Path Forward for Dusty Rocker: SCM Case Analysis
Leslie Thompson created western boots with attractive interchangeable inlay. The main reason that influenced Thompson to start a western boot business was her idea relating to an attractive interchangeable inlay. The initial idea by Thompson was simply to design and create a pair of boots for personal use. After the commencement of different operations, the products from DRB were marketed and sold direct to customers, particularly during the annual National Rodeo Finals. The main issues that affected the company included lack of experience in the fashion industry, challenges of the new brands of boots penetrating into the market full of similar products from established companies, insufficient funding for marketing activities, and reliance on supplies from a manufacturing company in Mexico, Araban. The main strength of DRB is that the business offers a unique product to the market, the company has established a network of potential buyers by advertising the products to market and trade shows, and the business provides high-quality boots. The main opportunity that can help the business gain a competitive advantage over the rival businesses includes is the use of word of mouth approach of marketing and adoption of the latest technology in advertising to attract more customers. The main strategic goal of DRB is to ensure the business continues to grow and scale. The dependency of manufacturing sources from a company located in León, Mexico created distribution, transport, and logistics issues for DRB. The main approach of dealing with the issues relates to continuing to store inventory and complete orders to prevent delays when offering products to customers.
Path Forward for Dusty Rocker: SCM Case Analysis
The main focus of DRB was to create boots that meet the needs of customers, particularly women (Litton, 2016). The founder of the company identified the gap in the market due to the lack of boots that would match ladies’ clothes. As a result, DRB introduced boots with changeable colored attachments. The new brand of boots allowed women to use the changeable colored attachments to match their clothes. The colored inlay is detectable through a decorative pattern in the upper shaft of the boot. The target market includes women who require boots with exceptional features from what is offered in the market. The three product lines of women’s boots, embroidery only, equestrian style, and the major one, are useful in meeting the needs of women. The company has created 32 styles of ladies’ boots in different sizes. Currently, the company is offering 13 sizes for each style. The size starts from five to 11. The styles and sizes are created based on the percent of demand. The brand of boots also has 20 different color options for the interchangeable attractive inlays. Additionally, the company created western-styled boots with five different shirts (Litton, 2016).
The company operates in an industry that consists of many players, including Justin and Lucchese (Lucchese Brand, 2021). Western-style boots have existed in the United States (US) for centuries (Litton, 2016). The boots were originally used by people while working in ranches and farms. There were established companies such as Corral, Ariat, Tony Lama, Justin, and Lucchese. As a result, Thompson has to develop strategies for dealing with competition from established brands. Despite the worry of entering into the fashion industry, Thompson created Dusty Rocker Boots, LLC (DRB) in September 2012. After two years, DRB introduced three product lines of ladies’ boots. The product lines were the major one, equestrian style, and embroidery only. The main growth issue facing DRB in the fall of 2014 was the manufacturing supplier. Thompson was involved in different operations, including designing new boots and inlays, invoicing, and accounting (Litton, 2016).
As a result, the leaders of the company had to develop strategies for dealing with increased competition from rival businesses. Among the strategies employed in the company include selling to boutique retailers and directly to online customers. Creating a unique product is a significant advantage in dealing with competition. In the process of dealing with competition, the management at DRB looked for a manufacturing company, Araban, in León, Mexico. The company was a footwear supplier for DRB. Despite increased competition from other top brands, DRB gained a market share with the company making sales of $510,000 by September 2014. The sale comprised approximately 100 pairs sold directly online and 3,366 pairs of boots sold wholesale to retailers. Thompson focused on reinvesting money generated in the company to promote the growth and development of the business. Earnings from the sale were used to finance operational costs, with the owner taking only $1000 per month for gasoline. Another strategy that has helped the company to continue growing is the focus on offering high-quality boots to the market. The strategy helps to attract customers to buy boots produced by DRB. Thompson was aware that the boots offered by the competitors were made in China, meaning that they are of low quality. The boots supplied from Mexico were suitable for Texas in terms of both culture and logistics compared to those that are manufactured in China (Litton, 2016).
There were several issues that affected the company from the time the business was started (Litton, 2016). The first issue that affected DRB, particularly in the early years, was the lack of experience in the fashion industry. For a company to grow and expand to a successful organization, there must be a team of people with sufficient knowledge about the business. In the case of DRB, the founder of the business was a teacher by profession with no knowledge of the fashion industry. Thompson relied on friends and family members who had a passion for the industry. Lack of knowledge is a concern because it can lead to poor judgment and incorrect decisions (Litton, 2016).
The second issue related to the challenges of the new brands of boots penetrating into the market full of similar products from established companies (USA Made Products, 2019). There were many companies involved in the production of boots in the US that made it difficult for DRB’s products to gain a significant market share. The company had to deal with competition from companies such as Lucchese and Tony Lama (Justin Brands, 2021).
The third issue is insufficient funding for marketing activities to increase awareness of the product to the target customers. Advertising is considered to be the main approach of communicating information about the product that companies are offering to customers (Yermolovich, 2018). Through advertising, companies can inform the customers about the available brands in the market to assist them in making purchase decisions. Advertising helps people get information about specific products to increase sales, revenue, and profit margins. Marketing of projects was among the main issues because the company only spent a very small percentage of the total budget on advertising. The main approach of advertising in the company involved the use of face-to-face marketing by the sales representatives in the field. Advertising was conducted mostly in markets and trade shows to create networks to gain extra sales. The company failed to explore the most effective method of marketing, such as the use of online advertising through Facebook and creating an official website. Additionally, the company did not use magazine and catalog advertising, online advertising, television commercials, and search engine optimization. Due to lack of adequate marketing, DRB does not enjoy benefits associated with a large western wear market. For instance, the U.S. western wear markets accounted for about $8 billion in retail sales in the year 2013. The market was comprised of apparel, footwear, and accessories accumulating to $3.5 billion, $3.0 billion, and $1.5 billion in yearly retail sales, respectively. There was a significant growth of about 7% in the western wear market between 2009 and 2013 (Litton, 2016).
The fourth issue is related to the manufacturing problem. The company relied on supplies from a manufacturing company in Mexico, Araban (Litton, 2016). The manufacturing company had high quality, low labor costs, and relatively short travel distance and time to west Texas. However, Araban was associated with manufacturing problems to DRB. The manufacturer experienced struggles finishing orders on a timely basis. The time issue occurs due to delays in leather making procedure at the tanneries. As a result, Thompson had to identify several options to solve her manufacturing issues. The main options included possibilities of making boots herself or continuing to store inventory and complete orders compared to outsourcing the processes to reduce dependency on Mexican boot manufacturers (Litton, 2016).
Situation or SWOT Analysis
In this part of the paper, the firm’s internal situation related to strengths, weaknesses, opportunities, and threats (SWOT) in the target market it operates is presented. The strengths of an organization involve aspects that make a company excel by gaining a competitive advantage over the competitors (Sarsby, 2016). Weaknesses refer to factors that stop a business from performing at its optimal level. Opportunities involve favorable external aspects that could give a competitive advantage to the business. Threats include factors that can cause harm to an organization (Sarsby, 2016).
The main strength of DRB is that the business offers a unique product to the market. The boots offered by DRB are designed based on a gap identified in the market. As a result, DRB has focused on producing products that meet the need of people in society, particularly women (Litton, 2016). By focusing on providing products that meet the needs of customers, the company has been able to gain a market share despite competition from top companies.
The second strength of the company is that DRB provides high-quality boots manufactured in Mexico (See appendix B). Compared to other businesses that buy low-quality boots from China, DRB gets supplies from a top manufacturer in Mexico (Litton, 2016). Quality of product is among the factors that customers focus on when making purchase decisions. Thus, by offering high-quality boots, DRB has the capacity to attract customers from different market segments.
The third strength is that the company has established a network of potential buyers by advertising the products to market and trade shows. The company has also created a network of buyers by focusing on boutique retailers’ channels. Having a network of boutique retailers is essential in enabling the company to reach out top many target customers, particularly women who visit the shops to buy fashion-related products.
The main weakness of DRB is that the company lacks a manufacturing line (Litton, 2016). The initial focus of the entrepreneur when starting the company was to receive consignments of the boots only from her supplier in Mexico (Litton, 2016). The boots would be stored in a warehouse near west Texas before completing orders to retail stores. The entrepreneur also focused on part-time by selling the products to small boutique retailers. Despite the high quality of the Mexican-made boots, Thompson experienced difficulties relating to increasing lead time and satisfying the customers with the aim of realizing future growth. Thompson explored the options of sourcing the boot production or continuing performing order fulfillment compared to outsourcing that process. The entrepreneur also explored the option of selling boots online directly to clients (Litton, 2016).
A manufacturing line is essential in facilitating the assembling of products using machines to create desirable items. Having a manufacturing line helps the management in the company to control the production processes to ensure that the right quality of products is realized. The management team can identify any issues with the production process to ensure that the required change is made. Additionally, the management can evaluate the production costs helping to identify new approaches to reducing expenditure. In the case of DRB, the company uses supplies of products manufactured by Araban based in Mexico. Relying on other manufacturers is associated with the increased cost of transportation. The company is also affected by the issue of increased lead time because DRB has no control over the manufacturing process (Litton, 2016).
The main opportunity that can help DRB gain a competitive advantage over the rival businesses includes is the use of word of mouth approach of marketing. The focus of the company is to ensure that loyal customers get high-quality services so that they can recommend the product to new clients (Litton, 2016). The use of the approach helps to create positive feelings about services and products that help build a company’s brand. Word of mouth referrals also helps to build trust to ensure better returns and higher conversion rates. Through this approach, the company will have an opportunity to reach out to new customers without spending large amounts of money on advertising.
Another opportunity that would enable the company to gain a competitive advantage over other similar businesses is the adoption of the latest technology in advertising. For instance, the company has the opportunity to use social media such as Facebook for advertising the products (Coles, 2017). There is a large number of people using social media for different reasons, including interaction and communicating. For instance, Facebook is the most useful social media platform in the world. There are 2.79 billion Facebook users globally. In the U.S., there is 237.8 million Facebook users with the number expected to grow to 228.6 million by 2025 (Chen, 2021). A large number of people using social media creates an opportunity for DRB to market its product to the target customers. Through the use of social media, the company can convey information about different types of boots to customers, including women. Social media offer a cost-effective approach to marketing western boots that allow the company to create awareness of the products to clients at a reduced cost. Thus, the company will benefit from increased sales, revenue, and profits.
DRB has an opportunity of expanding to a new market by opening branches in countries outside the U.S. (Litton, 2016). People across the world appreciate the change in fashion trends. As a result, women from different parts of the world, including Europe and Asia, would create a market for DRB’s products that are fashionable among the modern generation (Litton, 2016).
The main threat to the business relates to increased competition from companies offering similar products. There are many U.S. companies, such as Tony Lama, who offer western boots to the market (Litton, 2016). Increased competition can cause the company to struggle to expand to new markets. It is essential for the management of DRB to identify strategies for dealing with competition to enable the company to realize its strategic goals.
Strategic Goals and Objectives
The main strategic goal of DRB is to ensure the business continues to grow and scale (Litton, 2016). The main idea of Thompson was to introduce a product that would meet the needs of people in society. The focus was to introduce a product that has more features compared to normal western boots. It is essential for a business owner or a manager to understand the needs of customers. The understanding helps to investigate what is available in the market and compare it with the desire of most clients. Creating products that will meet the needs and desires of customers would help in attracting more clients leading to growth and development of the business within a short time. Thus, the goal of DRB was to meet the needs and desires of target customers, particularly women, to help in expanding the business to new markets (Litton, 2016).
The objective of DRB is to offer boots that fulfill the fashion needs of the women population in the U.S. and other regions of the world. The main reason that influenced Thompson to start a western boot business was her idea relating to an attractive interchangeable inlay (Litton, 2016). The idea was how to make a boot with an inlay visible through a decorative opening in the shaft of the boot. A cowboy boot had a back and a front shaft, with each having an inner lining (see Appendix A). The boots had a pocket formed by the inner linings of the back and front shafts and situated next to a cut-out. The initial idea by Thompson was simply to design and create a pair of boots for personal use. Thompson later realized that designing, producing, and selling the boots could be a great business idea. In the spring of 2012, Thompson was preparing in the morning for her teaching job. Thompson realized that choices could not find a suitable pair of boots that matched her clothes. She had seen interchangeable colored boots during coaching for youth athletic shoes. Based on the design of athletic shoes, Thompson felt that women’s boots should have a similar brand of changeable colored attachment. As a result, the entrepreneur came up with the idea of creating a colored piece of cloth that would be placed in the upper portion of a boot. The new boot would be offered to the market, hoping to attract target customers. As a trained teacher, Thompson lacks experience in the design and creation of boot. She lacked the experience to operate a business in the fashion industry. The entrepreneur explored the opportunity of the friends and family members who were passionate about the new idea to start the business (Litton, 2016).
The main aim of the company was to provide fashion boots that are inexpensive for the average consumer (Litton, 2016). Creating products with attractive interchangeable inlay enables women to have boots that match their dressing styles. Offering high-quality products that meet the desire of the customer is essential for DRB to help in realizing the strategic goals.
Distribution, Transport, and Logistics Issues
The dependency of manufacturing sources from a company located in León, Mexico, has created distribution, transport, and logistics issues for DRB (Litton, 2016). Shipping supplies from León to Texas lead the company to incur significant transportation costs to the company. The cost of transportation would have been reduced if the company had its manufacturing facility in Texas. The business arrangement of importing supplies from Mexico causes delays in filling orders for distribution. A delay in the distribution of products leads to dissatisfaction among customers. Thus, the distribution, transport, and logistics issues negatively affect business outcomes (Litton, 2016).
Thompson has several options that she can explore to deal with issues affecting the operations of the company (Litton, 2016). Among the main problem that the company experienced when working to meet organizational goals related to distribution, transport, and logistics issues. The first solution to the problems was continuing to store inventory and complete orders to prevent delays when offering products to customers. The business owner has an opportunity to adding another Mexican boot manufacturer to reduce dependence on Araban. The main focus of having a second Mexican source is to reduce the delivery time. Another solution to logistic problems relates to finding manufacturers based in the US that are more reliable to eliminate communication barriers. Having a U.S. source would also help to minimize inbound logistics costs (Litton, 2016).
The main recommendation is to find another Mexican or U.S. manufacturer, but continue getting supplies from the original producer (Litton, 2016). Maintaining the original manufacturer is essential to ensure that the identity of the boots is not lost. The original manufacturer can help in the production of some designs of boots. Having additional manufacturers help to eliminate the dependence on one company. Another recommendation is to employ modern approaches to advertising, such as the use of social media sites to reach out to the target customers (Coles, 2017). Advertising through the social media give the company to reach out to over 233 million social network users in the US (Statista, 2021). By focus on Facebook alone, the company will communicate its advertising messages to over 237.8 million Facebook users in the US and 2.79 billion globally (Chen, 2021). Social media helps sending information to users to increase awareness of different products.
Based on the highlighted recommendations to the company, DRB would effectively eliminate logistic issues. The main short-term impact of having other manufactures is to increase lead-time and satisfying the customers. Customers are essential to the growth and development of a company (Soltani et al., 2018). By ensuring that the consumers are satisfied, the company can attract new customers helping to grow the business by attaining a competitive advantage in the long term. The recommendation of having a manufacturer based in the US can help in reducing the cost of transportation in the short term. In the long-term, the reduction of transportation costs will have positive effects on the price of products. The company will reduce the cost of products to attract more customers, thus increasing sales, revenues, and profits generated in the business. Reduced cost of transportation will have a long-term impact on reduced expenditure to help the company save more money that can be invested to expand the business. The resources acquired through saving can help the company to open new branches in other countries to expand the market for DRB products. The use of social media sites such as Facebook, Twitter, and Instagram can help in increasing the customer base both in the short-term and long-term (Coles, 2017). The focus of using social media to market western boots made by DRB will help the company to expand its market beyond US by reaching out to target customers in other continents such as Australia, Europe, and Asia. Expansion of market for DRB products will increase sales, earning, and profits generated by the company.
Appendix A: Example of DRB Product
Appendex B: Dusty Rocker Boots Swot Analysis
|Dusty Rocker Boots Swot Analysis|