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Case #2 Kate Holmes and Leah Frey 1. Perform a business size-up. 442 McAdam is a lower end designer handbag brand originally completely owned and operated by Sarah Shell. After a boutique gained interest in her hand-made bags, the business began to grow quickly. At first Shell spent a lot of her time personally making her handbags but later found herself moving to a headquarters in Canada. Her products were available both online and in multiple retail stores which was amazing for her product because so many people were able to view and buy her handbags. Shell fell into a few issues when working with manufacturers because of the expense they charged for each seam in her designs. With that in mind Shell decided to lay back from her more unique designs and just make them more basic so she could afford them. Another issue McAdam ran into was not selling all of their inventory in the six month seasonal period their handbags should be sold. If they did not completely sell their inventory it would lead their prices to decrease because they would have to discount them leading them to not gain as much inventory as they need. McAdam’s focused their designs off of women between the ages of 20-45 which seems like a wide range of different designs. Which allowed Shell to continue her love for creativity when designing new handbags for her target market. A lot of her success came from having different unique designs that were not necessarily seen in other boutique stores.