Peanut Valley Cafe: what to do next? Instructor's notes.(Instructor's Note)

Weyant, Lee E. ; Steslow, Donna

CASE DESCRIPTION

The primary subject matter of this case involves the management of a quick service restaurant (QSR). The case has a difficulty level of three, appropriate for junior level courses in management or hospitality management. The case is designed to be taught in 1, 75 minute class period and is expected to require 2 hours of outside preparation by students.

CASE SYNOPSIS

This case focuses on the operational and strategic management issues faced by a family owned quick service restaurant (QSR). The case explores the operational issues with a multiunit restaurant. What are the operational decisions necessary to effectively manage QSR facilities? What are the strategic issues facing a QSR owner?

[NOTE: This case is a fictionalized version of a real-life situation. Names and other potentially identifying information have been changed to protect identities. The applicable fact situation is true to the real case.]

SUGGESTED TEACHING APPROACH

This case can be used in a variety of undergraduate classes. The authors believe that it fits into any of the following courses: Principles of Management, Introduction to Hospitality Management, and Strategic Management.

Principles of Management/Introduction to Hospitality Management/Strategic Management Learning Objectives:

Students will be able to:

comprehend the planning function of management, write a mission statement perform a SWOT analysis, and recommend a strategy

TIME:

This case is designed for 4 hours--2 hour of student preparatory time, 2 hour of class time.

MATERIALS:

The following materials support this lesson.

Case study--Peanut Valley Cafe: What to do next?

Environmental Scanning handout

A handout containing the following questions.

Does Peanut Valley Cafe have a mission statement? If not, what benefits might be derived from having a mission statement?

What are the benefits of environmental scanning?

What are the strengths and weaknesses of Peanut Valley Cafe?

What are the opportunities and threats facing Peanut Valley Cafe?

What strategy has Peanut Valley Cafe been pursuing to this point in time?

What strategy do you recommend Peanut Valley Cafe should pursue?

TEACHING APPROACH

This case is recommended as a culminating group activity for the planning function of management lessons. The case is designed for use in a traditional face-to-face class, online, or hybrid class.

As part of the introduction to the planning function of management lessons, the students are informed they will work in teams as a management-consulting firm hired to review a company's strategic plan. The students are given time to form groups of 3 to 5 students per group. The case and handouts are distributed either physically in class or via the Web (i.e., Blackboard, WebCT, course wiki, course blog) as part of the introductory materials to the planning lessons. This will allow the groups to collaborate before the in class discussion.

Students are reminded one day before the case is due of the pending class discussion. In class, students organize by groups. The class is asked if Peanut Valley Cafe has a mission statement? Since the company has no stated mission statement, students are asked what benefits might be derived from having a mission statement? While the specific answers may vary, the answers should thematically state the mission provides purpose to the organization (Robbins & Coulter, 2009, p. 164). Depending on time, students may be asked to write a mission statement for Peanut Valley Cafe. If this option is chosen, the responses are displayed (i.e., blackboard, posters, Discussion Board, course wiki, course blog) for discussion and collaboration.

Display the "Environmental Scanning" handout. Working in groups, the students are given the following directions, "Using the case study as your frame of reference and your knowledge of business, identify specific examples of each environmental component. For example, under competitor write McDonald's. You have 15 minutes to complete this activity". After the students have completed this activity, have the groups display their responses. As part of the discussion students are asked, "What are the benefits of environmental scanning to Peanut Valley Cafe?" Answers may vary.

Write the words "Strength", "Weaknesses", "Opportunities", and "Threats" on the board. Continue working in groups, students are given the following instructions, "Using the case study as your frame of reference, identify specific examples of strengths, weaknesses, opportunities, and threats. You have 15 minutes to complete this activity." After the groups have completed this activity, have members of the group display their specific examples. Answers will vary.

Now that a mission statement and SWOT analysis has been completed, students should be asked what strategy should Sam use for Peanut Valley Cafe? Answers will vary.

[Note for the instructor] Sam made the following decisions:

Reduced the number of menu items. Started featuring items on the menu for short periods of time similar to McDonald's approach with the McRib sandwich and the Shamrock Shakes.

Sold his catering equipment because of competitive forces.

Eliminated the gasoline sales at the Pleasant Valley facility

Started a succession plan with the goal of retiring from the business within seven years. This plan involved a mentoring program for the current General Manager as a possible successor. Sam had decided on a two-year mentoring program. If that did not prove successful, then Sam was planning to sell the business to outside investor since no family members were interested in the business.

MANAGERIAL ISSUES PRESENTED

The planning function of management involves "defining goals, establishing strategy, and developing plans to integrate and coordinate activities" (Robbins & Coulter, 2009, p. 9). This case focuses on the issues involved with the strategic planning aspects of a small business. Specifically, the case involves the application of a strategic management process.

The strategic management process is like driving your car through a snowstorm--you know your current speed, you check the weather conditions outside, and adjust your speed to meet the new environmental conditions. Robbins & Coulter (2009) describe the initial step in the strategic management process as "identifying the current organization's current mission, goals, and strategies" (p. 164). Why does the company exist?

The second step in the strategic management process involves gathering information about the environment in which the business operates. This is typically called the SWOT analysis since one is assessing the strengths, weaknesses, opportunities, and threats. The SWOT analysis is an analysis of the environment influencing the organization. An analysis of the internal environment provides information about the firm's "specific resources and capabilities" (Robbins & Coulter, 2009, p. 165). This analysis forms the basis for determining the strengths and weaknesses of the firm. On the other hand, an analysis of the external environment provides information about potential opportunities or threats. The external environment requires managers to scan for trends in a variety of areas--societal, technological, legal, global, competitive (Andrews, 1996; Robbins & Coulter, 2009)

The third step in the strategic management process is the formulation of strategies (Robbins & Coulter, 2009). These strategies will transcend the organization and require alignment throughout the various levels. At the corporate level organizations may pursue a growth, stability, or renewal strategy (Robbins & Coulter, 2009).

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REFERENCES

Andrews, K. R. (1996). What strategy is. In H. Mintzberg and J. B. Quinn, The strategy process: Concepts, contexts, and cases. (pp. 47-55). Upper Saddle River, NJ: Prentice Hall.

Robbins, S. P., & Coulter, M. (2009). Management, 10th ed. Upper Saddle River, NJ: Pearson-Prentice Hall.

Lee E. Weyant, Kutztown University

Donna Steslow, Kutztown University