Entrepreneurship and Venture Creation - Case Study Example

Jack Wills Operations Jack Wills is a clothing company with its headquarters in London. The company operates 85 stores internationally, with most of them within the UK while others are located in the US and Asia. Since its inception in 1999, the company’s growth trajectory has been fast and is currently regarded as a ‘preppy dressing’ store by customers and admirers. It deals with a wide range of products ranging from clothes to beauty accessories. Initially, the business was focused on students as its primary market, with outlets located strategically in cities with schools of high-status, for instance Oxford and Winchester among others. Even though the focus on students has not changed, the company’s products are currently purchased by the young and old. Through the company’s core values, Jack Wills is focused on maintaining strong brand equity by ensuring that all the products and marketing activities are associated with being ‘British’ (Lash, 2007). The company has positioned itself as a leading premium brand that has strong connections with British culture and a mixture of old as well as innovative components representing British roots. These values are manifest in new marketing catchphrases such as ‘Fabulously British’. The innovative products such as branded clothing, shoes and boots, bags and wallets among other accessories are customer focused to ensure that a wide variety of needs are taken care of (About Jack Wills, 2015). By 2012, the company’s net worth was estimated to be $326 million. Since May 2013, the company is run by a new CEO who is not the founder. Williams, the founder of the business gave up his executive powers to become a non-executive director. He had been the CEO since the company’s establishment. This was considered a strategic move to promote innovations in the organization. Williams saw the potential for business growth in the new CEO who is market oriented especially at a time the organization is focused on the global expansion of its operations. Having worked in Vodacom, which is a thriving global company, the new CEO understands the international market and appropriate entry strategies and hence his capability is a significant asset to Jack Wills. The company’s organizational culture has positioned it as a responsible outfit that observes integrity and decency, treating its customers with utmost respect. At the top of the organizational structure is the CEO with three other directors reporting to him including; the international operations, sourcing, finance and human resource directors. This structure disaggregates the company’s functions thereby increasing efficiency as different line managers specialize in specific roles within the company. Specialization enhances acquisition of experience and greater autonomy to innovate within the various departments (About Jack Wills, 2015). This paper examines the entrepreneurial theories applied by Jack Wills and how he managed to get the title of entrepreneur. Price discrimination is the strategy applied by Jack Wills to serve the different market segments as the affordability of the clothes is regarded as different among customers in these segments. One of the entrepreneurial factors in this pricing strategy is Jack Wills’ ability to know the customers. Even though the brand is targeted at well-to-do school and university scholars, the company also takes in to consideration a large market segment with low purchasing power. To this end, premium products branded as ‘preppy’ are offered at a higher price in stores located in towns hosting prestigious universities while the low cost products branded as ‘private school’ are sold in other UK stores targeting scholars with low purchasing power (Walsh, 2012). While many business people would go for convectional advertising methods, Jack Wills identified an opportunity in viral marketing that is based on word of mouth. Event marketing is an important approach that he applied to enhance the company’s viral marketing. ‘Jack Wills Varsity Polo’ and ‘JW Unsigned’ are among the popular events that are used in marketing. The company also prints seasonal handbooks that contain relevant information on products matching a particular time of year. Because of the entrepreneurial skills Jack Wills has managed to develop a unique advertising strategy that generates the idea of ‘something new’ among the target audience and is one of the factors which lead the company towards success. Jack Wills Varsity Polo calls for young people to participate with the brand thereby developing a sense of brand ownership among target consumers. E-commerce is applied to market products that were meant for a past season such as summer or winter clothes, but are sold at a lower price after the season is over. For example, customers who could not afford winter season prices for winter clothes are offered an opportunity to acquire them at significantly low prices that might go down by 75% during summer and vice versa. However, only Jack Wills’ loyal customers are accorded the privilege to buy products at off peak prices. The ‘Jack Wills outlet’ is a website that serves a few loyal customers that are invited through quarterly selection among Jack Wills account holders that have applied online for consideration. E-commerce has enhanced growth as Jack Wills continues to reach loyal customers at their convenience through online sales (About Jack Wills, 2015). Entrepreneurial Theory The acceptance of risk taking and venturing in to the unknown is one of the challenges that Williams who is the founder of Jack Williams can be considered to have overcome. His business empire has been successful through carefully calculated risks to ensure positive outcome is achieved. A major risk he undertook is the decision to position Jack Wills as a high end brand and specifically targeting students. It was an investment whose returns were largely uncertain as acceptance of the products and the premium prices could be rejected at the start-up stage. A non-risk taker would have chosen a more general approach beginning with a low price to attract consumers and then switch costs depending on growing customer loyalty. Psychological theories can be used to explain the phenomenon of entrepreneurship that Williams initiated. There are personal and intellectual elements that motivated the entrepreneur to undertake the risk (Minniti & Bygrave, 2001). Jack Williams was established through the desire to achieve, which according to Rae (2004) is the driving force towards entrepreneurship. At 23 years of age, Williams established the first store with self belief and without marketing skills. However, he knew through his father’s advice that he could establish a successful venture by being innovative, producing at a cost X and sell at a price Y but always ensure that Y is greater than X. This implied whatever the venture there must be some profits. Rotter’s theory of internal locus of control is manifest in Williams’ confidence that his own actions have the capacity to manipulate the outside world (Miner, 2006). He had a strong locus of control that made him see no impediment with regards to his entrepreneurship decision. According to Rae (2005), inventiveness resilience and confidence are critical aspects of entrepreneurship. Williams had the confidence that his inventiveness would be unmatched in his start up (Vahlne et al. 2012). Social circumstances generated enabling environments that allowed Williams to take advantage of emerging opportunities (Rae, 2005). His ideas of a start up were based on national identification and specifically how one felt studying in a British University. The idea was developed with a desire to enhance the meaning of life at the University and the products were targeted at students. Potential customers were expected to find the products appealing as they would help them identify with national culture (Cagan & Vogel, 2001). Williams found an opportunity in the cultural context and sought to find alternatives to identification with national heritage, which was a social aspect that was absent in the lives of campus students. It was possible for Jack Wills to win the hearts of people by developing a link between its products and the nation, which is represented in the company’s marketing strategy convincing consumers that Jack Wills products are ‘purely British’. Social attitudes also shaped Williams’ entrepreneurship decisions. He eventually settled on high end products that could be sold to students of high social class such as those studying in prestigious universities in Britain. This was an important entrepreneurial strategy that helped to increase the rate of return on capital. As a start-up Jack Wills may not have been in a position to enjoy economies of scale as initial production was in small scale. However, positioning as a premium brand made the company to sell its products at a high cost hence the significant growth recorded soon after it was launched (Belch & Belch, 2006). The socio-political perspective is also evident in the capacity of Jack Wills brand equity to be upheld in its international expansion strategy. The company has successfully penetrated the US, Chinese and Middle East markets because British products are generally considered to be of superior quality. This worked as a crucial entrepreneurial strategy that made it easy for the company to penetrate foreign markets by taking advantage of the existing perception of British products (Barringer & Ireland, 2008). As an entrepreneur, Williams succeeded through taking advantage of opportunities. His primary target market was the youth and specifically those in universities. However, the business path changed when he realised that there were more youths outside universities that were attracted to the products. He also realised that even the older populations had needs that the company could satisfy including household accessories. Identification of opportunities arising from technological advancements such as e-commerce has enabled Williams to expand his business to the current status. He does not stop at the present as he is constantly looking for new investment opportunities. Nevertheless, not all opportunities have led to the success of Williams (Miner, 2006). For example, Aubin & Wills was a brand extension of Jack Wills that was developed in 2008 to take advantage of the opportunity identified among adults aged 25 years and above. In 2012, Aubin & Wills brand was terminated as it was considered an impediment to the global expansion of Jack Wills, the primary brand. Williams was quick to note that the new opportunity did not work to his advantage because of his entrepreneurial ‘gut feeling’ which saved the company from further financial loss (Barringer & Ireland, 2008). Entrepreneurial Ideas After 13 years of leading the Jack Wills as the CEO, at the age of 38 Williams decided to forfeit his executive powers when most of the chief executives realise their dreams of becoming CEOs of large profitable companies. There was need to overhaul the company’s top management, but Williams should have considered maintaining his position as CEO based on his entrepreneurial character that the organization needs for sustained growth (Minniti & Bygrave, 2001). According to Chakravarthy & Coughlan (2011), founders acting as managers like controlling their own destiny as they strive to achieve their full potential. Even though the strong connections between Williams and the business might be reduced as he will be expecting others to play a bigger role in the accomplishment of business goals, there is increased potential for growth as greater contributions are expected from the new CEO who is an owner manager. There is need to change the top management after specific periods, for example 4 years to ensure new talents are integrated in the organization (Walsh, 2012). Even though Jack Wills has online presence, the opportunity has not been exploited to the maximum. The company’s website serves a limited number of customers who apply and await selection. However, active website marketing through social networking sites such as Facebook, twitter and Instagram among others present a creative marketing platform where young people that comprise the target market meet and share experiences (Isai, 2001). The company has a larger capacity than the current global presence through 85 stores mainly in the UK and few in other countries such as the US, Middle East and China. Franchises are among the contractual agreements that need to be used to penetrate the global market Jack Wills need to have marketers specifically for these sites distributed globally. These can be connected to the company’s marketing department through franchises located worldwide (Johanson & Vahlne, 2013). The marketing strategy of Jack Wills as ‘fabulously British’ might have worked well so far. However, it is important for a company that needs to establish global presence to appreciate cultural diversity that is a characteristic of the global consumer base. Products meant for foreign markets can attract more consumers if they represent local culture and hence the need to customise the marketing strategy to match the environment of business (Burt & Encinas, 2000). The strong brand equity of Jack Wills can be utilized to market differentiated products through strategic brand extension that preserves the original brand. Once brand equity has been established, it becomes easy for entrepreneurs to expand the business to cover other noncore items that developed through constant innovation rather than establishing new start-ups as long as they contribute to the accomplishment of business strategy (Magretta, 2012). Apart from clothing and accessories, the brand name can be used for other products that loyal Jack Wills’s customers can identify with. This can be achieved through strategic partnerships that are likely to generate mutual benefits to the company (Geller, 2002). For instance, a sewing machine labeled ‘Jack Wills’ can sell more considering the company’s market share compared to an ordinary one. The company can also take advantage of low end consumer segments such as the inexpensive universities as competitors are focused on winning the high end market that Jack Wills has already acquired. This can be accomplished through reducing the cost to the consumer by removing non-essential product characteristics, for instance expensive and colorful value addition that may not influence product’s utility to a great extent (Crawford & Benedetto, 2008). Many customers in the low-end segments are ready to welcome the new changes due to increased affordability. Moreover, they too are likely to enjoy becoming part of the loyal Jack Wills community while enabling the company to maintain market leadership for both high and low end consumer base. Even though Williams can be considered a successful entrepreneur, the company still needs to innovate and continuously develop new products to maintain the strong brand equity (Hoyer & MacInnis, 2006). Conclusion Williams who is the founder of Jack Wills currently holds a non-executive position in Jack Wills. The company is under a new CEO who took over from Williams in 2013. Market segmentation is applied to effectively target different market segments through price discrimination. Event marketing has successfully been applied to promote Jack Wills brand. The company rewards its loyal customers through its website. Williams has demonstrated entrepreneurship qualities in the establishment and success of Jack Wills. He is an entrepreneur with personal and intellectual capacities that motivates him to cope with uncertainties. He has demonstrated a desire to achieve and a strong internal locus of control in his endeavours. Social disposition in the business environment influenced Williams’ entrepreneurship ideas. He takes advantage of any emerging opportunity for growth. The company has maintained strong brand equity that has been significant in the global expansion strategy. Williams should have maintained the position of CEO to oversee further expansion of the business. There are still many unexploited opportunities globally that can be utilized through leveraging partnerships and establishing international franchises to enhance the company’s global presence. Successful establishment in the global market will require the company to demonstrate appreciation of cultural diversity. References About Jack Wills, 2015. Available from: < http://www.jackwills.com>. [16 February 2015] Arvidsson, A. 2009. ‘The ethical economy: Towards a post-capitalist theory of value’, Capital and Class, 33(13): 13-29. Barringer, B. & Ireland, D. 2008. Entrepreneurship: Successfully Launching New Ventures, International Edition: 2nd Ed., New York: Pearson Higher Education. Belch, G. & Belch, M. 2006. Advertising and Promotion: An Integrated Marketing Communications Perspective w/ Premium Content Card, New York: McGraw-Hill/Irwin. 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