Custom «Managing in an Entrepreneurial Way» Essay Paper

Entrepreneurial businesses are emerging as the leading market setters in the modern business world. As such, the entrepreneurial management planning is needed to ensure that the conception and execution of business is not derailed through a poor strategic management planning. It is essential that a business re-aligns its strategic position in order to capture the market needs, while tailoring their products to satisfy those needs. Therefore, an entrepreneurial company has the potential to grow exponentially with the adequate management planning. This ensures that the company offers the best satchel bags in the market, while, at the same time, protecting itself against the unscrupulous competition and infringement of its patents through pirated products.

This paper intends to highlight the inception, challenges and marketing strategies employed by the Cambridge Satchel company. Significantly, the paper will highlight the company’s entrepreneurial management drawbacks and strengths, which have made the company a success. The Cambridge Satchel company, like any other entrepreneurial company, is faced with significant logistical and operational challenges; however, the implementation of a strategic entrepreneurial management plan has the potential to avert a significant percentage of marketing problems.

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Meanwhile, the market positioning is a critical factor of a successful entrepreneurial company. The existing markets are characterized by vigorous competitions for a share of the market. Therefore, the entrepreneurial planning is essential in ensuring that the company tailors its products according to the identified market. The exploitation of identified opportunities and potential for business in the market are critical aspects of the entrepreneurial management. Meanwhile, safeguarding the going concern of the company is premised on ensuring that the company’s products preserve their unique attributes. These factors are critical in defining the entrepreneur and their command of the market; thus, the evaluation of the Cambridge Satchel company’s entrepreneurial management is critical in determining the company’s strategic planning aimed at commanding the satchel production, distribution and retail industry.

Background Information

The Cambridge Satchel company was started in 2008 by Julie Deane, in Cambridge, United Kingdom. As an entrepreneur, Deane had no previous experiences in the satchel industry. However, her business idea developed as a consequence of her desire to provide a better education for her children (Reuters 2013). Deane’s entrepreneurial idea was inspired through her children’s desire to possess satchel bags that are similar to those illustrated in the Harry Potter books they were reading. This inspiration drove Deane to conduct a market survey, where she discovered that satchels she intended to make for her business were no longer in the production. This led to challenges of finding a willing and ready business partner, since the satchels she intended to make could not be produced using conventional sewing processes in factories. Therefore, satchels required to be custom made through the manual development. The lack of the automated input in the development of the bag made it difficult, since it was challenging to find a person willing to develop satchels manually, in line with Deane’s ambition to develop “a classic British design” (Chernikoff & Yotka 2011). While the idea of developing and creating satchels for sale was promising, Deane had to find a ready market for her intended product. The search for a ready market took her approximately three months; before she could identify her first potential market in a school that required its students to carry satchels. However, the market was not within her locality, but in Scotland; her visit to the school’s supplier marked her initial steps towards the development of the Cambridge Satchel company. For her first supplier she made approximately 100 bags for the school in a year, Deane convinced him to make the first batch of satchel bags for her (Chernikoff & Yotka 2011). She took photographs of herself and her children holding the bags on various locations in Cambridge and posted them on her website. These photographs were the first advertising and marketing strategy in her entrepreneurial business venture.

The demand for satchel bags has increased significantly after the first batch was produced. As a result, Deane had to look for the additional production capacity in order to satisfy the increasing demand for satchel bags. She contracted a leather working company, which was seeking for the additional work to sustain itself. However, the company did not have the knowledge of making satchels bags. Therefore, Deane had to refer the new manufacturer to the first maker for the orientation and training on making satchel bags. The demand for satchel bags continued to increase to 800 bags a week (Chernikoff & Yotka 2011). However, the contracted manufacturer was infringing on the Deane’s patent; through the creation of knock off bags that were sold via a website, which was a replica of the Deane’s website.

Initially, Deane observed that her products were not moving as fast as she had hoped; therefore, she opted to create a diversification in her product through the creation of colored satchel bags. This led to an increase in sales, since consumers were provided with various colors  to choose from; additionally, the creation of fluorescent neon based colored bags increased the company’s market share. Meanwhile, as a result of the patent infringement by the manufacturer, the company could not meet all the consumers’ demands; therefore, Deane opted to open a factory, which was supposed manage production of the bags directly. The creation of satchel bags demands a patience and craftsmanship, since they are handmade; consequently, the company has 84 employees and plans to develop apprenticeships in an effort to create the awareness and revive a handmade leather manufacturing. The Cambridge Satchel company was initiated with a startup capital of 600 pounds (Chernikoff & Yotka 2011). In 2010, the company's profits amounted to 2.2 million pounds, whereas the year ending 2011 was expected to generate revenue of 10 to 15 million pounds. This is attributable to the quality of the bags and the affordable prices ranging from 80 pounds to 130 pounds per bags (Eccles, 2012).

SWOT Analysis

Strengths

Satchel bags have been widely demanded in a market, which was characterized by synthetic and conventionally made leather bags. Therefore, the development of a custom made unique brand of bags contributes towards the company in terms of having a significant competitive advantage. Satchel bags have unique attributes, which cannot be found in any other bag; therefore, they offer a distinct utility to users. The qualitative aspect of satchel bags offers consumers qualitative products at lower prices. Additionally, the use of the information technology in the company’s advertising, marketing and sales has ensured that the company is compliant with the technological developments (Hanival 2009, p.20). Therefore, the company’s website and online order requisitions give it a competitive advantage, whereas the clients make orders in advance. Therefore, the company can predict the expected production levels, costs and revenues for any given period. Therefore, the company’s strengths are attributable to the creation of a unique qualitative brand, which appeals to the younger generation and is readily accepted by the middle and older generations. As such, the Cambridge Satchel company has developed a product, which does not discriminate on the age of the consumer, but is readily acceptable by all. Meanwhile, the adoption of the information technology has ensured that the company has a direct interaction with its clients, suppliers and other parties with a vested interest in the company. Therefore, services are offered promptly, and customer orders, demands and concerns are addressed with little or no delay, since the information is readily available.

Weaknesses

It is essential that an entrepreneur is able to meet and satisfy the customer demands promptly, while safeguarding the company’s fundamental business secrets. The Cambridge Satchel company relies on hand made products; however, the modern manufacturing processes have shifted from manual operations to automated operations. The company has failed to employ a technology in its manufacturing processes; hence, it relies on manual designs, assembly and refining of its products. Meanwhile, the company’s competitors have embraced technological advances, where production is automated (Nieuwenhuizen 2007, p.206). In the event that a single worker is unable to work, the company’s overall output is affected, since the individual’s output cannot be met. In the light of this, the company relies significantly on its human capital. However, the dynamics involved in people’s lives are unpredictable; as such, there is a high likelihood of failure to meet the targeted production output as a result of human based factors such as the worker incapacitation.

The company’s trademark secrets should not be divulged to individuals outside the company’s internal groups. Therefore, the failure of the initial manufacturer to meet the demand should not have led to the commissioning of another manufacturer. An increase in demand should not be a reason to expose the company’s trade secrets to other individuals, who may or may not be trusted. Therefore, the initial manufacturer should have sought ways of increasing the production capacity with the help of the company (Nieuwenhuizen 2007, p.130). However, in the event that the initial manufacturer was unable to increase the capacity, the company should have enforced binding, non disclosure contracts, which safeguard the company’s patents and trademarks from piracy in terms of the second manufacturer. This would have ensured that the second manufacturer does not disclose or expose the company’s patents to potential infringements such as the creation of knock offs or websites aimed at defrauding the company of its customers and revenues.

Opportunities

The development of satchel bags has enabled the Cambridge Satchel company to grow its revenue significantly; however, these revenues have been realized from sales targeted mostly at ladies. The unique nature of a satchel bag provides an opportunity for the company to diversify its products (Hess 2006, p.151). In the light of this, the company should develop bags, which are unisex in nature or develop a product that should serve the male market. It is evident that bags are not unique to women, but are also used by most working men. Therefore, an opportunity exists in the male market, which has not been exploited. Male students and male workers are among the potential customers, who have been neglected in the development of satchel bag. As such, the company can develop satchel bags tailored for the male clientele.

Meanwhile, the performance of satchel bags in Cambridge and the surrounding regions should be perceived as a benchmark test for the company to expand its operations in the local and regional markets. The availability of a market for satchel bags is not restricted to the Cambridge region or the United Kingdom; however, the preference of fashionable bags and accessories is a universal phenomenon. Therefore, the company should expand its operations to other cities through commissioning the distribution and retail stores, which are unique to the company’s products. Additionally, the expansion exercise should integrate other products such as leather belts and jackets. These should be tailored to match the satchel bags; as a result, the company will not only be reinforcing its existing brand, but will also create the diversity in its product range. Furthermore, the product diversification will ensure that the existing customers do not venture into other stores; seeking leather products such as belts which the company can easily provide. This will not only grow the company’s market base, but will also result in an exponential increase in revenues (Chaston 2009, p.178).

Threats

The success of satchel bags has made the Cambridge Satchel company’s website be among the most visited websites. The company’s adoption of the information technology has enabled it to reach a large number of consumers. However, while the company enjoys the success in its increased sales output, it is threatened by individuals and companies, which infringe the Cambridge Satchel company’s patents through making illegal copies of satchel bags and websites aimed at defrauding the company through fraudulent sales and advertising. While the Internet has the capability of reaching large numbers of potential and actual customers, it is an economic tool, which is misused by unscrupulous individuals. These individuals create fictitious websites, which are exact replicas of the original or use the company’s name and logo in an effort to attract more internet traffic. As such, they misrepresent themselves as the real company or legitimate affiliates of the company.

The threat presented by the Internet fraudsters and individuals making illegal copies of the company’s patented products has the potential to alienate the company’s customers. This would lead to a mistrust and eventual abandonment of the company’s products (Daft 2012, p.216). The infringement of the company’s patents has led to the creation of inferior copies, which are represented as the original authentic products. Once, these are sold to unsuspecting customers, they are found to be faulty leading to cases of disgruntled customers. Meanwhile, the illegal sale and production of satchel bags by the company’s manufacturer is an indication of the extent of threats that the company faces. The infringement of intellectual property has an impact on the company’s image, which is tainted by the inferior imitations that are sold to the company’s customers. This has a net effect of steering customers away from the company’s products, since they may not distinguish between the authentic products and imitated copies.

Investigation Results

The evaluation of the Cambridge Satchel company revealed that the company has developed a unique and qualitative product. However, the company uses a manual production of satchel bags, which are handmade. Hand making of satchel bags creates a customized and unique product, which distinguishes itself from other products in the market; however, the production levels are lower, when compared to an automated production process, which has the capacity and ability to make a significant number of bags in a short time. Though the production levels have grown from 3 to 1500 bags per week (Rickey 2011), there is an un-exploited potential, which can be utilized if the company develops an automated production process, while preserving the product’s integrity.

Meanwhile, the strategic management of the business through the use of the information technology has proven to be advantageous and risky at the same time. The strategic use of the Internet to advertise, market and sell the company’s products has enabled the company to realize significant revenue growths. As a result, the entrepreneur has been able to create a company owned production facility. Meanwhile, it is evident that the use of the Internet has led to the infringement of the company’s intellectual property (Reuters 2013). This has led to considerable losses in revenues and increase in the number of complaints arising as a consequence of faulty products.

The commissioning of external manufacturers has led to the company’s intellectual property being abused through the unauthorized making of satchel bags. This has led to significant losses in revenue and potential customers. Meanwhile, the company’s unique product has no equal in quality and design; therefore, the company has opportunities to expand its operations to other markets through production facilities, distribution and retail outlets (Kuratko and Hodgetts, 2011, p.421). Additionally, as a result of the successful creation of the satchel bags brand, the company has the potential to expand its product portfolio through the development of other leather products, which are complementary to the existing brand.

Recommendations

The use of manual methods of to make satchel bags is effective in creating a unique and customized bag; however, the advances in technology have enabled manual functions in manufacturing of products to be automated. This has ensured that the production is affected as a result of human factors. Therefore, it is recommended that the Cambridge Satchel company should seek a method of automating the hand making process; this will ensure that the production is increased and expedited. Furthermore, the automation of the production will facilitate a prompt availability of satchel bags in the market. Consequently, the automation will reduce a waiting time for customized orders requisitioned by customers.

The company should engage in securing their products from the infringement by individuals, who seek to benefit from the company’s products through illegal means. This should include a physical theft of intellectual property with the intention of illegal reproduction and online activities aimed at defrauding the company and its customers. Therefore, it is recommended that the company should employ the information technology security professionals. This will ensure that websites infringing on the company’s products are identified and made to pay through the litigation. Meanwhile, companies and individuals identified to be responsible for the infringement of the Cambridge Satchel company intellectual properties should be made to pay damages caused as a consequence of the infringement. Therefore, culprits should be litigated against to compensate the company’s loss of revenue and cost the support given to customers, who bought defective imitations from these groups.

Additionally it is recommended that as a result of the previous infringement of the company’s intellectual property, external manufacturers should be made to sign and enforce non disclosure contracts, where the company’s intellectual property is safeguarded against the theft or misrepresentation through making illegal imitations. As a result, the consequences for infringing on the company’s products should be higher than the potential benefits accruing from the illegal reproduction of the company’s products. Meanwhile, the company has the potential to increase its capacity for other local and international markets. Therefore, it is recommended that the company should diversify its facilities, distribution and retail centers. This will ensure that the company covers a wider market, therefore, becoming a market leader in the satchel manufacturing industry.

Summary

In its initial days, the Cambridge Satchel company was producing 3 bags per week; however, this changed in a span of four years, whereas the production per week was 1500 bags a week. Meanwhile, the initial startup capital resulted in an average of 12 million pounds a year in revenues. The strategic entrepreneurial management planning enabled Deane to develop a unique product; however, she worked hard to create her brand through the customized handmade satchel bags and internet marketing strategy. Consequently, bags were sold at strategic prices, where the cost of a satchel bag did not exceed 135 pounds (Eccles, 2012).

The company’s development of a unique brand gave it a competitive advantage, which led to the availability of a ready market for satchel bags. However, the company was faced with logistical problems, which led to the company’s intellectual property being infringed. This led to the creation of knock offs. Additionally, online scammers picked on the satchel bags popularity and created websites purporting to be the authentic Cambridge Satchel company’s websites. These websites defrauded customers through fictitious sales and the sale of imitated products.

Consequently, the challenges, which have been observed, should enable the entrepreneurial management plan to tailored strategic measures aimed at preventing their occurrence in future. Furthermore, the company’s management planning should ensure that available opportunities and capacities are optimized. This will ensure that revenues are not lost, and customers are satisfied with the company’s products. Meanwhile, the preservation and improvement of the existing brand quality are the fundamental factors to be considered for the implementation through the entrepreneurial management planning.