ROOM & BOARD:

A CASE STUDY
In Completion of Requirements for the Subject
Management 18: Business Policy an Strategy
!"ila# I"y $iane
Mariquit# %unice &auren
'hagan# Chari(e )ane
*orres# Clye %rnest
+afra# May ,enci
EXECUTIVE SUMMARY
Room - Boar is a successful an unique pri"ately o.ne home/furnishings retailers
base in Minnesota .ith eight national retail stores# an annual catalog an a .eb site0
!ppro1imately 234 million of re"enue a year .as generate # offering proucts that combine
classic# simple !merican esign .ith e1ceptional quality0
*he company is unique as it base its business not on the normal ma1imi(ation of
.ealth to the shareholers but on the basis "aluing relationship bet.een the sta5eholers
6from "enors right o.n to the .or5ers an customers7 ahea of the bottom line0 8hat mae
Room - Boar special .as that the company prouce e1ceptional financial results espite
not subscribing to the stanar retail/inustry business moel0 It ha rejecte some common
attributes of pri"ate/company characteristics: hierarchy# comman an control from the top
an information on a nee/to/5no. basis0 Its culture .as base on principles of trust# respect#
relationships# transparency# accountability an the importance of a balance life0 *he o.ner of
the company# )ohn 9abbert aopte relationship business moel that isa"o.e ebt an
equity/gro.th financing an :3 years later he .as at the cross/roa# being ;4 years ol he
ha to ecie ho. to institutionali(e his business moel in orer to preser"e the business0
*his case eals specifically eals .ith the protection an preser"ation of the
relationship/base moel )ohn 9abbert ha aopte :3 years ago0 Methos of analysis use
are P%S* !nalysis# Porter<s 3 =orces Moel !nalysis an S8'* !nalysis an the Balance
Scorecar0 *he analysis leas to the conclusion that Room - Boar #)ohn 9abbert
specifically# to ientify an groom a potential successor that is highly qualifie> equally
possessing # if not surpassing# the s5ills sets an qualities of his or her preecessor0
STATEMENT OF THE PROBLEM
Room an Boar# o.ne an manage by )ohn 9abbert for more than :3 years# is
5no.n for its quality prouct an goo employee an customer relationship0 *he success of
his business relies hea"ily in the unique multi/sta5eholer moel# .here he primarily "alue
quality an relationship ahea of the bottom line0 ?a"ing at reache at the age of ;4# )ohn
9abbert .as no. confronting his biggest challenge# ho. .oul he institutionali(e the unusual
business moel# culture an employee en"ironment he ha built0 ?is primary objecti"e .as to
preser"e an protect his @relationshipA business moel# .hich .as the heart an soul of Room
an Boar<s success0
ANALYSIS
PESTLE Analysis
10 Politial/ *here is encouragement of e1ports from BS go"ernment# constrains for
e1ploiting local .oo material an so on0 !ttracti"e policy of encouraging foreigners<
in"estment is most popular in !sian countries0
:0 Eono!iCRoom - Boar caters to the customers .ho appreciate quality proucts an
.illing to pay for them as these proucts .ill ser"e many years to come0 *he Company# ue
to the economic changes an trens# are aopting the strategy 6relationship business moel7
that ta5es an appeal on their customers an o.ns the customer loyalty0 It mae the company
ha"e e1clusi"e esign0 *herefore# the economic conitions on<t affect the company<s mar5et
performance an sales ha"e increase from 1DD3 to :44E0
F0 Soial C ?igh employee turno"er# using part/time employee an commission/base
compensation are common strategies to lo.er fi1e costs in the mar5et0 But Room - Boar is
creating an en"ironment of collaboration an engagement0 *he engagement .as e"ience by
eep relationships .ith customers# fello. employees# an suppliers0 *he company pro"ies
harmony en"ironment to its employees an customers0 *he @.al5 the tal5A has been
communicate "ery .ell0 Go rules for personal lea"e or sic5 pay an rejection of commission/
base structure are for their employees0 Customers pay the same price# no iscount# no
sales0
H0 T"#nolo$ial C ?igh technological soft.are in trac5ing# orering an stoc5 management
is highly use0 'nline shopping is a tren in the future# in"ol"ing more customers0 Challenges
in 5eeping .ith the in/tren an fashionable esign .hich are not really a threat to Room -
Boar as it styling is relate to heritage !merican0
30 L"$al C *he legal compliance of the company is strictly implemente .ith the rele"ant an
applicable la.s an regulations that pertain to the en"ironment# social an .or5ing
conitions0 *he company also scheule the most emaning requirements to be specific in
maintaining the list of la.s an regulations an .ith the proceures0
;0 En%i&on!"ntal C 8ith regars to the en"ironmental factors such as the air# noise# an
.ater# inspections are implemente to ensure the company pro"ies correcti"e actions .ithin
the stipulate time0 *he en"ironmental inspection is part of the legal ocumentation an is
neee by the en"ironmental authorities0
E0 Co!'"tito&s/ Competition from other retail furniture stores that sell afforable proucts
prouce using mass manufacturing process or importe from e"eloping countries0 !n
similar concept stores e1isting in the mar5et 6e0g0 $esign 8ithin Reach an Crate an
Barrell70
Po&t"&(s Fi%" Fo&"s Mo)"l Analysis
Ba&$ainin$ Po*"& o+ S,''li"& -Lo*.
Room - Boar create their o.n supply chain .hich allo.e them to set an annual
goal of ha"ing 83I of its proucts in stoc5 at all times# contributing to quic5 eli"eries0
Ba&$ainin$ Po*"& o+ B,y"&s -Hi$#.
Customers can easily s.itch to competitor brans offering same proucts0
T#&"ats o+ S,/stit,t"s -Lo*.
R - B is ifferent from traitional furniture because it offers e1clusi"e esign# corporate
structure an long lasting heirloom/quality proucts that are not offere by any other
company0
T#&"ats o+ N"* Ent&ants -Lo*.
*hreat to of ne. entrants is lo. because of huge capital requirement - highly
e"elope supply chains0 !nother furniture company is rolling on a lo./cost strategy# but not
easier to establish a "ast supply chain an create a unique bran name li5e Room - Boar0
Ri%al&y A!on$ E0istin$ Co!'"tito& -Lo*.
Ri"alry is lo. ue to small number of irect competitors0
S1OT Analysis
STREN2THS
&ong/term business
relationship .ith "enors :
Create their o.n supply
1EA3NESSES
$epen completely on !merican
esigner - supplier0
Prouce only for !merican
chain
&o.er employee turno"er C
full time - pay base on
salary0
Positi"e corporate culture C
trust# respect# relationship#
transparency0
%mployee Benefits C offere
ae "alue 6facility#
programs - ser"ice70
Multichannel sales approach0
customers0
&ac5 of a"ertising0
=e. stores0
&o. "olume in phone - 8eb sales0
OPPORTUNITIES
%1pan mar5et / %urope -
!sia
$e"elopment of technology C
inno"ation in online sales0
Strategic alliances C
uni"ersity - international firm
C esigning> green materials
for furniture0
THREATS
Small furniture retailer C can easily
copy moel an offer lo. prices
Regulatory en"ironment across the
globe C "ary C the use of natural
resources0
STRATE2Y Analysis
Strategies Bse Impact
%ntrepreneurial minset
Inno"ations in
company culture#
supply chain#
employee
e"elopment#
leaership team#
eli"ery center# an
stores0
J %mployees became
one of the
competiti"e
a"antage for the
firm
9oo Culture
Culture base on
trust respect#
relationship#
transparency#
entrepreneurial
o.nership of one<s
job an career0
Impact
J %mployees feel
happy .hen
spening time at
.or5 an can ealt
.ell .ith customers
&o. employee turno"er
Clear %1pectation
9uiing principles for
employees an
leaers
%mployees .ere
sho.n annual
strategy an etail
financial pac5age
e"ery month
J *his helpe the
employees to
unerstan their
connection to its
business
J Bnerstan the
firm<s goal
9oo Benefit
%mployees are gi"en
in"estment a"ice at
no cost
e1tensi"e physical
fitness facility
Go rules for personal
lea"e an sic5 pay
%mployees .ere
happier an ser"e
better ser"ice to
customer
9oo Relationship .ith
"enors
Met .ith its "enors
frequently to plan gro.th#
iscuss nees an share
financial ata
J Contributing to quic5
eli"eries an can
control o"er prouct
quality
J Reuce the ris5 of
supply chain
isruption
Kuality 83I of the
company<s prouct
.ere mae in the
Bnite Sates
Maintain an attract
ne. customers
Balan" So&"a&)
C,sto!"&
J Customers are mainly consuming high/quality an e1clusi"e esign of furniture an
less concerning price0
J =ocus on interaction .ith the customer from the beginning to the en
J 9ain customer satisfaction at more than D; percent
Int"&nal B,sin"ss P&o"ss
Supply Chain - R-B create its o.n supply chain of appro1imately H4 ifferent "enors#
nearly all pri"ately o.ne family businesses on .hich R-B .ith its "enors iscuss nees#
plan gro.th an share financial ata0
Store Format - *o a"oi the high rent typical in retail malls# Room an Bar o.ne most of its
locations an searche out freestaning sites .ith ample par5ing an easy access for
customers0
Culture and Facilities -
It creates harmony an goo en"ironment by ensuring respect for ifferent "ie.s#
openness to feebac5# an responsibility for one<s actions0
It share accountability .ith employees> therefore# there .ere no rules for personal
lea"e or sic5 pay0
More facilities offer for the employees such as physical/fitness facility# a healthy lunch
program an personal financial/planning ser"ices an H41657 in"estment a"ice from
an outsie financial consulting firm at no cost0
Its culture .as base on the principles of rust# respect# relationships# transparency#
entrepreneurial o.nership of one<s job an career# an the importance of the balance
life0
Service Offering and Distribution System - Room an Boar i not outsource their eli"eries0
=or national eli"eries# R - B ha an e1clusi"e relationship .ith Minneapolis Comp0
L"a&nin$ an) 2&o*t#
J Room - Boar helps suppliers# employees learning more company<s strategic
information an action0
J Base on the principle of trust# respect# relationships# transparency# entrepreneurial
o.nership of one<s job an career an the importance of a balance life0
J *he 9uiing Principles has introuce to employees an leaership team0
J *raining its o.n staff for eli"ery is to transfer goo quality ser"ice to customers0
Finanial
Room an Boar isa"o.e ebt an equity/gro.th financing an chooses to embrace
a unique multiple/sta5eholers0 R-B pricing moel is the same for e"eryone0
SOLUTION
10 Ientifying an 9rooming Potential Successor 6Priority7
Ientify an groom a potential replacement for himself either from his o.n family
member or someone from e1ternal an groom him to ha"e the aptitue of inno"ati"e leaer
:0 !option of Ge. *echnology
:01 Bse of on/line orering aggressi"ely to increase sales an customer base
:0: Bse of %nterprise Resource Planning system 6if not one yet7 to manage the
orering# eli"ery an in"entory0
F0 Strengthening *he 8or5force
F01 Pro"ie an implement plans to ensure life/long employment li5e stoc5 option
upon retirement
F0: Continuous training of the .or5 force an regular job rotation in non/critical
areas to 5eep .or5 force focuse an moti"ate
IMPLEMENTATION
! 5ey to successfully preser"e an protect the @relationshipA base moel is for )ohn
9abbert to ientify an groom a potential successor that is highly qualifie> equally
possessing # if not surpassing# the s5ills sets an qualities of his or her preecessor0 *his
process is aie thru aopting a succession planning system .here it etails an organi(es
an effecti"e approach to the ientification an grooming of a qualifie successor0 )ohn
9abbert is tas5e to scout for a potential caniate# be it a family member or an employee#
.hom he thin5s is rightful to follo. his footsteps0 *he ientification process mainly in"ol"es
t.o steps> etermining the s5ills an qualities that the caniate nee to possess 617 an
establishing open ialogues .ith such caniate to etermine his ri"e an passion to.ars
the goals an long/term objecti"es of the company 6:70 ?o.e"er# if 9abbert ecies to pass
the responsibility to a family member# he can use a less structure approach an must start
as early as possible0
'nce the potential successor has been ientifie# 9abbert shoul e"elop a s5ills/
relate succession plan# one that is aligne .ith his timeline for retirement or .ining o.n
his in"ol"ement0 *o be effecti"e# the succession plan must pro"ie full etails on requirements
for eucation# e1posure to business operations an le"els of competency0 Geelessly# the
caniate must unerstan an accept these requirements# an the company<s culture an
"alues0 ! mentor or e1ecuti"e coach might also be consiere to help implement the plan an
guie the successor<s training an accelerate hisLher e"elopment0
RECCOMENDATION
Room - Boar can be inno"ati"e through cooperati"e strategies C strategic alliance
.ith %urope an !sian nations to further e1pan their operations an possible gro.th
opportunities0 *he company also has to impro"e e"elopment of cross/functional prouction
e"elopment teams that in"ol"es goo esigners# .ie categories of furniture an enhancing
.eb sale0 It is also recommene for Room - Boar to increase a.areness in possible
en"ironmental constraints that might occur as .ell as effecti"ely hanling @green earthA
issues0
CONCLUSION
* he abo"e analysis gi"es Room - Boar possible mitigation measures to ensure the
relationship moel is preser"e an institutionali(e .hile maintaining reasonable returns0 It
emphasi(es the importance of preser"ing an protecting the relationship/base moel on the
moern business en"ironment an ensuring that strategies are to be employe at a
reasonable time an pacing0 *he company has a lot of room for gro.th as a furniture
business .hile maintaining or e"en e1ceeing the satisfaction of its sta5eholers0