600 words minimum (2 pages, doubled spaced)
I have already started this assignment. 2 pages are already completed, but there needs to be 2 more pages.
THE CASE STUDY IS ATTACHED IN A PDF DOCUMENT. PLEASE READ CASE.
For this assignment, we are presenting recommendations to a leadership team about their growth strategy. A snapshot of how the company wants to grow is below:
Do they want to grow? Yes. Both King and Stott want to grow, but Stott wants to ensure that their plan for growth aligns with their current company culture/dynamic.
How do they want to grow? Both King and Stott had a passion for retail and they believed that retail expansion was promising.
How do they want to finance growth? They are considering investors. It sounds like a good idea at first, but they are also considering the cons that may come along with that. They will have partners, who will then have a voice in decisions, goals, and strategies that may not align with the ideas of King and Stott in their already well-established company. However, investors’ knowledge and management expertise could be useful.
How to scale org. growth? As they grow their company, there will be a need for more employees. Growing at such a rapid pace would require the need to quickly adapt to the faster-paced environment.
Below is the first 2 pages of this assignment that I’ve already written. Please edit if necessary and add 2 more pages discussing the ideas/strategies/recommendations mentioned above.
Stonewall Kitchen is a business truly built out of love and passion. The company’s foundation was built from homemade jellies and jams, which in turn, created a strong platform to grow the business. The last 13 years, Jonathan and Jim have exceed their initial plan and brought in annual sales of $25 million dollars and have become the largest private employer in York, Maine. Stonewall Kitchen has a strong backbone with Jonathan’s entrepreneurial drive and Jim’s hard work ethic, the two have created a great empire, an empire that questions if it can continue to grow over the next 5 years and have annual sales in excess of $100 million annually. Is there room in the kitchen to grow?
At Strategic Consulting Firm, we want to give Stonewall Kitchen every opportunity to make their dreams come true. Our goal is to review the long term plan and offer a recommendation that is in the best interest of the company. Our research is based on finding that will help determine the best options for the future of the empire. The outcome will determine if growing Stonewall Kitchen in the next five years is an achievable plan and with what risks/rewards will come.
Let’s look at the current valuation of Stonewall. By the end of this year, the revenue will reach a little over $24 million with an EBITDA of $1.8 million. Though the next five years without new retail stores are profitable, however, they will not get the outcome Stonewall desires. The projections without new retail stores in year five would be $64 million in sales and an EBITA of $5.3 million. While this is growth, it’s not as much as the ideal for Stonewall.
So, how does Stonewall get the growth and brand out to the customers in a grand style? We recommend growing the company and to do that, we suggest opening new retail stores. Retail is a great way to get the product in front of the customer and we understand that visual presentation is very important to Stonewall. In the next five years, 21 stores could be opened and this will raise the brand to a new level and create the revenue stream the company yearns. In order to achieve this objective, there should be some change to the catalog production and internet business. The catalog profits are low so reducing the production costs and putting that money back into the online business would make more of an impact. Another thing to consider is the inventory shelf time. If the inventory moved quicker, from 124 days to 70 days, this would put money back into the business. These tweaks will help the business move in a positive direction.
While we are very aware that the culture of Stonewall is something the owners pride themselves on, growing a business so fast is hard without the right tools for success.In order to make the new retail stores a reality, Stonewall must consider taking on a new investor. This could be scary to some because changing the dynamics of company could lead to unwanted changes. However, when searching for a retail investor, take the time to understand their morals and work ethic. There are investors out there that care about your company as much as you do and has the core values Stonewall is proud of. Balance is the key to finding the right investor, their expertise with Stonewall’s company values, could create a magical relationship that raise the company to a new elevation.
Of course there is a price to pay to play to obtain the dream. The building cost of 21 stores in five years is expensive, around $14.4 million. Though these additional stores will reap profits, it still a lot of work to get them up and running. We recommend bringing on an investor to help cushion the growing pains with the new stores. It is crucial to keep the majority ownership with Jonathan and Jim, so bringing in an investor below 25% is important and will keep a good sense of balance. Our suggestion would be to find an investor willing to put in $10 million, in the form of 2 million shares, with a 15.4% stake in the company. The owners will still have 75.19% ownership ( including previous shares outstanding) and have the reinsurance that they will have the upper hand in the future of the company.
Another change that should be considered is the organization chart.
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