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Keweenaw Mountain Lodge: An Opportunity Worth Pursuing?
Anna and Jack Oleson, long-time owners of a bridal and formal wear shop in a small community in Michigan's Upper Peninsula (U.P.), are contemplating making an offer to buy the Keweenaw Mountain Lodge (KML) property, located in Copper Harbor on the Keweenaw Peninsula. The property has been owned and operated by Keweenaw County since its beginnings in 1933, constructed under the Civil Works Administration and the Work Progress Administration during the Great Depression. Situated on 167 heavily-wooded acres in the northernmost part of Michigan, the facility includes a 6,000 square foot lodge built from logs and rough-cut stone, a banquet room and conference center, 24 rustic cabins, an eight-room motel, a nine-hole golf course, mountain biking and hiking trails, a tennis court, and disc golf. In 1970, the lodge was listed on the National Register of Historic Places, and in 1976, it was designated as a Michigan State Historic Site. Keweenaw Mountain Lodge, however, has not produced profits in several years. A consultant noted that while some repairs were needed (e.g., roof replacement/repairs, replacement of carpeting, installation of Wi-Fi), it has been a utilized for both hosting wedding receptions and as family vacation destination for Michiganders and other Midwesterners. The asking price for the property is $1.5 million. The Olesons, who are in their 70's in age, are considering selling the bridal shop and using proceeds towards purchasing the KML. The case provides a general overview of Michigan's Upper Peninsula and its unique culture, and the considerations involved in making a purchase decision - i.e., marketing, location and local demographics, marketing positioning, operations and management, succession planning, and financial valuation. It requires the reader to utilize the planning, analytical, and decision-making techniques of an entrepreneur investigating a new business opportunity. -
The Flint Water Crisis
The city of Flint, Michigan, a previous hub for General Motors auto manufacturing, began to experience budget shortfalls in 2007. By 2011, the city was running a deficit of nearly $26 million, and the state assumed control of Flint through the appointment of an emergency manager. In 2014, immediately after state officials decided to begin sourcing Flint's tap water from the Flint River in order to save money, residents began complaining about the cost, color, and quality of their water. Over the next 18 months, residents reported suffering from various illnesses and an outbreak of Legionnaire's Disease occurred in the area. During this time, state officials continued to assure residents that their water was safe despite three water-boil advisories, the water rusting parts at General Motors' Flint engine plant, and the straightforward warnings from an EPA employee that an unsafe situation existed. Public pressure built as an ACLU reporter broke the story, an outside researcher's tests uncovered unsafe levels of lead in the water, and a Michigan State University pediatrician found elevated lead levels in children coinciding with the switch to Flint River water. In October of 2015, Flint switched back to sourcing water from Detroit; finally, in January of 2016, Michigan's Governor (Rick Snyder) declared a state of emergency and activated the Michigan National Guard to patrol the city and assist the American Red Cross with the distribution of bottled water and water filters. The citizens of Flint had been exposed to poisoned water for 18 months. -
Royal Beginnings Bridal and Formal: Buying for a Boutique
In the fall of 2013, Anna and Jack Oleson, the owners of a full-service bridal shop in one of Michigan's Upper Peninsula's small communities were preparing for their annual six-hour drive to Chicago for the National Bridal Market. They would be making merchandise buying decisions for the upcoming season. However, this year's trip would be very different because the Olesons were reevaluating previous suppliers and potentially selecting new ones. In operation for 23 years, the shop prided itself on offering a full range of services, including alterations by a full-time seamstress. Because brides typically placed special orders for wedding gowns - after seeking consultation and trying on samples in the store - rather than buying them "off the rack," receiving timely and reliable deliveries from suppliers was critical. While vendors' corporate headquarters were located in the U.S., their gowns were often manufactured overseas, primarily in China. After incidents of "miscommunication" regarding deliveries, delivery failures, and suppliers' inflexibility regarding minimum order quantities for samples (i.e., unwillingness to grant concessions to smaller shops), the owners needed to re-conceive their buying criteria and sourcing strategies. To add complexity, the growing population of millennial brides (those turning 27 years before 2030) were brand- and quality-conscious, sought unique products, and increasingly turned to online retailers to make purchases. The case provides a general overview of retail operations within a small apparel (bridal and formalwear) shop, as well as insights into its market and suppliers' policies and operations, and challenges associated with online competitors. -
Ferris Valley Foods Company: Corporate Social Responsibility and Reentry
Ned Larsen, the CEO of Ferris Valley Foods Company (FVF), located in westernMichigan, was focusing on the issue of hiring ex-felons. He planned to ask his management team to consider if (and how) FVF could use information obtained from the Michigan Department of Corrections (and the Michigan Prisoner Reentry Initiative) and West Michigan Therapy, Inc. to benefit people like Lori Mitten, a middle-aged ex-offender who recently earned a Bachelor of Business Administration degree and was seeking employment. In a deeper sense, Ferris Valley Foods Company also needed to consider the meaning of corporate social responsibility, with respect to the human, financial, and time-related resources that would be required in order to reach out to ex-offenders. One option might be to adopt a hands-off approach and either do nothing at all or simply make a financial donation to a non-profit organization that provides support for ex-offenders; another could be to become actively involved in partnering with the aforementioned entities. Finally, it could begin to hire ex-offenders. Additional (ethical) complications arise because the CEO's nephew is one of the ex-offenders portrayed in the case. -
Daktronics (D): Keen on Lean Manufacturing at Daktronics, Inc.
For over forty years, Daktronics, Inc. had been one of the world's leading suppliers of electronic scoreboards, large electronic display systems, digital messaging solutions, software and services for sports venues, commercial and transportation applications. After decades of producing its products using a batch system, the multi-million dollar company made a formal decision to pursue lean manufacturing in February, 2006. The lean initiative took on even greater importance due to sluggishness in the U.S. economy and slowed sales in 2009. Now in 2010, four years after the lean project's initial launch, readers are asked, how successful has the lean conversion been, including the transition from a batch system to a high mix, flow line system? Is the firm poised and ready to extend its lean initiative to nonmanufacturing areas? By using clues within the case and detailed exhibits, the case provides a rich opportunity for readers to trace and evaluate an original equipment manufacturer's (OEM) lean journey. Ultimately, they should be able to answer questions, such as: What kinds of things did Daktronics appear to do correctly? What kinds of things could Daktronics have done differently... or better? What recommendations might follow from their experience for other OEMs that seek to implement lean manufacturing? What are the pros and cons of implementing lean techniques in nonmanufacturing areas? -
Precision Steel Fabrication: An Equipment Purchase Decision
For nearly 60 years, Precision Steel Fabrication (PSF) had been making fabricated steel components for the contract furniture (commercial office furniture) industry. At the time of the case, the $10 million firm was emerging from a downturn in sales and seeing its first sales increase in three years, and was contemplating the purchase of a $1 million tube laser. The tube laser could do the work of three machines: a table saw, a hydraulic press, and a deburring machine. Should PSF purchase a tube laser? If so, how should three vendors' offerings be evaluated and what criteria are most salient? While the tube laser would greatly increase the firm's manufacturing efficiency, the decision itself is relatively risky. The case is written to provide the framework for evaluating an equipment purchase decision within the context of business and operations strategy, and in a small business environment.