Overview
Mrs. Fields Cookies was founded by Debbi Fields in the late 1970s. She and her husband Randy Fields opened their first store in 1977 in Palo Alto, California, selling homemade-style cookies which quickly grew in popularity.
Products
Mrs. Fields Cookies came in 14 varieties.
All baked products were made on premises in the individual stores and the company especially focused on the fresh cookies. If the cookies are not sold within two hours, they were given away and discarded.
Competitors
Mrs. Fields competitors included New York’s David’s Cookies, Atlanta’s Original Great American Chocolate Chip Cookie Company, and the Nestle Company’s Original Cookie Co.
Challenges
1. Low barriers to entry and mall locations competition
In the early 1980s, cookies were cheap to make and the barriers of sweet snack industry to entry were low. There were many cookies producers and many consumers in the market, and no business had total control over the market price. Because some 80% of Mrs. Fields outlets were in shopping malls, so the competition for the most favorable mall locations was fierce.
2. Franchising Financing and performance of exchange market
Mrs. Fields had consistently refused to franchise their stores, because “she viewed franchising as a loss of control over the end product and loss of touch with the customers”. To find bank financing and additional capital for expansion, Mrs. Fields tried to go public and made initial public offering on the London exchange in 1986, but this experience was not successful, because buyers did not know the company and did not believe that Mrs. Fields’ business could be sustained growth without franchising. The result was that the stock price rose slowly.
Business Strategy
Organizational strategy
Mrs. Fields had a non-hierarchy organization with decentralized decision making. Typically, there was no official organization chart in company which means Mrs. Fields wanted to take advantage of the intelligence and trust the judgment of employee throughout the company, instead of relying on a small set of decision makers. The employees at Mrs. Fields were given much more responsibilities such as local marketing decisions were made by the regional and district managers, because they needed to be able to respond quickly to the demands of target customers. Mrs. Fields also encouraged employees to be wacky and personable, so that customers feel comfortable purchasing cookies. The company placed high value on employees by using “promote from within” strategy, employees were rewarded for their performance with a bonus system.
Information System strategy
Information technology played a very important role at Mrs. Fields. MIS enabled Mrs. Fields to have “network structure” and use centralized information system out of Utah and distribute it to every store as needed. Mrs. Fields’ approach of information technology was consistent with an ad-hoc cost/benefit analysis. All stores were running under implementation of information systems at Mrs. Fields to promote sales and control labor and cookies cost. Mrs. Fields also believed that it was not necessary to expand staff to accommodate business growth, and smaller groups of people at Mrs. Fields could make decision to solve business problems faster and better if people could work very well with the information technology to develop more new and creative applications, because a useful information system in company could save time and labor cost, and make business operations more accurate, effective and efficient.
Operations strategy
First, Mrs. Fields used very friendly and organized design style for their stores to attract more customers. Customers always were drawn into the store by the openness of the design and by the aroma of hot cookies fresh from the ovens.
Second, sophisticated management information system also played a very important role on the business operations. Store management system designed by Randy and the MIS organization was integrated with each business process for day planning, production schedule, time clocks, store accounting, inventory, interview scheduling, skill testing and electronic mail. Controller at headquarter in Utah was also integrated with system collecting sales information received from all stores. The information system helped controller in generating reports for management review.
“Expanded store” strategy/ diversification strategy
From 1980s, Mrs. Fields started a series of acquisitions to expand their businesses including a 119-store French Bakery/sandwich chain, La Pette Boulangerie and Famous Chocolate Chip Company. These acquisitions brought a combination of full lines of both cookies and bakery products and presented an opportunity to carve out a niche in a highly fractionalized market, and the size of the operation constituted an investment barrier to competition. But the same time, the acquisition also brought many of overhead functions into the existing organization, including accounting, finance, personnel, human resources, etc.