Home' Trinidad and Tobago Guardian : August 31st 2014 Contents SBG12 CASE STUDY
SUNDAY BUSINESS GUARDIAN www.guardian.co.tt AUGUST 31 • 2014
The following guide is intended
to aid readers in analysing the
case Handi Style Greeting
Cards. When analysing a case,
remember that there are many
possible approaches and solu-
tions and the goal is to develop your analytical
and problem-solving skills rather than figure
out the one right answer.
Amrita Koomar started Handi Style Greeting
Cards in her first year at university and the
business has grown slowly but steadily over
the past three years.
Amrita is happy with her slow growth strat-
egy but as she contemplated the future of the
business, she was not sure whether she should
focus on rapidly growing her business or get
another corporate job and continue to operate
her company on a part-time basis as she was
She knew that she had to make a decision
soon so she could stop worrying about her
career and start planning for her upcoming
Q1. What are the strengths and
weaknesses of Amrita's current
A major benefit of pursuing a slow growth
strategy is that it allows Amrita to continue
funding the business using cash received from
sales without incurring any significant external
debt. This reduces the risk of doing business
and provides the owner with a level of control
over all aspects of the business which may
not be possible in a rapidly expanding organ-
The flexible just in time production system
reduces the amount of inventory that must
be stored which lowers cost and fosters a high
level of customisation to match customer
This neatly dovetails with Amrita s desire
to be personally involved in the creative process
for her cards and ensures a degree of quality
control is maintained. This is important since
the quality of the cards is a key factor account-
ing for the success of the business to date.
A major limitation of the current strategy
however, is that the business is unable to take
advantage of commercial opportunities that
may present themselves.
The opportunity cost of this strategy is high
and sacrifices short-term profits. It also pro-
vides an opportunity for more aggressive com-
petitors to enter the market and block future
The small asset base of the business means
that Amrita would lack the funds to hire addi-
tional staff to meet larger orders that she
receives. The unsophisticated accounting sys-
tem that she currently uses may also cause
challenges as her business grows.
Finally, Amrita is personally responsible for
all the artwork in her card designs which leaves
the business vulnerable if circumstances were
to prevent Amrita from working for an extend-
ed period of time.
Q2. What are the personal
implications for Amrita of pursuing
a fast or slow growth strategy?
Pursuing slow and steady growth reduces
business risk and seems to fit well with the
personal preferences of the owner. It also pro-
vides a degree of control over product quality
which is extremely important to Amrita. She
may, however, find it increasingly difficult to
sustain the current strategy with the impending
changes to her personal life since in effect she
is the only employee of the business and may
not always have help available to fill multiple
orders when she needs it.
Growing slowly also allows amrita to learn
about market preferences and implement better
internal business practices as her managerial
Amrita may be less comfortable with pur-
suing rapid expansion since this will require
a greater commitment of time and effort in
the short run which may conflict with her
Hiring more staff however, could allow her
to delegate some of the work and achieve a
reasonable work/life balance.
At the same time, this would necessitate
relinquishing some degree of control over the
production process which she is unwilling to
Q3. If Amrita were to rapidly expand
her business, what options would be
available for her to finance this
Rapid business growth will require an injec-
tion of funds to generate increased sales. One
option if the growth is carefully managed and
her investment needs are modest is to continue
to use sales revenue to invest in additional
equipment and staff.
Hiring a salesperson to work on a commis-
sion basis may provide a rapid infusion of cash
with which to fund the expansion without a
large upfront outlay of working capital. This
option presents the greatest constraint on the
funds that would be immediately available for
the business to grow.
Another option would be to seek a loan
from a financial institution. Although the busi-
ness is profitable, lending agencies may con-
sider a loan to be a risky proposition since the
business has limited assets to act as collateral.
Getting funds via this avenue may thus prove
difficult unless Amrita is willing to offer per-
sonal assets as a form of collateral to secure
Given her personal preferences for low busi-
ness risk it is doubtful that this is an option
that she would want to pursue.
A third option is for Amrita to attract a
partner who is willing to invest in the business.
This would mean giving up some control over
decision making and increase business risk
but would provide the cash needed to grow
the business quickly.
A critical aspect of this strategy would be
finding the right partner whose business skills
would complement the owner s so that the
business would continue to maintain its rep-
utation for high quality cards and enable Amrita
to achieve a desirable work/life balance.
Dr Barney Pacheco is a lecturer in
the department of management studies
at The University of the
West Indies, St Augustine.
Case preparation guide: Handi Style Greeting Cards
Challenges of a
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