Zatswho Case Study
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1. What tips can you offer Cooper and Schwinoff about family members who start and run a business together? What pitfalls would you warn them to avoid?
Family-owned businesses account for 90% of all companies in the United States (large and small) and continue to be a powerful force. However, the day-to-day job of a family business owner is a challenge because emotions can interfere with sound business decisions. In business, business comes first: decisions must be objective, not personal; every job description must be clear and understood; and work life and home life problems should not overlap. (Arrendol, 2013)
In order to avoid confusions about roles and responsibilities, and put controls around the business, members should develop and communicate a clear business plan and mission. Besides, a clear chain of command must be established as well as lines of authority for decision making. (Gilbert, 2005)
Communication is key to help avoid confusion and maintain a holistic view across the business. As the company grows and the work piles up, there is a tendency to have everyone handling everything, causing frustration and finger pointing when there is pressure to meet deadlines. Hence, a clearly defined work responsibilities and a good communication plan will ensure that actions match agreements. (Nico, 2011)
Whether its a difference of opinion or a performance issues, dealing with discord or conflict among family members in a business environment is tough. Families will always bicker, but the challenge is not to let the bickering from interfering with the business goals. Especially challenging is trying to remain objective about the situation; working effectively with family members isnt much different from working with any other business partners. It takes an approach that encompasses some principles such as respect, effective communication, equitable treatment, integrity, competence, consistency, loyalty, and specially openness.
(Toren, 2011)
2. Suppose that Cooper and Schwinoff approached you when they were launching Zatswho concerning the form of ownership they should use. Which form of ownership do you recommend they use. Why?
I would recommend as a form of ownership the Limited Liability Company (LLC). This is the fastest growing form of business ownership because of its advantages and flexibility. It is a hybrid structure that provides the limited liability features of a corporation and the tax efficiencies and operational flexibility of a partnership.
The owners of an LLC are referred to as “members”. Although it can have just one owner, most have multiple owners (members). Unlike shareholders in a corporation, LLCs are not taxed as a separate business entity; instead, all profits and losses are passed through the business to each member of the LLC. Its members report profit and losses on their personal federal tax returns, just like the owners of a partnership would; this fewer restrictions on profit sharing with an LLC allow members to distribute profits as they see fit. Besides, its operational ease and less registration paperwork make it more attractive for smaller start-up costs than S Corporations. (U.S. Small Business Administration, n.d.)
3. Work with a team or your classmates to brainstorm potential groups of people who make up Zatswhos target market.
Zatswho target market is a parent with children between the ages 0 and 3. Potential groups of people who make up Zatswhos target market are families with babies and toddlers including mothers, aunts, and grandmothers. Since the product started with the idea of Cooper taking care of her granddaughter, the mothers and grandmothers with toddlers in their family are the primary market.
Besides, families with children with special needs, and seniors (people with more than 55 years old) with memory lost are also target markets.
4. Help Cooper and Schwinoff develop a guerrilla marketing strategy for Zatswho. Write a two-page memo to Cooper and Schwinoff that highlights the key points of your strategy and the reasoning behind each one.
A guerrilla marketing plan should accomplish four objectives:
It should pinpoint the target markets the small company will serve.
It should determine customer needs, wants, and characteristics through market research.
It should analyze a companys competitive advantages and build an effective, cost-efficient marketing strategy around