MAMA BEAR

Case Study No. 1

TITLE OF THE CASE:

Mama Bear

TIME CONTEXT / PERIOD:

Around 2012 – present

SUMMARY:

Five years ago, Mylene Bartolome, Antonette Evangelista, Mary Rose Ang, and Alalyn Ramos worked
on the idea of forming a business based on the emerging needs to help working mothers, thus establishing
the Mama Bear Child Care Center. Even if the Mama Bear was conceived almost effortlessly, its birthing pains
were quite traumatic. The partners believe however that they now have the winning formula and team. By
leasing the condominium unit of Mylene, their operation started with an initial number of four enrollees
which grew to 50 due to referrals from satisfied customers. The Mama Bear Center is a 'child on-cam' with
advanced and quality childcare services that would meet parents' needs. This will be the second home of
children from three months to four years old. Parents will be assured that their children are in good hands
because the center developed a childcare program and approaches that will make the Center as a dwelling
place in enhancing the social and emotional growth as well as the development of both physical and
intellectual skills of the children.

In their second year of operation, more companies became their institutional partners. The
company's workforce continued to grow during the past three years. The success story is based on attitude,
hard work, and frugality. At this juncture, Mylene broached the idea to the partners about the possibility of
expansion by capturing another market segment. This idea created the first serious disagreement among
three partners. Each has a different view on how to capitalize further on their current success. They had a
meeting about the idea and their thinking are summarized as follows:

According to Mary Rose, they must keep doing what they are doing right now. She sees their current
standing as a good one. Only the partners are in charge and there is no bureaucracy. "Mama Bear can make
a name for itself as a player but not necessarily to be a major player.", said Mary Rose.

Mylene agreed with some of the points of Mary Rose but claims that her perspective has a number
of flaws. Mylene can handle the concept of Mary Rose on keeping up their current pace but what she can't
handle is losing the opportunity of gaining millions. "We have a winning formula but we must leverage our
time and capitalize on it.", exclaimed Mylene. Building a bigger and stronger organization fast is her proposal.
She wants the partnership to be a corporation and sell up to 40% of their stocks to either a venture capitalist
or to the public. She believes that with a larger organization, they can look for more market opportunities to
further exploit their potential.

"I simply lack the foresight and the inside information of the total market potential to address the
growth and expansion opportunities in the metropolitan areas.", Antonette said. She also raised her concern
about Mylene's tendency of over managing of the business.

Alalyn wants to expand their business by establishing more centers but she focused more on their
employees. "The thought of having more centers would mean having more personnel.", as per Alalyn's
statement. She raised the problem about the high turnover rate of their employees and the creation of a
hiatus. She also stated the criticism by a radio commentator that they are not looking at the concern of their
employee's welfare.
 The partners ended their meeting with no specific course of action to take. They agreed to meet next
month to have more time to study and thresh out their differences.

I. STATEMENT OF THE OBJECTIVES:

1. To be able to determine if the Mama Bear Child Care Center should expand their business or not and
how the expansion will be.
2. To provide supporting ideas about the decision the partners should make.

II. CENTRAL PROBLEM:

What will be the next step for the Mama Bear Child Care Center? Should they expand or not?

III. AREAS OF CONSIDERATION:

Strength

 The company has a High-Tech facilities and is “in” with the trend.
 There is the assurance that the program that the company provides is excellent because it
was developed by a child care specialist.
 The company has a number of adequate institutional partners (e.g. PLDT, Philippine Stock
Exchange, Citibank, HSBC, and BPI)
 Good location which is in the Makati Business District.

Weaknesses

 There is no bureaucracy or a system of government in which most of the important decisions

are made. They do not have proper delegation of positions.
 Rapid turnover of employees creating a hiatus.
 Inconsiderate attitude of the partners. They do not consider the welfare of their employees.

Opportunities
 The partners can expand their business by capturing another market segment.
 There is an increasing demand for child care services due to the employment of women in
the workforce.

Threats
 Competition with other child care centers in the area.
 Losing the business program due to copycats who imitates their approach.
 Losing a percentage of clientele due to fear about what happened in 2010 in the Quirino
Grandstand.
 Tendency of losing some customers with Kids at Work due to their strategic location inside a
mall.

IV. ALTERNATIVE COURSES OF ACTION

1. The Mama Bear Child Care Center should expand their business from a partnership into a
corporation.

Advantages
  The center will be considered to be more stable entity than any other business forms. Thus,
it is easy to attract potential customers, suppliers, investors, etc.
 In a corporation, there will be a proper delegation of duties because they will be required to
arrange the organizational structure in order to govern the business effectively. There will be
bureaucracy among the supposed to be stockholders.
 The company will have an increase of their profit.
 Establishing a great bargaining power with suppliers and customers.
Disadvantages
 The partners will be required to contribute a large amount of money for the reorganization
cost. There may be a shortage of cash to meet expansion costs. Taking on more and more
work to generate more income places additional pressure on the company’s premises and
staff.
 Managing the business will be more difficult unlike in their current situation. The larger the
span of control the harder it is to manage.
 Too risky.
 The decision will be distributed to different people or stockholders. Unlike in their
partnership, the decision making rest only on the four of them.

2. Mama Bear should remain a partnership and keep on doing what they are doing right now.

Advantages
 The management of the business will be easier than in a corporation. Less people under a
manager, the easier it is to manage.
 Day to day operation will be easier because they are familiar with the operations.
 They do not need to spend for reorganization, establishing new centers, etc.
Disadvantages
 Losing to competitors because of a steady growth.
 There is a chance of falling because the company may not adapt to the changing business
environment.

3. Mama Bear should remain a partnership and expand by establishing more centers in their target
location.

Advantages
 Greater potential for profit
 The center will have new customers. Reaching out to these new customers with expansion
is one thing, but capturing them for long-term relationship building is primary. Growing a
loyal customer base is the best way to achieve stable and growing profits over time.
 Diversifying the business into new markets can reduce the risk from external influences like
competition or technology advances. Spreading the cost of the whole company to its
different branches.
 There is a possibility of partnership with well-known businesses because a larger company
might be perceived by others as more secure than smaller businesses, which means that the
company will be depended on for future business.

Disadvantages
  Getting involved in too many markets or products can cause the company to spread its
abilities out to the point that it does not perform well in any area.
 Larger businesses tend to be more complex than smaller businesses. This can make the
management of the business more time-consuming and expensive. They might need to
delegate management duties. As a result you can lose some direct control of your business
when it starts to grow.
 There may be a shortage of cash to meet expansion costs. Taking on more and more work to
generate more income places additional pressure on your premises and staff.

V. STRATEGY FORMULATION OR RECOMMENDATION

I therefore conclude that the best solution for the problem is the Alternative course of action #3,
which is to remain as a partnership and expand the business by establishing more centers in the Makati
Business Center. It is better stay on the middle among the three alternative courses of action. Being on a
steady pace is not good especially when the external environment is gradually changing. Being a corporation,
on the other hand, will be difficult too because I think that the partnership is not yet ready to be a
corporation. They are just five years in the business and they still have to learn more on how to manage a
business. In fact, they still have to fix the issues on their employees and the rapid employee turnover. They
must expand their partnership first and when they already know what to do and are not blind and numb of
significant data relevant to their business, they can reorganize their business into a corporation.

VI. PLAN OF ACTION

1. Resolve first the current problems of the company before expanding. The misunderstanding of the
partners about the proposed expansion and also the issue on the welfare of the employees.
2. After resolving the current problems, evaluate the company. Develop a Strategy and Business Plan.
Consider the company’s resources if it can accommodate the expansion and prepare a budget for
this new project. Consider also the past performance of the company and make use of it as a guide.
Look at the current situation and assess whether there are risks attached to the expansion. Lastly,
what are the possible impact of this expansion to the company in the future.
3. Find a suitable area for the location of the new centers that will be built.
4. Consider the market in the area. The partners must be sure who are their ideal customer. This is the
foundation of every business. Document how your prospects/customers think and behave. Every
decision starts with a desire created by internal emotion or external influence. If the company follow
the way they think and act then they can place their center right in front of them at the point of
decision.
5. Assess the presence of competitors and involve these assessments on the plan. Think of ways that
will set us to the competition and will be beneficial to the company but not harmful to the
competitors.
6. Establish close relationships with local business. The company could gain a strong competitive
advantage by creating a supporting environment of business partners.

VII. POTENTIAL PROBLEMS

1. What if one of the centers suffered great loss from its operations or of unforeseeable circumstances?
2. What if the Mama Bear expanded and the the difficulty of centralized decision making arise?
 3. What if Mama Bear experience problems about their employees like hiring persons that are low
skilled or there still is the rapid employee turnover rate and it affects the day-to-day operations?

VIII. CONTINGENCY PLAN

1. Let the other solvent centers assist the financial needs of the center at loss.
2. The company should shift to a Decentralized decision making to effectively manage a business center.
They should assign a branch operations manager so that he/she must be the one to make a decision
for his/her responsibility center.
3. Before hiring employees, they must make sure that the people that will be chosen are skilled and are
appropriate for the position. If they are already hired, the company should conduct seminars,
trainings, and team building activities for the employees at least twice a year. In this way they can
improve their employees’ skills and at the same time give them the welfare and care which had been
an issue about the company. Giving them benefits is a way to make them stay.