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CASE24_Room&Board - Room Board INTRODUCTION John...

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Room & Board INTRODUCTION John Gabbert's unique management and business philosophies are the foundation of his successful home furnishings retail company, Room & Board. Established over 25 years ago, Gabbert is now faced with the challenge of solidifying the organization's culture and high stakeholder engagement to withstand a change in leadership and continued expansion of the business into new urban areas. In order to institutionalize Room & Board's way of doing business beyond the life of its founder and to grow at a rate which will sustain stakeholders' financial health, Gabbert should determine: In what ways does Room & Board's competitive advantage offer value to customers which is superior to the value that traditional or alternative furniture retailers provide? How does the company work with employee and supplier stakeholders to achieve shared objectives? What measures can he take to perpetuate the successful features of his business strategy and to sustain the company's high level of performance? INTERNAL ENVIRONMENT ANALYSIS Room & Board's unique approach to the home furnishings retail business is based on Gabbert's rejection of the standard retail business model. The table below compares the company's resources with those of typical furniture retailers. Resources Standard Business Model Room & Board's Business Model Financial Debt and/or shareholders' equity to fund growth Internally-funded growth Organizational Formal work procedures and policy manuals Financial results valued Deliveries outsourced Guiding Principles - core beliefs of productivity, personal fulfillment, and shared success Quality and collaborative relationships valued Delivery staff trained as "Brand Ambassadors" Physical Available products determined by large manufacturers, often made overseas with cheap labor Retail mall rental Available products made domestically by exclusive, private craftsmen and artisans - high in-stock rate and quick turnaround of special orders Ownership of retail sites with employee kitchen and gym Room & Board - 1
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Room & Board . . . continued Resources Standard Business Model Room & Board's Business Model Human High turnover Traditional hierarchy, command and control from top Information shared on a need-to-know basis Part-time employees Limited access to benefits Commission-based pay structure Attract and retain valuable human capital - Employee longevity Empowerment and accountability - independent judgment and decision making based on principles of the company - entrepreneurial ownership of one's own job and career Transparency, trust, respect, and equality Full-time employees Generous benefits for part-time and full- time employees to support physical, mental, and financial health Salary pay structure Importance of balance in personal life - concern for employee happiness Managers guided by leadership objectives and generous bonuses for achievement of company objectives Reputational Varies according to retailer Brand name, customer perception of quality, reputation with family-owned
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