Within three years (1997-2000), profits increased by 350%. OBO is Simon's third business venture and he has learnt considerably from each undertaking.
Simon invests heavily on research and development which fuels his desire to improve his existing products and to develop new ones. He has also kept up with the changing technology and offers a website that encourages customer focus groups, gives playing tips, product information and also sells the product online. Simon believes that consumer market research is essential in product development. At present, OBO has a very strong distribution network and a formidable brand value.
OBO is a strong company and has a far sighted CEO Simon Barnett, who has over a 20 year experience, ranging from manufacturing table tennis table to selling and distributing hockey equipment for Ishan. Eventually however, he also went into production and specialized in making protective hockey equipment for goalies. Simon is an ambitious individual, a visionary leader who believes in managing by setting his own examples. He is a creative person who invests heavily on product research. Simon is of the opinion that it is important to bring changes in the product so that it seems fashionable as well as useful to the customer.
His sound distribution networks and brand value has made OBO the market leader in its industry. Simon holds a strong relationship with his agents and also with his customers. He encourages his customers to express their opinions and ensures that new products are made keeping in mind the customers' changing needs. Moreover, OBO gives a lot of attention to product quality which is their key competitive advantage. Although OBO operates in a niche market, it is still a big name. It is doing well in the market and had a profit of $450,000 in the year 2000.
However, if OBO decides to step into a new market of making cricket equipment it will be big change for the company. This 'big change' brings with it a lot of risk. Simon's financing policy has always been to avoid bank loans. He prefers to reinvest his retained earnings. For a venture as huge as cricketing equipment, heavy investment will be needed and with Simon's current policy this can be a huge gamble.
OBO has limited staff and a new venture would certainly mean expanding the personnel base. Apart from this, Simon depends very strongly on 2 key personnel. Simon acts as a facilitator and the manufacturing and designing sides are looked after by two men. Such excessive reliance can be dangerous as even if one of them quits, Simon can be in big trouble.
Although Simon has ample experience in business, a cricket venture will still be a new area. The requirements of cricketing equipment will be very different from hockey as the two games vary greatly in the way they are played.
In terms of opportunities, there are many. OBO operates in a niche market and in comparison cricket will offer a bigger market. For hockey a team would at a maximum need 2-3 pairs of protective pads, but for cricket, all the batsmen will need pads along with the wicket keeper. If OBO is able to manufacture pads that are lighter and allow players more speed and agility then there will certainly be a lot of scope of the product. Also cricket is a game that is more popular all over the world and is played by many countries at a national level. With time, OBO can also expand towards