Spreading Happiness: Warm Fuzz Cards Group 6, Section B Should Mills pursue slower or faster growth?

What are the implications of her choice? Solution: Erica Mills started production of Warm Fuzz Cards, a greeting card company, in 2006. She started designing cards when she was moving around from country to country with her husband. When they returned to Canada Mills started to pursue a greeting card business. Initially, the mission for Warm Fuzz Cards was to brighten days and to create smiles. Just send a card for the fun of creating smiles, laughter, cheer and warmth and no particular reason. SWOT Analysis of current situation i.e. slow growth and bootstrapping method of finance. a) Strengths i) Strong relationship with retailers and customers. ii) Unique designs and artwork for the greeting cards to attract customers. Uses innovatively traditional methods for non-traditional designs iii) Not much initial investment was required iv) The profits were good even though the rate of growth was small. They had good sales and the advertisement channel was effectively chosen. Sales reached $3500/month in 2008. b) Weaknesses i) Mills has no formal business or c design training. ii) There is a financial risk. Low profit margin and rate of profits growth is slow c) Opportunities i) Wedding invitation market and custom corporate card business has good growth potential ii) Mills connections with executives at a chain of stores shows a potential business expansion opportunity d) Threats i) There is a huge competition which accounts for majority of the market share ii) Wedding market is highly competitive iii) Effect of economic cycles on the demand for greeting cards By analyzing all the above mentioned points. If Mills continues with a slow growth process, she may lose the opportunity of business expansion. So she should go for fast growth strategy. She should enter the fast growth mode before she enters motherhood. She has the perfect opportunity that she shouldnt let pass. If we analyze the customs cards market, the wedding invitation

market and custom corporate card business has good growth potential. They make up 50% of the total sales, with retail chains making up the other 50%. Implications of this strategy: The orders are usually in large quantities and many were repetitive customers. So there is a high need of emphasizing more on customer service. When more money has to be borrowed for investments, interest costs might rise. She should employ more enhanced planning and professional management system. She should establish a more profession and organized team based management system. . The office should be formalized and standard procedures in accounting needed to be employed to show to the investors. These things were not a factor when she was running at a slow pace in bootstrapping mode of financing. If Mills were to select fast growth, where should she invest to achieve this growth? How much should she invest? For fast growth the number of chains needs to be increased. The inventory should be sufficiently maintained to meet the demand. The chain has 85 stores and 160 small stores across the country. Needs 20 designs per large store and 10 designs per small store. So her initial investment should be to keep enough inventory for atleast 3 months. Grow business faster by employing good designers through freelancing, having a proper accountant to manage cash flows and marketing employee who can market the deigns. How should she finance this investment? She can finance her investment needs by debt financing through bank loans or raise money through equity financing from angel investors.