Question

As an executive at diversified mail order retailer Avian Group, Ruth Owades saw opportunity. Choosy gardeners...

As an executive at diversified mail order retailer Avian Group, Ruth Owades saw opportunity. Choosy gardeners did not have easy access to premium specialty gardening equipment.

But these amateur horticulturalists could be profitable, easily reached, and extremely loyal if well served. She proposed the business to Avion, but they had no interest. Her next step was to ask them if she could take the idea and develop it on her own. Surprisingly, they agreed.

Ruth had not worked outside the comfortable confines of a corporate environment. A brief investigation into setting up her own operation revealed that investment money for an unproven entrepreneur with an unproven idea was not exactly forthcoming.

Ruth's best offer for funding involved her providing 25 percent of the money for the venture from her own bank account, while giving up 49 percent of the company to a group of four private investors. Determined to make it work without the investors' money, she plunged into business, naming her venture Gardener's Eden.

Ruth's first stop was the printer. To a mail order company, the single largest expense is the printing and mailing of the catalog-a line item that can account for up to half the costs in the

business. Ruth needed both a fantastic print job and good financial terms---- two elements that are usually mutually exclusive. So she proposed a scheme where the printers would bid on her first two catalogs rather than just her first one.

This showed the printers that she was willing to make a commitment to them, in exchange for favorable treatment on their part. Her suggestion was novel to the industry and was well received. So when she went in and said, "Gee, the other printers are offering me 90-day terms. Can't we do better than that?” the printer gave her six months to pay.

Gardener's Eden needed more than catalogs, however. And Ruth doggedly pursued each supplier necessary to make the venture happen.

She negotiated with the utilities so that she did not have to tie up her cash with deposits for electricity and telephones. She arranged long credit windows with the suppliers that manufactured the exotic gardening items she intended to sell. She drove hard bargains with both her landlord and with the credit card company for unusually low terms. She even pursued her local postmaster, visiting him again and again until he turned up a forgotten regulation that enabled her to collect her daily mail without any service charge.

Ruth's strategy was simple: figure out who would benefit from her success; tell them the story about what she was trying to accomplish; explain to them why they were critical to the venture and

how they would be successful when she was; and push each entity to make an investment to help her be successful.

She negotiated everything with everyone until she got what she wanted. Unknowingly, she was successfully applying affordable loss to her venture.

As the picture came together, Ruth had built an environment where everyone around her had a reason to do something special to make her successful-an environment where she had transformed suppliers to the venture into partners with the venture -an environment where she was able to succeed.

Ruth's revenues well exceeded US$1 million when stylish retailer Williams-Sonoma acquired Gardener's Eden less than four years after she launched the venture.

v  Answer the following questions.

a)    List down the principles (Only) of effectuation theory, highlighted in the above case

b)   Was the opportunity created or found? Briefly explain. (Max 100 words)

c)    As per our discussions many times in class identify the skills which guided Ruth towards her success ( Max 100 words)

Homework Answers

Answer #1

Q1.

A. ANS: These are the following Principes of effectuation theory, highlighted in the case study:

  • Bird in Hand principle: start with what you have
  • The crazy quilts principle: Forming Partnership
  • The lemonade principle: Leveraging surprises.
  • The affordable loss principle.

B. ANS: Ruth Owades found an opportunity in the form of easy access to premium speciality gardening equipment. The “found” view assumes that the budding venture is sufficiently similar to an existing business so that historical information will inform decisions in the new venture, and the environment is sufficiently stable so that outcomes from the past will be relevant to the current situation and the future. She saw an opportunity that can improve the relationship between the supplier and its customer in the form of Seeding Symbiotic Relationships. Ruth's wanted to improve access to high-grade speciality gardening equipment that would have created a premium market segment.

C. ANS: Skills which guided Ruth towards her success:

  • Soft skill: she can communicate, persuade and Negotiate with its supplier and with other stakeholder's that has made her successful with its new venture.
  • Curiosity: she found out new opportunities refactoring the existing business operation and identified a solution to achieve them.
  • Management skills: she was able to manage various parties associated with its business to make it a successful venture.
  • Networking: she created a network that facilitated her in partnership deals with its vendors.
  • Strategic thinking: she was able to decompose its problem and identified a creative solution to achieve his target.
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
AD Printers Pte Ltd (“AD” or the “Company”) is a company manufacturing and selling 3-D printers....
AD Printers Pte Ltd (“AD” or the “Company”) is a company manufacturing and selling 3-D printers. Bernard is the Sales Director of AD and was specifically instructed by the Chief Executive Officer of AD to achieve S$1 million in sales per year. At a recent networking event that he organised to meet potential customers, Bernard spoke with Charrie and Diana who were looking to purchase a 3-D printer. Charrie had never purchased anything from AD before, and was concerned that...
Homeplate Lexi Taylor looked out the window of her Rexburg apartment and marveled at how her...
Homeplate Lexi Taylor looked out the window of her Rexburg apartment and marveled at how her life had changed in the past few months. Since launching Homeplate a little over a year ago, she had grown from a one-person operation preparing meals in the local YMCA kitchen to a fast growing meal preparation and delivery service, with nearly 3,000 regular customers and strong growth and profit potential. Lexi had gone through raising a seed round of capital and was now...
Case Study: Monica’s Handbags Monica, after completing an internship with a national apparel company, decided that...
Case Study: Monica’s Handbags Monica, after completing an internship with a national apparel company, decided that she wanted to exercise her creative design talents and her strong entrepreneurial spirit by starting her own fashion business. She conducted fundamental market research and determined that there is an unfulfilled market need for the moderate fashion handbags that she had designed at the $100 retail price point. She also learned that the independent women’s apparel stores she was targeting require a 50% retail...
CASE 3.2 Horizon Consulting Patti Smith looked up at the bright blue Carolina sky before she...
CASE 3.2 Horizon Consulting Patti Smith looked up at the bright blue Carolina sky before she entered the offices of Horizon Consulting. Today was Friday, which meant she needed to prepare for the weekly status report meeting. Horizon Consulting is a custom software development company that offers fully integrated mobile application services for iPhonetm, Androidtm, Windows Mobile® and BlackBerry® platforms. Horizon was founded by James Thrasher, a former marketing executive, who quickly saw the potential for digital marketing via smartphones....
CASE STUDY REWARD ENCOURAGES BEAST.....OOPS, BEST! Challenges and accomplishments Neera and Vijit’s experience proved to be...
CASE STUDY REWARD ENCOURAGES BEAST.....OOPS, BEST! Challenges and accomplishments Neera and Vijit’s experience proved to be an asset in the project. Both were technically qualified and committed to the work. Both wanted to excel in their work. Neera knew that with a big team, verbal instructions will get diluted and therefore written instructions were important. Manuals were prepared for each aspect of assessment and the entire field staff was meticulously trained so that clarity about the work and mechanism to...
Please answer below questions in brief after reading the below article What makes the study of...
Please answer below questions in brief after reading the below article What makes the study of strategic management so interesting? Things can change so rapidly! Some start-ups can disrupt industries and become globally recognized names in just a few years. The rankings of the world’s most valuable firms can dramatically change in a rather brief period of time. On the other hand, many impressive, high-flying firms can struggle to reclaim past glory or even fail. Recall just four that begin...
Read the attached articles about the proposed merger of Xerox and Fujifilm. Utilizing your knowledge of...
Read the attached articles about the proposed merger of Xerox and Fujifilm. Utilizing your knowledge of external and internal analysis, business and corporate strategy, and corporate governance, please discuss the following questions: 1. What is the corporate strategy behind the merger of Xerox and Fujifilm? 2. Why did Xerox agree to the merger? Is this a good deal for Xerox? Discuss the benefits and challenges they face with the merger. 3. Why did Fujifilm agree to the merger? Discuss the...
Gender Bias in the Executive Suite Worldwide The Grant Thornton International Business Report (IBR) has described...
Gender Bias in the Executive Suite Worldwide The Grant Thornton International Business Report (IBR) has described itself as "a quarterly survey of business leaders from across the globe … surveying 11,500 businesses in 40 economies across the globe on an annual basis." 1 According to the 2011 IBR, the Asia Pacific region had a higher percentage (27 percent) of female chief executive officers (CEOs) than Europe and North America. Japan is the only Asia Pacific region exception. The report further...
It had been a busy day for Marsha Chamberland. She had spent most of it cleaning...
It had been a busy day for Marsha Chamberland. She had spent most of it cleaning and running errands in prepara- tion for her brother-in-law Ed’s return, and now she was preparing a quick dinner for her family. Ed, an industry official whose job it was to decide whether or not new products needed premarket approval by the U.S. Food and Drug Administration, had spent the last two weeks in Tennessee expressing his views on genetic engineering in food. He...
2. SECURING THE WORKFORCE Diversity management in X-tech, a Japanese organisation This case is intended to...
2. SECURING THE WORKFORCE Diversity management in X-tech, a Japanese organisation This case is intended to be used as a basis for class discussion rather than as an illustration of the effective or ineffective handling of an administrative situation. The name of the company is disguised. INTRODUCTION In light of demographic concerns, in 2012, the Japanese government initiated an effort to change the work environment in order to secure the workforce of the future. Japan is world renowned for its...