Ruth M Case Analysis

Ruth M. Owades

Intro;

Ruth worked for Avion and while she was there as a marketing director she discovered a need for special gardening tools that would be used by the suburb demographic of women. Even though she initially wanted to work with Avion, they declined, and she had to go through with the idea herself. I will start by showing the swot analysis to analyze her likelihood of success in this new venture.

Swot analysis

Strengths

• She had marketing experience as the director of marketing at Avion group, this gave her an eye for need and a little sales experience to sell her idea and products.
• She knew her target market extensively, their interests, their purchase history of mail order and money they are willing to spend.
• She had some contacts with computer firms she developed at Avion
• Her husband is supportive and does a lot of inventing himself, so he knows his way around some of the things she may need.
• She had strong negotiation skills, she managed to negotiate office rent close to nothing, warehousing costs below average and her equity above 50%.

Weaknesses

• She had no experience running or starting a business.
• There was no cash flow to show, therefore there were slim chances she could raise anything from the bank.

Opportunities

• Competition was almost non-existent.  
• The outcomes were very measurable.

Threats

• She might run out of money sooner than expected
• The companies she was talking to about the idea could end up doing it themselves, Avion which she left.
• If she ran out of money, she was running a risk of ending with venture capitalists who have financial ties with Avion.
• Economy was starting to look week and it was risky for investors, meaning even if first round goes well, she might need second round funding which is way higher than she expected when economy is terrible. It may still be too early for banks to trust her cash flow, therefore its possible she may runout of cash.
• Bad credit and bad checks were common in this industry and cost 2-3%, but her target had money, so they would be less inclined to give bad checks.

Financials

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Whats next?

She should quit her job and sink her $50,000