Veranda Brands: Developing and Coaching Talent Workshop Case Solution
Erin Vickers is the founder and CEO of Veranda Brands, which was founded in the year 2002. She is professionally a designer and a product marketer of home furnishing. The company started with initial sales of zero to about $8 million from 2002 to 2012. It has a workforce of about 50 employees among which, three employees are considered potential in the development of the organization: Sales director â€“ Robin Schnell, Operation director â€“ Lee Bencourt, and Program manager – Chris Tellier.
In 2003, Vicker got her first order of about 10,000 units. Vicker was well aware of the customersâ€™ demands, retailers, and ongoing competition in the market. Thatâ€™s why she was able to start her business with a quite different approach. Vickers contacted local tailors for sewing of her products while making sure about the productsâ€™ quality. The company significantly operates in the United States and Turkey. In 2008,Veranda brands faced financial crisis due to the United Statesâ€™ 50 percent rate of cancellation in order purchasing,which was considerably overcame by finished product sourcing by Turkey.
Vickers has been managing to retain and increase the revenue of the organization since its beginning. As she is quite an experienced person to lead the business, which she is the founder of,but the issue that organization is facing is related to its three potential employees – Robin Schnell, Lee Bencourt, and Chris Tellier who have shown some irrelevant behavior and interest, which is not considered to be beneficial in the economic growth of the organization.
- There are few organizations working with the same products sale in the furnishing market as Veranda. It has a strong reputation in the United States and Turkey.
- The use of resources is efficient in the making (manufacturing) of the products,increasing the revenues of the organization.
- The choice to limit the units to about 20,000 to 30,000 range units, which is easy to deliver in a period of one month.
- The growth of the organization is steady rather than being rapid as rapid increase poses a great threat of rapid decline as well.
- Increase in the sales has also increased the workload of the organization, which is getting difficult for the organization to handle in an efficient and a better way.
- There is an absence of enough space to manage the order according to the needs of the customers in the United States and/or Turkey.
- Problems with the attitudes, interest and behavior of the organizationâ€™s potential employees towards work.
- With professional skills of the employees and their effective performances, the business possess higher chances of having a rapid expansion in the international market.
- Better management of workload will result in the increased number of contracts and sales, improving the economy of the organization.
- The training programs related to the skills of employees in their particular working area will lead the company towards an efficient management of services at workplace.
- Growing workload mismanagement can lead to the loss of potential contractors due an inefficient performance in the provision of services.
- Decreased sales might cause instability in the financial condition of the organization, which could lead to the termination of some employees to overcome the losses.
- Inefficient performance of the employees and financial instability might result in poor standards of products and the resources used in the manufacturing of the products.(James, 2018)
Porterâ€™s Five Forces:
In the furnishing industry of the United States; there isnâ€™t much competition in the sale of products like pillows and cushion cases, slip covers and bed dings etc. Veranda is itself a leading brand as Vickers is well-aware of the industryâ€™s conditions, and she knows how to be different and lead in the market among all its competitors. Due to the reason that there are a very few organizations working with the same type of product line among which, Veranda is the leading organization. Hence, competitiveness is quite low.
Threat of Substitute:
Variation in the number of products offered by numerous organizations in the furnishing industry has been an essential key to the competition. This has forced the competitors to introduce substitute products to meet the competition in the industry, and grab the interest of the customers towards their products. In the furnishing industry, as the competition is low, there hasnâ€™t been such threat of substitute, but due to the high cost of the products, there might be a moderate threat of substitute.
Threat of new Entrant:
The domain of furnishing industry in which Veranda has been working;there are very few players in the market. This gives new entrants a great chance to enter into the market with new innovations in the products. Therefore, it allows and gives an opportunity to the new entrants to make the customers switch to their brand as there is no such trend of brand loyalty. It will be easy for new entrants to build their distribution network. Thus, the threat of new entrants is high, because the survival in the market is easy.
Bargaining Power of Buyers:
The bargaining power of buyers increase when there is a large number of organizations with variation in their products, which provides customers with options to switch their interest towards different brands. Currently, the bargaining power of customers is low, but it might increase with the low cost products in the market.
Bargaining Power of Suppliers:
The management of the organization has maintained a healthy relationship with its suppliers for the distribution of the products. Due to the limited number of organizations and suppliers; the bargaining power of the suppliers is low. There is no threat of increased demand of suppliers in the product distribution as fair amount is paid to them. (Hopkins, 2018)
The VRIO analysis of Veranda Brands is a broad range analysis, providing the organization with a chance to acquire a viable competitive advantage against its competitors in the furnishing industry.
The resources used by Veranda are valuable for the company or not. Such as the resources like finance, human resources, management of operations and experts in marketing. These are some of the key valuable factors of for the identification of competitive advantage:…………..
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