QSO Operation Mgt Milestone 1 Case Study

Volume 17, Number 1 Printed ISSN: 1078-4950
PDF ISSN: 1532-5822

JOURNAL OF THE INTERNATIONAL
ACADEMY FOR CASE STUDIES

Editors

Inge Nickerson, Barry University

Charles Rarick, Purdue University, Calumet

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Journal of the International Academy for Case Studies, Volume 17, Number 1, 2011

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Journal of the International Academy for Case Studies, Volume 17, Number 1, 2011

EDITORIAL BOARD MEMBERS

Irfan Ahmed
Sam Houston State University
Huntsville, Texas

Devi Akella
Albany State University
Albany, Georgia

Charlotte Allen
Stephen F. Austin State University
Nacogdoches, Texas

Thomas T. Amlie
SUNY Institute of Technology
Utica, New York

Ismet Anitsal
Tennessee Tech University
Cookeville, Tennessee

Kavous Ardalan
Marist College
Poughkeepsie, New York

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Stephen F. Austin State University
Nacogdoches, Texas

Lisa Berardino
SUNY Institute of Technology
Utica, New York

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James Madison University
Harrisonburg, Virginia

Steve Betts
William Paterson University
Wayne, New Jersey

Narendra Bhandari
Pace University
North Brunswick, New Jersey

Barbara Bieber-Hamby
Stephen F. Austin State University
Nacogdoches, Texas

W. Blaker Bolling
Marshall University
Huntington, West Virginia

Lisa N. Bostick
The University of Tampa
Tampa, Florida

Michael W. Boyd
Western Carolina University
Cullowhee, North Carolina

Thomas M. Box
Pittsburg State University
Pittsburg, Kansas

William Brent
Howard University
Washington, DC

Michael Broihahn
Barry University
Miami Shores, Florida

Gary Brunswick
Northern Michigan University
Marquette, Michigan

Carol Bruton
California State University San Marcos
Poway, California

Gene Calvasina
Southern University
Baton Rouge, Louisiana

Russell Casey
Penn State University Worthington Scranton
Dunmore, Pennsylvania

Yung Yen Chen
Nova Southeastern University
Davie, Florida

Wil Clouse
Vanderbilt University
Nashville, Tennessee

Clarence Coleman
Winthrop University
Rock Hill, South Carolina

Michael H. Deis
Clayton College & State University
Morrow, Georgia

Carol Docan
CSU, Northridge
Northridge, California

Scott Droege
Mississippi State University-Meridian Campus
Meridian, Mississippi

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Journal of the International Academy for Case Studies, Volume 17, Number 1, 2011

EDITORIAL BOARD MEMBERS

Martine Duchatelet
Purdue University Calumet
Hammond, Indiana

Steve Edison
University of Arkansas at Little Rock
Little Rock, Arkansas

Andrew A. Ehlert
Mississippi University for Women
Columbus, Mississippi

Henry Elrod
University of the Incarnate Word
San Antonio, Texas

Mike Evans
Winthrop University
Rock Hill, South Carolina

Werner Fees
Georg-Simon-Ohm-Fachhochschule Nuernberg
Nuernberg, Germany

Troy Festervand
Middle Tennessee State University
Murfreesboro, Tennessee

Art Fischer
Pittsburg State University
Pittsburg, Kansas

Barbara Fuller
Winthrop University
Rock Hill, South Carolina

Ramaswamy Ganesan
BITS-Pilani Goa Campus
Goa, India

Joseph J. Geiger
University of Idaho
Moscow, Idaho

Issam Ghazzawi
University of La Verne
La Verne, California

Michael Grayson
Jackson State University
Jackson, Mississippi

Richard Gregory
University of South Carolina Spartanburg
Spartanburg, South Carolina

Robert D. Gulbro
Athens State University
Athens, Alabama

Allan Hall
SUNY Institute of Technology
Utica, New York

Karen Hamilton
Appalachian State University
Boone, North Carolina

Heikki Heino
Governors State University
University Park, Illinois

Terrance Jalbert
University of Hawaii at Hilo
Hilo, Hawaii

Marianne L. James
California State University, Los Angeles
Los Angeles, California

Marlene Kahla
Stephen F. Austin State University
Nacogdoches, Texas

Joseph Kavanaugh
Sam Houston State University
Spring, Texas

William J. Kehoe
University of Virginia
Charlottesville, Virginia

Wasif M. Khan
Lahore University of Management Sciences
Lahore, PU, Pakistan

Marla Kraut
University of Idaho
Moscow, Idaho

S. Krishnamoorthy
Amrita Institute of Management
Tamil Nadu, India

Dave Kunz
Southeast Missouri State University
Cape Girardeau, Missouri

John rence
University of Idaho
Moscow, Idaho

Jonathan Lee
University of Windsor
Windsor, Ontario, Canada

John Lewis
Stephen F. Austin State University
Nacogdoches, Texas

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Journal of the International Academy for Case Studies, Volume 17, Number 1, 2011

EDITORIAL BOARD MEMBERS

Rod Lievano
University of Minnesota Duluth
Duluth, Minnesota

Steve Loy
Eastern Kentucky University
Richmond, Kentucky

Anne Macy
West Texas A&M University
Canyon, Texas

Edwin Lee Makamson
Hampton University
Hampton, Virginia

Jeff Mankin
Lipscomb University
Nashville, Tennessee

Paul Marshall
Widener University
Chester, Pennsylvania

James R. Maxwell
State University of New York College at Buffalo
Buffalo, New York

Steve McGuire
California State University, Los Angeles
Los Angeles, California

Michael McLain
Hampton University
Elizabeth City, North Carolina

Todd Mick
Missouri Western State University
St. Joseph, Missouri

Kenneth K. Mitchell
Shaw University
Raleigh, North Carolina

Mohsen Modarres
Humboldt State University
Arcata, California

William B. Morgan
Felician College
Jackson, New Jersey

Inge Nickerson
Barry University
Miami Shores, Florida

Inder Nijhawan
Fayetteville State University
Fayetteville, North Carolina

Adebisi Olumide
Lagos State University
Lagos, Nigeria

Joseph Ormsby
Stephen F. Austin State University
Nacogdoches, Texas

D. J. Parker
University of Washington Tocama
Tacoma, Washington

Karen Paul
Florida International University
Miami, Florida

Steven K. Paulson
University of North Florida
Jacksonville, Florida

Terry Pearson
West Texas A&M University
Canyon, Texas

Rashmi Prasad
University of Alaska Anchorage
Anchorage, Alaska

Sanjay Rajagopal
Western Carolina University
Cullowhee, North Carolina

Charles Rarick
Purdue University Calumet
Hammond, Indiana

Sherry Robinson
Penn State University
New Albany, Pennsylvania

Ida Robinson-Backmon
University of Baltimore
Baltimore, Maryland

Durga Prasad Samontaray
King Saud University
Riyadh, Saudi Arabia

Joesph C. Santora
Essex County College
Newark, New Jersey

Sujata Satapathy
Indian Institute of Technology
New Delhi, India

Bob Schwab
Andrews University
Berrien Springs, Michigan

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Journal of the International Academy for Case Studies, Volume 17, Number 1, 2011

EDITORIAL BOARD MEMBERS

Elton Scifres
Stephen F. Austin State University
Nacogdoches, Texas

Herbert Sherman
Southampton College
Southampton, New York

Linda Shonesy
Athens State University
Athens, Alabama

Mike Spencer
University of Northern Iowa
Cedar Falls, Iowa

Harlan E. Spotts
Western New England College
Springfield, Massachusetts

Harriet Stephenson
Seattle University
Seattle, Washington

Philip Stetz
Stephen F. Austin State University
Nacogdoches, Texas

Jim Stotler
North Carolina Central University
Chapel Hill, North Carolina

Jennifer Ann Swanson
Stonehill College
N. Easton, Massachusetts

Joseph Sulock
UNC-Asheville
Asheville, North Carolina

Joe Teng
Barry University
Miami Shores, Florida

Prasanna J. Timothy
Karunya Institute of Technology
Tamil Nadu, India

Jeff W. Totten
Southeastern Louisiana University
Hammond, Louisiana

Jack E. Tucci
Mississippi State University-Meridian Campus
Meridian, Mississippi

George Vozikis
University of Tulsa
Tulsa, Oklahoma

Rae Weston
Macquarie Graduate School of Management
NSW Australia

Greg Winter
Barry University
Miami Shores, Florida

Art Warbelow
University of Alaska
Fairbanks, Alaska

Thomas Wright
University of Nevada – Reno
Reno, Nevada

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Journal of the International Academy for Case Studies, Volume 17, Number 1, 2011

JOURNAL OF THE INTERNATIONAL ACADEMY FOR
CASE STUDIES

TABLE OF CONTENTS

EDITORIAL BOARD MEMBERS …………………………………………………………………………………. III 

LETTER FROM THE EDITORS ……………………………………………………………………………………. IX 

PEANUT VALLEY CAFÉ: WHAT TO DO NEXT? …………………………………………………………. 1 

Lee E. Weyant, Kutztown University 
Donna Steslow, Kutztown University 

COMPETING IN THE AGE OF WAL-MART:
A BOUTIQUE BUSINESS CASE STUDY ……………………………………………………………………… 11 

Michael L. Thomas, Georgia Southern University 
Linda Greef Mullen, Georgia Southern University 
J. Michael McDonald, Georgia Southern University 

BYD OF CHINA: ELECTRIFYING THE WORLD’S AUTOMOTIVE MARKET ……………… 19 

Charles A. Rarick, Purdue University Calumet 
Kasia Firlej, Purdue University Calumet 
Arifin Angriawan, Purdue University Calumet 

PEGASUS RESEARCH INSTITUTECTHE DEVELOPMENT OF A COST
ACCOUNTING AND PROJECT MANAGEMENT SYSTEM FOR A 
SMALL DEFENSE CONTRACTOR………………………………………………………………………………. 29 

Richard E. McDermott, Weber State University 

AUSTRALIAN DREAM: AN AMERICAN DREAM…………………………………………………… 49 

Stephen L. Loy, Eastern KentuckyUniversity 
Steven Brown, Eastern Kentucky University 
Mark Case, Eastern Kentucky University 

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Journal of the International Academy for Case Studies, Volume 17, Number 1, 2011

CHIROPRACTIC MARKETING: MARKET SEGMENTATION
& GROWTH STRATEGY …………………………………………………………………………………………….. 65 

Jeanny Y. Liu, University of La Verne 
Stephanie N. Van Ginkel, University of La Verne 

ST. LOUIS CHEMICAL: COST OF CAPITAL ……………………………………………………………….. 83 

David A. Kunz, Southeast Missouri State University 
Benjamin L. Dow III, Southeast Missouri State University 

FEMSA 2007: THE FINANCIAL STATEMENT ANALYSIS IMPACT OF
DIFFERENCES IN MEXICAN AND US GAAP……………………………………………………………… 89 

Kevin L. Kemerer, Barry University …………………………………………………………………….. 89 
Michael L. Tyler, Barry University 

ANDERSON’S DEPARTMENT STORE: A COSMETIC DILEMMA ……………………………. 109 

Regina A. Julian, Stephen F. Austin State University 
Elton L. Scifres, Stephen F. Austin State University 

MIXED SIGNALS AT GABBA ENTERPRISES …………………………………………………………… 115 

Kurt Jesswein, Sam Houston State University 

HSN, INC.: WEATHERING THE RETAIL STORM ……………………………………………………… 121 

Alexander Assouad, University of South Florida St. Petersburg 
William T. Jackson, University of South Florida St. Petersburg 
James A. Fellows, University of South Florida St. Petersburg 

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Journal of the International Academy for Case Studies, Volume 17, Number 1, 2011

LETTER FROM THE EDITORS

Welcome to the Journal of the International Academy for Case Studies. The editorial
content of this journal is under the control of the Allied Academies, Inc., a non profit association
of scholars whose purpose is to encourage and support the advancement and exchange of
knowledge, understanding and teaching throughout the world. The purpose of the JIACS is to
encourage the development and use of cases and the case method of teaching throughout higher
education. Its editorial mission is to publish cases in a wide variety of disciplines which are of
educational, pedagogic, and practical value to educators.
The cases contained in this volume have been double blind refereed, and each was
required to have a complete teaching note before consideration. The acceptance rate for
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If any reader is interested in obtaining a case, an instructor’s note, permission to publish,
or any other information about a case, the reader must correspond directly with the Executive
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We intend to foster a supportive, mentoring effort on the part of the referees which will
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you at any time.

Inge Nickerson, Barry University

Charles Rarick, Purdue University, Calumet

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Journal of the International Academy for Case Studies, Volume 17, Number 1, 2011

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Journal of the International Academy for Case Studies, Volume 17, Number 1, 2011

PEANUT VALLEY CAFÉ: WHAT TO DO NEXT?

Lee E. Weyant, Kutztown University
Donna Steslow, Kutztown University

CASE DESCRIPTION

The primary subject matter of this case involves the management of a quick service
restaurant (QSR). The case has a difficulty level of three, appropriate for junior level courses in
management or hospitality management. The case is designed to be taught in 1, 75 minute class
period and is expected to require 2 hours of outside preparation by students.

CASE SYNOPSIS

This case focuses on the operational and strategic management issues faced by a family
owned quick service restaurant (QSR). The case explores the operational issues with a multi-
unit restaurant. What are the operational decisions necessary to effectively manage QSR
facilities? What are the strategic issues facing a QSR owner?

[NOTE: This case is a fictionalized version of a real-life situation. Names and other potentially
identifying information have been changed to protect identities. The applicable fact situation is
true to the real case.]

THE PEANUT VALLEY CAFE

Peanut Valley Café is a family owned, ethnic food quick service restaurant (QSR). The
company has two locations in the southwestern part of the United States. The two facilities are
20 miles apart with one facility located in Plainsville and the other in Pleasant Valley. Both
facilities are equidistant, about 8 miles, from a major military base that is in the process of
expanding operations. The population of Plainsville is nearly 33,000 and the population of
Pleasant Valley is approximately 11,000. Plainsville is the county seat for Mountain County.
The city has a small, regional shopping mall, a civic center, a hospital, and Mountain
Community College. Pleasant Valley is the county seat for Lovely County. The town has an
ethanol processing plant, milk processing facility, several peanut processing facilities, and
Regional State University (RSU). RSU is a small regional university providing undergraduate
and graduate programs for approximately 4,000 students. Both cities are about 100 miles from a
metropolitan area with a population greater than 50,000 and more than 120 miles from a
population centers greater than 150,000. (See Appendix C: Map).

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Journal of the International Academy for Case Studies, Volume 17, Number 1, 2011

Peanut Valley Café started in 1967 serving Mexican-American fast food. Sam Snow
joined the company in 1969 as a management trainee after graduating from a prestigious land-
grant college with a degree in Hotel, Restaurant Management (HRM). By 1970, Peanut Valley
Café had grown to five locations. In 1971, the owner of Peanut Valley Café offered Sam the
opportunity to buy the Plainsville restaurant. This facility was located in front of a new shopping
center, across the street from the Plainsville Park, and within a block of the Plainsville High
School. In 1971, this was an ideal location since the highway had been expanded to three lanes
to handle the traffic to the hospital and the military base located west of town. In 1975, Sam
received permission from Peanut Valley Café general management to open a restaurant in
Pleasant Valley across the street from a RSU dormitory and the RSU administrative building.
Additionally, this location was along the main highway to Desert Sun, a city of 55,000 located
about 90 miles southwest of Pleasant Valley.
In 1979, Peanut Valley Café’s operations were facing financial difficulties. Originally,
the locations in small towns resulted in little competition with national franchise operations such
as McDonald’s and Burger King. With increased competition from national chains, three of the
five Peanut Valley Cafés reported their third consecutive annual loss. Only Sam’s operations in
Plainsville and Pleasant Valley posted profits during this time. When Peanut Valley Café’s
general management decided to close the business, Sam offered to buy the company’s name and
continue operating his two facilities. On January 1, 1980, Peanut Valley Café was officially sold
to Sam Snow’s new corporation – High Plains Restaurant Management, Inc., dba Peanut Valley
Café. Sam has operated the two restaurants in the same location since 1975. Over the years Sam
has experienced the typical business cycles of all small businesses. Likewise he has experienced
his share of attempting new projects. For example, from 1998 to late 2004 Sam operated a food
court version of his café in the local mall with a limited menu. Also, during this time period, his
corporation owned an Orange Julius franchise in the local mall. For simplicity, the gross
revenue figures for the Plainsville operation during those years reflect these additional ventures.
Moreover, in 1996 Sam was offered the opportunity to buy the gas station adjacent to the
Pleasant Valley facility. This venture accounts for approximately 10% of the total revenue at the
Pleasant Valley facility. (See Appendix A for current organizational chart and Appendix B for
selected financials.)
Last July, Sam met with Dr. Abraham, Associate Professor of Management, RSU. Dr.
Abraham was designing the curriculum to support a new Hospitality Management degree at RSU
and needed the input of industry leaders such as Sam Snow. Their initial conversation covered a
variety of topics including the local economy, community growth, entrepreneurship, and the
need for a hospitality degree in the area. During this conversation, Sam stated that he wished he
had the time to implement the systems that would really help his business. “My managers are
not a part of this operation. Sure, they try, but there is no follow through on items. I feel like we
are not on the same page.” Sam asked Dr. Abraham if he could help in facilitating a discussion
between Sam and his managers. Dr. Abraham agreed to assist Sam, but wanted to observe the

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Journal of the International Academy for Case Studies, Volume 17, Number 1, 2011

operation before conducting the meeting. Over the next several months, Dr. Abraham visited
each facility, met with the employees, and received a tour of the operation. By November, it was
agreed that Dr. Abraham would attend the employee meetings being conducted by Sam.
The employee meeting for the Pleasant Valley facility was scheduled for late November.
Following his normal procedure for these meetings, Sam decided to close the facility at 8:30PM
versus 10. About ten minutes into the meeting a bus from Mountain Plains University arrived
with the women’s basketball team and coaches. The team had played the RSU women’s team
earlier in the evening. When the coach came to the door, a member of Sam’s management team
answered the door and told the coach they were closed. Without prompting, the Peanut Valley
Café employees asked Sam to open the restaurant for the team. Sam agreed and the team was
invited into the facility. While the restaurant employees were busy preparing the food for the
team, Sam overheard one of his Assistant Manager’s remark “We can’t afford to let that much
revenue be turned away. I can’t believe this meeting is more important than servicing the
community!” After the team completed their meal, Sam resumed the employee meeting. During
a conversation about hours, one of the morning managers, Jesus, started complaining about the
lack of support from the other managers, especially Daniel. This continued for several minutes
with both managers and their respective subordinates trading barbs about the operational
procedures. Finally Sam stopped the meeting and looking at Jesus stated “We’ll continue this
conversation in private after the meeting.” The meeting ended with Sam and Jesus going to the
manager’s office. As Dr. Abraham was collecting his materials, several employees stopped to
talk. One employee commented, “This has been brewing for some time. Jesus and Daniel have
not gotten along since Daniel was promoted to manager. Jesus is a great cook, but he is not a
strong manager.” Another employee added, “You know this all began when Daniel started going
to RSU for his management degree and doesn’t have to work the early morning shifts.” The next
day Sam called Dr. Abraham to apologize for the incident with Jesus. “He probably has the best
overall culinary skills of all my managers. But he is very narrow-minded about what needs to be
done. He is not a good manager and tries to tell the others how things should be done. I had
planned to talk to him about his overall performance for several weeks but never got the time to
drive to Pleasant Valley for the talk”. About a week later, Sam and Dr. Abraham were
coordinating a time for Sam to be a guest speaker in a hospitality management class when Sam
stated, “Well, Jesus quit. Called me at 6:25AM last Tuesday and quit. That hurt since we open
at 6:30AM. I had a young employee waiting outside the door for about 45 minutes until I got
there to open. The young man was upset that he had to wait and tersely told me about 20 people
stopped by and wanted to know why the restaurant was closed. When I explained what
happened, he added ‘I should have known. Jesus and Daniel had words yesterday’.”
During the spring, Sam and Dr. Abraham met to discuss managerial operations. They
discussed the employee training programs. They reviewed the various videotapes Sam had
collected over the years concerning customer service, sales, and safety. Sam stated that the
Plainsville facility has an extra room above the restaurant that can be used for small groups or

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Journal of the International Academy for Case Studies, Volume 17, Number 1, 2011

individuals to view the tapes. “Unfortunately, I do not have the same luxury in Pleasant Valley.
It’s a space issue. So I will periodically show a tape at Pleasant Valley as part of the employee
meeting.” When asked who is responsible for the training, Sam stated it was the General
Manager and Assistant Manager’s responsibility. “But they don’t have time to do the training.
We get done what we can. I know some of my people are not very good at teaching others, but
when you live on the margins, you do what you have to.” Additionally, Sam and Dr. Abraham
discussed the menu. Dr. Abraham raised the issue, “Sam, there appears to be a lot of items on
the menu from traditional Mexican cuisine of tacos and burritos to American cuisine of
hamburgers and fried chicken. Doesn’t this cause inventory and production issues?” Sam
responded “Not really. I use the same ground beef for the hamburgers that I use in the tacos and
burritos. There is a longer prep time for the hamburger, but it’s not a big seller and whoever
wants a burger is willing to wait.” As they talked about the size of the menu, Sam stated that he
was proud of the fish taco. “I was in Hawaii for a conference and saw a restaurant similar to
mine offering a fish taco. It’s been great, though not a big seller. I think we sold 10 fish tacos
last week between the 2 facilities. I use fresh fish and created my own seasonings. Since we are
using fresh fish, I’ve created a separate prep area to eliminate any cross contamination.”
During a meeting in April, Sam lamented that he was 62. He had been in this business
for is entire life. “I started with this venture on a lark. No clear plan. This was just a stopover
until I found what I really wanted back in the northeast. Here I am 40 years later. I’ve done
well. Had several years when I did not take a salary. Man, that was the closest to bankruptcy
I’ve ever been. I enjoy this business, but for how long? I know I need help. I’m sorry my son
lost his job with a major corporation. But he got a good buyout and has decided to come live
with us for the next six months to help me get some of the systems I’ve always wanted to do in
place.”
About a month later, Dr. Abraham was ready to facilitate the meeting between Sam and
his managers. Sam arranged to have the meeting in a location away from the restaurants. After
introductions, Dr. Abraham started the meeting.

“The purpose of today’s meeting is to discuss Peanut Valley Café – where you are, where
you want to go, and your role in the journey. To start we will begin with “Through the
Looking Glass”. Our initial goal is to identify as many items as possible. So please hold
your comments until later. We will list the ideas on the flip chart and post these on the
wall for ease of reference. Let’s begin. Where do you see Peanut Valley Café five years
from now?”

Please refer to Figure 1.

“Look out the window. What do you see?”
Please refer to Figure 2.

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Journal of the International Academy for Case Studies, Volume 17, Number 1, 2011

Figure 1
Through the Looking Glass – Peanut Valley Café in 5 years

Participate in city events
More automation
Better advertising
Tours by elementary schools
Training programs
More family friendly
Higher presence in community
Keeping up with IT
More managers
Bigger Pleasant Valley store
Double sales – customer count
Work with Military base
General Manager
Faster service
Menu redesign/simplify
Advertise birthday parties
Online orders
Expand

Figure 2

Out the Window – What do we see?
RSU
es
Banks
Fire department
Hospital
Schools: Public and Private
Travelers
Military Base
School Athletic teams
Competitors (Partial List)
McDonald’s
Dairy Queen
Burger King
Taco Bell
Wendy’s
Juan’s Authentic Mexican Restaurant
Price of Gas Increasing

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Journal of the International Academy for Case Studies, Volume 17, Number 1, 2011

“What are the roles the people in the room should have?”
Please refer to Figure 3.

Figure 3

Managerial Roles
Sam
Face of the
Provide vision leadership
Be supportive
Marketing
Vendor support
Update stores
Moral support
Son
Implement programs/IT
Short term – implementation
Training development
Your
Face of the store – true managers
Hiring employees
Smoother running crews
Better customer …