IFSM 300
Instructions:
Use the Case
Study presented here to answer the questions below. Your answers should be long enough to answer
each question fully and completely and typed below the individual question in
this document. Follow the instructions
in the questions to determine the appropriate length of your responses.
·
Your
answers should demonstrate an understanding of the concept(s), should apply
critical thinking, and should provide analysis of the Case Study in light of
the concepts(s).
·
You
should not just re-iterate what has been presented in class, but integrate the
information and relate it to the Case Study.
·
Proper
APA style must be used for any citations and references that you use.
·
Your
exam will be graded on the completeness and accuracy of your responses and
whether you have appropriately tied your responses to the Case Study. Responses that do not mention the Case Study
will receive very few points, if any.
Virginia’s
Finest Meat Distributors
Victor Constantine is owner of one of the
few remaining privately owned meat distributors in the Washington DC
Metropolitan region. Independent
butcher shops have decreased in number over the last decade, since meat sales
have fallen overall and restaurants have increasingly moved to large wholesale
distributors. However, this has created
an opportunity for specialty butcher shops in markets which provide only basic
options through these larger retailers.
Victor’s market niche is providing customized meat cuts for each client
– clients are individual restaurants, chains, caterers and specialty places
such as country clubs.
Virginia’s Finest Meat Distributors (VFMD)
operates a 40,000 square foot processing plant in Winchester, Virginia. The company is doing very well with revenues
steadily increasing over the last several years and reaching $19 million in
gross revenue last year, netting a modest but satisfactory net profit. As would be expected, the largest expense is
the cost of the meat itself, followed by labor costs currently hovering around
$2.5 million per year. Current debt includes approximately $4 million on its
current building.
Retail
butchers have been replaced with grocery chains and big box stores. In addition, people are eating more meals
away from home. With an increasing
percentage of food dollars spent in restaurants,there
is a growing need for sales of specialty meats to the niche market that can
afford and desire them. Caterers,
especially those serving high-end corporate and private events, and upscale
restaurants seek high-quality specialty meats at Market Prices. VFMD sells
to catering businesses and restaurants, meeting their special timing needs and
highly variable special demands, which puts VFMD in high demand and provides
them with an above average margin of profit.
VFMD treats its employees well and the
labor costs include matching funds on employees 401K plans, a very good medical
plan, and bonuses for all employees. At
this time, there are approximately 50 employees. The business began with
Victor’s father who originally sold meat to local families and restaurants from
a wagon and ran the business out of his home.
Today’s business is quite different.
In addition to Victor, whohas long-term
relationships with the best suppliers of meat as well as an understanding of
the craft of butchering, the leadership team includes
Victor’s son and daughter. His son, who performed every job including
receiving, shipping and cutting the beef, is currently the Vice President and
is expected to take the reins when his father retires; his formal education includes
food service management, state food hygiene laws, business to business sales,
and finance. Victor’s daughter handles
marketing and social media.
A typical day starts very early in the
morning when employees receive carcasses, cut and grind the meat, weigh, package
and label it (if needed), and load the 8 refrigerated trucks owned by
VFMD. These trucks deliver on average
65,000 pounds of meat and poultry to their roughly 375 customers in the
Washington area each week. Deliveries
consist of standing orders of specific cuts of meat, special orders to be
delivered on specific days, and expedited deliveries to meet unexpected demand.
At the operational level, orders are
taken by the office clerk over the phone or Internet. The clerk works
with Victor and the customers to ensure their individual needs are met. For example,when a
restaurant client couldn’t get its nine-pound racks of lamb to cook equally
from end to end, Victor reduced the size of the cut he sold them to precisely
7.5 pounds; the problem was solved and a valuable customer was pleased. Orders for immediate delivery of specific cuts are written
down and carried from the clerk to the butchers on duty who will prepare the
cuts. They will be packaged, priced, and prepared for delivery. While products can be
replenished within a few days, there is the possibility of certain items
running out because of unexpected high demand, and VFMD may run out of stock on
certain products until new shipments arrive.
In such cases, the sales staff will offer suggestions of substitutions
or special offers in order to make sure all customers are satisfied.
The majority (about 85%) of VFMD’s product
is boxed beef from the Midwest which arrives every other day. Additionally pork, beef, lamb, and poultry
are sourced from local farms. Victor
insists on purchasing from well-managed and supervised farms where no drugs or
medicated feed are used. The majority of beef is wet-aged – a common process
where the meat is aged by sealing it in a bag with its own juices. However, the real profit is in dry-aged beef
that high-end restaurants require, and then sell, at a substantial
premium. Costs are considerably higher
as a large percentage of weight (close to 50%) is lost in the dry-aging process
and the time to age is considerably longer.
This process results in a more tender and flavorful meat. The profit
margin is higher than wet-aged beef as high-end restaurants are willing to pay
for this – which in turn their customers expect. VFMD operates a very busy dry-aging facility
where the dry-aging process takes from 15-28 days and the stock rotates
continuously. Vincent refers to his
dry-aging facility as the “Money Room.”
While VCMD is doing well in today’s market,
Victor is aware of the increased trends in healthy eating and vegan
lifestyles. In addition, he’s seen the
number of producers shrinking as small, high quality livestock farms and
ranches struggle to stay competitive with large-scale commercial
producers. He’s also observed the impact
to high-end restaurants when the economy dips.
He has read the American Meat Institute’s analysis on why meat prices
rise and fall:
“The
meat industry is unique because it relies on live animals as its raw
materials. Within livestock production, there is a classic,
livestock price cycle. Prices rise and fall as producers raise more
animals in response to high prices or low supply, and then cease producing when
livestock inventories become high and prices fall.” (North American
Meat Institute, p.1)
(North
American Meat Institute, Jan 2015, Fact Sheet, retrieved on April 14, 2016 from
https://www.meatinstitute.org/index.php?ht=a/GetDocumentAction/i/89479)
VFMD’s primary competitor in this market isMaine
Avenue Butchers, which was established fifteen years ago and sells only
high-quality beef products, both wet and dry-aged. Maine Avenue Butchers charges high prices for
its quality beef, and sells primarily to caterers and specialty restaurants. There are a number of very large big box
stores in the area who are competing for business from caterers by offering
one-stop shopping for all their catering needs. Neither Maine Avenue Butchers nor the large
box stores provide the level of service and expedited delivery as VFMD
Victor and his leadership team have
identified the following Keys to Success as part of their business plan:
1.
Maintain high quality
standards for its suppliers and continuously monitor this quality.
2.
Provide unequaled
customer service and delivery.
3.
Preserve meats in
optimal conditions to maintain freshness and minimize waste while in the
facility.
4.
Maintain excellence
in the skill of butchering meats through hiring, training, and supervision of
staff.
5.
Listen carefully to
customer needs and respond with custom-cut products, whether in person, over
the phone, or through Internet orders.
6.
To the extent
possible, make a profit on each item that passes through the facility.
7.
Increase
productivity, management of the business and profit margin through the use of
information technology.
Victor
is seeking your help to analyze his business and identify areas where
information systems could help him better manage and grow his business. Review the Instructions above and respond to
the questions that follow. Each is worth
10 points.
Questions:
1.
Analyze theVirginia’s
Finest Meat Distributors business.
This question has 2 parts.
a.
Discuss each of Porter’s Five Forces in relationship to VFMD.
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FORCE List Porter’s Five Forces |
JUSTIFICATION of Minimum 3 good sentences that explain the impact Refer to specific details from the business in |
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b.
Identify
which one of the forces
should be the primary factor in the
development of future business and their information technology strategy. Include the chosen force andyour explanation of why you chose that force using information
you’ve learned in this course and specifics from the case study in a minimum of
3well-written sentences. Your explanation must explicitly refer to
the VFMD business in the case study.
2. Identify
which of Porter’s Generic Strategies is most
appropriatetoVirginia’s Finest Meat Distributors and explain
why you selected it in light of your Five Forces Analysis.You must mention the case study to gain all points for your response. (This will take approximately 2-3 sentences—give the strategy and an
explanation).
3.
Imagine walking through the three business
processes listed:
·
Purchasing meat products from
suppliers.
·
Creating and managing a schedule to deliver
ordered products (standing orders and special orders) to the right customers
each day.
·
Managing inventory
identify
one step in each process, and then list
one input, one system processing action, and one output that would be part
of that step in the process. Note:
these 3 pieces need to relate to each other.
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Process Choose |
Input Information/data item entered into the system as part of (input needed for the system) |
Processing Processing or (what the system will do with the input) |
Output Information/data (what the system |
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PURCHASING PRODUCTS – Briefly describe ONE step in the process: |
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SCHEDULING DELIVERIES TO CUSTOMERS – Briefly describe ONE step in the process : |
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MANAGING INVENTORY – Briefly describe ONE step in the process:
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4.
Keepingin mind the specific business processes listed in
question #3:Explain how each of the following could benefit Victor’s Virginia’s Finest Meat
Distributors business. Use 2-3
sentences for each and be sure your explanations demonstrate that you understand
each of the types of systems. Your
explanation must explicitly refer to the VFMD business in the case study.
a.
Supply Chain Management System
b.
Customer Relationship Management System
c.
Enterprise Resource Planning System
5.
Victor would like to increase the profit
margins on his products – increasing the volume on those products that yield
higher profits. He wants to analyze the data he will be collecting in his new
information system to help him do this.
·
Identify
two questions that Victor would want answers to in order to
determine ways to increase sales of the more profitable products.
·
Then, identify
what informationVictor would need to answer each question.
·
Finally, explain how that information and the answers to the questions would
help Victor with data-driven decision making.
For example,
to solve a different problem: If Victor
wanted to know when he could schedule his delivery trucks for maintenance, he
might ask: On average, how many delivery
trucks have been sent out each day of the week (over the past 6 months)? He would need to know this so he could figure
out when his trucks are least in demand.
Using this information, he might see that he makes very few deliveries
on Sundays. But, his maintenance shop is
not open on Sundays, so he would have to look at the next least busy day. If he found that Tuesdays generally require
the next fewer delivery vehicles, he could schedule his trucks for maintenance
on Tuesdays on a rotating cycle. Victor
can then use that information to ensure his trucks are in good working order
without impacting his ability to deliver the products to his customers.
a.
Question, information needed and
explanation #1:
b.
Question, information needed and
explanation #2:
6.
Victor has decided to use technology to
improve one of the business processes
identified in question #3 above. Select
one of the processes and analyze the
IT requirements as they apply to that process using the table below. Type the name of the process you selected
on the line below:
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Business Process forVirginia’s Finest Meat Type the name the business
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IT Requirement
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Importance/ High, Medium, (each must have a ranking, including N/A) |
Explanation for (Write a minimum of 3 good sentences · · · |
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Usability
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Scalability / Portability
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Database/ Data Quality
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Reliability/
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Authentication / Security
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7.
Victor has decided to implement a
cloud-based SaaS solution to improve the process of shipping products to his
customers. Identify one important activity that would need to be
done during each of the following phases
of the system development life cycle (SDLC)to implement his solution. Your answers should demonstrate an
understanding of the phase of the SDLC and implementation of a SaaS
solution. (An example answer is provided
for the Programming phase—all other phases are applicable to this solution.) . Your explanation must explicitly refer to
the VFMD business in the case study.
a.
Preliminary Analysis:
b.
System Analysis and Design:
c.
Programming: Since the system has already been developed
by the SaaS vendor, Victor is not required to take any action regarding the
Programming Phase. The vendor will have
already created the code needed .
d.
Configuration and Testing:
e.
Implementation andContinuedUse:
8.
Consider the process of shipping
products to his customers listed in question 7. Once the cloud-based
Software-as-a-Service (SaaS) solution is in place, list and briefly explain two specific quantifiable (measurable) business
benefits. These should reflect measurable benefits achieved by using the
SaaS solution – not general benefits. In other words—what can be measured to
determine if the new system has improved the business?
a. Business
Benefit #1 and explanation:
b. Business Benefit #2 and explanation:
