Baby’s Out of Breath: Challenges of Running a Neighborhood Store

by: Joy Rabo

Publication Date: March 10, 2017
Length: 8 pages
Product ID#: 1-007-100

Core Disciplines: Accounting/Finance, Marketing/Sales, Strategy & Management

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Teaching Note

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Baby’s Hardware, a small retail shop, sells plumbing and electrical equipment as well as tools, paints and accessories. Over the last few years, sales have been declining. Competition has increased, and store owner Baby’s attention has been divided between the store and the needs of her growing family. Baby now faces a multifold decision: should she add or drop a product line to keep up with the competition? Or, should she venture into a completely different business, using the store space in a new way? The case provides financial data for students to analyze – as well as non-financial information to consider – when coming up with recommended courses of action.

Teaching Objectives

After reading and discussing the material, students should:

  • Describe the advantages/disadvantages of a small-scale neighborhood retail store over a large-scale retail store.
  • List the challenges faced by Baby’s Hardware as a small-scale store.
  • Identify Baby’s Hardware’s possible courses of action with their related costs/benefits.
  • Evaluate alternatives using cost-benefit analysis to offer recommendations for Baby’s Hardware.