The mini camachile tree store: survival and growth in a special environment.
The primary subject matter of this case is the impact of government regulation on business. Other issues described in this case are related to small business management, business strategies, and cultural environment of doing business in Guam. The difficulty level of this case is three and up, which is appropriate for junior level and beyond. This case is designed for discussion in two class hours in a government and business, or an entrepreneurship, or a small business management course. Students are expected to spend about two hours for outside preparation, consisting mainly of reading the case and of familiarizing themselves with the business environment in the Western Pacific region.
This case is about the Mini Camachile Tree Store, a family-owned retail business operating on the island of Guam. The business was started right after the WWII by Mr. Jesus Maanao and subsequently entrusted to his daughter Louisa. Louisa's strategies moved the business into a new level of fast-growth by opening more than ten additional stores island-wide. The family-basedretail business has to endure many regulations and rules and deals with various government agencies, ranging from the Department of Health and Social Services to the Department of Revenue and Taxation. Meanwhile, the business is able to balance the forces that influence market operations, such as economic activities and technological changes. In addition, the Mini Camachile Tree Store has been functioning in a business environment with unique natural characteristics and cultural heritage.
A BRIEF HISTORY
The Mini Camachile Tree Store is a family-owned business that has withstood the test of time dating back to post-WWII in the heart of Tumon on the island of Guam. The founder of the Store, Mr. Jesus O. Maanao, was a business-minded man who was always looking for ways to improve his financial situation. The business really started out as a hobby for he enjoyed the beer that came with the store.
Jesus' first main store was known as the "Hollywood Poolhall & Tumon Grocery Store" located at the now present day parking lot of "Stanlees" in the heart of Tumon. Upon selling the land in Tumon, he then moved his family to Dededo, where he opened the "Magic Hill" store in which he operated with his children. The store became popular amongst the locals in the area and still remains in the same location to date. It is on a lease contract.
Jesus' endeavor in running the Store was not an easy one for the single father of ten children. The loss of his wife, Agueda, due to child-birth left the businessman to fend for his children and become both father and mother. The number eight child of the ten was Louisa. She was the one whom Jesus entrusted his assets and businesses. Louisa, like her father, was a very business-minded person and took a lot of chances in the game of business. She married Roland V. Ada, the youngest son of Jose and Regina H. Ada of Tamuning. Roland was a former army Engineer and is now retired under the Guam Power Authority.
Upon taking over the "Magic Hill" store in Dededo, Louisa expanded her ideas to a whole new level of business that her father could only dream of. She decided to take up a lease contract which resulted in the "Mini Camachile Tree Store" in Windward Hills, Yona. The store was nothing like her pool-hall/game-room and was appropriately named after the tree that grew next to the store, a Camachile tree.
Riding her wave of ideas and through the opportunities that arose eventually, Louisa expanded her business by opening "Magic Hill Store", "JAM Janitorial", "Che'lu's Mini Mart" in Agat, "Lil' Bob's Cafe'" at the Agana pool, "Ma'anao's Catering", "Mother's Day Store", Sayama's Video", "Sayama's Feed", "Tendan I Sengsong" and the new franchise "BJT Entertainment". Using her financial business practices, the Mini Camachile Tree Store was the staple that made everything possible.
Louisa's business practice was pretty simple: being honest, promoting customer satisfaction, and staying in compliance with the governmental aspects of the business world. Moreover, her success also comes from learning from experiences at the expense of losing. Louisa has lost the roof over her head due to natural disasters like Typhoon Russ, and as recent as Typhoon PongSong-ha. No matter what happened, like many business people, Louisa kept optimistic of the future with the intent of longevity when doing business.
There are many rules and regulations that a store must endure, but these rules and regulations are in place to not only protect the store, but to maximize a store's potential not only in business, but more importantly, in the community.
The importance of staying in compliance with the governmental licensing, rules, and regulation is at the forefront of operating the business at the Mini Camachile Tree Store. The "trick" is not to draw any unwanted attention to the business. For example, when the media covers a restaurant that does not use ethical practices, the restaurant draws unwanted attention and eventually loses the public trust as well as its rating of A,B or C.
Each rating represents the infractions or demerits that the business may incur during an inspection from the government's Department of Public Health and Social Services. An "A" rating is based on an assigned demerit score of10 or less demerit points. The placard indicating the stores' rating is also required to be placed in a conspicuous space for the customers to see and become aware of the store's rating grade. A demerit can range from dirty floors to an un-kept restroom. The general maintenance of the store is the primary focus of the inspector. The inspector represents the general public and it is their responsibility to hold the store accountable for the infractions the store may incur.
In turn, the store's managers and workers must always be aware of the store's operations ranging from product expiration dates, to making orders and inspecting the items coming in and the general cleanliness of the store for a smooth operation. It is also during an inspection that the inspector takes the opportunity to relay important messages or notices from the Department of Public Health and Social Services. For example, a printed statement from the Director of the department would like to give the store a kind of "heads up" on things that are current and request that the store check their shelves for items that can be potentially dangerous if consumed by anybody.
In the Mini Camachile Tree Store, these notices are usually taken care of as soon as they are received. Things ranging from lead-based toys, potentially hazardous foods, a certain kind of toothpaste that is being recalled by the manufacturing company and proper temperature for refrigerated foods as an annual reminder.
The Department of Mental Health and Substance Abuse along with the Department of Revenue and Taxation really play an important role in regulating the stores as a part of the tobacco control act of 1998. The intent of the program is to take underage "smokers" and have them enter the establishment and request to buy a pack of cigarettes. The cashier must be able to identify if the person is a minor and not of age to consume the product. If the cashier fails to identify the minor and fails to check for identification, he or she has earned the store a penalty of monetary proportions. However, if the cashier successfully identifies the minor and asks for Identification, or refuses to sell the minor the cigarettes, then the cashier has played their part in maintaining a healthy Guam. The cashier will receive a "Certificate of Compliance" signed by both of the Directors of the Department of Revenue and Taxation and of the Department of Mental Health and Substance Abuse.
The Department of Revenue and Taxation issues business license to individuals who wishes to start a business on Guam. In opening its business, the Mini Camachile Tree Store experienced the same procedure. Depending on the type of business that will be conducted, the business will be required to obtain clearances from various government agencies. For example, if somebody wants to convert his/her home to rental property, this individual will be required to obtain clearances from the Department of Land Management and the Department of Public Works (DPW). Upon approval of the Business License, the business will be issued a Gross Receipts Tax (GRT) Account Number for purposes of filing and paying your GRT.
The Mini Camachile Tree Store must be prepared for many things at all times. For example, the Americans with Disabilities Act (ADA) provided that because of programs the store houses, the facilities must also conform to the rules and regulations that follow the program. The store in turn, had rails, a ramp, and a reserved handicap parking space installed to meet these requirements.
As a pre-caution, the store has a camera system in place and witnesses according to the shift. For example, the afternoon shift is a low-activity shift, so the cashier usually works with management during these hours. On the other hand, the night shift is a busy shift, so the cashier is teamed up with stocker or stockers to cover the areas that the cashier is too busy to supervise as a preventive measure towards injury to the customer.
There are a lot of unforeseen elements that contribute to the legal matters that the store must address like if a customer slipped in the store and was injured, we must always be alert and never let your guard down. But to take the pre-cautionary steps to prevent such a scene is a virtue to ensure and safe working and shopping environment, but more importantly does not jeopardize the business.
RUNNING BUSINESS IN A SPECIAL ENVIRONMENT
In a small business the key is being able to balance the forces that influence market operations, including all economic activities, competitors' actions, and technological changes to name a few. In order to keep up to speed in the competitive market, the Mini Camachile Tree Store strives to attract customers by providing them with convenient services. For example, during the Government of Guam pay periods, the store functions on a check-cashing system that protects the interest of the store. Consumers are able to cash their checks, but in turn will buy up to ten percent (10%) of the check cashed according to store policy. Another example is to accommodate influxes of grocery shoppers on the beginning and end of each month due to the food-stamp program, otherwise known as the Electronic Benefit Transfer (EBT-the Guam Quest card), in which each card holders' account is replenished during this time. The technologies surrounding the EBT program have evolved from paper Food Stamps to the now electronic card-swiping system. Each store of the Mini Camachile Tree Store maintains a card machine in addition to a store I.D. number and pin number to access the account when handling banking duties.
The Mini Camachile Tree Store operates its business on a dual system. There are two generations that operate the store, and the older generation relies heavily on the "traditional" method rather than learning the technological system. All book-keeping is manually recorded in simple notebooks and receipts are filed in boxes chronologically. Records of everyday sales, payments on accounts, accounts receivables, and cash on delivery status (C.O.D.) are manually recorded. On the other hand, the younger generation of the store family conforms to the electronic method of record-keeping when handling some business ranging from e-mailing interested vendors to record-keeping using programs like Microsoft Excel. The younger generation is also adequately trained on registers and both the EBT and Credit Card machines. They attend all workshops offered by the Department of Public Health and Social Services and the Woman Infant Child program (WIC) to keep the store updated on both technological changes as well as updated information in regards to the store and government policy.
To the Mini Camachile Tree Store, this dual system does not hinder the store from improving, but rather it enhances the operation. In the case of record-keeping, there are two models in place that will eventually help the store accountant/GM by giving her information and she will then conclude accurate numbers for taxation and general financial purposes.
As a locally-owned business, the Mini Camachile Tree Store has always welcomed outside vendors to accommodate the popular taste of Chamorro food, such as tamales gisu, empanada, coconut candy, etc. This outsourcing is sharing the wealth of the business with the community.
As a family store, the Mini Camachile Tree Store also provides a family-friendly environment even down to the music that is played in the store. The cashiers are well aware of their environment and are able to assist customers in almost everything they ask for, ranging from the use of restroom facilities, phone, to directions to the nearest golf course or hiking trail. In addition, the cashiers and management never show that they are having a "bad day", as business is an attitude, and a positive attitude renders positive return.
When a typhoon threatens Guam, the community surrounding the Mini Camachile Tree Store shifts the store into over-drive. The shelves must be stocked to its limits to accommodate the high demand of a product e.g. water, batteries, propane fuel, among others, all in efforts to be adequately prepared for the typhoon.
A rainy day also forecasts the sales of the day. Because of the human tendency to stay dry, most people opt not to pull over to the store during a rainy day just to get wet while running inside the store to buy a drink, but they would brave the elements if they needed something like a can of soup for a sick family member. So in a sense, the rain separates wants from needs which in turn make the store sales reflect that indication. While during a hot sunny day is the vice versa of the rain forecast sales. It means a successful business day for many stores. The hot sun promotes drinks, ice, ice cream, etc., all for the trip to the beach with the family and/or the golf course with friends.
The natural environment around the store also presents what is inside as well. A dirty parking lot and un-kept lawn is not an inviting scenario to shop. So the lawn must be kept and a clean parking lot at all times. This is always a priority. Part of being a business is selling an image. That image must be well maintained to keep loyal customers given that they like the environment provided for them.
The internal environment at the Mini Camachile Tree Store transcends from co-workers to family. The upside of a family business is just that, family. Nothing is explicit and everyone is aware of each other's function and must respect each other in order for the business to be successful, by osmosis. And the downside of the business is again, family. With each personality within the business, some may clash with others, but unlike a co-worker who goes home every night, you live with your family. So each problem is usually taken care of from a family standpoint.
1. What are Louisa's main business strategies?
2. Conduct a business environmental analysis of this case. Be sure to include the following:
* The Economic Environment
* The Technological Environment
* The Political Environment
* The Legal Environment
* The Cultural Environment
* The Natural Environment
* The Internal Environment
3. Describe the business-government relationship for a small family-owned retail business in Guam.
Ning Li, University of Guam
KenJoe Ada, University of Guam
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|Title Annotation:||SPECIAL NOTE ISSUE: SPECIAL ISSUE 1|
|Author:||Li, Ning; Ada, KenJoe|
|Publication:||Journal of the International Academy for Case Studies|
|Article Type:||Case study|
|Date:||Dec 15, 2009|
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