Tanglewood Case Study

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Emerson and Wood eventually decided to rename their store chain Tanglewood in 1984. Much more rapid growth began around this time. As Emerson put it, “we worried for a long time that expanding would compromise our vision of a small, personable shopping experience. We had always wanted to run the type of store that we would love to work and shop at. Around 1984, after we had 10 stores, we realized we had developed a fairly successful blueprint for running stores with a strong base of employee participation, customer satisfaction, and profitability. So we decided to spread out to cover the northwest.”

During the 1990’s the expansion strategy really took root. Most of the expansion occurred by purchasing other existing stores rather than building new stores. Emerson and Wood had been heavily involved in the management of the stores, but found that increasingly the corporate administration was a more pressing concern. The company arrived at a regional structure for its operations. Emerson and Wood took on the positions of CEO and President of the company, respectively, while a team of regional managers more directly oversee day to day operations. The company currently has a total of 243 stores open in the states of Washington, Oregon, Northern California, Idaho, Montana, Wyoming, Colorado, Utah, Nevada, New Mexico, and Arizona.

Prior to any further expansion, however, the company needs to consolidate its current management strategy. The process of growth has been very quick in the last 5 years, and has involved buyouts of several smaller chains of department stores. While all the stores under the Tanglewood name have the same basic look, the management styles and human resource (HR) practices still reflect the historical differences between stores. Wood noted in a recent interview with Business Monthly, “Tanglewood really needs to slow down and take a hard look at our corporate culture. Right now, we need to consolidate and make sure we’re as close to the company’s original mission as we can be. Our success is due entirely to our strong culture—this is something we need to hold on to.” These concerns have lead Tanglewood to bring in external human resources consultants like you to help centralize the organization’s practices.

Another major concern for Tanglewood has been the westward expansion of companies like Kohl’s and Target. The possibility of more direct competition has lead Tanglewood to critically examine their HR policies and practices. For staffing, in particular, the organization feels there absolutely must be a workforce of committed, qualified individuals who will help carry the Tanglewood philosophy into the future.

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Competition and Industry[1]

The Tanglewood Department Store chain operates in the nondurable general retail industry, which fits into industry 452100 as classified by the North American Industry Classification System (NAICS). This industry engages in the sale of consumer goods including clothing, small appliances, electronics, and other housewares. The retail industry accounts for over $3 trillion in annual sales. Recent estimates indicate that the retail industry employs approximately 23 million people.

A comparison of several top retail stores is presented below. The operating revenues indicate total sales for these organizations, and the compound growth rate tracks changes in the sales for each retail chain. The financials show that Tanglewood is a moderately sized organization with strong growth potential.

Operating Revenues (in millions)

Compound Growth

Rate (%)

Employment (in 1,000s)

Number of Stores

5 yr

1 yr

Dillard’s

8,170

3.7

-2.6

54

330

Federated Dept. Stores

15,788

-0.3

-1.4

111

457

J.C. Penny

32,347

24.4

21.8

147

1,020

Kohl’s

9,120

0.7

1.1

85

600

Saks

5,911

10.2

-2.6

52

350

Sears, Roebuck

41,366

0.0

0.7

249

1,970

Tanglewood

7,200

9.3

14.2

53

243

Target

43,917

9.6

10.1

328

1,147

WalMart

244,524

15.7

12.3

1,500

4,800

Profit ratios

ROR