Issue 2 Organizational Environment 35 points 1000 words li

Issue 2 - Organizational Environment - 35 points (1,000 words limit)

Rafael has been a glass designer and blower for the past 17 years. He operates his small business under the name “Rafael’s Art Glass” out of a workshop in the northeast and makes custom pieces that appeal to an \"artsy\" market. Although his customers are mostly young, they are affluent and willing to spend money for unique, high-quality items, so “RAG” (as it’s commonly referred to) products command a premium price.   Currently, the sculptures are produced in one workshop in Binghamton, NY and sold in only three locations in the U.S.: New York City; New Orleans, LA; and to a limited market in Princeton, NJ (Rafael is a Princeton University graduate). Production is approximately 2,000 pieces per year, with prices ranging from $800 - $7,500 (and sometimes more) per item. The items are produced in quantities ranging from single, made-to-order, one-of-a-kind designs to limited-availability items of no more than 100. After Rafael appeared on a popular cable television reality show, \"Accessory Wars,\" his glass designs gained instant national recognition. Even though he was one of the earlier designers to be \"fired\" from the show, the publicity resulted in many fans for RAG designs. Now, people across the country want to have RAG pieces in their homes. Rafael has been approached by a big art-design industry investment firm that is willing to fund his expansion. They have told him that, despite the bad economic conditions, they believe now is the time for him to expand to take advantage of the television boost to his popularity. In addition, they believe that there is now demand for his pieces in markets outside of the U.S.   Since design trends are often fleeting, the investors advise Rafael that he should \"go big now\" and try to capture as large a market share as possible. Of course, he would have to produce items in larger quantities and sell them at lower prices to do so. Rafael is used to running a small business, but all of this is new to him. He knows the company will have to invest in more trained staff and production equipment to meet the increased demand.   

Rafael has hired you to give him advice about how he should proceed.

Answer the following questions about RAG. Be sure to state clearly any assumptions you make about the organization as part of the description of factors to consider and state the reasons for including each factor. Use organizational structure language and theory in your response.

In deciding whether or not to produce larger quantities, what factors should Rafael consider?  

What specific recommendations do you have for Rafael?

Solution

Rafael should consider expanding his business to international level. The emergence of new competitors in his present market will eventually slow his business. Inorder, to avoid his company to be single market oriented, he should explore different markets and try to sell his products globally.

Assumptions:

1. RAG has received extensive coverage internationally in the show \"Accessory Wars\". Hence there is no need for Rafael for invest in advertising.

Strategies for expanding business:

1. Set Goal:

Rafael has to set goals for himself and his company through mission and vision statements. This would help him stay focussed on the goals and also motivate his employees to perform in provided line of track.

2. Business Strategies:

Rafael has to develop short-term, medium-term and long-term business strategies. Long-term business strategies needs to be well thought and outlined along with his employees. Short term business strategies are for immediate company operations like production process, purchasing, cost, etc.

3. Joint Venture:

If Rafeal is considering his company to operate globally, he will have to invest more to increase his production and increase his company size. He can consider a Joint Venture with a business alliance to increase the investment into the company.

4. Hire Multilingual employees:

Even if English is an international language to operate business globally, hiring multilingual employees has an added advantage. These employees can help the company know global market requirements and their cultural needs. Multilingual employees easily gel among locals and can promote the company.

5. SWOT Analysis:

Prepare a SWOT Analysis with competitors products. Knowing his product in a particular market will give Rafael a competitive edge.

6. Market Segmentation:

Market segmentation will be needed to decide the requirement of the locals in a particular market.