Sir Kensington’s Company

One of the steps taken by Scott Norton and Mark Ramadan to show their dedication to truly understanding development and its implications for their company was to approach local grocery stores as the first adopters of Sir Kensington's Ketchup, which are more appealing to innovators. Furthermore, Norton and Ramadan worked tirelessly to develop a bundle and label that expressed Sir Kensington's ideals in a unique way in order to make their brand appealing to innovators. Firm Sir Kensington’s competencies include developing a new ketchup brand, creating something compelling, something that reflects Kensington’s values, as well as creating ketchup brand from natural ingredients such as cane sugar, fresh tomatoes, and real diced onion. The firm’s core competencies are very sustainable because they rely on the naturally produced raw materials which cannot get depleted easily.

13-38. Sir Kensington's is located in the Continuous Growth Stage of the organizational life cycle shown in Figure 13.2. The issues Sir Kensington's founders need to specifically sensitive to in this stage include the need to have a business structure and increased formal business relationships. Another issue of great concern at this stage is the acquisition of resources required for the business, as well as the business owners’ ability to take the firm to the next level. Another issue relates to the need to develop new products and services with the aim of exploring new markets. Sir Kensington’s owners also need to be sensitive about partnering with other firms, as well as developing various business procedures and policies during the continuous growth stage.

13-39. One of the key lessons entrepreneurs could learn about growth potential by studying how Sir Kensington’s has grown is that it is always important to appreciate the nature of business growth because it the business growth depends significantly on good management, preparation, as well as an appreciation of the involved issues. The second lesson that entrepreneurs could learn about growth potential from Sir Kensington's case is that it is always essential for businesses to focus on quality as opposed to price because the products will eventually earn high margins if they are of the right quality. The third key lesson entrepreneurs could learn about growth potential by studying how Sir Kensington has grown is that it is always advisable to stay committed to the business core strategy by sticking to the product or service that are in line with the core strategy and then eventually adjusting to other related areas. The fourth lesson entrepreneurs could learn about growth potential by studying Sir Kensington's growth is that it is always important to have a business strategy in the form of a business plan by providing a detailed forecast of the firm's operations as well as a description of the resources the firm will require to achieve its goals.

Application Questions

13-21. Pete is not starting the venture with realistic expectations because he has not studied the market and he has no strategies for achieving an annual growth of 100 percent. Pete's expectations should be developing a business strategy that would enable him start off his business. Additionally, he should expect a gradual growth as opposed to an instant growth. Being on the top list of best-performing companies is not a one-year achievement, it is a gradual process with a broad range of challenges, all of which Pete needs to take into consideration.

13-22. In response to Sam’s questions, I would say there is something to what the guys say in the article because people usually do not expect businesses to growth that fast. Additionally, I would confirm to Sam that opening new kiosks as fast as he can, is really a good thing. However, it is unrealistic for a business to grow from one kiosk to 142 kiosks within a short period and that is what makes the public to develop the interest of knowing the magic behind such a growth. Additionally, the fact that Sam hopes to add 200 kiosks annually for five years is just unimaginable and raises questions about how he would go about it, and specifically, how he would raise the resources for such a growth. It appears unrealistic for a single kiosk to generate enough profit to open 141 similar new kiosks within a short period, and the sustainability of the business will always be questionable.

13-23. The argument that Patty Stone can make in favor of adding new products as a means of effectively growing her firm is that adding new products would expand the market for her business and in turn increase her profit margins thereby contributing to the growth of her firm. Additionally, adding new products would enable her to explore the full potential of her business and the possible strains related to inventory costs mentioned by her chief financial officer as some of the challenges that any business has to face when expanding its market base.

13-24. By being a market leader, Chris Dees has various advantages in terms of firm growth over his competitors. One of the benefits of being a market leader is that Chris will have lower customer acquisition cost than his competitors. Another advantage is that the market leader is already in the deal and will always be ahead whenever other companies think about copying his type of solution. He therefore has higher growth chances than the competitors. Additionally, the non-market leaders are the ones that will be forced to differentiate their products, a situation that will make them to work longer and harder to achieve substantial growth compared to the market leader. With the lower customer acquisition costs, the market leader will have higher margins and will therefore grow faster and more profitably than the competitors.

13-25. My advice to Kyle is that he needs to understand the company's core strategy and remain consistent to the company's competencies because the company is no longer experiencing any growth and putting it back to growing phase would require patience and staying focused on its core strategy. Additionally, growing the company implies taking the company to higher levels and that would require Kyle to disturb the company's healthy culture because growth comes with transformation.

13-26. For Sarah’s business to move from the early growth stage of its organizational life cycle to continuous growth stage, she has to take certain actions. One of the things Sarah has to do is to begin transitioning from her role as the hands-on supervisor of every activity of the business to a managerial position. She has to start working on the business as opposed to working in the business since the business will never grow beyond her ability to directly supervise every activity that takes place if she remains unwilling to make such a transition. Additionally, Sarah has to consider increasing formalization in her business for it to move from early growth stage to the continuous growth stage. That means she has to start developing various procedures and policies that would guide the employees in running the business in her absence.

13-27. Meredith should give the investors an option of trying her new approach before making full payments for the idea. I f she allows the investors to first try the idea first before making full payments, the investors would develop confidence that she has the preparedness to cope with the challenges of rapid growth and they would eventually pay her for the new approach of packaging meat.

13-28. By stating that business partnerships can help firms reduce the impact of the managerial capacity problem, the speaker meant that partnerships bring about shared responsibility among individuals who are empowered and recognized by their own companies to cause change by building consensus. Additionally, partnerships lead to improved coordination of form’s programs, policies, and service delivery. Partnerships also result in transparent and shared decision-making processes that are essential in reducing the impact of managerial capacity-related problems. Besides, partnerships compel the partnering firms to ensure accountability for every action they make.

13-29. Collin’s company might need huge capital to hire a large number of new employees, and that might lead to the consumption of a substantial amount of the company’s profit, a situation which is not healthy for a business which expects to grow. Instead of hiring 35 to 50 new employees, Collin should consider partnering with various distributing companies that deal with electronics to assist in the distribution of the new products. Alternatively, Collin may make advertisements for the new products and the buyers would eventually look for the new products in its stores without necessarily employing several employees.

13-30. My friend seems not to have a good sense of financial implications involved in launching a new product into the marketplace. My friend needs to understand that the marketplace is very unpredictable, especially for new products, and there are various financial challenges faced by new companies. My friend is likely to face the challenge of dealing with the unknown regarding the profitability of his product, the response of the customers to the new product, as well as the sustainability of the business. None of such issues has a reliable and solid answer, even if the business bases on great idea with all the theoretically needed resources.

13-31. Having looked at the Scuba Toys (www.scrubatoys.com) and familiarized myself with its products as well as business model, the following are my recommendations regarding the issues it needs to be aware of as it launches its growth initiative;

oScuba Toys should provide the right kind of oversight before launching its growth initiative. That means both the staff executives and the CEO should have a joint responsibility of ensuring that the company closes its growth gap.

oThe company must also make sure that it puts the best and most experienced talents in charge of its growth initiative launch. That is because business growth initiatives are great development opportunities, whose failure might have a significant impact on the company's performance. Scuba Toys, therefore, needs to assign the ambitious and smart talents for the implementation of its growth strategy.

oIt would also be risky for Scuba Toys to assemble a wrong staff and implementation team prematurely. It would be essential for the company's senior executives to focus on the employees' capability as opposed to their availability, and only staff up the initiative when the value proposition, business model, and strategy are clear. It will be a waste of the company's resources if the Scuba Toys decide to scale the business prematurely.

oScuba Toys has to take the right approach to its performance assessment. Since it is already a mature company, Scuba Toys needs to consider cultivating a combination of capabilities and skills that would move it closer to achieving its growth objectives.

oScuba Toys also needs to review its organizational readiness for the growth initiative before its launch. That is because cultural differences among the target customers require Scuba Toys to have flexibility in the implementation of its procedures and policies when operating internationally to ensure the engagement of both its employees and clients, as well as the execution of its plans. It would, therefore, be essential for the company to evaluate its organization structure necessary to execute the growth strategy successfully.