Assignment
Graeter's still makes ice cream by hand, just like the founders did in 1870. But in every other respect, it's a very different business from the mom-and-pop firm founded by the great-grandparents of Richard, Robert, and Chip Graeter. The founders greeted their customers in person, mixed and packed every batch of ice cream by hand, and added up the cash in the till after hours to find out how much they had made. In contrast, today's fourth generation of family owners runs a $30 million company with a workforce of nearly 800 and three factories capable of producing, in total, well over a million pintsof ice cream every year. Graeter's now sells premium ice cream through supermarkets and grocery stores in 43 states, and receives thousands of orders through its Web site every year. It would be impossible for the owners to keep this business running smoothly-let alone keep up their fast-paced growth strategy- using only the basic information systems that served Graeter's earlier in its history. NEW GROWTH, NEW SYSTEMS Paul Porcino, a consultant working with the Graeter family, observes that small, entrepreneurial firms often have only "a very small amount of information, and . . . it hasn't been pulled together in any meaningful way."
In fact, the Graeter's stores were collecting some useful sales data, but "not really enough to run the company of the future," he notes. Therefore, the first step in implementing an updated information system was to define what Graeter's executives needed to know to run the business. For example, they needed to be able to track unit sales online, in each store, and to each wholesale customer, and to measure both costs and profitability by product and channel. Without timely, accurate, and detailed data, they couldn't determine how far they were progressing toward their goals, nor could they coordinate the efforts of every business function for maximum efficiency. With the new management information system, Graeter's owners would have "some of the same powerful decision-making tools available to managers in much larger companies," Porcino says. "We are going to be . . . bringing in probably a variety of different information systems . . . so we fully have an understanding of what we are selling, as well as some other financial systems, and probably some human resources information systems." Despite some technical challenges during implementation, Graeter's has already experienced some of the benefits of collecting better information, particularly about store-level sales. When management noticed that overall bakery sales weren't up to par, "we had to adjust," comments Porcino. The remedy was surprising: "We actually reduced the number of products we were selling in the store . . . . It wasn't very clear exactly how much we were selling, but at least [we had] the good-enough gut sense in terms of the ones that were not selling, and we . . . adjusted the total inventory line." With the MIS in place, Graeter's managers have the data they need to fine-tune production, inventory, and shipments to meet demand in each channel. COUNTING ON ACCOUNTING Graeter's controller, David Blink, is responsible for preparing "all financial statements, all reports, payroll, [and] any ad hoc reports that any of the managers would need.
I handle a lot of the reporting for the retail side as well as the manufacturing side," he says. Although an outside payroll company actually prints the employees' checks, Blink's department collects and analyzes payroll data as input for management decisions. Blink and his staff are also in charge of accounts receivable, accounts payable, and financial reporting. They check and record financial details about revenues and expenses, and then send the data to an outside accounting firm, which prepares financial statements for top management use. With these reports in hand, the Graeter's team can make informed decisions about how many seasonal employees to hire, which products to keep, how much to invest in new equipment, and other issues that arise day by day. GRAETER'S SOCIAL SIDE Even a small business can have a big presence in social media. Graeter's has designated an employee to manage all of the company's activities on Facebook, Twitter, and YouTube.
With 150,000 Facebook "likes," Graeter's engages its brand fans in conversations about new or favorite flavors, the size of its chocolate chunks, special celebrations featuring ice cream, and more. It posts a new message or photo every few days, and reveals the names of mystery flavors on Facebook in advance of other publicity. As a result, fans return to its Facebook page often and they enjoy commenting on what other customers post, as well. In addition, Graeter's tweets frequently and periodically posts videos on its YouTube channel. Graeter's also monitors mentions of its brand on other socialmedia sites. For example, hundreds of consumers have shared images of Graeter's ice cream and its logo on the Pinterest site. As other people add their comments and click to "like," the conversation continues and the word of mouth builds more buzz for the Graeter's brand. Similarly, whenever a customer uses Foursquare to "check in" at a Graeter's shop while buying a sundae or another treat, others can see the activity. The social competition aspect of Foursquare encourages others to join the fun by vying to become "mayor" of a particular location (such as a Graeter's shop) by gaining the highest number of check-ins during the month. No matter who's the Foursquare mayor, Graeter's is always the brand winner
Questions
1. Suppose you were writing a social media plan for Graeter's, with two objectives: to improve brand awareness in markets where the ice cream is just becoming available and to build online orders during holiday periods. What quantitative and qualitative measurements would you plan to use to evaluate the results of your plan?
2. Graeter's uses information to track cash, sales revenue, and expenses on a daily basis. How does this type of accounting system facilitate effective decision-making and discourage store-level theft?
3. As a small but fast-growing, privately-owned company, which of the financial ratios should Graeter's track especially closely? Why?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.