City Furniture and Mattress

The majority owner and general manager of City Furniture and Mattress (CFM) needed to make several decisions that would determine the company’s strategy. CFM had continued to grow in terms of sales, but the general manager and his father, also an owner and manager at CFM, were concerned with profitability and the increasing competition from local and big-box stores. The general manager looked at several options including capital investment, expanding global outsourcing, store network expansion, and vertical integration.

The purpose of this case is to help students develop an understanding of the challenges in operating a family-run, multi-site business. The case enables students to directly deal with managerial issues that small businesses face (e.g. operational and strategic decision-making). Students will gain an understanding of the issues related to both strategy formulation and strategy execution. With CFM and Singh as their example, they will learn to evaluate the choices facing a chief executive officer and owner who is attempting to deal with prior decisions that are not working as anticipated. In particular, having chosen this strategic direction, should the company continue on the same path? Or, in recognition of the increasingly competitive landscape, should Rajeev Singh and the other owner, Rajeev’s father, shut down the company completely? Through the case discussion, students recognize that strategic business decisions are path-dependent and can have significant consequences for small businesses, which often do not have the financial resources to recover from incorrect choices. This case is appropriate for introductory courses in strategy and entrepreneurship. It is also suitable in a general management course or a course specializing in small business.

• Vertical Integration
• Expansion
• Improving Profitability
• Global Sourcing
• Furniture
• Small Business