Analysis of the Company Speedo - Case Study Example

ENTREPRENEURSHIP (Authors Name) (Institutional Affiliation) Introduction The process by which an entrepreneur starts a business is referred to as the entrepreneurial process. This process can be defined as the activities that take place in building, organizing and launching a business with the aim of deriving economic value. The process involves several key activities which are generating an idea and evaluating an opportunity, planning and forming the company through a business plan, evaluation of the necessary resources and management of the venture (Hisrich et al 2005). This essay is focused on the analysis of the company Speedo. The Entrepreneur Success of a venture is dependent on the qualities and characteristics of the entrepreneur. The entrepreneur is described as a business leader who identifies an opportunity and through proper planning and management is able to turn it into a profitable venture despite the risk associated with the business (Scott 2003). One such entrepreneur is Alexander MacRae the founder of the company Speedo. Alexander was born in Scotland in 1888 to Mary and a humble fisherman from North Western part of Scotland called Murdo MacRae. Alexander left his native home of Losh Kishorn and migrated to Sidney Australia with the aim of becoming a successful businessman. In 1914 he set up his own underwear firm by the brand name Fortitude which was taken from the motto of the clan MacRae. Fortitude was later renamed to Speedo in 1928. Alexander was considered as a opportunistic, hard working, highly motivated and creative individual who put his family at the heart of everything he did and at the same time maintained good relationships with his staff based on friendship and trust. These great character traits played an important role to the success of his business. Identification and evaluation of the opportunity Identification of a business opportunity is the start of the entrepreneurship. Most ventures are created because of the ability of the entrepreneur to identify possibilities in the market. It is mandatory that every business opportunity be carefully evaluated and analyzed. The entrepreneur should first of all conduct an evaluation to determine whether the new business idea correlates with his personal skills and also whether it meets his goals. It is important for an entrepreneur to believe in the business so as to sacrifice much of his time and effort to ensure success of the business. Evaluation helps the entrepreneur to clearly identify the risks associated with the business and also the potential returns from the business. Risk assessment helps the entrepreneur to understand the market, the competition and also the amount of resources needed to run the business. The entrepreneur identifies the competitive advantage and uniqueness that the new venture has over its competitors and is able to use this to attract a huge customer base. Opportunity analysis however is a brief assessment that focuses on the opportunity rather than the business as a whole. It includes the description of the services or the product being offered, an evaluation of the entrepreneur and the team and a view of the resources required for the success of the business. The 1920’s was characterized by a high rise in the swim wear market due to the legalization of swimming as a sport. There was also a great change in the attitude of people as they were now more open to mixed bathing. It is through these changing situations that Alexander identified the opportunity to create a successful venture. He introduced to the market the classic figure-hugging costume that was able to allow free movement of the body thus allowing swimmers to swim faster and more comfortably. This new brand quickly gained popularity amongst swimmers and the public as well. The swimmer Arne Borg world record win with the swim suit also saw a increase in the demand of the suit. Alexander was able to capitalize on the great rise in beach culture in Australia, by developing swim wear that were attractive and convenient to everybody. Speedo’s competitive advantage was through its styles and performance for example the bare-chested swimming shorts design that were used by the Australian mens swimming team in the Berlin Games in 1938 made headlines. The Business plan After careful analysis and evaluation of the opportunity it is important to develop a business plan in order to be able to capitalize on the existing opportunity. A good business plan contains an identification of the target market, the business model, the positioning of the business and the objectives and goals of the business. The target market is defined as the potential buyers of the company’s products. Analysis of the target market enables the entrepreneur to differentiate the product or the services in order to satisfy the needs of the consumers. The entrepreneur is also able to develop appropriate marketing strategies that are focused to the company’s target audience. Identification of the target audience moreover enables the entrepreneur to understand the purchasing behavior of the company’s consumer and therefore he/she is able to develop affordable prices for the products and services (Kuratko 2006). The business model is a description of the profit generating activities that the business ventures into. The model clearly defines the benefits of the product or service to the consumer and the proposed pricing for the commodity. The business model also evaluates the risks associated with the business and the solutions to these risks (George et al 2012). Positioning defines the company’s uniqueness and differentiation of its products and services in the market. Positioning clearly states the activities the company undertakes in order to satisfy its customers (Levi 2007). The company’s position is embedded in its vision statement or slogan for example in 1928 Speedo staff made the slogan “Speed on in your Speedos” to attract the vast number of consumers who were interested in swimming. The business plan should also include a set of objectives and milestones for your business. Objectives enable the business to set priorities that will guide the entrepreneur in making tough decisions for the company. Clearly stating the objective allows the business to develop an operation plan. An operation plan is a statement of the activities that need to be undertaken by the members of the company in order to achieve the set objectives. The resources Assessment of the resources needed for the success of the business opportunity is an important factor to every entrepreneur. Resources should be classified according to their need and overall value to the company. Lack of the necessary resources exposes the company to risk and undermines the competitive nature of the company (Coulson 2003). Alexander noticed the great need for finances and it is through this that during the First World War his company under the name Knitwear made socks for the Australian army. This gave Alexander the necessary finances to expand his business which progressed to the underwear company called Fortitude that was later renamed to Speedo. In 1940 Speedo during the Second World War dedicated over 90% of its resources supplying the armed forces with necessary clothing. After the war Speedo had adequate finances that enabled them to open up a new factory to cope with the rising demand of swimsuits. Alexander recognized the great need of finances as a resource that will drive the success of his company. Speedo also recognized the need of a large customer base as a necessary resource. It is because of this that in the 1956 Melbourne Olympic Games, they sponsored the entire Australian team which made Speedo into a World Famous Brand. Speedo immediately started exporting to the USA and also developed relations with the New Zealand, Japanese and the South African Markets. Managing the enterprise After successful acquisition of the resources it is important to properly manage the business to ensure that it is grows and becomes a great venture. The manager should work towards strengthening the brand of the product. Strong brand strength increases the consumer base (Kapferer 2008). Speedo has seen great growth significantly through proper management. Its international presence has expanded with new ventures being launched in Europe, Brazil, Japan and Canada. Speedo has over the years also differentiated its products to strengthen its brand for example the launch of the Fastskin in 2000, Fastskin FS-PRO in 2007 which was the most powerful light weight swim suit in the market, LZR racer in 2008 which was the most technically advances swimsuit in the world and in 2011 they launched the Fastskin Racing System which is a collection of caps, goggles and suits that work together to achieve the best swimming experience. Recommendation The recommendation to the C.E.O is to initiate activities that will promote the brand of the business as Speedo is already a well-established company. Brand is an intangible resource to the company and it is important because products and services associated with the brand attract high profits. A strong brand has competitive advantage and can utilize this to reduce the company costs and thus increase its profits. References Hisrich, Robert D., Michael P. Peters, and Dean A. Shepherd (2005), Entrepreneurship, McGraw-Hill Irwin, New York Scott Andrew Shane (2003). A General Theory of Entrepreneurship: the Individual-Opportunity Nexus. Edward Elgar Publishing  Kapferer, Jean-Noël (2008). The New Strategic Brand Management: Creating and Sustaining Brand Equity Long Term. Kogan Page Publishers George,G and Bock AJ. 2012. Models of opportunity: How entrepreneurs design firms to achieve the unexpected. Cambridge University Press Levi, K. (2007) Differentiate or Diminish: The Art and Necessity of Business Positioning, Cambridge University Press Coulson Thomas, C. (2003). The Knowledge Entrepreneur: How Your Business Can Create, Manage and Profit from Intellectual Capital: Kogan Page Ltd. Kuratko, D. F, (2006). Entrepreneurship: Theory, Process, Practice (7th ed.). Mason, OH: Thomson South-Western. Read More