Case Analysis (24 marks) The Food Emporium The Food Emporium is a specialty food store that specializes in organic food. Its main competitor is Whole Foods although competition in the organic food market is increasing as some of the chain stores such as Loblaw, Sobeys, and Longos are beginning to offer organic food as well. A recent CBC Marketplace news report (https://www.facebook.com/cbcmarketplace/posts/10153659315115587) revealed that that organic foods are contaminated with pesticides so customers have been asking for guarantees that the company offerings are pesticide free. Information from the Organic Trade Associate in the United States shows that growth in demand is approximately 10.8% vs. 3.3% in the non-organic food market (https://ota.com/sites/default/files/indexed_files/OTA_StateofIndustry_2016.pdf) The Food Emporium is expanding due to the trend in sales of organic foods hoping to capture the trend and move their company from a privately held company, owned by Stephan and Sylvie Gregoire, to a larger publically traded company. They currently have 15 locations spread across Canada but they have plans to expand into the US market as well as expand their presence across Canada. INFO 31787 Accounting Info Systems Theory Online Final Exam Winter 2020 Page 1 The Food Emporium has issues that must be addressed prior to expanding. The consulting company they have hired to advise them on expansion plans requires them to have audited financial statements. The company is currently using a periodic inventory system which is a barrier to optimizing their procurement activities. There are many times in which the wrong products are ordered resulting in surpluses in inventory which leads to higher than average spoilage. The company is also experiencing stock outs for other inventory items. This tends to frustrate the customers and the stock outs require the company to pay excessive expediting fees. The consultants have recommended the company implement a new computer system that incorporates supply chain management functionality and a perpetual inventory management system. The Purchasing Manager, Guylaine Dumont has not taken a vacation in several years. She is difficult to work with and the position responsible for the vendor bidding process has been vacant for 18 months. Three employees, hired into this position, have quit the company and Elaine La Fontaine has not ascertained the root cause of the issue. Guylaine is opposed to changing the inventory system as she says it is adequate for her purposes. To differentiate themselves in the organic food retail marketplace, the consultants have recommended they implement an on-line store where customers order products for either delivery to their home or take advantage of in-store pickup. Currently their stores do not have an appropriate physical design for instore pickup so the current 15 stores require renovation to accommodate this new business process. It is anticipated these renovations will be minor and should not require significant investment. The Sales Manager is not in favor of implementing this new business process as he believes organic food customers are attracted by the prospect of personal shopping. He does not believe the market for organic food on-line shopping exists. Computer systems are not an area of expertise for him and he is worried this will create a distraction given the number of other changes recommended by the consultants. INFO 31787 Accounting Info Systems Theory Online Final Exam Winter 2020 Page 2 To support the expanding business it is recommended the company implement an ERP system targeted at small to medium sized businesses. The owners are not familiar with the benefits of an ERP nor do they have knowledge of the steps they should take to implement a system of this nature. They do not have the ability to hire a sophisticated IT department so they must consider alternatives to hiring the expertise. Sylvie Gregoire is in favor of implementing new computer systems as she views this as a necessary event to support the expansion plans. Their current organization chart showing key positions is displayed below: INFO 31787 Accounting Info Systems Theory Online Final Exam Winter 2020 Page 3