Term Paper on "Army & Air Force Exchange Services Aafes"

Term Paper 4 pages (1291 words) Sources: 3

[EXCERPT] . . . .

Army & Air Force Exchange Services

AAFES is a publicly owned organization which strives to improve the living standards of the military personnel and their families. In order to best understand its features, it is first necessary to comprehend the organization from two distinctive angles: (1) the situation in which it currently finds itself, and (2) the issues which can be improved to increase the firm's chances of attaining its objectives.

Summary of the situation

Army & Air Force Exchange Service envisions itself as the first choice of consumers. The organization retails a wide array of products and uses the funds to support morale, welfare and recreation. In their own words:

"It is the dual ensuring mission of AAFES to provide quality merchandise and services to its customers at competitively low prices and to generate earnings which provide a dividend to support morale, welfare and recreation (MWR) programs" (Website of the Army & Air Force Exchange Services).

The company is run in a military fashion and its purpose is that of generating sufficient earnings. Yet, they redistribute two thirds of their revenues in the form of MWR programs. Other costs -- congressionally approved -- include salaries, utilities, logistics and operational expenditures. The organization supports the improvements in the quality of life for the American soldiers and their families, and it also funds operations of the Department of Defense.

Additionally, AAFES uses its own funds to generate improvements in its facilities and to build new facilities, without generating as such governmental expens

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es. During 2006, the company raised revenues in the total amount of $7 million and their sources of income include the following:

Direct sale of merchandise

Finance revenue

Concessions on revenues.

Aside from its role as an economic and public agent, AAFEA also serves as a noteworthy member of the community by generating employment opportunities for over 47,000 individuals. In terms of actual size, AAFES operates a total of 117 retail stores and over 2,200 fast food stores. The organization is present in numerous locations and it supports the life of the military personnel through not only retail and fast food facilities, but also through specialty facilities, such as movie theaters. The specialty stores are run in concessionary contracts, highly similar to the franchise contracts in the private sector. Specifically, the specialty stores operators manage the stores under the license of the AAFES and share the profits with the firm.

1.2. Summary of the problems

The term of problems might be a bit too strong to describe the issues with which AAFES is currently confronted. Nevertheless, in order to create an action plan for improvement, it is first necessary to identify the organizational elements which could be subjected to improvements. These refer specifically to the following:

Financial stability

Customer awareness, and Living standards for the military personnel.

2. Proposed action plan

Based on the issues previously identified, the organization seems faced with the need to attain three specific goals, as follows:

An increased financial stability

Incremental levels of customer awareness and demand, and Increasing the living standards of the military personnel and their families.

In order to attain these objectives, the actions below could be implemented:

a) Organizational development

b) Promotion of the company, and c) Enhancement of the MWR support programs

a) Organizational development

The development of the firm would specifically be based on territorial expansion as well as expansion through the development and introduction of new products and services. In this order of ideas, the development through the penetration of new markets would be supported by thorough the research of the markets in which a demand for the company's products and services existed. Emphasis would be placed on the military locations as well as any other locations in which defense operations are completed. The research process would be focused on the identification of locations in which the needs of the military personnel and… READ MORE

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Quoted Instructions for "Army and Air Force Exchange Services Aafes" Assignment:

“

I need an analysis an action plan,, measure of a leader by Aubrey C Daniels and James E Daniels, How can it be used or put to use in a CO called AAFES I am a store manager.......WWW.AAFES.COM is a military CO with military leadership style ( the book list most of the core values we use each day )...

Mission

AAFES is charged with generating reasonable earnings, but returns roughly two-thirds of its net earnings to its customer base through their respective MWR programs ([1]). The only congressionally appropriated money spent in AAFES comes in the form of utilities and transportation of merchandise to overseas exchanges and for salaries of U.S. military personnel assigned to AAFES. A non-appropriated fund instrumentality (NAFI) of the Department of Defense, AAFES funds 98% of its operating budget, including civilian employee salaries, inventory investments, utilities and capital investments for equipment, vehicles and facilities, from the sale of merchandise, food and services to customers.

Roughly 67% of AAFES earnings are paid to MWR programs.([2]) As of 2006, more than $2.24 billion has been contributed by AAFES over a 10-year period to the Army and Air Force to spend on quality of life improvements for Soldiers, Airmen and their familiesÃ¯Â¿Â½Ã¯Â¿Â½*****"Youth Services, Armed Forces Recreation Centers, arts and crafts, aquatic centers, post functions and golf courses.

In Fiscal Year 2006, AAFES earned $427 million from direct sales (retail, food, and vending/services), finance revenue, and concessions on revenues of $8.9 billion. MWR and services programs received $228 million, which was distributed as follows:

U.S. Army, $138 million

U.S. Air Force, $76.5 million

U.S. Marine Corps, $13.3 million

U.S. Navy, $.5 million

The per capita dividend in 2006 was $229 for every Soldier and Airman.

In addition to funding MWR programs, AAFES earnings are used to build new stores or renovate existing facilities without expense to the federal government. Funds to construct these new or replacement facilities come entirely from sales of merchandise and services.

AAFES is also a major source of employment for members of the U.S. Army and Air Force family. Approximately 31% of the 47,323 AAFES associates are military family members. Many associates have worked for years with AAFES as they moved from one installation to another with their military sponsors. Another 1.9% of associates are military members who work part time in exchanges during their off duty hours.

Burger King AAFES cooperation, Camp Liberty, Iraq (June, 2003)AAFES operates more than 3,100 facilities worldwide, in more than 30 countries, five U.S. territories and all 50 states. AAFES operates some 147 retail stores and more than 2,000 fast food restaurants, such as Taco Bell, Burger King, Popeyes and Cinnabon. AAFES also provides military communities with convenience, specialty stores and movie theaters on installations worldwide. Many of these specialty stores are operated concessionaires. These concessionaires are third parties that are allowed to sell merchandise inside AAFES operated facilities provided that AAFES receives a set percentage of the earnings. Many of these concession shops are found in overseas locations and specialize in locally themed merchandice such as home decor, furniture, clothing, pottery, and other merchandise and even include locations in Operations Enduring Freedom (such as Camp Phoenix) and Operation Iraqi Freedom (Camp Liberty).

In the spring of 2007, the largest PX (Post Exchange) in the world opened on Fort Campbell, Kentucky. This project will construct a 165,000 square foot (SF) expansion to the existing 107,400 SF shopping center. The end position will be 164,000 SF sales area, 18,800 SF food court with 458 seats, expansion of both food concepts and concession operations.

On its website, AAFES states its business aim is *****"to serve Soldiers, Airmen and their families around the world.*****"

Topic

summary an action plan ...who can i take what i learned in this book and integrate into my job and a store manager

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