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Jamba Juice.pdf MNGT 475-801 Case Assignment 2 Page 1 of 3 MNGT 475-801 Summer 2019 Case Analysis Assignment: Jamba Juice Source: Case 31 in Textbook, Jamba Juice Due Date/Time: 11 pm (US central time), Saturday, July 27th. Submission File Format: Upload your submission as a Microsoft Word document (.doc, .docx). No other file formats will be accepted. If you are using Apple or Google software, you must export your document into a Microsoft Word format before submission. After uploading your document in the Canvas assignment, I recommend that you view your submission to make sure that it displays correctly. No credit will be given for submissions that Canvas cannot display. Document Formatting: • Times-Roman 12 point font • Double-Spaced • 1” margins all around • Maximum of three pages • Header with Your Name and page number at top of page; no cover page • No footnotes, citations, or references; only original content written by you. • Include question number and title as section heading (e.g. Question 1: Value Proposition). • Strive to be clear, concise, and to-the-point. Answers should be brief, but complete. We’ve all read the case, so there is no need to repeat a lot of extraneous background. Just include what you need to support your argument. Additional Background and Analysis Perspective: Since the case was written, Jamba Juice, Inc., Was acquired through a merger with Atlanta-based Focus Brands Inc. in a deal worth approximately $200 Million. Focus Brands is a leading developer of global multi-channel foodservice brands. Through its affiliate brands, Focus Brands is the franchisor and operator of more than 5,000 restaurants, cafes, ice cream shoppes and bakeries in the United States, the District of Columbia, Puerto Rico and over 50 foreign countries under the brand names Carvel®, Cinnabon®, Schlotzsky’s®, Moe’s Southwest Grill®, Auntie Anne’s® and McAlister’s Deli®, as well as Seattle’s Best Coffee® on certain military bases and in certain international markets. Focus Brands is in turn majority owned by affiliates of Roark, an Atlanta based private equity firm that focuses on investing in franchised and multi-unit businesses in the restaurant, retail and other consumer sectors. For the sake of this analysis, assume that you work for Focus Brands. Questions: 1. Customer Value Proposition Jamba Juice is a franchise and our analytical perspective is that of Corporate Management, not a local store manager. How does this impact the “value proposition” for Jamba Juice’s business model? Who is your customer: the Jamba Juice franchisee, or the smoothie consumer? MNGT 475-801 Case Assignment 2 Page 2 of 3 2. Financial Performance Analysis Examining the financial statements provided in the case through the strategic audit (and ratio analysis) perspective discussed in the “CSFs, KPIs, and Performance Assessment” video lecture, what problems do you see with Jamba Juice’s performance, with a particular emphasis on profitability and liquidity? Expressed as a profitability ratio, is it satisfactory to generate $3 Million in operating profit from $158 Million revenues? What about Return on Assets (ROA)? Is there any reason to be concerned about the $24 Million in Jambacard liability (prepaid purchases where the money has already been collected but the food and beverage orders will have to be filled in the future)? Note that 2016 is the last year to include the operating results of the 179 company-owned stores sold to franchisees. Future financial performance will reflect less revenue (and operating expense) from Company Stores and more revenue from Franchise and Other Revenue. 3. Value-Chain I think we all have some idea about how to make a smoothie, but we may not have considered the processes and resources necessary to make them to-order, with consistent quality, in quantity, and in multiple locations. Beginning with the sourcing of raw materials and utilizing the Value-Chain model, describe the key Primary activities required to create and deliver value to the consumer. Which of these activities are exclusively the responsibility of the franchisee and which would be performed or coordinated by the franchisor (the corporate level). You may be able to use a diagram to save verbiage. 4. Critical Success Factors Briefly describe what customer characteristics you believe define Jamba Juice’s market and who you feel are its two strongest rivals. What are the top three Critical Success Factors in Jamba Juice’s Business Model? 5. Competencies and Competitive Advantage Given that the majority of the store locations are owned by franchisees and the 2016 year-end balance sheet shows only $59 Million in assets (including $25 Million in cash and receivables) it must be assumed that Focus Brands believes that Jamba Juice possessed intangible assets that made it worth the $200 Million acquisition price. What do you see as Jamba Juice’s core competencies (capabilities) that Focus Brands is expecting to exploit to generate a return on its $200 Million investment? Does Jamba Juice have either absolute or comparative advantage in any strategically important value-chain activities? Please pay attention to the very specific definition of comparative advantage provided in the video lecture(s). MNGT 475-801 Case Assignment 2 Page 3 of 3 Evaluation Rubric: Content: Missing, simplistic, or Incomplete: No points Weak or poorly communicated; Analytical concepts not appropriately utilized: Partial Points Complete and well-presented; Analytical concepts used properly: Full Points Points Possible: 1 Customer Value Proposition 0 0.5 1 1 2 Financial Performance Analysis 0 0.5 1 1 3 Value-Chain 0 1 2 2 4 Critical Success Factors 0 1 2 2 5 Competencies and Competitive Advantage 0 1 2 2 General: Poor; Frequent Errors: No Points Marginal; Some Errors: Partial Points Good; Few/No mistakes: Full Points Spelling, punctuation, grammar 0 0.5 1 1 Followed instructions for format and organization 0 1 1 Totals: 0 4.5 10 10