LOON LAKE CO-OP Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

LOON LAKE CO-OP Case Solution

Introduction

The CO-op is a small general store. It was established in 1879, initially named as Hudson’s Bay Company Post in 1879. Later on, the company sold the entire undertaking to the Giovetti family. They changed the name to Island Store. When to the store faced several problems, the Giovetti family ceased operations of the store and sold them to to Council, who purchased it at $75,000 in 2003. Council developed the store and made new establishments; for instance, a dining hall.

The store is located in the Loon Island, and it provides food, marina services, postal services, and a meeting place for residents, as well as part time work place for local students. It has five counters for groceries, two displays for crafts, three counters for hardware supplies, two displays for souvenirs, two counters for food &snack items, two meat & ice cream freezers, and two coolers for drinks. The postal outlet is inside the store, while marina facilities is a few meters away from the store. The Council renamed the store or facility to Loon Lake Co-op in the spring of 2006 by the council.

Problem statement

The Co-op store has been facing operating and financial difficulties and it is running at losses, which is compensated from the grants and subsidies. The store has been dependent on the financial assistance since 2006. The council has attempted several times to improve the operational and management issues faced by the store, but all efforts gone in vain. The store continues to operate while incurring losses.

The council, Temagami First Nations Band Council, needs to identify the main issues that have been affecting the operational, management activities, place control procedures, and system to sort out these problems. The council wants the store to become self-dependent and generate at least enough earnings, so that it doesn’t require any grant or subsidy. The store was being provided grant for several years but now it should become self-dependent, as the council is short on funds and the grants can be used for other public activities, such as roofing the community buildings.

Key issues and problems Analysis

Location drawback

The store is located on the Loon Lake Island, and the major customers of the store are from the town of Temagami, located at the eastern tip of the lake. The customers visit the Loon Lake Island for post office, pay telephone, store, Marina facilities, public library, and church. It is probable that due to the travel and distance issues many of the potential customers are reluctant to visit the island. Thus, the store has less number of customers and less number of sales.

Over-Staffing and high wages

As per the case, the store employed about five to fifteen people at any one time. The visitors also noticed this and argued that the store is overly staffed and there is no need of such extra staff. Moreover, consultants were hired from time to time in order to improve operations of the store. They too recommended the council to reduce the staff. However, this was overlooked, since many of the employees are related to the band council and have significant influence on the council.

The staff wages cost and benefits are affecting the operational earnings. There is no need of extra staff. As per the case, employees include a manager, an assistant manager, and several clerks working under these two. Therefore, it is clearly understandable that the store does not require that much staff......................

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LOON LAKE CO-OP Harvard Case Solution & Analysis