Mustang Music Case Analysis

Date: 12/11/2011 Group 6

Mustang Music is a music store. Its president and chief executive officer (CEO) is Arthur Weber. He graduated from a well-known performing arts conservatory with a masters degree in music, double majoring in classical guitar and composition. He opened the store three years ago. Webers emerging vision was not merely to operate a music store and earn a living. Mustang Musics strategy from the start concentrated more on

quality of its services and the richness of its product. Weber wanted to provide a world-class musical education and high quality instruments to the general population and perhaps in the process, help to identify and develop the next gifted Hendrix, Santana, Joe Satriani or even Keith Richards. With the perfect combination of store location, effective promotional style and great customer relationship building skills, Weber was successful in achieving his vision that he set for himself and for Mustang Music. The store has three zones: retail showroom, five small-soundproofed classrooms and office area. Its classroom setup was well planned and organized which provided great convenience not only to its customers, but also to the employees. The environment was built on such that it motivated not only the students that participated in its music, but also their parents, thereby, encouraging them to create long term commitment to its institution to deliver excellent tuition in music and to generate interest and nurture the talent that the students possessed. Weber saw this long-term commitment, though not legally binded, as a strong building ground and signified symbolic values. He also made sure the store location was in a neighborhood that provided every resource for it to develop in the best possible manner, surrounded by many academics so it could be accessible to top-notch university trained music instructors. Not only did Mustang Music attracted this skillful people, but key factor being, its ambience letting them enjoy what they were doing, thereby, psychologically having them accept the true intentions and the concept of its institution, which was to provide top quality music lessons in the best spirit. Mustang Music also used local media and shopping malls to promote its services and its products.

Webers strategic layout for Mustang Music seemed to have worked perfectly. With the quality of mentors, usage of only high quality musical instruments, giving excellent deals for its instruments in the form of trade-up services its reputation skyrocketed. They reputation was further advanced to the outside world by its students winning local and national level awards. To the point most schools recommended Mustang Music as a place for excellent instruments. The work ethics at Mustang Music was highly regarded by its employees and some even aspired for a full time posts. Its popularity was well captured where every public and private schools boards were beginning to source all their musical goods from them. By the end of Year1, Mustang Music has reached 50% of its theoretical lesson slot capacity. This climbed to 70% by the end of year 2, and 82% in the most recent year. Product sales had more than tripled in three years. Average markup on cost was 33%. Mustang was generating nearly $2.4 M in net sales and almost 0.5 M earnings. Mustang Music grew leaps and bounds, but only from monetary point of view. The company did great financially and was making huge profits but its information and control system was largely shaky. Proposals were made for Mustang Music to expand beyond just the current city and in doing so required a well established and a reliable internal control system in order to share data and informations within different departments and branches. With time, issues began to pop up for Mustang Music due to usage of old school system of spreadsheet. Just yesterday, Weber had used the spreadsheet to look up a phone number for a customer and six different

numbers came out. The spreadsheet had become bloated with data and was slowdown noticeably; it took over a minute just to open the file. To make matters worse, if more than one person tried to update the spreadsheet at the same time, the latest-saved version would overwrite the earlier change. It seems Mustang Musics data has update anomaly and delete anomaly and, hence, such problems needed immediate attention, if ever Mustang Music wanted to sustain the current success that it was enjoying and to stabilize itself as a complete firm. Considering the pace at which Mustang Music was growing, a tool was needed to reorganize its entire information system. A better method in the form of database technology appeared relevant than its current obsolete method of spreadsheet. Application of database system to Mustang Music could significantly improve its control system and as well simplify its information management system. Hence, such urgency ignited many reasons why Mustang Music needed a database to monitor its control and information system. Particularly for the following reasons, Mustang Music could capitalize on database system. Firstly, with database system, Mustang Music could achieve data integration by combining master files into larger pools of data where many application programs can access. For an example, an instructor database consolidates data formerly contained in payroll, personnel, skills mater files, etc. By inputting data directly into instructor database, the data is much easier to combine in unlimited ways.

Secondly, by using database system, reports can be easily revised and generated. For example, the relation between tuition and instructor's salaries can be precisely defined and used in preparation of management reports. Any information needed can also be quickly found as well as shared with other authorized users. Thirdly, database technology makes data more independent. Each data can be altered or deleted without any change of other data or programs. Redundant and inconsistent data would be removed all at once. For instance, in the Exhibit 2 "Mustang Music Spreadsheet Fragment" we can find two record of the same person 'Irma Ethridge' with the same personnel information. By using database system, errors like this can be checked and revised easily. References: 1."Mustang Music (A)," Richard Ivey School of Business, The University of Western Ontario.

REA Diagram:

Supplier Inventory Employee Order Inventory Sales Employees

Service Supplier Receive Inventory Customer

Employees

Disburse Cash

Cash

Receive Cash

Employees

Employees (as Payees)

Time Worked

Employee Time

Employees (Supervisor)

Combine revenue cycle, expenditure cycle and HR cycles Notes: Merging redundant resources Alters cardinalities

Relational Database:

Column1 table name Sales Receive cash

Column3 Column4 Foreign Key Other Atributes Customer No Employee No Dat of sale, total amoun tof sales Employee No Customer No Receipt time, receipt amount Cash Account sales No Order inventory purchase order No Supplier No, Employee No Item No, Quantity Receive inventory receiving report No Supplier No, Employee No Prcie Quantity Pur. Order No, Check No Disburse cash Check No Supplier No, Employee No Amount (payee and supervisor), Acc No Times worked Timecard no Employee No, Supervisor NO Employee, title Paycheck No supplier Supplier No Address, Phone No Employee Employee No Address,name, Job title Customer Customer No Name, address, phone number Cash Account No bank, type of account Service Class NO instructor, section No Inventoy Item No orchestral section, instrument name Sale-inventory Sale- Item No Quantity sold Sale-service Sale-class No Intrument name, instructor Order inventory- Inv. No-Item No Order dat e, Inventory discription inventory Receive inventory-Pur.No-Item No Rreceive date. Inventory amount inventory receive invnetory- Pur. No-Check no receivate date, Disburse cash

Column2 Primary Key SaleNo CashRect. No