Instructor’s Manual Abstracts
Issue 1 IM Abstract: Mother Myrick’s Confectionery
Paul W. Thurston, Jr.; Erik R. Eddy; and Daniel C. Robeson
Case Overview
Ron Mancini and his wife Jacki had owned and continuously operated Mother Myrick’s Confectionery, located in Manchester Vermont, for 35 years. When they started the company, the bank kept them afloat on a series of 90-day notes. They purchased the raw ingredients, made a batch of fudge, loaded it in the van and hit the road. After selling all the fudge, they would come back, pay off the loan and repeat the process. In the early days, they would do 50 to 60 shows each year. That gradually decreased as Ron and Jacki grew their downtown business. They added an ice cream parlour and bakery, extended their product line, and developed a mail-order business. In 2005, they closed their downtown shop, shed the ice cream business, and relocated the retail store to the edge of town. In the process, the company took on $205,000 in notes payable. The move reduced revenues but increased their bottom line. Company revenues topped $800K for 2012 for the first time since they closed the ice cream parlor. The company provided a modest salary for Jacki (about $60,000) and had positive income in each of the last four years.
Ron thought about the balloon loan payment due on February 20, 2013. He had sufficient cash to pay it off, but that could leave him short in the fall when they were busy making product for the holiday season. Interest rates were still low, and they could probably borrow the money needed to pay off their existing debts and get additional capital to improve operations. Ron developed a one-page business plan in January and provided it to several area banks. The plan requested approximately $86,000 to consolidate their notes payable and an additional $90,000 for improvements and upgrades. Beyond the loan, Ron and Jacki had decisions to make about the company’s future. He and Jacki did not have children together. Ron had children from previous marriage, but they all had careers of their own, and were not interested in the confectionery business. He was not sure whether any of the employees were ready to step up or had the capital needed to buy Jacki and him out. He could try to sell the organization outright. Taking on new debt now, however, would make the company less attractive. He also thought about bringing on new partners and teaching them the business.
Learning Objectives
By working through this case, students should be able to
- Develop an awareness of the challenges involved with running a small, family-owned business, particularly as the proprietors reach retirement age.
- Apply strategic situation analysis techniques to gain a better understanding of the organization and its environment.
- Employ the balanced scorecard for strategic analysis and implementation planning.
- Use knowledge gained from the situation assessment to recommend a general strategy, identify key success factors, define strategic issues, evaluate alternatives, and develop action plans.
Course Suitability
The case is appropriate for use in either an undergraduate or a graduate course on organizational strategy to illustrate the challenges facing small businesses and the importance of succession planning. The case was useful when teaching the various techniques available to conduct situational analyses and develop strategic plans, or when assessing students’ abilities to integrate and apply skills in these areas. This case was most appropriate toward the middle or end of a strategy course, after students had learned about mission, vision, general strategies, and the various forms of internal and external situation analyses.
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