Sid Stevens and Ladder Rail - Assignment Example

Sid Stevens and Ladder Rail Q1. Every organization has four factors of production - land, labor capital, enterprise. Enterprise, which is one of the most important things in the start up of a business, is the availability of entrepreneurs. An entrepreneur is a businessperson who owns an organization, firm or venture and takes full responsibility for its outcomes. He is a person who is usually adventurous in nature as he basically gambles by investing into a new business. He is the one who introduces the capital as the proprietor and it is his money that is at stake. Entrepreneurs are risk bearers - they are ready to take the risk of losses in the business and hold themselves accountable. Not every person has the nerve and bravery of putting a large amount of their money at jeopardy. Sid was ready to go ahead with his dream of owning a business and not doing a job under someone. He was ready to invest all his savings that were kept aside for another important purpose of a family by his wife. He not only invested money that he had, but also took major loans from the bank. And entrepreneur not only invests money into the business, but runs the entire set up. Sid fits the picture well because he had an entire plan in mind for the business of a product that he created, which also received positive responses from his friends and co-workers. As the entrepreneur, he worked out the business plan that stated the business objective, an introduction to the product, his manufacturing plant details, marketing techniques, financial funding reports, legal planning and even his personnel hiring plans. Although, Sid did not have the knowledge that normally an entrepreneur would have because of his lack of professional degrees; he managed to know enough for his use by the small management course that he did. He covered up for that by following the advice of his bank consultant who guided his through the steps towards the loan. In order to pursue his dream, Sid took a big risk of starting Ladder rails. The product was totally new and could have easily failed to catch the consumer attention, but Sid did not lose hope and just like a successful entrepreneur entered the gamble. An entrepreneur needs to have passion and deep faith in his product and work, which Sid most definitely did. Even in the first two years of the business, when losses were actually being made, he did not blame anybody else and took responsibility for it. Along with that, he did not lose hope that quick and with the satisfaction from the increasing sales continued with the business. Therefore, we can say that Sid is truly the definition of an entrepreneur. Q2. Not every business endeavor tends to succeed in its mission, only certain ones with the necessary qualities cross hurdles and reach its destination. One of the basic factors is a good entrepreneur running the business. Entrepreneurs are people with different skills and qualities. There are usually four cornerstones that are crucial for entrepreneurs to possess - commitment to the opportunity, strategic leadership, organizational capabilities and persistence. For a business to succeed, the people running it should have strong faith in their plans. It is only with deep passion and commitment that a business can cross all hurdles, otherwise people tend to lose hope when there are many problems on the way. Sid's business, Ladder Rail, initially had to face many financial problems. There were not enough funds available to start up a new business from the scratch or to buy plants and machinery for production. There were also some people who discouraged Sid; and later the losses made were disheartening in itself, but it was Sid's devotion to his dream of a new business that gave him the strength to pull through. In order for a business to sustain and flourish in the future, the leadership should be strategic; that is, the leader should have a vision in the future. Current activity should be such that the long term goals are fulfilled and the business becomes much more lucrative with time. Sid was doing the same - Ladder Rail was going in loss in the first two years but since the sales were rising, it was evident that the business will reap profits in the long run. A business will only succeed when it has a structured and well-designed organization. Finance, marketing and technology falls under this category. Organized financing it to make sure that funds are being raised, loans are being paid back, interest is being paid and investments are being made; marketing is to make sure that the product is being sold at its best and is being advertised properly; and technology is to make sure that innovative and advanced methods are being used for proficient production. Ladder Rails had a lack of proper organization; although, personnel were hired for these purposes but Sid was mostly taking care of all departments which made it tough for him to concentrate on each in great depth. Persistence is the patience that a businessman needs in order to see his business succeed in the long and cross the obstacles that are faced in the initial days of set up. Ladder Rail encountered managerial problems almost every other day, but Sid's devotion provided him with persistence to handle all the chaos and move ahead with the business. Q3. The ten largest managerial problems of Ladder Rail are: 1. Sid had hired very less personnel as managerial heads. This resulted in a great amount of work being burdened on only a few people, causing frustration and reduced productivity. 2. The new plants were at a distance from the old ones, traveling from one to another wasted a lot of Sid's time. 3. Proper marketing using TV ads and newspapers was not done, causing the product popularity to rise very slowly. 4. Sid himself was not very educated regarding management - he had done only a small course. Despite this, he hired personnel that were not very qualified as he believed it was not necessary; however, it is always good to have skilled workers. 5. Working hours were very extensive; it caused worker engrossment in work to reduce, affecting productivity. 6. He had entered the US market but had not employed international marketing techniques; neither did he have his agents working on his product in the US. 7. Suzie was helping him out with the business but not given a proper designated post, which caused her orders to be not taken seriously. She should have been given a proper position in the company for authority. 8. The wages were kept low to compensate for rising costs and reduction in selling price; this should not be done as the company is dependant upon workers who stop working once wage is not appropriate. 9. Proper departments such as finance, accounting, marketing and administration with department heads were missing. 10. Operating deficit as the retail hardware owners would pay only once a month - proper deals or negotiations for this were not made. Q4. Marketing strategies are basically techniques that are used to promote a product by advertising it to the target audience. In order to do successful marketing, a proper marketing plan needs to be made that meets the requirements of the quality advertisement. Before planning anything, the marketing planner needs to be clear on his objectives. Ladder Rails were a totally new product; consumers need to be made aware of it in order for proper sales. There was a serious lack of planning for marketing for Ladder Rail. Before a product is launched, proper market researches need to be carried out to discover the demand for it, the market value and the market for the product and of course the target audience/consumers. However, Sid did not carry out these steps showing lack of knowledge and organization. There are basic and important steps that successful marketing is divided into. Prior to marketing, the planner needs to first understand what kind of market they are catering. Plans should be made according to the target market, the pace of the market and the current events. With the help of this information, the right product can be sold at the appropriate prices and at the right places. Also the most suitable promotional strategies can be then used (Wulf, Kristof, Odekerken-Schroder and Iacobucci; 2001). After the marketing process starts, the appropriate marketing mix needs to be developed. Marketing mix is basically the reference to the four P's - Product, Promotion, Price and Place. Sid concentrated on the product and price, but almost ignored the promotion and place bit. Promotion should be successful and good marketing tools such as brochures, billboard advertisement, television, newspapers, word of mouth and even internet should be used. Consumer attention and responses should be tracked and then used in the future. The best channel of distribution should also be tracked for future promotion. Also, celebrities could be used as a patron for marketing; fans are for sure to follow and purchase the product. Advertisements need to be projected at the right time with the right message being projected; track should be kept of how well the advertisement is working on customers. Not only is attractive packaging a good way to attract attention, creation of an attractive brand signature or slogan also works. Sid also missed out on international marketing - the application of marketing principles across national boundaries. Being a part of the US market means crossing the geographical boundaries. This creates the necessity for marketing internationally. However, this was not done by Sid. All of this requires large amount of funds which Sid does not possess. However, some parts of marketing should be carried out in order to guarantee success. Q5. Sid started the Ladder Rail to fulfill his dream to the possession of a solely run proprietorship. One of the reasons behind this dream was to have a happy family life. He has no idea that his business would one day become a problem for his family. His wife Suzie was initially against the idea because she thought it was safer if he continued the job and not waste the savings they had because she wanted a start a family. Sid was so deeply devoted to his creation that he spent day and night planning and working on this project. He first prepared the business plan and consulted the banker for advice and finally for the loan passed. Later with the start up, Sid got so busy that family time was bound to become negligent. Although, Suzie was a part of his plan, they could not have had personal time alone - this was bound to irritate a wife. Sid had, however, made many mistakes that lead to a day where he had to make this decision of choosing between his family and his business. Since the very start, Sid hired only a limited amount of workers which caused the work load to be great on one individual. Apart from that, Sid did not hire supervisors who would do part of his job, giving him time off. Sid took too many things at once on his plate which left him with no time for himself. He should hire more managerial staff that would look after the workers and reduce his burden. Also, proper departments should be made for finance, marketing and accounting with proper qualified department heads who would handle each department causing confusion to reduce and efficiency to increase. It is crucial for Sid to take some time off from his business and appoint somebody professional enough to take his position for some time. He should spend this time with his wife and sort things out. He should try to go on a holiday, relieve all his stress as that is best for his health too. After returning, he should make sure that more staff is hired and that workload is divided. He should also give Suzie a proper post in the business as that would increase their time together and make her feel more involved. He should then make a fresh start - return with a bang and reach new heights. WORKS CITIED 1. De Wulf, Kristof, Gaby Odekerken-Schroder and Dawn Iacobucci; "Investments in Consumer Relationships: A Cross-Country and Cross-Industry Exploration,"; Journal of Marketing; 2001 Read More