, Vice president...