JENNEY & DAVEY JEWELRY case study

Jenny has no any formal education and only developed a desire to be an own boss after working in a supermarket. She settled on the jewelry designing and making based on her passion for doing the work and also she believed that she could make good products that could amaze customers and be sold at a profit. Jenny started with experimenting on jewelry making a task that she undertook while her kids were away in school. The idea was first to test the products on her family and gauge the reaction they will get from neighbors and everyone who would see them on her children. This was a smart move indeed since it prevented the two from investing heavily on products they were unsure of whether they will appeal to the target market.

However, it is worth to note that despite the conditions being very bad on the side of the company, sales have seen a decline of as high as 25% in the last 90 days of the 3rd year. The financial crisis prompt Davey to give an honest prediction that the business may only manage to make sales of a total of £150,000 from the three primary sources. Although the sales are slowing down, they are expected to stabilize then grow to 10% in the following year and may remain that way for some time which could go to years. Another critical statistic about the business is that its borrowing had grown as high as £20,000. The company itself is valued to only £40,000 meaning if the money borrowed is reclaimed now, the Jenny and Davey will remain with just £20,000 for the business.

More so, establishing a supply chain that is both reliable and sustainable is crucial. Jenny and Davey’s business supply chain is very unreliable. After the hiking in prices, they are unable to obtain the raw materials on credit as it had always happened to portray a weak supply chain (Linton, Klassen and Jayaraman 2007). Lack of business planning is also evident in the firm. There is no established management system making it hard for the business to strategize on how to obtain various necessities such as capital during the time of need (Covin and Slevin 1989). Recommendations to the Owner The idea of starting the business was a good one as could have allowed Jenny to implement her passion and desire to become a self-boss.

It could also have provided a more certain future for their two children something that their previous jobs could not do. However, despite their determination and will to succeed, things are not turning out as per their expectations. The following recommendations could help Jenny and Davey to come up with a more informed decision on what to do next to improve the conditions of their business. a) Jenny and Davey should stop borrowing. Davey should then seek for a job, and the two should wait for things to stabilize and at the same time build enough capital to re-launch the business again. Conclusion The case study presents a classic case of a business failing due to multiple factors which includes bad economic times unfavorable for a small business with limited capital, lack of enough experience and know how to run a business, lack of strategies to handle contracts and too much borrowing and too much ambitions and determinations to succeed.