Reference no: EM132830047

THE BIRDSEED LADY

The subject business is a small one in a suburban town. Staff is the owner (the birdseed lady), and three part-time employees. It started through a franchise, but has managed to break away from that, for a negotiated payment and a requirement to change the name from the franchiser's. The nearest competitor is about 20 miles away, in this area representing about six cities of distance.

Birdseed is sold to homeowners generally, who install feeders in their yards. Feeding birds helps them survive the changing habitat plus provides an entertainment in watching them feed. The store sells a variety of seed types and feeders. The central competition is the large box stores, e.g. Home Depot, which sell less variety of both, but at 25% lower prices. The smaller, retail store cannot compete with those prices. This is not unlike the dilemma posed to a host of smaller businesses across the country when confronted with these large chain store operations, be they in construction products like Home Depot and Lowe's, or in a wider variety still, like Wal-Mart and Target.

The problem for the birdseed lady is how she can keep her store afloat, bring in customers, and not be overwhelmed by the big-box competitors, and ultimately to prosper in the chosen business.

Questions

1. How does the general concept of the big-box stores allow them to charge less for their products?

2. How do the big-box stores use leverage?

3. What can the bird-seed lady do, to compete with the big-box stores?

a. Product ideas

b. Service ideas

c. Pricing ideas

d. Other ideas

4. What kind of outside the box thinking can the birdseed lady do for her store?

5. How can the birdseed lady ensure that the big-box places cannot do the same strategies she thinks up?