Steve B. Belkin Case Analysis

– 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

CaseEastwind

EASTWIND

The Most Dangerous Word in New Business Development: IF

 

 

OPPORTUNITY

 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

becoming missionary

 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

STRATEGY

 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

MANAGEMENT

 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

ANALYSIS

 Trend: downward

 Stage: Turnaround

 Experience: Not in this industry

 Key: how to sell fashion accessories. Don’t have it. I would reject.