b. What is the Opportunity, People, Context, and Deal
c. What can go right? What can go wrong?
*People
Steven Rogers (CEO)
-Business analysis
-Management
-Personnel management
-Purchasing
-Consulting John Smith (Production Supervisor)
-15 years on the job Geri Wandall (Office Manager)
-5 years on the job Production Workers
-67% of workforce is over 40 years old & 55% of workforce has limited experience (1-2 years) *Opportunity
Competitive Advantage
-Industry leader in shadow-free lampshades
-Reputation for quality and service Market Characteristics
-Market size is 20 million
-Growth is 5% per year
-34 competitors (Low competition due to transport costs)
-Seasonal sales (Summers are slow / Holidays are good) Product Characteristics
-Hand made
-Plenty of variety in shapes, materials, colors and trim
-Made to specifications
-Slow replacement interval Manufacturing Characteristics
-Production is started with an order
-Made to specifications Distribution Channel
-Department stores
-Independent retail stores Importance of Scale Economies
-Only important for sourcing raw materials Working Capital Profile
-Most of the sales are on credit
-Working capital as of 1987 was $139K Plant & Equipment Requirements
-Machinery and furniture are currently $32K and are projected to increase to $50K Potential Opportunities
-Increased cash flow due to lower owner salaries
-Selling lampshades to high quality lamp manufacturers
-Building retail outlets
-Taking advantage of minority incentive programs Context
-Computers were on early adopters phase
-Bonds and T-bills are at above average rates What can go RIGHT? - The company can transition smoothly & Sales can increase dramatically if a deal is landed with Her’s Lamp Shade Shoppe in Wisconsin (Carry Silk-o-lite but not fenchel) - The lease is renewed at the same monthly