Advantage Food & Beverage Vending
(4 pages of text)
Advantage Food & Beverage Vending is a decision-based case that highlights four options for the owner and president of the Advantage Food & Beverage (AF&B) snack vending operation. He had been running his business for 16 years and possessed a great deal of knowledge about his company and the vending industry. His dilemma was whether or not to invest in his existing operation and, if so, how to determine the best use of his resources. The vending industry was stagnant and considered to be declining, which complicated his decision. However, newer technologies had become available that could improve AF&B’s competitive advantage in the marketplace.
Technology options included a system that (a) accepted electronic payments and (b) tracked inventory and transactions. The electronic payment method came in the form of the swiping of a credit card, or in the newer form of Touch-and-Go card readers. These features could be retrofitted to existing machines or built into new machines. The decision involved which option(s) would likely provide the president with the best return on his investment.
- Understand and apply resource advantage theory to the current business situation and related options, i.e., how technology would improve value and/or lower the cost structure for a firm (Bloom’s Taxonomy learning outcome level 2).
- Perform quantitative computations to analyze costs and benefits of each alternative and provide estimated figures to select appropriate alternatives (Bloom’s Taxonomy learning outcome level 5).
- Evaluate and assess costs, benefits, and other factors and apply knowledge and skills to recommend a course of action for the decision situation (Bloom’s Taxonomy learning outcome level 6).
The case can be used at the end of a marketing principles course, during a retail management course, or at the beginning of a marketing strategy course. The case involves several challenging calculations, which students should be familiar with before attempting the case. The dilemma faced by the owner highlights an investment decision in the face of a declining or shrinking market.
The case works best when students are asked to answer the discussion questions at the end of the case. The questions lead students into the final calculation of return on investment for the options the owner is considering. There is significant quantitative information within the case that provides the basis for the analysis.
The case could include instructor- or student-led discussion in a classroom format to discuss the critical issues that would affect the owner’s decision. The case could be assessed by individual students or by small teams of students with an analysis and recommendation presented to the instructor, or possibly as a final exam after learning the quantitative principles applied.
United States, Small, 2011
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