Marketing 400 level case study

Coleman Art Museum Hints

Important!!

Given the nature of this case and the many different options Ashley Mercer, Donald Smith, and the Board of Trustees can consider, you will not be completing a full IFAAR on this case. Instead, you will create one recommendation for Coleman Art Museum (CAM) which will address your issue (presumably related to CAM’s current state of affairs). A revised rubric is attached with the revised criteria and weights.

Hints

Given its association with Chapter 9, this case concerns reformulation with both strategic and operational implications. You might first consider strategy and then operations. In doing so, think about the following questions:

· What is Coleman Art Museum? What does it do? (Think beyond the obvious to other ways people use CAM.) What is CAM’s mission and overall strategy?

· What is CAM’s current image? Why is this important for a museum? What does the image affect?

· How would you rate CAM’s overall performance?

· What are CAM’s various activities, both operational and auxiliary, and how critical are they to its mission/strategy? Putting these activities on the grid below can help you determine how they relate to CAM’s mission and how critical it is that they be profitable (based on future performance). It may be less important for those that are critical to the mission make a profit, while those not specifically related to the mission should be profitable.

· Of CAM’s activities, which ones are currently profitable? Which ones are not? (Include the analytics on how you determined profitability.) How does the profitability of these activities compare to what they should be according to the grid? What should CAM do about it? For example, if an activity you included in the “Turn a Profit”/”Non-mission Related” box is not profitable, what would you recommend for CAM?

· How can CAM at least break even on its operations? You can use some of the options presented in the case, and/or develop your own. Be sure to demonstrate how you will achieve any increased revenue and/or reduced expenses (your analysis of the activities in the bullet point above will help). Note that your recommendation can include multiple activities, both operational and auxiliary.

· Is membership an area where CAM can bring in more revenues? If so, you may wish to analyze the cost of each type of membership vs. the revenue; also consider the cost to recruit new members and the impact on membership cost/revenue. (Note that members receive special benefits per the chart on page 600. These membership benefits are accounted for differently in the expenses reflected on the income statement versus the cost information on page 601. Use the appropriate data in your calculations.)

· Based on the net results of your recommendation, what does CAM’s 2005 income statement look like? You may wish to use the format from page 597 as the basis, and include 2004 results to demonstrate the changes resulting from your recommendation. (This format also allows you to separate out operations results from auxiliary results.) You may wish to create a “do nothing” 2005 option using Mercer and Smith’s thoughts toward the end of the case about anticipated revenues and expenses to help you see where changes are possible, and then one incorporating your recommendation. Use information and data from the case as well as your own projections (with backup financial analysis on how you determined them) for line items where direct case data is not available. Be sure your recommendations are realistic and achievable for CAM.

(S15)

Coleman Case Grading Rubric

(S14)