Mrs. Fields Cookies: A Strategic Analysis

Introduction

Mrs. Fields Cookies, founded by the entrepreneurial spirit of Debbi Fields in the late 1970s, represents a significant chapter in the sweet tale of American indulgence. This essay delves into the history, challenges, and strategic dimensions that shaped Mrs. Fields Cookies into the beloved cookie brand it is today.

Products and Competitors

At its inception in 1977 in Palo Alto, California, Mrs. Fields Cookies took the culinary scene by storm with its homemade-style cookies. With 14 delectable varieties, the company distinguished itself by baking all products on-site in individual stores, placing a particular emphasis on the freshness of its cookies.

Any unsold cookies after two hours were generously given away or discarded, ensuring a commitment to quality.

Mrs. Fields found itself in the competitive arena with rivals like David’s Cookies from New York, Atlanta’s Original Great American Chocolate Chip Cookie Company, and Nestle Company’s Original Cookie Co. The challenge was intensified by the low barriers to entry in the early 1980s, as cookies were inexpensive to produce, and the sweet snack industry saw a proliferation of producers and consumers.

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Challenges

The early 1980s posed distinct challenges for Mrs. Fields Cookies, marked by low entry barriers and fierce competition for prime mall locations, where approximately 80% of their outlets were situated. The era of cheaply produced cookies meant a crowded market and fragmented pricing control, intensifying the competition for strategic locations in shopping malls.

Moreover, Mrs. Fields faced a pivotal decision regarding franchising. Debbi Fields staunchly opposed franchising, viewing it as a compromise to control over the end product and a disconnection from customers.

Seeking bank financing and additional capital for expansion, the company made an initial public offering on the London exchange in 1986. However, buyers were skeptical, questioning the sustainability of Mrs. Fields' growth without resorting to franchising, resulting in a slow rise in stock prices.

Business Strategy

Mrs. Fields adopted a distinctive organizational strategy characterized by a non-hierarchical structure, decentralizing decision-making processes. The absence of an official organization chart underscored Debbi Fields' vision of tapping into the intelligence and judgment of employees across the company, promoting a collaborative approach over a concentrated decision-making model.

The company cultivated an environment where employees were empowered with significant responsibilities. Regional and district managers, for instance, were entrusted with local marketing decisions, facilitating a swift response to the demands of target customers. Mrs. Fields further encouraged a culture of eccentricity and approachability among employees, fostering a comfortable atmosphere for customers. The commitment to valuing employees was evident in the "promote from within" strategy, coupled with a performance-based bonus system.

Information System Strategy

Information technology emerged as a cornerstone in Mrs. Fields' operations. The company embraced a "network structure," employing a centralized information system based in Utah that distributed data to every store as needed. Mrs. Fields conducted an ad-hoc cost/benefit analysis, aligning with the belief that information technology could enhance decision-making without necessitating an expansion of staff.

Every store operated under the umbrella of the centralized information system, serving dual purposes of promoting sales and controlling labor and production costs. The company's conviction in the efficiency of information systems extended to a belief that smaller, well-coordinated teams could leverage technology to solve business problems more swiftly and creatively. This approach aimed to save time, reduce labor costs, and enhance overall operational accuracy and efficiency.

Operations Strategy

Operations at Mrs. Fields were meticulously crafted to create an inviting atmosphere for customers. The store design was deliberately friendly and organized, drawing customers in with an open layout and the irresistible aroma of freshly baked cookies. This strategic design choice contributed to the overall appeal of Mrs. Fields stores and played a role in customer attraction.

The management information system, designed by Randy Fields, played a pivotal role in day-to-day operations. Integrated with various business processes, including planning, production schedules, time clocks, store accounting, and inventory, the sophisticated system ensured streamlined operations. The controller at the headquarters in Utah seamlessly integrated with the system, collecting sales information from all stores and generating reports for management review.

“Expanded Store” Strategy/Diversification Strategy

Amidst the challenges and strategic decisions, Mrs. Fields embarked on a diversification strategy in the 1980s. The company initiated a series of acquisitions, including the 119-store French Bakery/sandwich chain, La Pette Boulangerie, and Famous Chocolate Chip Company. These acquisitions strategically expanded the company's product lines, offering both cookies and bakery products. This move not only carved a niche in a fragmented market but also posed an investment barrier to potential competitors.

However, the diversification strategy was not without its challenges. While bringing a broader product line, the acquisitions also introduced overhead functions such as accounting, finance, personnel, and human resources into the existing organization.

Conclusion

In conclusion, Mrs. Fields Cookies, founded by Debbi Fields, navigated a competitive landscape with resilience and strategic acumen. The company's commitment to freshness, employee empowerment, innovative use of information technology, and strategic diversification all contributed to its enduring success in the sweet domain. Mrs. Fields' journey serves as a testament to the intricate interplay of entrepreneurial vision, operational excellence, and strategic adaptability in the world of confectionery.