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Emmas Parlor Case
Emmas Parlor Case
References 32
I. CASE BACKGROUND – EMMA’S PARLOR
Emma Lathbury, described as the indefatigable 52-year-old, left her nursing job
in the early 1990s due to burnout after working grueling hours, emotionally draining
work, and lack of both respect and autonomy. She opened a cozy Victorian tearoom
in the small Illinois farming community near where she lived and grew up. Emma’s
parlor owes its success in part to perfect timing when specialty teas as in double-
digit annual growth. Emma’s also worked hard for 60 and 70 hour per week,
personally chose the colors for the cottage’s exterior, hung the lace curtains,
selected the fresh flowers that grace the small circular tables, hired the staff, and
tracked down and tested recipes for the finger sandwiches, scones, jams and
Battenburg cake.
Emma’s parlor earned glowing reviews in numerous guidebooks and a national
reputation. Upon realizing that special events were key to attracting customers, she
organized and publicized fanciful gatherings. The tearoom was nearly always
completely booked. Emma developed a real expertise when it came to teas. She
started by conducting evening workshops on the efficacy of organic teas in treating
everything from a simple upset stomach to menopausal distress. She began
blending her own Emma’s Parlor Organic Teas and selling them to retail stores,
restaurants and individuals over the Web. The Web-based business flourished,
generating slightly less revenue than she was realizing from the tearoom. Also, the
profit margins were higher.
Now with two main business segments to operate, Emma’s Parlor and Web-
based Organic Teas is becoming too big for Emma to handle.
The growth of Emma’s Parlor is becoming too big for Emma to handle. At this
stage of her business where expansion is imminent, she needed to consider all
possible business options.
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III. OBJECTIVES
1. Emma should consider the best option given her entrepreneurial traits, the
stage of the business, and the pros and cons in every alternative decision.
2. Clearly state the direction of the company whether to expand or make some
changes in the current structure to provide her enough breathing space to
continue.
IV. ANALYSIS
The following are the pertinent insights re Emma’s Parlor that could lead to the
decision-making:
Business Stage
If you piece the information from the case from the specialty teas potential
of earning double digit growth rate, 20 people employed, always fully booked
place, to expanding her scope to selling at retail stores, restaurants and Web, we
can say that Emma’s Parlor is in Stage 3 or Success Stage of business growth
based on the Five Stages of Growth for an Entrepreneurial Company. At this
stage, the parlor is enjoying profit and Emma being involved established already
processes and procedures on how to run things. In this stage also, Emma can
opt to hire professional managers or supervisors to assume her role in operating
the business.
At Stage 3, this is where the management function of organizing is highly
utilized. Owners must learn to create organization structure that could cope with
the fast pace increase in size and growth of the company. But since the business
is still in the early success stage, Emma must decide whether to hire managers
and delegate tasks by creating a helpful operations manual to ensure
consistency and smooth transition.
If this is too taxing however, Emma can opt to let the Parlor remain as it is
without expanding. This will automatically qualify it under Stage 5 or Resource
Maturity Stage. This means that Emma, in her perspective chose to retain her
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business solely for the purpose of catering to her customer base. Since she is
reluctant to expand, the management now is more focused in controlling which is
an indicator that the company is in its maturity stage.
The same Success stage is true for Emma’s web-based Organic Tea
business. Financial gains is stable with higher profit margin. The use of
technology promises a bigger opportunity for expansion.
Business Synergies
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the web-based business can easily get the pulse of the customers for further
marketing research, areas for improvement, and free publicity.
The web-based business can also help the company get its steady growth
if it decides to expand on untapped markets like young professionals, lactating
moms, etc.
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V. ALTERNATIVE COURSES OF ACTION
The following are the alternative courses of actions based on the above analysis:
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and time.
3. Quality of the product or
service can be sustained
given that there would
only be one business to
monitor and operate.
3 Sell the Business 1. Emma can earn money 1. There is no
banking on the good guarantee that her
reputation of her new business venture
company. will succeed.
2. New capital to open a 2. She will lose her
new business which is major source of
less tiring. income.
3. Emma is in her fifties 3. Her employees
and stress could affect her might be affected by
health, selling the the changes in the
business will spare her new management
from sickness and other thus, will probably
diseases. threaten their source
of livelihood.
VI. RECOMMENDATION
After considering the pros and cons above, Emma Lathbury should
consider Option 1, Hire a Manager/Supervisor, as the best alternative among
the three. Being an entrepreneur takes a lot of hard work, persistence,
determination, and even luck. You’ll never know when another opportunity comes
knocking. So for Emma, while the business is in its Success stage, she should
grab the chance to continue pushing towards more success. Not all businesses
are given the same opportunity. More are failing even at the starting point.
Considering that her business is already in its expansion phase, it is the
right time to hire new managers/supervisors for her to delegate the tasks. Most of
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the business decisions especially on a single proprietorship comes from the
owner. And any wrong move could eventually led to the demise of the company.
As the owner and business leader, Emma must fully grasp the concept of
management from planning, leading, organizing, and controlling. She can
actually start hiring on a smaller scale and will just continue doing so if the new
organizational structure works. By delegating tasks she can now focus on more
important things like assessing whether the business’ vision and mission are still
on point, financial projections, and regulatory compliance among the few.
Emma’s business is no longer hers alone. She now have a social contract
with her suppliers, employees, and most especially with her customers. She
already has the fiery passion when she started so what she needed is to revive
that. She should get a much needed break to relax. Stress and burnout can
affect her productivity and creativity, and worse her health.
As a leader, she should maintain the same level of tenacity to continue
being a role model to her employees. If they see that she is pessimistic about the
future, it could have a negative impact on her employees. And if customers
sense that the company seemed to be reluctant in implementing innovations,
they will always have an option to switch to competitors.
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