Introduction
Squirrels have been a big threat and the major cause of frustration to bird feeders. They are big animals that mostly feed on birds. They have always been a problem to bird feeders.
To address the issue, the solar bird feeder was developed to tame the squirrels and also to ensure that birds are fed. The feeder was constructed using high technology that puts off squirrels with out harming them.
The solar feeder was constructed by Squirrel Defense, Inc. This company was founded in 1998 by Eld Welsh and Bo.
The main idea was to ensure that squirrels and other pests are kept off by the electric charge. However, this electric charge was not harmful to birds.
The feeder was economical as it ensured that the food meant for birds is not wasted by the squirrels. The feeder was also eco-friendly as it uses solar energy, which is reliable and can be renewed.
The energy is also environment friendly. This makes the solar feeder the preferred method for bird feeders.
However, after developing this unique product, the two forgot very critical factors. For instance, they were not able to develop a business plan, which would guide them on critical issues such as production, market analysis and organization of their company.
How the Solar Feeder Works
The model was developed from the common bird house and was converted into a bird feeder which had an electric shock that was meant to put off the squirrels. Inside the feeder, there were two copper tubes that were used as bird perches.
The roof of the bird feeder was made of copper. If a squirrel comes into the bird feeder and touches the copper tubes and the copper roof, the circuit becomes complete.
As a result, the squirrel receives a mild shock that puts it off from the bird feeder. However, the shock does not affect birds because their legs are made of cartilage and they do not have sweat glands.
The solar feeder is developed in two styles. There is the town style and the country style. The difference between the two styles was the material used.
For the country style, red cedar is used to make the sides but the roof remains to be copper. The town style is more expensive than the country style. For the town style, sintra material is used.
It is similar to PVC but more durable. The structure is more appealing due to the white finish and the copper roof.
The feeder is friendly to squirrels as it does not harm them. The shock developed is mild and it only keeps the squirrels off. The unit is unique and very successful. Consequently, the two have won different reputable awards.
Pricing
After developing the solar bird feeder, Ed and Bo came up with the terms and conditions applicable as well as the price list.
The country style solar feeder was sold at $229 while the town style feeder was sold at a retail price of $269. The wholesale price for the town style feeder was $161, and the country style feeder was $138.
However, even with the above prices, the company is not able to make profits and is experiencing problems in the area of finance.
There are several critical issues which need to be addressed by the management in order to ensure that the business remains profitable.
Problem Identification
In this case study, Ed and Bo developed a unique product that has won several awards in trade fairs and world shows. The project was well thought of as it appears that the bird feeders that were already in the market were not satisfying the needs of the customers.
The solar bird feeder was able to bridge the gap which existed between customers and the producers. However, there are several issues that were not well addressed.
The cost of production was high in relation to their competitors. The price set for their product was not properly calculated as it cannot meet the cost of production.
Another issue with this company is the lack of proper market analysis in order to know their target group. Market research was not done properly, and this made them waste a lot of money on issues that were not necessary.
A good analysis of the company sales showed that they were not able to meet with the rising demand. Most of the customers needed the feeder in the first quarter of the year, yet the company could not meet the customers demand during this time.
The company also lacked a business plan, hence scaring away investors. This implies that the company lacks a good vision, mission and goals. This was the reason why the company is not making good progress.
In order for the company to solve some of the core problems, they need to have a well developed business plan with all the seven chapters.
A good business plan should have the company introduction, description of the product dealt with, identification of the market, sale description, company’s strategies and financial plans as well as the organizational structure (Thompson & Strickland, 2003).
The company also needs to develop good marketing strategies that will ensure that their sales increase in order to meet with the rising demand. The company also needs to be strategic in production. For example, they should ensure that the feeder is available to customers when they need it.
Analysis and Evaluation
Financial Analysis
From the balance sheet, the company is not doing well financially. Long term debts are too high compared to the equity in the company. The debt to equity ratio is very high.
Therefore, the company is not able to meet its long term obligation in case of liquidation. The company’s current ratio also does not meet the required standard. The company cannot meet its short term obligation as the short term liabilities are higher than the current assets.
Another critical issue in the company is the number of sales made. The sales are insufficient. As a result, the company’s balance sheet has been affected. Due to insufficient sales and high expenses, the company makes losses that are transferred in the balance sheet.
It also appears that the developers of the feeder were more interested in developing the project without being concerned with other critical issues. The parties involved were not able to contribute enough capital to sustain the business. This resulted in high expense in the company, hence affecting their profitability.
The company expenses are also very high, and they do not match with the sales made. The cost of advertising is very high compared to the sales made. The cost of production is also very high, hence affecting the company pricing.
Market Analysis
From the case study, it appears that there is a problem in marketing the feeders. From the onset, it appears that the marketing strategy used by the company is poor. The use of a website to advertise appears inappropriate as the results achieved are weak.
Most of the customers could not access the page. Therefore, advertising through this means was not achieving the required results. Use of fliers is okay but the fliers need to be redesigned to ensure that they are more appealing to customers.
Business advertising through trade shows is quite okay, but it appears like they need to spread ways of advertising to ensure that they are able to realize more sales.
Another critical issue that needs to be addressed in the business is identifying the target market as well as the market niche. When they were developing the unit, they had identified their market to be people who were old.
However, they realized that their product was still attracting young people. Identifying the target group will help them design a customized unit that will meet the needs of their customers.
Recommendations
Squirrel Defense Inc Company has a competitive advantage over its competitors in that they have a unique product. The company’s critical issue is the lack of a business plan.
A good business will be able to address most of their problems and ensure the company is on the right track.
In the business plan, the company needs to outline its mission, vision and objectives. This will be like a guideline of where the company wants to be in the future. In their objective, they should ensure that they are able to cut down the costs of production and increase their sales.
Another thing that the business plan should address is the marketing strategy. They should ensure that they use the four marketing strategies ( DeMatteis, 2004).The company needs to identify the market, formulate goods ways of promoting their product as well as managing their sales.
Having a well planned marketing plan will enable them to increase sales, hence improving their profitability. In the marketing plan, they need to reconsider their advertising strategies. Use of fliers is effective, but they need to redesign the fliers in order to make them more appealing to the customers.
The owners should also convince more people about the uniqueness of their products and its advantages. They should look for other means of promotion such as through media, especially the use of media that can reach their target groups.
The company should also evaluate their production strategies. The company needs to ensure that they are able to meet the demand and the customers access the products in good time.
They should also explore other ways of ensuring that they cut down the cost of production. They should explore new technology that is cheaper and effective.
The last section that will be tackled by the business plan is the financial section. In this section the company should come up with new policies on how to service their debts in order to ensure that the financial position is not threatened.
However, new marketing strategies will increase sales that will improve the financial position of the company.
Conclusion
The above case study is a good example of the fact that a unique product does not always guarantee sales. There are other aspects that are very critical to ensure that a company remains profitable.
A good business plan for Squirrel Defense Inc Company will ensure that the company is able to meet all their sales, marketing, production, and financial challenges.
Reference List
DeMatteis, B. (2004). From Patent to Profit: Secrets & Strategies for the Successful Inventor. Garden City Park, NY: Square One Publishers.
Thompson, A., & Strickland, J. (2003). Strategic management: Concepts and cases. Boston: McGraw-Hill/Irwin.