Jinju Barrel Products is a small woodworking company located in Sarasota, Florida run by my neighbor and his wife out of their garage. They sell products made out of recycled wine and whiskey barrels through ETSY and at local craft fairs. They gain more customers through word of mouth, ads on ETSY, and social media.
If this business hopes to grow to a larger level, they could run into issues. Since the business is currently running out of a garage with one employee, they can only grow a certain amount before they need to find a larger place to manufacture their product and hire more employees. Both of these things are large financial investments they could be issues if they don’t sell the amount they expect to.
Another issue that this business faces is access to the resources they need to make their product. They purchase the barrels from a supplier. One of the suppliers is the Jack Daniels Distillery in Tennesse, which is the only place they can get Jack Daniels barrels. So, to make their products, they must drive a truck to Tennesse to buy a lot of barrels and stock them for the next few months. The need to buy a lot of barrels at one time could lead to financial loss for multiple reasons. Their business could slow down, causing them to lose money on that investment.
One of the most important stakeholders for this small business is the consumers. The business must create products that are high quality but are also at a price point that is affordable to a wide range of customers. For instance, one of the most popular products they sell is a guitar rack. The guitar rack can’t be substantially more expensive than one from a store, or it won’t be worth it for the customer. So, if they are priced reasonably, the business will make a profit, and the consumers will have a product they like.
Another important stakeholder is the employees, or in this case, the employee. The tools needed to make the products are very loud and create a lot of saw dust. So, the owner must provide hearing protection and dust masks to ensure the employee is safe.
Another organization that faces competing pressures between financial performance and need to create shared value for stakeholders is Florida Design Works, a cabinet company. They must create high quality cabinets for their customers. To do this, they must use materials that are cost effective, look good, and create durable cabinets. Many customers want their cabinets built out of formaldehyde free plywood. However, this is more expensive than regular plywood, so Florida Design Works must decide if it is cost effective to supply.