Case Memo Instructions

Case Memo Instructions The short memo is one of the ways that people in corporations communicate with one another. The ability to make a persuasive argument in a single page is a very important skill and is one of the things we will work on in this class. The focus of these memos, and this class in general, is on creating a logical connection between data and recommendations. During the course everyone will write a memo on two of the cases we study. For each of the two cases you choose, prepare a one-page case position memo accompanied by one page of exhibits (maximum of 3 exhibits). The memos should follow the following format:  One-inch margins on all sides  12-point Times font  Single-space within paragraphs  Double-space between paragraphs  You will lose 3 (out of 35) points if you don’t follow this format (see grade sheet on next page). Address your memo to the decision maker in the case. Headings should be on a separate line. Identify your memo with your name (as registered), Student ID, section, and the case in the FROM section. Exhibits should be referred to in the text and should not contain content that belongs in the memo text itself.  Ideally Exhibits should be created by you using information from the case. Only use data and information provided in the case when creating your exhibits (no online or other sources may be used).  Refer to your exhibits in the text of the memo  Exhibits can support your analysis or to demonstrate your recommendations. Examples are spreadsheets, graphs and a marketing research survey. Because busy executives do not have time to read long essays, memos that exceed the length limit or that otherwise do not comply with the format will have three points taken off (see the grading sheet below). Make sure your recommendations are very specific and actionable Assume you are writing at the time of the case. We know that market conditions and competitive contexts are likely to have changed. However, only base your analysis and recommendations on the data in the case--not on current conditions. Do not assume you need to be comprehensive. You should exercise judgment as to what to put in and what to leave out. The grade will be based upon the bottom line—how useful is this to the decision maker? Does it offer new insight that is likely to lead to a good decision or to help develop strategy? Remember that the decision maker is familiar with the case and thus—DO NOT REHASH THE CASE. Writing memos can be challenging for those who are not used to the process. You will be surprised at how much easier it gets as you have more practice. A sample memo and exhibits are attached. Grading. Because we will discuss each case in class, written cases need to be uploaded to UM Learn by 2 p.m. on the due date. Please follow the following shell when writing your memo: Introduction (omit this heading) This is the most important part of the memo. It presents your plan of action and demonstrates to the reader your point of view. It answers the following questions: What is recommended? What key details or data influence this decision? What decisions are needed at this time? Background The background sets the context for your plan of action and includes one or two statements of strategy that form the basis of your recommendation. Important - do not restate the facts in the case. Use only key facts that led to your conclusion. Recommendation Provide a complete, detailed, statement of your plan of action and answer the following questions: What is being recommended? How is your recommendation going to be accomplished (e.g., quantities, costs, timing)? This section can be omitted if the recommendation is completely stated in the introduction. Basis for Recommendation: Identify key supporting reasons for recommendation listed in descending order of importance. Bullet points are helpful. No more than three points/reasons. Assumptions and Risks Outline key assumptions you have made. Present alternative strategies and reasons these strategies were not selected. Briefly discuss possible risks involved with recommendation. Next Steps Brief and action-oriented statement of next steps needed to implement recommendation. What must be done now? Who will do it? When will it be done? The following grading rubric provides guidance on how the memos will be assessed: Excellent Organization (5 pts) Logic (5 pts) Spelling, Grammar and Mechanics (5 pts) Exhibits (5 pts) Overall Usefulness to the Decision Maker (15 pts) Good Well-structured and easy to follow Some organizational issues Recommended headings used Recommended headings used Sections clearly build on each other Flow could be improved (5 pts.) (4 - 3 pts) Some logical issues Incomplete analysis Hard to follow Material in wrong section Missing/wrong headings (2 -1 pts) Recommendations flow from wellreasoned assumptions Accurate analysis (5 pts) (4-3 pts) (2-1 pts) Free of all spelling, grammar, and punctuation mistakes. Writing is clear and concise Clear evidence that memo was reread prior to submission (5 pts) Free of most spelling and punctuation mistakes. Fairly fluent and free of all but a couple grammar issues. Edits could have been made. (4-3 pts) Numerous spelling, grammar, and punctuation errors. Does not read fluently. Writing is wordy or crowded Clearly not re-read before submitting. (2-1 pts) Weak basis for recommendations Inaccurate/weak supporting data Relevant to recommendations Good Relevant but missing some use of numbers if applicable important analysis. Good integration/analysis of data Data integration could be better Exhibits referenced in memo text. Could be clearer (5 pts) (4-3 pts) Exhibits missing Don’t add anything over case exhibits Confusing; include extraneous data not related to recommendation (2-0 pts) Recommendations are important and actionable Specific and precise Next steps are clearly delineated (15-13 pts) Recommendations are vague Call for additional research rather than taking a stand Next steps unclear (5-1 pts) Mix of important and unimportant recommendations Could be more specific (12-6 pts) (Subtract 3 points if longer than 1 page or if font, spacing or margins are too small) TOTAL SCORE Needs Improvement /-3 /35 Because we will have already discussed the case in class, you cannot rewrite memos. If you believe that a mistake has been made in grading, please submit an explanation to me within 3 days of the assignment’s return. MEMORANDUM – EXAMPLE TO: Hilary Nolan FROM: Jonathan Trumbull (section 1 and student id) DATE: January 10, 2021 RE: Sergeant-Major’s Pricing Strategy Excessive discounting and price competition is eroding Sergeant-Major’s profits, hurting brand equity and raising production costs. To address these issues, Sergeant Major’s should move to an everyday-low price strategy. Background Flat growth in the dog-food industry and manufacturer overcapacity has created intense price competition in the market. The failure of retailers to fully pass through our price discounts has reduced unit contributions without substantially increasing volume. Increased discounting (up to 15%) has eroded brand loyalty and threatens our premium positioning. Recommendation Sergeant Major’s should stop discounting its products and switch to an everyday-low price strategy. In particular, Sergeant Major’s should reduce its wholesale case price by 10% to $16.65, eliminate promotional price discounts while holding other advertising expenditure constant (see Strategy 3, Exhibit A). Basis for Recommendation  Failure to take action now will lead to continued declines in profits and do long-term damage to our brand equity (See Strategy 1, Exhibit A).  Lack of a stable price structure increases the variability of demand for our products and production costs.  Alternative strategies risk alienating retailers and provoking competitors to undercut our prices (See Strategies 2a and 2b, Exhibit A). Assumptions and Risks The recommended plan assumes that we will be able to maintain current volume with a stable, but lower, list price. Retailers may still retaliate by taking away shelf space. Competitors may seek to undercut our strategy through continued discounting. It will be important to convince retailers that the new pricing policy is in their best interest. Next Steps Start by using the sales force to educate retailers about the advantages of the new pricing policy. In three months, lower the wholesale case price to $16.65 and focus advertising expenditures on informing consumers of the advantages of everyday-low pricing. In six months, evaluate the effectiveness of the new strategy in terms of profits, brand equity and production costs. Exhibit A: Pro-Forma Income Statements for Alternative Strategies Strategy 1 Strategy 2a Strategy 2b 1992 1993 Revenue Number of Cases Sold 1,126,894 1,126,894 1,126,894 1,014,205 List price per case $18.50 $18.50 $18.50 $18.50 $20,847,53 $20,847,53 $20,847,53 $18,762,78 Total Revenue 9 9 9 5 Cost of Goods Sold $8,654,365 $8,654,365 8,481,278 7,633,150 $12,193,17 $12,193,17 $12,366,26 $11,129,63 Gross Contribution 4 4 1 5 Expenses Promotional Price Discounts Ad Allowance for Retailers Other Ad/Coupons/Samples Selling and Admin General Overhead Net Contribution Strategy3 1,126,894 16.65 $18,762,78 5 8,481,278 $10,281,50 7 $2,836,186 $641,828 $3,426,322 $731,346 $0 $1,141,828 $0 $1,141,828 $0 $641,828 $2,377,858 $2,413,805 $2,482,222 $2,484,289 $3,377,858 $2,413,805 $3,377,858 $2,413,805 $2,377,858 $2,413,805 $2,467,455 $1,456,042 $2,467,456 $601,540 $2,467,455 $2,965,315 $2,467,455 $1,728,689 $2,467,455 $2,380,561 Assumptions: Overall: Fixed costs, sales, and list price are same as previous year. Strategy 1 (Status Quo): List price stays at $18.50, volume and COGS ($7.68/case) are same as previous year, price discounts, ad allowances, other ad/coupons, selling and admin grow at same rate as previous year. Strategy 2a: List price stays at $18.50, volume same as last year, COGS ($7.53) are 2% less than previous year, no price discounts, ad budget increased by $1,000,000, co-op ad spending increased by $500,000. Strategy 2b: List price stays at $18.50, volume same as last year, COGS ($7.53) are 2% less than previous year, ad budget increased by $1,000,000, co-op ad spending increased by $500,000, volume drops by 10% due to retailer and competitor reaction. Strategy 3: COGS ($7.53) are 2% less than previous year, wholesale price is cut 10%, volume same as last year, ad allowance and ad budget same as previous year. OTHER EXAMPLES OF EXHIBITS (created by student for a different case): Exhibit A Strengths Product leader & innovator Successfully developed interactivity Largest technology electronic components company Weaknesses  No real competitive advantage in market  Lack of penetration in Business Mobile Market  Not as much brand equity/awareness as Apple Threats  Intense competition from Apple, Blackberry, etc.  Constant innovation from other companies  Possible competition with cable companies if interactivity is enabled on smartphones *Highlighted shows that Samsung’s strengths align with current market opportunities  Samsung must jump on opportunity for interactivity Opportunities Growing demand for smartphones in emerging markets Interactivity with other electronics Differentiation (competitive advantage) against Apple Exhibit B: Target Segments and Corresponding Benefits of Interactivity Everyday Consumers (consumer market): Enables consumers to play their favorite games on the television simply by interacting with their smartphone. It allows individuals to access all of their favorite features on their smartphone on the TV/Internet in their very own home. Business Professionals (business market): Allows working professional to access emails, presentations, reports etc. stored on their phone using TV’s/monitors at work. Can be very effective for storing materials on mobile phone and then using these in meetings, conferences, etc. Advertising Agencies (commercial market): Can use interactivity to sell ads on screens that are 25 times larger than the Iphone screen. Thus, ads will arguably be more effective in capturing the attention of consumers.