ENTR-510 Week 2 Case Study Assignment: Vera Bradley (GRADED A)

Week 2: Case Study- Vera Bradley Discussion Questions 1. Describe the personal attitudes of the two entrepreneurs and their approach to challenges and opportunities. Concerning the two entrepreneurs, Barbara Ba ...

Week 2: Case Study- Vera Bradley Discussion Questions 1. Describe the personal attitudes of the two entrepreneurs and their approach to challenges and opportunities. Concerning the two entrepreneurs, Barbara Baekgaard and Pat Miller were very humble in their beginning stages of business and they were both very eager to earn and learn. Despite the challenges and opportunities that came their way, they remained focused and continued to set goals for themselves to remain successful in business. They were passionate about their work, striving to earn and grow their business each day and they took pride in perfecting their business strategies and customer service skills. To directly describe their personalities, I would have to give both of them a round of applause for their tenacious entrepreneurial spirit and their willingness to overcome each challenge to succeed. Barb and Pat’s advice to entrepreneurs describes the method or routine that they used to overcome most of their challenges. Their methods are listed in the chart below: Concentrate on what you do best. Don't be satisfied with the status quo—innovate and practice continuous improvement. Choose the right people to work with: vendors, bankers, and employees. Networking is important; it's important when people like you and you like them. Don't be afraid to take risks. Take one day at a time. Follow your passion and have fun! This study source was downloaded by 100000849840424 from CourseHero.com on 11-07-2022 13:36:05 GMT -06:00 2. What resources were critical to getting the company off the ground? The critical resources to getting the company off the ground can be found in the text as: Initial Financing, Production, Brand Image and Sales. Excerpt from page 76: Fabric was the key raw material of the business. As sales accelerated, the founders realized that purchasing fabric at retail prices would impair profitability. Retail fabric was generally priced at four and one-half times wholesale. They needed to establish relationships with fabric wholesalers, but had not yet realized that their purchase volumes were still too small to interest wholesale textile suppliers. Pat noticed that some of the bolts of cloth they were using were imprinted with their manufacturers' names and address. She created a list of these and sent letters to each one requesting a meeting. To her surprise, none responded. One of the manufacturers, VIP, was located in New York City, not far from the college where Barb's daughter was enrolled. So, Pat suggested that Barb drop in on that company the next time she visited the campus, which she did. Without invitation, Barb showed up in VIP's lobby and introduced herself. Mistaking Barbara for a representative of the much larger company with a name similar to Vera, the receptionist whisked her off to meet the company's Vice President of Sales, Leo Driscoll. As the two talked shop, Leo realized that they weren't speaking the same language. Barb didn't appear to understand the standard terms of the trade. He asked me at one point how many pieces I wanted and I responded, ‘As many as you can sell me.’ To me, a piece was a two foot swatch; [to people in the trade] a piece was 25 yards. Then he asked, ‘Who are you with again?’ and I said, ‘Vera Bradley.’ His next comment was, ‘How did you get in here?’ Leo wasn't interested in taking on a small customer like Vera Bradley, but he was amused and impressed by his guest's affirmative attitude. The two hit it off so well that he accepted her order for 500 yards of fabric—VIP's rock-bottom minimum order quantity. Barbara attributes her success in this and similar encounters to advice received from her father many years earlier: “First, sell yourself, then your company, and then your product.” In the years that followed, Leo Driscoll became a friend and mentor to Vera Bradley, and his company was rewarded with larger and larger orders. This study source was downloaded by 100000849840424 from CourseHero.com on 11-07-2022 13:36:05 GMT -06:00 3. Comment on the market research and the level of analysis and planning employed by Barb and Pat. Barb and Pat were very creative and most of their efforts were successful because when they did not have the answer or solution to a specific problem, they reached out to the nearest expert in the particular field of business that they did not have as much experience with. From page 69, Pat says, “We needed to do some market research and wanted to be certain that it was unbiased. We couldn't let friends who came to the trunk show know that we had developed these products—they might buy them simply because they were our friends. So, we had to come up with a brand name that didn't have either my name or Barb's name in it. We decided to use Barb's mother's name, Vera Bradley. My mother's name was Wilma Polito. That name didn't have a prayer of sticking as a brand, so we settled on Vera Bradley Designs.” When Barb and Pat failed to plan, they still planned to succeed by reaching out to friends, family and the experts of their line of business. By extending their informal market research to college campuses, they were able to market their products to a younger and more enthusiastic crowd. 4. What is your opinion of the company's sales and distribution strategy? Its production strategy? Can you cite feasible alternatives to these, given Vera Bradley's resources? I think the company used methods such as referrals, cold calling and networking that are still used today which means that they did very well to implement those sales strategies in their era of business. They also used current business-to- business sales strategies that are key to a businesses success and they always asked for the sale. Although many improvements have been made to transition the sales process to a completed sale, the company did very well for the 1980’s strategies. Although the Chicago Gift Show was held for the company, one of the main oversights for this business would be a company fashion show and I think that if the company had hosted a fashion show to market their product, they would have made more sales and raised more money for their business. People attract money and models are very necessary to market products. This study source was downloaded by 100000849840424 from CourseHero.com on 11-07-2022 13:36:05 GMT -06:00 Excerpt From page 73: The 1982 Chicago Gift Show gave the company some exposure to the distribution channel. Developing relationships and creating a network of repeat customers within that channel would require much more work. As with other functions of the nascent enterprise, the two founders began with a do-it-yourself approach. Whenever either of them was out and about they would look for local gift shops, walk in, introduce themselves and the company, show samples, and ask for an order. They also recruited friends and family as independent sales representatives: Barb's mother, sisters, college friends, friends of friends—they turned to people whom they knew and liked and asked if they would represent the company's products in their geographic areas. The first of these reps was Barb's college roommate, a resident of upscale Arlington, Virginia. She enlisted in 1983. Sales representatives were responsible for developing a customer base of primarily gift stores in their geographic areas. Reps would take orders, but would not be paid commissions until sold items were paid for. The reasoning behind this compensation strategy originated in Barb's earlier gift trade experience. Many shop owners, she knew, were slow to pay. If reps were paid only after receivables were collected, they would naturally avoid store owners of dubious creditworthiness. That strategy also benefited cash flow at a time when cash was scarce. 5. (Typo in the book) What appear to be the critical brand- building factors in this industry? Are the founders focused and executing on the right things? The material, quality of the bags and image of the brand appear to be the critical brand-building factors in this industry. In my opinion, the founders did focus on executing the right things because they remained focused on the image of their product and their business until the business became more fruitful and productive. The founders began with a do-it-yourself approach throughout the sales process and they found ways to keep an image of poverty away from the public eye until they were successful and reached a level of prosperity that was good enough to be displayed and talked about. This study source was downloaded by 100000849840424 from CourseHero.com on 11-07-2022 13:36:05 GMT -06:00 Excerpt from page 72: The founders' concern with the “look” of their products extended to the public's perceptions of Vera Bradley, the company. In their view, it was important for the business to look professional and larger than it actually was in those early days. They did not want customers or suppliers to think of Vera Bradley as a basement operation. With that in mind, Barbara instructed her children not to answer the phone during business hours. Meanwhile, Pat, with help from Barbara's daughter, Joanie, designed a striking and professional-looking letterhead and business cards. Joanie also lent her artistic skills the first company catalog (Exhibit 2.1). Product shipments used new boxes rather than reused boxes and packing material. According to Barb: We didn't want people to know that we were working out of the basement. You have to look as though you are a strong, successful business. So everything sent out had to look as though we were in the most beautiful corporate setting around, and doing well. 6. Will Vera Bradley's initial focus on middle-aged and older women lock it out of expansion to a younger demographic market? This question is easy to answer because the answer is ‘No’. Vera Bradley’s initial focus on middle-aged and older women does not lock it out of expansion to a younger demographic market because the founders decided to market their business to college students. Due to Barbara’s daughters being in college, the marketing process to the younger demographic market became a successful process. This study source was downloaded by 100000849840424 from CourseHero.com on 11-07-2022 13:36:05 GMT -06:00 7. Describe the network of helpers and stakeholders enlisted by the two founders and how that network helped the company. The network of helpers consisted of businesses, friends and family, Barb’s college roommate and independent sales representatives that helped to grow the business by implementing the sales strategies that were previously discussed and participating in the marketing techniques of the business. This network helped the business expand nationwide as opposed to keeping the business small and local. From page 72: They also recruited friends and family as independent sales representatives: Barb's mother, sisters, college friends, friends of friends—they turned to people whom they knew and liked and asked if they would represent the company's products in their geographic areas. The first of these reps was Barb's college roommate, a resident of upscale Arlington, Virginia. She enlisted in 1983. 8. Is Barb and Pat's focus on company culture advisable during this early stage of company development and growth? Comment on the sustainability of that culture if and when the company experiences major growth. Barb and Pat’s focus on company culture certainly is advisable during this early stage of company development and growth. When the company does experience major growth, each person will have a significant sense of accomplishment due to their individual effort to help grow and maintain the business because of the company’s structure and culture. From page 76: Barbara and Pat knew from the start that company culture would play a large role in their success and their own personal satisfaction. Because they thought of the company as a family, they hired family members, relatives, friends, and friends of friends who seemed to fit in with the Vera Bradley family—people whom Pat and Barb would enjoy spending time with: “nice people” who felt as passionate about the products as they did. “We focus less on the bottom line than on our culture, giving back [to the community], and having fun,” Barb says. This study source was downloaded by 100000849840424 from CourseHero.com on 11-07-2022 13:36:05 GMT -06:00 If you walk around this office, you'll see that people are laughing and having fun. Everyone is on even terms here. You never say, ‘She works for me.’ Instead, we work together. I'm insulted when someone says, ‘Barb is my boss.’ We're in this together. Reference: Bygrave,W.D. & Zacharakis, A. (2014). Entrepreneurship This study source was downloaded by 100000849840424 from CourseHero.com on 11-07-2022 13:36:05 GMT -06:00