Tanglewood Case

Introduction

The Tanglewood is a chain of general retail store which deal in items such as clothing, electronics, appliances and home décor. It operates in the moderate price niche and its strategic distinction is an “outdoor” theme, with an outdoor living section in each of its stores. Tanglewood targets middle and upper-income customers and distinguishes itself by its simple yet elegant and uncluttered design concepts. Its mission statement is among other things “… to accomplish its goals by adhering to the core values of responsible financial management, clear and honest communication, keep performance and customer service in the forefront”.

Founded by best friends Tanner Emerson and Thurston wood in 1975 as a single store in Spokane, Washington which sold a collection of outdoor clothing and equipment they designed themselves. By 1984, Tanglewood had blossomed into 10 stores. They expanded further and successfully, in the 90’s, by purchasing other existing stores to a current total of 243 stores operated within the US. Furthermore, Emerson and Wood found that increasingly the corporate administration is a more pressing concern and so, prior to further expansion, the company needs to consolidate its management strategy and ensure that the company’s mission is achieved.

Current Operating Environment

The return on revenue for Tanglewood as shown on the table below, illustrates that the company is on top compared with other competitors. The return on assets and income both show that the company has effectively managed its assets and is a bit fair but needs adjustment respectively. Tanglewood targets the upper and middle income consumers with moderate prices, and at the same time providing quality and durable products to its customers.

Profit Ratios

ROR (%) ROA (%) ROI (%)

Dillard’s 1.7 2.0 5.5

Federated Dept. Stores 4.0 4.3 11.3

J.C. Penny 1.1 1.9 5.8

Kohl’s 7.1 11.4 20.4

Saks 1.2 1.5 3.1

Sears, Roebuck 3.8 3.3 24.6

Tanglewood 4.1 12.7 17.2...