– Please follow the format on the Eastwind case with the bulletpoints (opportunity, Strategy, Management, and Analysis)
– Analize the Steve B. Belkin case; use the Eastwind case for the format only
– Don’t go beyond 500 words
The Most Dangerous Word in New Business Development: IF
Product: Buttons; are they out of fashion; can they be brought back; are there any sales (minimal); do old fashions return? Key: designs and PR
“Limited” number of buttons: 6 million; enough for lots of years at current rate
Market segment: minimal sales; which segment will buy is unclear
Industry: Easy to enter; fail; few succeed; strong design skills and reputation/ brand; “no” competition may mean no market
Trends: This is the fashion industry. Old fashions/ new. Who sets trends?
Stage: turnaround in fashion industry
Is there any proof of potential: no proof fashion will come back; Sales not much or enough to support asking price for business
o Owner #1: $390K in 3 years; trend downward o Owner #2: Minimal sales after spending money on marketing (catalog); Daughter
Acquisition price: Owner 2 paid cash; They had offered terms – why pay cash now; what are buttons worth; cash flow (none); if based on potential, who should take risk?
What’s the most dangerous word in new business development: IF
No key competitive strategy other than raise prices and hire reps
Sales reps: will they sell if no demand? Will they ask for cash up front?
Catalog: tried; no sales
No strategy in place: living on hopes; need to design a new strategy –no proven plan
Industry experience: None; key to succeed in this industry – set fashion trends
Entrepreneurial experience: yes; own business
Acquisition experience: No
Investors: some silent; some meddlers
Stage experience: Turnaround – they have none
Poor management fit with needs
Experience: Not in this industry
Key: how to sell fashion accessories. Don’t have it. I would reject.