Week 5 Case StudyMichele Baker

Week 5 Case StudyMichele Baker - Running Header: CASE STUDY...

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Running Header: CASE STUDY Case Study Michele Baker GM 560 Entrepreneurship and Small Business Management Professor Timothy Fields August 1, 2010 Before, After, and Impact Previously Bravado! was in control of most of its supply chain and their manufacturing base was out of Canada. Once the U.S. dollar lost about 45% to the Canadian dollar, Bravado! was forced to move their base to Mexico. Before the transition to Mexico Bravado! bought their own raw materials, however once they transitioned to the new base, Bravado! instead bought
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garments at $6 each. This in turn lowered the cost of goods sold by 30%. Many of these changes called for new operating procedures. The major impact of all these changes is that Bravado! went from a manufacturer of lingerie, to becoming a design, marketing, and branding company who happens to source lingerie (Scarborough, Wilson, and Zimmerer, 2009). Financial or Banking Relationship In order for Bravado! to keep growing and expanding, they do not necessarily need to keep a financial or banking relationship but it also means that an owner may have to relinquish some control of the company to the investors. This is referred to as equity financing. If a small company does not want to work with financial institutions, or in this case when the bank is pulling credit from the company, equity financing is an alternative option. In this case investors and partners provide financing with the expectation of getting a portion of the profits in return. Without having to make debt payments a company has more available cash.
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Week 5 Case StudyMichele Baker - Running Header: CASE STUDY...

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