Question

Ernie Grimaldi runs the Grimaldi Candy Company located in the town of Sibley. Ernie’s attitude toward running the business leaves much to be desired. He believes in “flying by the seat of my pants.” He doesn’t believe in “wasting” time by sitting down and forming strategies. For example, every Christmas the company loses countless sales because Ernie is too cheap to spend much money on advertising. He figures that the company name will “draw” people to their door. The most he’ll permit is the passing out of flyers--which are printed on the company’s outdated copy machines--in front of the factory. Additionally, at certain times of year, like Valentine’s Day, the factory habitually runs out of candy because employees take vacations or machinery is down for servicing and consequently, production can’t meet demand. Currently, a local environmental group is planning to picket the factory because it uses a lot of water from Rock Bottom Creek which is then dumped back into the creek contaminated with milk, butter, and machine oil. The creek omits foul odors and much of the fish downstream have died. Ernie doesn’t want to spend the money to update the facility where it could return cleaned water to the creek. He’s garnering significant bad press from this issue. Ernie currently only hires part-time employees because he doesn’t want to provide them with health benefits as required by Sibley law for fulltime employees. Only 10% of his workforce is fulltime and turnover is high. The average part-time employee only stays about 6 months. Due to the fact that their pay is so low, most of the employees see the Grimaldi jobs as a paycheck and couldn’t care less about the company. Ernie is so cheap that he makes his bookkeeper, Celine, prepare his taxes. Celine doesn’t know what she’s doing and Bernie suspects that he might be overpaying his taxes. He also goes to Celine for financial advice and much of the information that he’s given is not helpful.

Ernie comes to see you and spells out his troubles. What specific business strategies would you employ to help him turn his company around.

Instructions: Each student MUST answer the scenario in approximately 250-300 words. A student may exceed 300 words in the essay.

Answer 1

For turning his business around and make it a profitable and sustainable one I will suggest Ernie to first identify the weak points and flaws in the business one by one. The elements that are important for the growth and how they are not up to the mark should be determined. Planning should be done based on it. The business, sales, marketing and operations are some main heads that should be included in this planning process. The plan will have an insight into the good and bad decisions and results of the past and a vision of the future course of action.

In a small business, the management is not very big to take responsibilities, make decisions and control the operations of the business. Instead, the sole proprietor is responsible for the plans, strategies and vision he forms for the business to follow. In such a case, he should involve his employees in the process. Work on the business growth as a team explaining to them what the position of the business is and what is required from it and thus take inputs from them as well as make them get involved in the growth process. For this involvement and dedication, it is important to make sure that the employees are being paid fairly and given the benefits they deserve. Employee satisfaction will in turn help in business development and sustainability.  

Understanding the market trends, the demand and behaviours of the customer are also essential to plan our production and operations. Business cannot grow until and unless its production and supply are consistent. If a customer does not gets his demand fulfilled from a product he will take no time to switch to another one. The strategy should be formed to avoid this kind of situation and keep the demand and supply balanced and thus have a strong place in the market.

Using proper measures to advertising and marketing also can be used once the supply in the market is aligned. Advertising is an important element of multiplying sales and profits. Making strategies to promote the business through advertising in budgeted cost will help the business grow effectively.

Ernie will also have to take the responsibility of keeping the environment unharmed from the activities of the factory in the manufacturing process. He cannot ignore the pollution his manufacturing process is creating in the water and thus has to take measures to rectify that issue as a social corporate responsibility.