This paper is an MBA analysis of the Smith Designs instance survey written by Sylvia M. Asay. Larry Carstenson. and Susan M. Jensen from the University of Nebraska at Kearney. The intent of this paper is to find jobs within the company and to happen possible solutions and recommendations. The elaborate analysis of this instance showcase cognition of Global Management and Leadership class stuffs learned therefore far. Smith Design Case Analysis
Introduction and Summary
Owned by Cindy and her hubby Greg Smith. Smith Designs is a apparently successful home-based concern. chiefly selling crafted headbands to a individual history. a section shop purchaser who supplied 56 shops. After five old ages of major alterations and growing. the company has made a combined sum of $ 165. 405 in gross revenues. $ 57. 990 for their 5th twelvemonth entirely. and has a projected gross revenues sum of $ 75. 000 for their 6th twelvemonth. Along with the jutting growing in gross revenues are major chances for growing and enlargement. These chances leave the twosome to reexamine all facet of their life. household. and concern. including past concern determinations. determinations that can assist their company travel frontward in the short and long footings. and if there is really a hereafter for the company in the long-run.
A Look Back
As a stay-at-home ma with two little kids of her ain. Cindy began her home-based concern by researching her creativeness and manner preparation to happen her niche in what is called “wearable art” ( Asay. 2006 ) . She designed babe rompers from apparent cotton tee-shirts and sold them. along with legings and tee-shirts for grownups. at local trade carnivals and dress shops either ready-to-decorate or pre-decorated.
By the 2nd twelvemonth of selling at dress shops and carnivals. Smith Designs caught the attending of high-end section shop purchaser who became their major history – telling infant rompers to provide 27 shops. To travel with the rompers. Cindy expanded her merchandise line to include crafted chapeaus and headbands. which grew in popularity. Soon. the headbands took the lead in gross revenues and production increased while chapeau and romper production decreased. Gross saless continued to turn ; with their major history now providing 37 shops. disbursals grew and demand became impossible for Cindy to pull off with Greg’s parttime aid entirely. To assist. the Smiths increasingly made some major alterations. Three parttime piece-sewers were hired to maintain up with demand. Greg quit his occupation to work full-time with Cindy. and they moved their household to the Midwest to assist cut costs.
Now providing 56 shops with headbands through their major history. and seeing growing in gross revenues. net income. popularity and chances. Smith Designs is now left to measure their options and do major determinations.
Questions and Problems
Even though Cindy is really aroused about the possible chances. she is forced to inquire herself she could pull off the volume of demand. and what options would she necessitate to prosecute to be successful. Almost from the start of Smith Designs. Cindy found her ware to be time-consuming to bring forth and incurred disbursals chiefly due to the uninterrupted demand to increase stock list to carry through demand ; which ever seemed to be a battle. Other major disbursals are those linked to contract parttime labour. and equipment and fixs. Therefore. with the concern at its present province. the reply to the meeting demand inquiry is. no ; the jobs being Cindy’s battle to run into demand and turning disbursals. These obvious issues can be the consequence of a figure of initial causes such as. deficiency of concern know-how. non adequate on-hand workers. unequal equipment and engineerings. and deficiency of money and support. From the information given. the premise can be made that all of these issues play a portion in Smith Designs’ production and costs issues.
Repairing the Problems
At this point. the determinations that Cindy needs to do are hazardous and contingent to the success or failure of her concern. Because of the significance and high-risk of the determinations. they would be defined by Lussier ( 2008 ) as “nonprogrammed determinations. ” which require considerable clip to procedure and do concluding determinations ( p. 94 ) . By utilizing both a “reflective” determination devising manner and a “consistent” determination devising manner. Cindy should be able to take adequate clip to believe and research before doing an appropriate determination to repair and better her concern without blowing excessively much clip that would endanger her concern chances to do to believe about how she has been pull offing her concern.
Using the combination of determination manners will let Cindy to truly believe about where she wants her concern to be in the hereafter. the determinations and alterations that need to be made so that her concern can run into her ends for the hereafter. and a scheme to put to death her programs ( p. 92 ) . To decently make this. Cindy should see and put to death two major procedures – the determination devising procedure and the strategic planning procedure. as mentioned by Lussier ( 2008 ) .
To thoroughly put to death the determination devising procedure. Cindy would necessitate to make the followers ; “classify and specify the jobs and opportunities” . set aims and criteria” . bring forth originative and advanced alternatives” . “analyze options and select the most feasible” . program and implement the decision” . and so follow through to “control the decision” ( p. 92 ) . After traveling through the first three stairss and developing solutions. each option should be researched and analyzed. Hazard and uncertainness should be considered and if possible. chances of success and failure should be given to each solution. Besides. a pros and cons and/or a cost-benefit analysis of each option should be done.
These analyses both compare the advantages and disadvantages and the costs and benefits of each option ; nevertheless. the cost-benefit analysis uses math. and personal “intuition and judgment” ( p. 108 ) . After each alternate solution has been exhaustively evaluated. the most rational determination should be clear and selected. Once the determination has been made. a scheme for execution should be developed. executed and decently managed.
A Bit More About the Planning Procedure
One job with Smith Designs is that Cindy doesn’t seem to hold clear set ends and aims ; and. with the minimum ends and aims she may hold. she lacks the appropriate schemes to accomplish them. Now. if Cindy truly wants to turn her concern and pursue greater chances for the long-run. she should get down by traveling through the “strategic planning process” . which entails puting long-run aims. making a mission. and developing a scheme to achieve those aims and to “pursue the mission. ” Once a existent mission has been created and long-run ends have been set. Cindy should so concentrate on what needs to be done soon to keep and/or Begin to turn her company by puting short-run ends and aims and a program to accomplish them ; this procedure is called “operational planning” ( p. 129 ) .
Thoroughly Analyzing the Situation and Options
In order for Cindy to do the best determination and to reply many of her inquiries about Smith Designs potency in the hereafter. she will necessitate to garner every bit much information as possible about her concern. the industry. the economic system. and competition. To make this. it would be wise to carry on a SWOT analysis to exhibit all the company’s strengths. failings. chances and menaces. The analysis will expose what’s good about the company. competitory advantages. all the company’s jobs. competition. present chances and possible menaces to impede or close down the concern ( p. 131 ) .
As stated in the instance. the first option to travel frontward with the concern is continue to run and pull off “as they had been making. with some alterations. ” This would intend that Cindy and Greg would go on to fight to run into demand working from their place. go on to job-out to piece-sewers. and go on to apparently be fliting about without a strong concern scheme. In my sentiment. this option should non be an option at all ( Asay. p. 286 ) .
A 2nd option mentioned in the instance entails “jobbing out” some of their “product to be sewn by an bing manufacturer” when there is a demand for the excess aid. The instance besides makes a point to advert that there are advantages and disadvantages to jobbing-out ( p. 287 ) . The chief advantage is the excess aid with the stitching. On the other manus. jobbing out or “out-tasking” . as referred to by Nanda ( 2012 ) . “hardly of all time works” when there is a demand for dedication. preciseness. cooperation and coordination for longer periods of clip and the it “works best when there’s a erstwhile undertaking that has to be done: an open-and-shut case” ( Nanda. 2012 ) . With the deficiency of dedication from out-taskers and the deficiency of control. pull offing a concern can go really nerve-racking and may make more injury than good.
As an alternate to out-tasking. Nanda ( 2012 ) suggests “smart outsourcing” alternatively ( 2012 ) . In Cindy’s instance. she would necessitate to properly calculate the demand for her merchandises to happen the demand for the excess workers. Then she can utilize that information to assist seek out the appropriate outsourcer to engage to make the stitching of choice merchandise. Outsourcing piece-sewing is a better option because it allows more stableness in work. clip. dedication. disbursals. and coordination. etc.
Furthermore. other advantages of outsourcing include ; no salary disbursals. “better gross realisation and enhanced returns on investing. ” “reduced hard currency escape and optimized resource use. ” lower labour cost and increased realisation of economic sciences of graduated table. ” “increased velocity and the quality of bringing of outsourced activities. ” and more clip for leisure. concern direction. planning. and concentrating “on nucleus competences while non being concerned about outsourced everyday activities. ” With that that is good. there are besides a few defects that may happen with outsourcing such as loss of control over procedures. quality and public presentation ( flatworldsolutions. 2013 ) .
The last option mentioned in the instance involves the most hazard by proposing that Smith Designs start their ain little fabrication company. This option will be a immense investing and will necessitate an unbelievable sum of clip. research and planning. This bad and involved option is one that Smith Designs is non ready for yet. However. it should be a end for the hereafter. A scheme for this end should shortly be put in topographic point and launched.
Recommendations and Decision
Because of the current province of Smith Designs. I would non be wise for the company to remain the same ( option 1 ) . or get down a much larger operation ( option 3 ) . at least non yet. As an option that should work out all jobs and assist travel Smith Designs into a successful hereafter. I recommend that Cindy earnestly go through the strategic and operational planning procedures. seek out a concern wise man to assist rede and steer her in her concern determinations. research support chances for future growing programs. and program to outsource selected merchandises. Overall. if Cindy does what she needs to make for the short-run and finds an appropriate outsourcer. she will hold the clip to go on to larn the concern. turn her company and live a less nerve-racking. happier. successful life.
Asay. S. . Carstenson. L. . & A ; Jensen. S. ( 2006 ) . “Smith Designs. ” Annual Advances in Business Cases. 26 ( none ) . 284-291 Flatworldsolutions. ( 2013 ) . The pros and cons of outsourcing. Retrieved from hypertext transfer protocol: //www. flatworldsolutions. com/articles/pros-cons-outsourcing. php Lussier. R. N. ( 2012 ) . Management basicss: Concepts. applications. accomplishment development. 5. Springfield. Ma: Springfield College. Nanda. G. ( 2012 ) . Out-tasking or outsourcing – Which Would you take? . Retrieved from hypertext transfer protocol: //www. evancarmichael. com/Business-Coach/2148/Outtasking-or-Outsourcing–Which-Would-You-Choose. hypertext markup language