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Three Different Business CasesCase Study

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¶ … Forecasting Attendance at SWU Football Games

(no Outside References Required For Case Due To The Nature Of The Case)

Develop a forecasting model, justify its selection over other techniques.

There are many different variables to consider when trying to choose a forecasting model. Some of the attendance patterns jump out without many calculations. For example, the second game of the season for the years represented seems to draw the highest attendance of the season. This is despite which opponent the team is playing and is consistent through all the years and whether or not there is a craft festival. The totals for each year steadily grow between 1.55% and 8.88% year over year. The percentage growth of last three years seem to be within a smaller margin. Thus using a three-year running model would most likely be the accurate.

2008

2009

2010

2011

2012

2013

34200

36100

35900

41900

42500

46900

39800

40200

46500

46100

48200

50100

38200

39100

43100

43900

44200

45900

26900

25300

27900

30100

33900

36300

35100

36200

39200

40500

47800

49900

Year Total

174200

176900

192600

202500

216600

229100

Percent Growth

1.55%

8.88%

5.14%

6.96%

5.77%

2. Project the attendance through 2015. What revenues are to be expected in 2014 and 2015?

2008

2009

2010

2011

2012

2013

2014

34200

36100

35900

41900

42500

46900

49695.24

52761.44

39800

40200

46500

46100

48200

50100

53085.96

56361.36

38200

39100

43100

43900

44200

45900

48635.64

51636.46

26900

25300

27900

30100

33900

36300

38463.48

40836.68

35100

36200

39200

40500

47800

49900

52874.04

56136.37

Year Total

174200

176900

192600

202500

216600

229100

242754.4

257732.3

Percent Growth

1.55%

8.88%

5.14%

6.96%

5.77%

5.77%

5.77%

5.96%

6.17%

5.77%

A three-year running mean was calculated based on the annual growth rate in attendance. This was then used to calculate the expected attendance for both 2014 and 2015. The expected growth rate for the team's attendance could be thought of as roughly six percent per year. This would be a good heuristic to plan future capacity requirements. It was also calculated that the total revenue for the stadium would be over six million for both 2014 and 2015 as shown in the table below.

Ticket Price

Attendance

Revenue

25

242749.8974

$6,068,747.43

26.25

257874.8518

$6,769,214.86

3. Discuss SWU's options.

SWU seems to have a number of options. The first option would be to use the stadium as is for the upcoming years. There are two games in the 2015 that are predicted to exceed the current seating capacity. This would only cost the university a total of about five thousand seats through these two years. If the events were sold out, it would be imaginable to suspect that may of the potential attendees would go to another game and the total loss based on lost seating revenues may not be as much as anticipated.

SWU could also consider projects to increase the seating capacity of its current stadium. If the stadium could increase capacity over the existing capacity by five thousand seats, then the stadium should not sell out again for another few years. At which point, they would run into a similar problem and they could build an entirely new stadium if the predictions for the increases in visitors is accurate.

Case 2 Strategic Management

Why Costco May Never Raise Prices on $4.99 Chickens, $1.50 Hot Dogs?

a) Differentiate between overall corporate strategy vs. tactical/operational strategy as in the case of Costco. You are expected to research and explain how this marketing tactics fits into Costco's overall corporate strategy.

The overall corporate strategy can make many provisions that a tactical or operational strategy cannot. Costco's prices on its chicken and hot dogs illustrates this point quite clearly. Many organizations will price their goods using an operational strategy that will generally add a margin to all the particular ideas being sold. However, from a corporate strategy, Costco has chosen to forgo the margins on some of the popular items as part of a corporate strategy. The strategy that they are using is to use the cheap chicken and hot dogs to bring in foot traffic. If consumers come to Costco for the chicken, it is likely that they will also purchase additional goods.

Costco is acting as a low cost leader in the rotisserie chicken market, however they are using this to further broader organizational goals. There are many difficulties using an overall low cost leader strategy, but Costco can offer some goods selectively to drive foot traffic into their stores. If you adopt low price as your strategy, then your business must be continually focused on lowering and controlling costs -- like Walmart (Stiving, 2011). It would be difficult for Costco to compete on this level because they do not have the same infrastructure and distribution capabilities as Walmart. However, they can keep the chicken priced low, to attract consumers, and make their margins on other products.

b) Do other companies tie their corporate strategy to tactical operations? Give at least three examples of companies who either do or do not undertake such.

There are many examples of companies using both a corporate strategy and tactical operations together. One example could be the famous In-N-Out chain in California who chose not to do a lot of marketing and focus primarily on the tactical operations that were based on the company's objectives. Instead of marketing the company themselves, the burger chain provided such value to their consumers, that the consumers themselves helped to market the products (Perman, 2009). Amazon also used tactics to serve as their corporate strategy. Amazon survived the dot-com bust because it had a viable and innovative business model built around a market-changing customer value proposition and a radical profit formula (Johnson, 2010). Thus the company used innovation as a corporate strategy.

Best Buy has also used a corporate strategy of being "customer-centric" to drive its tactical decisions. Best Buy took the time to understand who its customers are and what they need and then started selling solutions instead of products (Harvard Business School, 2010). They grouped items together that were related, they created a kids center so parents could shop, and they even bought a repair service so that everything electronic consumers needed could be under one roof. Each of these companies has used a combination of both strategic and tactical objectives to differentiate itself in the market.

Case 3 Management Information Systems Giving Out Private Data for Discount in Insurance

a) How do you perceive the sharing of personal medical information which has traditionally thought to be private and confidential with the exception of physicians, hospitals, and other healthcare providers?

There are a lot of pros and cons that are inherent in the sharing of data. I could personally see the Vitality program having a motivating effect; although this type of program would not be necessarily for everyone. However, knowing that you get some kind of bonus for being active might motivate me, or anyone, to not skip a workout. However, this program seems like it would be most relevant for those who actively try to improve upon their health. Someone who didn't concentrate on their own personal health might be overwhelmed by such a program. Furthermore, sharing information about health could actually improve the quality of the healthcare that is being provided. For example, tracking cholesterol would benefit many people who don't already monitor such data. Sharing this information with doctors may be able to assist them in making a diagnosis.

b) Do you believe that your medical information can be compromised and/or used against you by sharing with others or in increased premiums for different products? Outside of health insurance, what kind of product lines or services do you feel can be impacted from a consumer's perspective?

There would always be a risk that your data would be compromised and used for purposes that do not benefit you. Your personal data could be used against you for insurance premium or in a slew of other ways. For example, a program that tracked you workouts and routine could be used for marketing programs. Say, for instance, if Nike knew that you worked out for an hour a day and preferred running as your favorite exercise then they could use this information to try to sell you running shoes based on your personal data.

Furthermore, there would be virtually no limit to what the personal information can be used for. If a program tracks routes that an individual takes, then it could market to them based on their proximity to nearby stores. Having digital personal information can also bring about an immediacy of Internet advertising, which often customizes ads to reflect, eerily, your most recent online activity; for example, if you peruse an automaker's website, for instance, chances are good you'll soon see banner ads for the exact same model you were researching elsewhere online (Kunz, 2010). Having personalized medical data could take the internet marketing to a whole new level.

c) Would you give up a 9% discount… [END OF PREVIEW]

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