At Janine’s graduation party, her Uncle Harry walked over and shook her hand. “I understand you’re in the job market now that you’ve gotten that fresh, new M.B.A.” “Well,” Janine replied, “I realize my real-world experience is limited, but I hope to find a place where I can learn and work my way up.”

“I know it’s not as glamorous as some big corporate job, but how would you like to come work for me in the hardware business? I’d like you to consider coming into the head office; we could use some new ideas over there.” “Let me think about it and call you tomorrow,” Janine replied.

Janine considered the offer. Since her childhood, the Henderson Hardware stores had been part of her life. The family owned twelve stores in eight counties in the state. The privately held company had been started by her great-grandfather in the 1800s, and as it expanded over the years, children, aunts, uncles, cousins, and in-laws had grown up and joined the business. The income from the stock Janine received automatically at birth paid for her college education.

Janine’s Uncle Harry had taken over the company six months ago. Janine knew from her mother’s letters that Harry was trying to bring the company into the new millennium, but it was quite a task. Janine decided to ask her mother what she thought. As a family member who was not actively involved with the company, her mother would be more objective than some.

“I’m not sure that it’s the place for you, Janine,” her mother answered. “The company isn’t doing as well as it once was. The stores are going downhill, and there is a lot of blaming going on among family members in the company. Your Uncle Harry is the third company president in four years. I do know that they could use a new perspective over there. Your grandfather and the great-uncles think they can run the business the way they always have, and everything will be fine, but the market’s changed. The baby boomers are buying, but from ‘big box’ competitors such as Home Depot and Lowe’s.”

After considering the situation, Janine called her uncle. “What sort of job did you have in mind?” “Well,” Harry replied, “to start, I would like you to work in human resources and help them develop a customer-service program. I don’t think we pay enough attention to our customers anymore. But I’d also like your opinion in general. You’ve got a fresh viewpoint and a newly minted business degree. We can use your knowledge of new management trends and ideas.”

Janine’s first week on the job was a real eye opener. She started by visiting all the stores with her Uncle Tom, the operations director. While Tom chatted with the managers, Janine wandered up and down the aisles and looked through the stockrooms in the back of each store. She soon realized that the types and levels of inventory, attention to service, cleanliness, the knowledge and competency of the sales staff, and even the prices varied dramatically from store to store. The only consistency was the name. Even sales promotions could vary, since each store had a small, individual advertising budget.

The customers were also a concern. Most of them were older and tended to make small purchases. Janine asked her Uncle Tom about this. “Well, a lot of the young kids just look at price, and then they shop at these big warehouse and discount stores like Home Depot and Wal-Mart. We’ve already got three different stores entering this market. It’s also tough for us to compete against the national chains because they can get much better price discounts.”

Janine’s concern grew deeper when she looked at the company’s financial reports. Several stores had lost money regularly for over three years. When she asked Uncle Harry about them, Harry replied, “I know, but the last three great-uncles in the family are running those, and they’re on the board of directors. I can’t do much about them. Besides, it isn’t really their fault; those neighborhoods have really gone downhill in the last five to ten years.”

The next thing Janine asked to see was the company’s strategic plan. “There isn’t one,” Harry explained. “We’re all so busy getting the day-to-day things done that we just don’t have time.”

Altogether, it had been a discouraging week for Janine.

Questions

*Based on the information in the case, do a mini-SWOT analysis. What are the biggest problems facing Henderson Hardware?

*Consider Porter’s generic competitive strategies. Which approach would work best for Henderson, given the nature of the competition?

* What steps can Janine take to help convince her Uncle Harry that the company needs a strategic plan? Do you think Janine will succeed?

Answer rating: 100% (QA)

1 The following table shows the SWOT analysis Strength Weakness 1 Its a family business so less chance of internal conflicts 2 Ample number of stores ... View the full answer