Performed by Hunaid Sulemanji
Instructor: Carolyn M. Johnson
1. What strategic information will the hand-held computer (HHC) provide for Frito-Lay?
HHC will provide aggregate, summarized, and analyzed results for the top managers. Information related to product category, quantity, prices, and promotional discounts. This data is downloaded into the central computer which will provide information such as performance of goods and services, comparison of performance within different market conditions, and comparison data with other industries and competitors.
2. How will this information benefit the company?
It will benefit the company by providing information for trade development, control accounting, correct ordering, and promotion planning and analysis.
3. What technology issue forced Frito-lay to move from their scanners?
Obsolescence was the primary driving factor. The manufacturer had stopped manufacturing the scanners, and in the future they would not be serviced by the manufacturer and therefore they needed a technology alternative.
4. What technology risks did they have with the new HHC’s?
HHC were not an industry standard at the time. Frito-Lay was the only user of HHC in that type of environment. Major technology risks are the bugs in the system that would have required to be worked out. Quantifying the impact and justifying the expenditure was a big concern.
5. How did the environment and strategy change at Frito-Lay in the previous three to five years?
In the previous five years, the strategy focused on introduction of new brands and major reorganization of sales force. Management reorganized the sales force with a program called "segmentation" under which the sales force was divided into two groups -- route and supermarket. The intent of the program was to focus on distribution channels for two different markets, however, segmentation became a disaster because of different compensation packages.
In the previous three years, the strategy was to focus on faster new product introductions, more aggressive sales and marketing, more efficient production, sales, and distribution, greater emphasis on product selection, pricing, and promotion.
How does HHC fit with the current environment and strategy?
HHC allows each sales person to automate the sales process so that the different procedures within the two segments could be centralized. The HHC allowed the management to access the information they had never received before such as "just-in-time" predictions, shelf space optimization, and efficiency. One of the greatest rewards to the sales persons was time. They no longer had to review the sales ticket to assure correctness, and therefore accounting errors were no longer a factor for the take home pay.
6. Why does Bill Korn personally support the HHC project? How critical is his support to the project?
Korn personally supported the project because he felt that HHC would provide him with the data to support his two goals of 6% real sales growth and double digit profit growth. Both goals are physical in nature and Korn would need numeric strategic information. Korn’s support is very important because the HHC project was part of his transition to becoming the president.
7. Given a decision to go ahead with the project, what are the key components of the plan to rollout 10,000 units to saleforce? What are the risks in this plan?
Hands-on and interactive training for managers and sales persons, and previous planning to incorporate the relevant data into the main computer for access by HHC. The risks are incorrect information that could be detrimental to customer.
8. What is the importance of regionalization and micromarketing in Frito-Lay’s business strategies and goals?
Regionalization allows the company to focus on a small sector of the market in a particular region, and allow the principles of micromarketing to be efficient by viewing each entity as a separate marketplace and tailor the strategies to the local environment.
9. How does "shelf space" drive Frito-Lay, or any other producer, to have more explicit information about the sales performance of its product(s)?
Shelf space allows the producer to determine the average shelf life of its products, and thus allow more control on deliveries, reordering, promotions, etc.
10. Identify one example of operational information from the HHC project and how that information would/could be used?
Work load statistics such as category, price, quantity, and promotional discounts. IT will allow sales person to make effective decision on inventory, delivery call, etc.