CJ Mclaine's Deli & Bakery, LLC: A Small Family Business Case study.(Instructor's Note)

CASE DESCRIPTION The primary subject matter of this case concerns small business strategy. Secondary issues examined include: family business strategy, start-up businesses, changes caused by external forces, and small business sustainability. The case is appropriate for undergraduate small business and entrepreneurship courses, a family business course, or an introductory management or marketing course. It would also be appropriate for a use in studying small business strategies in a business policy and strategic management course. The case is designed to be assigned for reading prior to class, discussed during one 75 minute class period, and is expected to require one and one-half to three hours of outside preparation by the student (depending on whether the discussion questions are assigned for discussion purposes or written submission). CASE SYNOPSIS CJ Mclaine's Deli and Bakery, LLC, a family owned small business venture, operated in the town of Evergreen, Colorado. The Italian style deli and bakery focused primarily on its lunch business but also offered a limited breakfast menu, a dinner takeout menu, and general catering services. The business was launched in 2004 and gained significant momentum in its first year of operation. This initial success encouraged the family owners. During its second year, however, changes in the competitive environment and an economic recession created new obstacles that affected the business' sales and bottom line. Somewhat discouraged, the owners recognized that strategic alternatives had to be considered if the business was to survive. The case demonstrates the difficulty of starting a business and sustaining its growth and momentum. It highlights the vulnerability of the small business to changes in the macro environment, especially changes in economic factors, and changes related to industry and competitive forces. INSTRUCTORS' NOTES Small businesses are an important part of the U.S. economy, with approximately 23 million firms in the United States classified as small businesses and over 50% of the private sector workforce employed by such firms (Ibrahim, et al, 2008). There is also a significant failure rate. U.S. Small Business Administration statistics indicate that of the businesses founded in a given year only 50% will remain in business four years later (Headd, 2003). This case demonstrates some of the challenges faced by one such business as it entered its third year of operation. LEARNING OBJECTIVES 1. Identify factors that contribute to the initial success of a small business as well as the challenges confronting small business owners post start-up. 2. Identify the challenges in running a family owned business. 3. Develop an understanding of the nature of competition in the small deli/restaurant business. 4. Develop an understanding of the potential impact of external environmental forces on small business owners. 5. Develop an understanding of the difficulty of managing a business start-up through the first three years of operation. 6. Learn how to apply and use SWOT analysis to assess small business strategy. 7. Learn how to apply Michael Porter's (1990) competitive strategy framework to a small family business. COURSES AND TOPICS This case is well suited for use in an undergraduate small business and entrepreneurship course, a family business course, or an introductory management or marketing course. It would also be appropriate for a use in studying small business strategies in a business policy and strategic management course. CLASSROOM DISCUSSION QUESTIONS 1. How would you assess the business idea of opening an Italian style deli in Evergreen, Colorado in 2004? Was there sufficient opportunity for a successful start-up and were there adequate skills and resources to launch the deli? External Opportunities Students can identify and evaluate the opportunities in the market. …