Short Cycle
Katie’s custom-engraving logo business is sheltered by the Bullet’s Award Inc. The company is owned by her uncle who is the overall manager of the entity. Katie works as a part-time employee or for longer periods during the summer holidays. The idea of logo engraving is solely derived by Katie in the company is found to be of greater benefit to the entity. She identified a swift in demands for custom engraving as an opportunity in her uncle’s entity.
However, the inadequacy of skills, decisions, and narrow research were major setbacks to the implementation of the idea as a personal business since it required development to obtain relevant information. Another opportunity that is available is the presence of stock images for engraving hardware when one buys a machine. As indicated in the case, the images are generic; hence, a competitive advantage does not exist. Lastly, the biggest problem that Katie faces is the inadequacy of capital to start her own enterprise. This situation is evident from the case where she discussed the idea with her uncle.
Long Cycle
In the context of the case, it is noted that Katie is on the verge of either going back to school for graduation or venturing into the small-scale business. The sources of such problems emanate from the fact that Katie has inadequate capital and limited information on the market environment that are paramount to the development and implementation of the idea. Taking a bold step to put the idea into practice is paramount to its successful execution. The capital required to run an individual entity is a basic requirement that Katie needs to fulfil. The knowledge about such factors will also lead to the identification of the specific market niche that will favour the new business. It is also important for the formulation of apt communication strategies that are paramount to the delivery of the products to consumers.
Analysis
Cause and Effect
Various problems and opportunities that have not been nurtured in the case can be traced back to their source. Katie cannot trace such problems alone since she is unable to make the appropriate decisions on the aspects of the development and implementation of the idea. The case reveals that Katie must make a choice of either going back to school for graduation or starting the small business. Being an entrepreneur, there is a need to further her skills through studies. However, conducting the two activities at the same time can be hectic bearing in mind that a starting capital is also required for the success of the business.
There is an overreliance on the image engraving systems amongst the engravers in the Red Deer Region. This situation is evident in the case where most of the images are generic. As a result, the business that has ventured into logo engraving can fail to gain a competitive advantage. More research that is based on innovation has not been conducted to examine such businesses; hence, quality engraved logos among other products are minimal. This situation has been caused by the absence of research to ensure more quality engraved products in the Red Deer market.
Various causes of the mentioned cases can be categorised into qualitative and quantitative methods. The cases presented indicate that only Katie was skilled in designing the logos and other engraving products. The competitors to the business as mentioned in the case also have inadequate skills to use effectively the computerised systems to engrave quality products. This situation is a clear indication that both the company and its competitors have a problem of producing low quality products. A qualitative cause of poor products emanates from the human resource system whereby most of the entities cannot recruit employees who are highly skilled.
Constraints and Opportunities
The case presented indicates many opportunities that exist in the Red Deer market. Katie has identified most of such opportunities. One of the opportunities that were identified included low-quality engraved products that existed in the market. Although the situation had been deemed a disadvantage, Katie saw it as an opportunity. The realisation of the existing quality gap compelled Katie to seize the opportunity to ensure that her customers were satisfied.
As noted in the case, Katie used her skills to create custom logos for the Bullet’s customers. The logos were then engraved to metals and wood neatly. A notable case is where she engraved a computer format logo. This situation attracted most of her customers who performed a repeat business. She realised that the customisation was very important in the maintenance of the business since it attracted more customers.
Further elaboration of the generic images that accompany the engraving hardware and software systems were evidenced where Katie spotted the opportunity to create her own logo business. Although such opportunities existed in the market, various constraints emerged whereby the images were designed by many engravers who had purchased the programmed systems. A creative and innovative entrepreneur to nurture the idea to create a more innovative product was unavailable due to the deficiency of skills, knowledge, and in-depth research on the engraving art.
Another opportunity that was identified by Katie was the appropriate technology for the engraving business. As revealed in the case, most of the local artists in the Red Deer market were not conversant with the computer supported engraving. This situation was taken as an opportunity for producing the high-quality engraved logos that were computer-based. The resulting product was a breakthrough that led to the satisfaction of many customers. The emerging competition also compelled various local artists to use the new technology to engrave more products.
Katie countered her constrains by focusing on customer loyalty. She established and maintained an affirmative relationship with the consumers. This situation is seen through her involvement in producing products that are preferred by most customers. A benefit is that she creates the awareness of the customer preferences and their potential needs of various aspects of the business in terms of products and/or services. A minimal turnover of the customers is also realised.
Qualitative and Quantitative Analysis
Qualitative and quantitative analyses involve the inclusion of various analyses of decisions that are either tangible and/or intangible. These decisions must have effects on the business under consideration. An example of a quantitative analysis noted in the case is where the Bullet’s Award Inc. incurs low expenses. This state of events is seen in terms of the monthly expenses such as rent, internet and phone charges, accounting software, insurance, supplies, internet marketing, furniture, web page development, and wages as indicated in the table below.
A quantitative analysis of such data will indicate that lowering the expenses will make the company trade at fair and affordable prices on its products; hence, more customers will go for its products that are of higher quality besides being offered at reduced prices. This situation will ensure a net increase in sales that will in turn boost the profit margins significantly among other benefits.
A problem that the company is likely to face is the loss of skilled personnel such as Katie due to the lower monthly wages offered to the employees. The idea that Katie wanted to start her own enterprise can be owed to the fact that the low wages failed to meet the needs of the employees in the company. The approximated amount of wages upon the implementation of the private enterprise was $36000 per year after gaining a profit margin of $ 6,200. She estimated that the production (1200 to 1400 images) surpassed her uncle’s projection of generating 1000 images. A disadvantage of this perspective analysis is that there is no indication of goodwill, barriers to entry, and long-term growth based on the target or ever-growing customers.
Generating Alternatives
The solutions to problems of starting such an enterprise do not necessarily need the reliance on the causes of the problems mentioned above. Alternatively, she can start her own entity by adopting various alternative strategies.
Being equipped with Relevant Information
It is indicated by the case that Katie had inadequate information on the competitors. This situation was a clear indication of an inadequate market analysis. Katie needs the relevant information on market statistics, trends, and consumer behaviour among others. Since she identified that the business is an e-commerce type, she did not have to rely on her uncle’s ideas solely. More and relevant information about the business establishment were available in online sources. She should have obtained more information from different sources to ensure that the relevant knowledge is captured. In addition, she must conduct a thorough market research via various telephone directories, the Internet, catalogues, and compilation of statistics among others.
Segmentation of Customers
Katie’s customers are not divided into segments. The segments that should be included in the market are homes, businesses, various organisations, and government offices among others. When the market is divided into various segments, it is easier to address the specific needs of the consumer trends, pricing patterns, and advertisement criteria among others. Segmentation also promotes the identification of specific customers with a view of focusing on the individual needs.
Market Size and Growth
It is clear that Katie knew the total number of people who resided in the Red Deer market. The only information missing is the specific sizes of the different segments that exist among the 90,000 people. Growth is also another aspect that she should have considered for her new entity. Katie did not specify the percentage change as a forecast of the market. She must clearly identify if the customers in every segment are either increasing or decreasing annually. The forecast must also indicate the total number of possible purchasers in every segment besides deciding the change percentage before the projection.
Market Trends
A market trend must be understood clearly to remain aware of its influence on the purchasing behaviour of various consumers. For example, the engraving of the logos trend for the consumers should be known well to respond to issues concerning the quality of other subsidiary and substitute goods. There is also a need to appreciate how various people respond to the computer-based engraved products.
Collaboration
Sourcing capital has been a problem for many entrepreneurs; hence, their dreams and ideas go to waste because since many they fail to implement their ideas. Since Katie had inadequate capital to start her own enterprise, forming the collaboration with individuals who have cases,no ideas but had capital was essential to ensure the accomplishment of the perceived project. A good idea is that she had approximated about $27000 to invest in both hardware and software systems. The formation of a partnership with others can be significantly productive.
Decision Criteria
Being equipped with information and encouragement of collaboration is paramount to a successful business start-up. Partners will provide enough capital that will help her put the idea into practice. It is noted that the competitors in the market are only five with undeveloped bases that can offer stiff competition. By collaborating with her colleagues, she is in a better position to open a bigger enterprise that can result in the realisation of more returns.
This situation can ensure an increased market share since she is the best engraver who exists in the area. The costs of production will be reduced through minimal advertisement. Most of the advertisement will be conducted on a digital platform; hence, other forms will be omitted. In terms of the qualitative analysis, skills are the key to success. Katie is highly skilled in the engraving of logos and other products. Through her hard work, it is noted that she produces high-quality products besides constantly exceeding the consumer expectations.
Assessment of Alternatives and Select Recommended action
Various alternatives were ranked from low medium to high with respect to the increasing numbers 1 to 3. Access to the relevant information was issued as the highest rank (number 3) followed by the formation of collaborations at number 2. Matters concerning the trends and size of the market and growth got numbers 1 each. She needs to conduct extensive research to ensure that she becomes conversant with the consumer trends, the viability of the idea, and scope of the competitors in the prevailing market situation.
This set of circumstances will help in the accumulation of quality and relevant information about the market trends and consumer behaviour. It is also recommended that Katie should conduct both qualitative and quantitative surveys with a view of studying the market dynamics that can lead to the success of the business.
Action Implementation Plan
Katie should form collaboration with three partners out of which she should contribute to a minimal percentage in terms of capital. The situation was an obstacle to her. The most critical positions that she should handle are human resource and production because she is skilled on the design and development of the recruitment and training systems to ensure the hiring of a competitive workforce. The kind of product to be produced should be well known to facilitate the handling of employees.
The recruitment and training process is a critical process in any developing business. The overall manager should have the largest share in terms of capital while the marketing docket should be accomplished by other persons. These activities should be performed within a span of utmost one year. It is identified that various challenges are faced by entrepreneurs hinder them from executing their business ideas.
Most entrepreneurs are overwhelmed with the negative idea of failing in the end. Ideas such as the engraving of logos possessed by Katie were hard to implement owing to the inadequate capital and limited information on what was required of her to run the entity. The analysis of such cases can grasp an idea of what to be done before embarking on the business. The implementation of the plan also demands an analysis of the target market to determine the viability of the new product. This strategy will be realised through the development of knowledge about the existing products and their corresponding market shares. Lastly yet importantly, the implemented programme should be monitored frequently to ensure the detection of any in appropriate logo designs that do not meet the consumer expectations.