Jimmy Possum: The Business Case Study

Executive Summary

Possum’s brands symbolize quality, authority, expertise and a good shopping environment with the addition of the current retailing business. Possum furniture is targeted at through the niche the company has built and promoted through the years. The addition of and the increments in profits for the business is an example of the extent to which the retailing business has been very lucrative to the Spalding’s.

Possum’s product and market positioning with respect to the Ansoff Matrix pertain to market penetration strategy. With respect to leadership in what the company does, Possum does have a leadership position since its “goods” and brands rather are very well in terms of popularity among the top-end consumers; however, diversity in locations is missing from Possum.

The decision-making at Possum is quick and in line with the market push and pull. There are now five Jimmy Possum retail outlets. The estimated revenue of around $25 million in 2008, when compared with their 2002 revenue of $3 million for manufacturing only, indicates that branching into retail was a wise decision. (Nicola Card, 2007).

However, it can be generally said that decision-making at the company can be made more wise and effective by making use of some wise decision-making tools. The planning processes at the company are not very transparent leading to no one clear strategic goal or vision. But, the way that the strategy has worked has resulted in a lot of success which can be seen by the massive increments in its profits, especially after the decision of opening up retail outlets and dealing with the market’s consumers directly.

The company needs to develop three corporate objectives pertaining to the strategy outlined in its functioning. It has been assumed that this strategy is that of a three yearlong vision, that is from 2009 to 2011.

Recommendations

• Developing a clear vision for the company in the form of corporate goals.
• Analyzing the external and environment
• Highlighting the areas where the decision-making process has been good and bad for Jimmy Possum
• Learning tools in the form of new approaches to running a company
• Decision making and planning tools that can be used by a company
• Critically analyzing the company’s overall functioning
• A brief analysis of how consumer centrism and employee care have helped Possum
• The importance of creating a valuable niche and promoting it well

Introduction

This paper talks about Jimmy Possum as a successful business in the furniture sector in Australia. It starts with the analysis of the external and internal environment of Possum through PESTEL Analysis and SWOT analysis respectively. It moves on to discuss the decision-making at the company and how it has worked in the company’s favour. After this, the paper highlights how Possum plans out its goals and strategic aims if any.

This case is an example of an entrepreneurship endeavour that has landed with a lot of success with the owners – or more famously known as the Spaldings. For any business or business initiative to grow and become successful it needs to develop a niche for itself in the market it wants to open up, survive and thrive in. When creating a niche that is in line with the market’s gap is concerned, positioning it well stands out to be important as well. Targeting one’s business to the right kind of people or consumers is again another very necessary decision that needs to be analysed and re-analysed with great care.

Analysis of Jimmy Possum’s external and internal environment

Analyzing the External Environment of Jimmy Possum

This section talks about the political, economic, socio-cultural, technological, environmental and legal analysis, in other words, the PESTEL analysis for Jimmy Possum.

Political

Australia’s political side remains non-detrimental to the business side. In fact, the government gives a substantial amount of freedom to the organizations to run their businesses which benefits the growing business of the Spalding’s (Turner, G. and Cunningham, S., 2006).

Economic

We see huge economic changes due to the financial crunch of 2008. Furniture is a source of generation of millions of dollars and even the economic credit crunch is faring quite well internationally. Since Possum’s furniture would be considered ‘leisure spending’, people who are affected by the economic condition will save and wait to buy a Possum piece. In a place like Australia, the economic condition of people generally is quite decent. Keeping this fact in mind, it can be said that the economic environment has been good for the company, inclusive of its retail stores (Turner, G. and Cunningham, S., 2006).

Socio-cultural

Possum also sells a kind of Victorian Ash furniture to the high-end segment of the market. This sort of furniture helps in keeping up with its aims of social norms since Australia’s history is kept intact. Also, the notion of purchasing ‘branded’ pieces and ‘treasures as pieces of furniture or designs that are unique have a personality of their own (Topfer, K., 2002).

Technological

Technology-wise, Possum has not had much exposure, since it has been more into manufacturing. With the way technology is fast changing these days, it is advisable that in order to derive sufficient benefits from it, Possum needs to be accessible online as well, to increase its consumer base and retain it too (Environment, n.d.).

Environmental

This is one area that could have a deep impact on the way the company functions, considering it is a furniture maker. Therefore, it is advisable that Possum engages in environmental acts by planting a tree for all the trees that it makes use of (Environment, n.d.).

Legal

The legal environment, just like the political environment has been very stable from 1995 till today in Australia. Therefore, with such freedom as the legal code of conduct Australia observes, it has been quite beneficial to the company (Turner, G. and Cunningham, S., 2006).

Analyzing the Internal Environment of Jimmy Possum

Strengths

The Jimmy Possum brand has now developed from a struggling two-person manufacturing business in 1995 into a thriving, vertically integrated business. The name “Jimmy Possum” is again a strength for the company since it is whimsical and humorous – a name that people could remember easily.

The business is value-based, where creativity, good design, and high-quality craftsmanship are the ruling values and far more important than profit or growth.

This has again really worked in favour of the company.

A decision was taken to develop a number of retail outlets (five) to sell Jimmy Possum furniture directly to the public, in 2004. The estimated revenue of around $25 million in 2008, when compared with their 2002 revenue of $3 million for manufacturing only, was recorded indicating that branching into retail was a wise decision. The Spaldings proved to be lucky to possess the abilities to succeed in both business sectors – manufacturing and retailing, adding strength to their business (Nicola Card, 2007).

It has won important business awards in recent years including the Australian Westpac Business Owner Award. In 2006, Margot has crowned Telstra Australian Business Women of the Year. Spaldings also spend a lot of time on speaking engagements and appearing on TV and radio. Further, their profile has been raised within both the public and business communities.

The company really believes in its employees. An example of this could be that Margot believes that women bring a different approach to business. Another example of the way Possum cares for its employees is the decision to provide a breakfast of fruit and nuts to energise the staff at the Bendigo factory, each morning (Nicola Card, 2007).

Weaknesses

There is secure socket layer software on the various website as part of the security and privacy policy that the company’s website or web retailing follows. Such is the technological environment that Australia exists in. Sadly, though the company yet does not have a proper site through which e-commerce can be taken advantage of.

Opportunities

Creating secure socket layer software on its website to start selling the products online is one opportunity that should be implemented. Also, Possum should have a variable pricing that is in line with the competitors importing cheap furniture is a good option.

Threats

Sales can be lost by Possum by the end of this year to that has started importing cheap furniture. And generally, also, Possum’s prices are on the higher end, again risking the market share portfolio, which needs to be carefully worked out because finance can get very tricky.

The decision-making processes in the organisation and ways they could be improved

Possum now is a well-established company, dealing with the retail of branded, classy, and ‘design’ based furniture. The company has five retail stores now that have been bringing a lot many profits to the Spalding’s.

Ansoff Matrix

Possum’s product and market positioning with respect to the Ansoff Matrix pertain to market penetration strategy most. With respect to market growth strategies, Possum does not deal with diversity in regions since its major stores (around five) are located in Australia. With respect to leadership, Possum does have it since its “goods” and brands rather are very well in terms of popularity among the top-end consumers.

Where product development is concerned, Possum has applied its diversification in products being offered in existing markets. This Possum has done by stressing more on the design part of the furniture pieces that it offers to its consumers. This it did when Possum decided that it wanted to take a more customer-centric approach along with an already existent employee care stance.

The decision-making at Possum is quick and in line with the market push and pull. When Possum saw that other retailers were importing cheap furniture, the company decided to invest in stores and open up retail outlets. There are now five Jimmy Possum retail outlets. The estimated revenue of around $25 million in 2008, when compared with their 2002 revenue of $3 million for manufacturing only, indicates that branching into retail was a wise decision (Nicola Card, 2007).

However, it can be generally said that decision-making at the company can be made wiser and more effective by making use of some wise decision-making tools. These are (Mind Tools, n.d.):

• Pareto Analysis for choosing what changes to make
• Paired Comparison analysis for valuing varying options
• PMI for weighing the benefits and costs attached to a decision
• Six thinking hats by looking at the same issue with six different stances (Napier, R., Sidle, C. and Sanaghan, P., 1997)
• Starbursting by holding brainstorming sessions with colleagues and employees
• Cost-benefit analysis
• Decision trees for choosing one right path
• Stepladder technique for using group thinking effectively
• Checking financial feasibility and viability of all decisions (Mind Tools, n.d.)

The planning processes in the organisation and ways they could be improved

The planning processes at the company are not very transparent leading to no one clear strategic goal or vision. But the way that the strategy has worked has resulted in a lot of success which can be seen by the massive increments in its profits, especially after the decision of opening up retail outlets and dealing with consumers directly. (Napier, R., Sidle, C. and Sanaghan, P., 1997)

The company needs to develop three corporate objectives pertaining to the strategy outlined in its functioning. It has been assumed that this strategy is that of a three yearlong vision. Hence all major planning at the company needs to be based on these three corporate objectives. (Napier, R., Sidle, C. and Sanaghan, P., 1997) These are:

• Improving upon the product mix by including for instance gift offers to go with pieces or plainly going over customer-centric by offering them ‘pampering sessions’. Also, improving upon the aesthetics of the retail environment could be kept in mind when planning to open up new retail outlets.
• Adapting to a multi-channel environment by firstly going digital, and making itself available throughout the world online with the usage of e-commerce tools effectively.
• Lastly, cost-efficiency could be reached as a medium-term objective, according to the three-year plan starting from 2009 April. This could include bulk purchasing even. (Napier, R., Sidle, C. and Sanaghan, P., 1997)

Conclusion

Possum’s brands symbolize quality, authority, expertise and a good shopping environment with the addition of the current retailing business. Possum furniture is targeted at through the niche the company has built and promoted through the years. The addition of and the increments in profits for the business is an example of the extent to which the retailing business has been very lucrative to the Spaldings. There are quite a few environmental factors that have a huge effect on the behaviours of the marketplace or the kind of functioning and performance that a business undergoes after the effect of such external changes. The company however needs to develop three corporate objectives pertaining to the strategy outlined in its functioning. It has been assumed that this strategy is that of a three yearlong vision, that is from 2009 to 2011.

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