Fenchel Lampshade
1) What is your assessment of the business of Fenchel Lampshade Co.?
b. What is the Opportunity, People, Context, and Deal
c. What can go right? What can go wrong?
*People
Steven Rogers (CEO)
-Business analysis
-Management
-Personnel management
-Purchasing
-Consulting John Smith (Production Supervisor)
-15 years on the job Geri Wandall (Office Manager)
-5 years on the job Production Workers
-67% of workforce is over 40 years old & 55% of workforce has limited experience (1-2 years) *Opportunity
Competitive Advantage
-Industry leader in shadow-free lampshades
-Reputation for quality and service Market Characteristics
-Market size is 20 million
-Growth is 5% per year
-34 competitors (Low competition due to transport costs)
-Seasonal sales (Summers are slow / Holidays are good) Product Characteristics
-Hand made
-Plenty of variety in shapes, materials, colors and trim
-Made to specifications
-Slow replacement interval Manufacturing Characteristics
-Production is started with an order
-Made to specifications Distribution Channel
-Department stores
-Independent retail stores Importance of Scale Economies
-Only important for sourcing raw materials Working Capital Profile
-Most of the sales are on credit
-Working capital as of 1987 was $139K Plant & Equipment Requirements
-Machinery and furniture are currently $32K and are projected to increase to $50K Potential Opportunities
-Increased cash flow due to lower owner salaries
-Selling lampshades to high quality lamp manufacturers
-Building retail outlets
-Taking advantage of minority incentive programs Context
-Computers were on early adopters phase
-Bonds and T-bills are at above average rates What can go RIGHT? - The company can transition smoothly & Sales can increase dramatically if a deal is landed with Her’s Lamp Shade Shoppe in Wisconsin (Carry Silk-o-lite but not fenchel) - The lease is renewed at the same monthly
b. What is the Opportunity, People, Context, and Deal
c. What can go right? What can go wrong?
*People
Steven Rogers (CEO)
-Business analysis
-Management
-Personnel management
-Purchasing
-Consulting John Smith (Production Supervisor)
-15 years on the job Geri Wandall (Office Manager)
-5 years on the job Production Workers
-67% of workforce is over 40 years old & 55% of workforce has limited experience (1-2 years) *Opportunity
Competitive Advantage
-Industry leader in shadow-free lampshades
-Reputation for quality and service Market Characteristics
-Market size is 20 million
-Growth is 5% per year
-34 competitors (Low competition due to transport costs)
-Seasonal sales (Summers are slow / Holidays are good) Product Characteristics
-Hand made
-Plenty of variety in shapes, materials, colors and trim
-Made to specifications
-Slow replacement interval Manufacturing Characteristics
-Production is started with an order
-Made to specifications Distribution Channel
-Department stores
-Independent retail stores Importance of Scale Economies
-Only important for sourcing raw materials Working Capital Profile
-Most of the sales are on credit
-Working capital as of 1987 was $139K Plant & Equipment Requirements
-Machinery and furniture are currently $32K and are projected to increase to $50K Potential Opportunities
-Increased cash flow due to lower owner salaries
-Selling lampshades to high quality lamp manufacturers
-Building retail outlets
-Taking advantage of minority incentive programs Context
-Computers were on early adopters phase
-Bonds and T-bills are at above average rates What can go RIGHT? - The company can transition smoothly & Sales can increase dramatically if a deal is landed with Her’s Lamp Shade Shoppe in Wisconsin (Carry Silk-o-lite but not fenchel) - The lease is renewed at the same monthly