Kabloom BSAM
Written Report
Assessment o Symptoms (Brainstorm – find 15+ symptoms; list 5 symptoms)
1. Decentralization of his business led to his unawareness of many problems throughout the franchise
2. Loss of Profit due to bad decisions
3. No Manager Power led to customer dissatisfaction
4. Poor Hiring Criteria because of employee role confusion
5. Expensive distribution
6. Shrinkage of Inventory
7. Bad flower quality
8. Inconsistent Growth
9. Lack of exploitation of the market (ie;misunderstanding customers needs and wants)
10. Flower quality decrease because of insufficient experience in the flower business
Analysis o Common Causes
1. Franchising. Investors opposed franchising because it would not have immediate profit, as would a company owner store. With advice from his mentor, Hartstein pushed towards it, thus the “plunge into becoming a franchised operation”.The franchising route would also be a slower path to high returns. Also, Hartstein was “thinking less of the franchiser’s ability to pay the fees and royalties. Hartstein’s advisor made recommendation that worked in mature franchising operations but not as well in franchising start-ups, which was KaBlooms current state, for it was not yet a fully running and operational company, rather a small, starting up company. His decision to become a franchise would provide fast growth, but would require KaBloom to become a decentralized business, where several individuals (1 manager for every 10 franchisees) would be responsible for making decisions, preventing Hartstein from know everything that was going with his company - he was unaware of many issues. Problems with franchising were never-ending, and as Hartstein said, “this is how you get yourself in trouble with decentralization,” a sort of acceptance that decentralization caused many problems, which was an ultimate consequence of having franchised.
2. High Expensive Expectations - Hartstein wanted franchisee’s to love and share his vision,
Assessment o Symptoms (Brainstorm – find 15+ symptoms; list 5 symptoms)
1. Decentralization of his business led to his unawareness of many problems throughout the franchise
2. Loss of Profit due to bad decisions
3. No Manager Power led to customer dissatisfaction
4. Poor Hiring Criteria because of employee role confusion
5. Expensive distribution
6. Shrinkage of Inventory
7. Bad flower quality
8. Inconsistent Growth
9. Lack of exploitation of the market (ie;misunderstanding customers needs and wants)
10. Flower quality decrease because of insufficient experience in the flower business
Analysis o Common Causes
1. Franchising. Investors opposed franchising because it would not have immediate profit, as would a company owner store. With advice from his mentor, Hartstein pushed towards it, thus the “plunge into becoming a franchised operation”.The franchising route would also be a slower path to high returns. Also, Hartstein was “thinking less of the franchiser’s ability to pay the fees and royalties. Hartstein’s advisor made recommendation that worked in mature franchising operations but not as well in franchising start-ups, which was KaBlooms current state, for it was not yet a fully running and operational company, rather a small, starting up company. His decision to become a franchise would provide fast growth, but would require KaBloom to become a decentralized business, where several individuals (1 manager for every 10 franchisees) would be responsible for making decisions, preventing Hartstein from know everything that was going with his company - he was unaware of many issues. Problems with franchising were never-ending, and as Hartstein said, “this is how you get yourself in trouble with decentralization,” a sort of acceptance that decentralization caused many problems, which was an ultimate consequence of having franchised.
2. High Expensive Expectations - Hartstein wanted franchisee’s to love and share his vision,