MOS Burger - Behind the QR Code

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1 Ruey-Shiang Shaw, Ta-Yu Fu, & Che-Pin Cheng MOS Burger - Behind the QR Code (Received Sep 15, 2012; First Revision Dec 17, 2012; Second Revision Feb 1, 2012; Accepted Mar 17, 2013) Case 1 On October 16, 2011, MOS Burger (a Taiwanese firm named for An-Shin Food Services Co., Ltd.) first attempted to launch a Facebook-based marketing tool that used quick response (QR) codes. At first glance, this initiative appeared to be only a beverage-marketing activity; however, this activity concealed a secret weapon for promoting the organizational reform of MOS Burger. MOS Burger was established in Japan in 1972 and sought to adhere to its founder s philosophy of providing delicious meals that can make the customer happy!! by serving freshly prepared, delicious, safe, and healthy meals. In 1990, a Taiwanese corporation known as the TECO Group acquired the Japanese firm MOS Food Services, Inc., and received authorization to establish the joint venture known as An-Shin Food Services Co., Ltd., to operate MOS Burger in Taiwan. MOS Burger currently employs more than 5,100 workers in Taiwan across 218 different restaurants (An-Shin Food Services 2012). In fact, MOS Burger features the second highest number of restaurants among fast-food restaurant chains in Taiwan (as presented in Table 1, which indicates the number of Taiwanese restaurants of comparable types of firms). The continuing growth in the scale of MOS Burger has led to expansion in the firm s managerial scope; as a result of this expansion, MOS Burger has attached great importance to the use of information systems and constantly examines the introduction of emerging information technologies and the firm s need for reform. A number of years ago, MOS Burger actively developed diverse marketing initiatives involving cooperative relationships with various business communities, including firms in the banking, aviation, and telecommunications sectors. In particular, MOS Burger issued gift certificates and vouchers that were sent to customers through bills and letters; customers could then visit retail locations and exchange these certificates and vouchers for meals, 1 Ruey-Shiang Shaw is Associate Professor of Department of Information Management, Tamkang University. Ta-Yu Fu is Ph.D. Student of Department of Management Science, Tamkang University and Manager of Innovation and Incubation Center, Ming Chuan University. dyfu@mail.mcu.edu.tw Che-Pin Cheng is PhD. Student of Department of Management Science, Tamkang University and Lecture of Information Management, Taipei Chengshih University of Science and Technology. beverages, and other products. These gift certificates were expensive to manufacture because they were printed on paper, required a lengthy production process, and needed to incorporate safeguards against forgery. The certificates were associated with a variety of cooperative marketing efforts with other businesses and diverse seasonal and product-related promotional activities. In total, as many as 10 different types of vouchers were offered at a time with varying values, applicable products, and periods of use. Each retail location was required to collect the vouchers that had been used by customers and send these vouchers to corporate headquarters every month. The corporation then allocated manpower to account reconciliation and statistical analysis to ensure the accuracy of account settlements, reconciliations, performance calculations, and monetary allocations for headquarters, retail locations, and voucher issuers. The manpower and effort expended during each settling of accounts required more than three days; moreover, at times, situations arose in which accounts could not be reconciled, causing significant issues for MOS Burger. The cumbersome account workflow for paper gift certificates (Figure 1), particularly the end-of-the-month process involving voucher recovery and the balancing, reconciliation, and monetary allocations among cooperating businesses (as shown in 4, 5, and 6 of Figure 1), became a shared pain point within the MOS Burger organization. MOS Burger upholds the principle of creating value for the customer; moreover, for many years, MOS Burger has invested in developing IT and providing innovative services. MOS Burger has committed itself to research and development investments that are designed to create an intelligent electronic coupon system in which QR codes are an important tool. The firm believed that QR codes and this electronic system as a whole would help the firm create an integrated service chain that would resolve problems at both the external and internal levels. Externally, MOS Burger emphasized a marketing perspective that targeted external customers by strengthening the connections between virtual and physical promotions for customers, providing broader and more convenient marketing channels, and improving customer satisfaction. Internally, MOS Burger sought to resolve the longstanding headaches experienced by corporate headquarters, retail outlets, and cooperating Management Review Vol. 32 (Apr 2013),

2 enterprises with respect to not only the reconciliation and settling of accounts but also the integration of internal processes and financial data. How did MOS Burger encourage its employees to accept its organizational changes? MOS Burger effectively reduced resistance to change within the organization by appealing to the firm s shared pain points. In particular, MOS Burger emphasized the fact that new information systems could resolve issues with which the company staff could empathize (such as bookkeeping errors and accounting problems that related to voucher redemption) and generated internal anticipation for electronic voucher processing. Once the company s employees had reached a consensus in support of the concept of electronic vouchers, this concept began to be incorporated into external marketing events, causing MOS Burger s associates to become more confident in the benefits of this new voucher system and more willing to cooperate with the voucher changes. The changes would allow the firm to integrate all voucher and MOS card data into a centralized database. With a single swipe, various types of gift certificates, membership cards, rewards cards, coupons, and other discounts could be easily redeemed in each MOS Burger retail location to order meals. Each location could prepare meals and readily settle its accounts. The system would also be connected with corporate headquarters, allowing company management to obtain the most recent product sales and financial information. MOS Burger spent a great deal of time evaluating the technologies and tools that are associated with intelligent identification, including one-dimensional bar codes, radio frequency identification devices (RFIDs), and technologies related to near field communication (NFC) and Figure 1 Flowchart of Paper Voucher Operations QR codes. Factors that were considered in the firm s decision-making included the ability to rapidly identify information, retail stores capability to immediately input data, ease of use by consumers, ease of setup in all retail stores, cost considerations, and other factors. After a long planning period, which involved examinations of foreign experiences, the performance of cost and technological evaluations, and the selection of collaborating manufacturers, the firm formally launched using the Intelligent Electronic Coupon System program. This system included five important functions: account management and consumer behavior analysis; MOS card bonus exchange; Facebook digital marketing; buyer-to-buyer (B2B) business cooperation; and buyer-to-customer (B2C) electronic meal coupon sales (Figure 2). In combination with the launching of the Intelligent Electronic Coupon System program, MOS Burger has begun to provide several novel services, including a cell phone app for ordering and for sending electronic gift certificates to others; self-ordering devices at certain locations, such as university libraries and dormitories; delivery services; and other innovative offerings. Given the firm s expansion of the scale and territory of its operations, the challenges that it is about to face include how to continue to innovate, master information technology, build competitive advantages based on the value of innovative services and the spirit of the MOS Burger brand, and replicate its successful experiences and model in overseas strongholds. 2. Issue and send paper vouchers that may be exchanged for goods or discounts 2 Customers & Consumers 3. Customers exchange vouchers for discounts or goods at stores 3 The banking, telecommunications, aviation, and other industries Cooperating Enterprises 1 1. Strategic alliances, cross industry marketing cooperation 4. At the end of each month, numbered vouchers are returned and entered into the accounting system 4 Retail Stores 6 6. Reconciliation, profit sharing, and benefit analyses for voucher collaborations Company Headquarters 5 5. Monthly reconciliation wit h each outlet with respect to voucher income and turnover and bonus c alculations Data source: Interviews with MOS Burger personnel, arranged for this study 184 Management Review, April 2013

3 Figure 2 Schematic of the Intelligent Electronic Coupon System that was Introduced by MOS Burger Existing Customers Loyal Customers Customers Redeem QR Codes in Stores Integration of Hardware & Software Systems Personnel Training Electronic Coupon Validation New Customers Retail Stores Account Management Consumer Behavior Analysis Downloads and Mobile Commerce , SMS Viral Marketing Account Management and Consumer Behavior Analysis MOS Card Official Website Brand Management Member Businesses Website Activities MOS Burger Company Headquarters Facebook Cooperating Businesses QR Code MOS Card Bonus Exchange QR B2B Business Collaboration Facebook Digital Marketing Code B2C E Coupon Sales Intelligent Electronic Coupon System Apps Promotions Cross Industry Cooperation Data source: Interviews with MOS Burger personnel, arranged for this study. Teaching Notes MOS Burger s Facebook-based QR code messaging appears to be simply a beverage marketing activity; however, this activity is associated with an underlying organizational transformation triggered by MOS Burger s introduction of emerging information technology. This transformation not only addressed the problem of integrating internal processes but also allowed the firm to achieve its goal of increasing product turnover. The following teaching benefits and objectives may be achieved through an examination of this case. 1. Through this example of a well-known chain restaurant firm, an analysis that uses organizational transformation and the introduction of new technology as its main axes can guide students towards a greater understanding of the decision-making process regarding the introduction of corporate changes and cause students to ponder how resistance to change may be effectively defused during the course of organizational transformation. 2. From a theoretical perspective, an examination of the introduction of emerging information technologies by a firm (Laudon and Laudon 2009) may facilitate the exploration of how these technologies can resolve a firm s problems and thereby create competitive advantages. Teachers are advised to divide studies of the examined case based on the framework of a firm s introduction of emerging information technology that was proposed by Laudon and Laudon (2009). Different perspectives may be discussed, including examinations of a company s business challenges (the operational issues and challenges that a firm faces), people, organization, technology, information systems, and business solutions (Figure 3). From the business challenge perspective, the examined firm, MOS Burger, belongs to the fast food restaurant category. Teachers can ask students to discuss their own dining experiences, the competitive situation in the restaurant industry, and the advantages and shortcomings of different restaurant types and brands within this industry. Thus, a discussion of MOS Burger s important issues and challenges may involve comparisons of MOS Burger s products, services, personnel, channels, and image with the corresponding traits for other firms in the restaurant industry. With respect to people, the discussion focus should be centered on the customer. According to Aaker (2010), strategic marketing is an important aspect of understanding the consumer. Discussions of this topic should address the three elements of market segmentation, customer motives, and unmet needs. For instance, through innovative Internet-based and mobile commerce sales pipelines, convenient and rapid virtual channels may be created. In particular, marketing initiatives that utilize customers strong affinity for the internet, phones, mobile internet, and social networking sites may readily attract and be accepted by high numbers of customers. Furthermore, consumer behavior may be correlated Behind the QR Code 185

4 with database statistics, and analyses of consumer behavior can therefore identify more unmet needs. With respect to the organization dimension, projects to introduce new information systems are large in scale and involve many changes to existing organizational standards and operating procedures. In fact, organizational changes must not only address alterations in processes but also overcome the change-resistant mindsets of organization members (Igira 2008). To learn how paper vouchers could become a pain point for the examined organization, students can be guided through a discussion of Figure 1: Flowchart of Paper Voucher Operations. In particular, students may be steered towards an understanding of why the process through which MOS Burger introduced a new system did not particularly emphasize the new system s benefits but rather focused on the ways in which this system would alleviate organizational pain points; through this approach, associates could appreciate how the new system could resolve the longstanding and distressing issue of financial account reconciliation. The introduction of new technology was commonly expected to improve the accuracy and efficiency of accounting processing; by creating this expectation, MOS Burger effectively allayed initial internal doubts and resistance to the change in question. With respect to technology selection, MOS Burger s assessment of using a new technology involved considerations of potential issues at various levels, including the innovative technology itself, the integration of the innovative technology with the organization s existing technology, relevant policies and regulations, employee acceptance, the costs of introduction, and other potentially problematic factors. In accordance with Rogers (2003), who stated that innovation involves a series of consecutive deliberation and decision-making behaviors, MOS Burger s primary considerations regarding the adoption of new technologies can be divided into the five dimensions of product relative advantage, compatibility, complexity, trialability, and observation. With respect to the dimensions of information systems and business solutions, students may be guided towards discussions of the uses of information technology and how changes in the value chain and in the value of certain activities can generate even greater changes in industrial structures and the nature of competition (Porter and Miller 1985). Innovative information technology can create three major competitive advantages: cost reduction, improved differentiation, and changes in the competitive scope of an industry (Porter 2008). In addition, the influence of MOS Burger s investment in information technology on the firm s competitive advantages may also be discussed. The recommended teaching time for this case is 100 minutes, and this case is intended for use in the information management, business management, and tourism and catering departments. The case should mainly be discussed by undergraduate, masters, or continuing education students who understand basic concepts of information and management. This case is applicable to various courses, such as information management systems, electronic business, electronic commerce, customer relationship management, and other information- or management-related courses. Finally, this case may be extended to examine decision-making and planning activities that are associated with the introduction of emerging information systems by related enterprises. For example, the introduction of enterprise resource planning (ERP), customer relationship management (CRM), knowledge management (KM), or similar systems could be examined, as the introduction process for these systems involves information technology and organizational restructuring. Figure 3 Architecture Diagram of an Organization s Introduction of Information Systems (Laudon and Laudon 2009) 186 Management Review, April 2013

5 REFERENCES Aaker, David A. (2010), Strategic Market Management, 9th ed. New Jersey: John Wiley and Sons. An-Shin Food Services Co., Ltd. (2012), An-Shin Food Services Co., Ltd., 2011 Annual Report, (accessed Dec 31, 2012), [available at Igira, Faraja Teddy (2008), The Situatedness of Work Practices and Organizational Culture: Implications for Information Systems Innovation Uptake, Journal of Information Technology, 23, Laudon, Kenneth C. and Jane P. Laudon (2009), Management Information Systems, 8th ed. New Jersey: Pearson. Porter, Michael E. (2008), On Competition, Updated and Expanded Edition. Boston: Harvard Business School Publishing and Victor E. Miller (1985), How Information Gives You Competitive Advantage, " Harvard Business Review, 63(4), Rogers, Everett M. (2003). Diffusion of Innovations, 5th ed. New York:The Free Press. Behind the QR Code 187

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