Case – The Subway Family. In 1965, a young man named Fred DeLuca wanted to become a medical doctor. Looking for a way to pay for his education, a family friend – Peter Buck – advised him to open a submarine sandwich shop. With a loan of $1,000, Peter offered to become Fred’s partner. Their first submarine sandwich shop opened in Bridgeport, Connecticut in August, 1965. Soon after opening their first shop they set a goal of having 32 sandwich shops opened in 10 years. Business went well and in 1974, Fred and Peter owned and operated 16 submarine sandwich shops throughout Connecticut. However, they realized that they would not reach their goal – 32 shops – in time.
Therefore, they began franchising, launching the Subway brand into a period of substantial growth. Today, Subway is one of the fastest growing franchises in the world with approximately 34,695 restaurants in 98 countries as of June 2014. Franchising is the practice of using another firm’s successful business model. For Fred and Peter, franchising was an alternative to building ‘chain stores’ to distribute submarine sandwiches; they allowed others to use their business model and to run a Subway submarine sandwich shop in return for an agreed-upon fee.
Case – The Subway Family. Subway’s main operations office is in Milford, Connecticut, and five regional centers support Subway’s growing international operations. The regional office for European franchises is located in Amsterdam, The Netherlands. Fin Green is a Senior Manager at the regional office for European franchises. Fin’s main challenge is how best to maintain control over Subway’s franchisees in Europe without excessively constraining their entrepreneurial spirit. He has asked Bart Veldkamp, a master student from Tilburg University specializing in Strategic Management, to investigate this issue. Bart has developed a conceptual model based on a paper of Strutton, Pelton, and Lumpkin (1993). The dependent variable in the model is “Satisfaction with the Franchisor”; the independent variables in the model are “Innovation”, “Pressure”, “Cohesion”, “Recognition”, “Autonomy”, and “Fairness”. To test this model Jan has created the following questionnaire.
QUESTIONS
- Before Bart can start analyzing the data, some preliminary steps need to be completed. Discuss these steps briefly.
- To get a feel for the data Bart wants to obtain some measures of central tendency and dispersion for each single item in the questionnaire.
- Which measures would you use to provide an overview of the items representing the dependent variable and the independent variables of Bart’s model (question 1-24)? Why?
- Which measures would you use to provide an overview of the sample characteristics. (question 25-28)? Why?
- In hindsight, Bart is not happy with the way he has measured the age of his participants and for how long they have been a franchisee. What could be the problem?
- Bart has made 28 pie charts to provide a visual display of the data. Fin Green has told Bart that he also would like to see histograms and box-and-whisker plots for all the items.
- What is a histogram?
- What is a box-and-whisker plot?
- Do you believe that it is a smart idea to provide histograms and box-and-whisker plots for all the items? Why (not)?
- Because the variables in Bart’s model were measured with multi-item scales, the consistency of the participants’ answers to the scale items has to be tested for each measure. Bart has decided to use Cronbach’s alpha to test the inter-item consistency of his measures. However,
before submitting the data for reliability tests Bart has to reverse the scores of some of the items in his questionnaire.
- What is reverse scoring and why is it necessary?
- Which of the items in the questionnaire have to be reverse-scored?
Case – The Subway Family. Grammatically correct paper, no typos, and must have obviously been proofread for logic. Questions must be typed out as headings, with follow up answers in paragraph format, and a summary or conclusion at the end of all answers as in the outline (Sample provided in Course Resources). Case analysis must be in APA format.