Management - individual assignment chapter6 shopify PDF

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individual assignment chapter6 shopify...

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School of Business MGMT 1120 Principals of management Instructor: Jeanette Stead Individual Case Assignment (Group-B) Shopify: Makes Commerce Better Dabeet Singh February 11, 2020

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Table of Content

Introduction

Attributes that Tobi Lutke possess that

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classify him as an entrepreneur

The reasons why Shopify did not fail in

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2008 was

The stages in the life cycle of Shopify

Financing used at each step of the life cycle.

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Introduction 2

Shopify is basically a commercial software used by the companies to record their day to day transactions. It was officially launched in 2006 and it started becoming popular after 2008, Tobi Lutke became CEO of Shopify. He didn’t know much about this job but he learned and manage everything very effectively and efficiently. He learned the skills by interviewing some software designers, programmers and fellow entrepreneurs. After 2008, Shopify started attracting many investors and in 2015, the company went public with IPO and raised a huge amount of funds. Business model was also changed to selling monthly subscriptions which became a significant source of revenue. Shopify got a huge success due to the qualities of software as well as with the Lutke’s skills.

Attributes that Tobi Lutke possess that classify him as an entrepreneur:

Passion: This is the most significant characteristic of Tobi Lutke as he loves what he do. He put all the extra efforts just to establish Shopify and to perform his job as a CEO of the company. He did a crash course MBA just for the sake of gaining some experience for the management job. For this quality I would rate him 9 out of 10.

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Determination: Most of the successful entrepreneurs are successful because their determination. As Lutke also never greatly affected by any uncertainties, he encountered. He decided to shift his business from selling snowboards online to selling his self-designed e-commercial software. He never gave up, for him, failure was like an opening for a new success story and hence he tried very hard till he got the success he was expecting. He not only attracted small, medium scale businesses but he attracted some large-scale businesses also including Red Bull, Cross Fit, Wikipedia, Tesla Motors, etc. I would rate him 6 out of 10 in this because firstly he was not determined with the job of selling the snowboards online.

Self-Starter: In 2008, Scott Lake left his job then Tobi Lutke became the CEO of the company and handed everything by his own although he was not having enough knowledge about this new job. He took crash course as well as took the experience from some programmers and software developers. Moreover, he interviewed his fellow entrepreneurs to gain some knowledge, then he started to focus on developing and improving his software so that a greater number of users can easily find it compatible and affordable. I would give in 9 rating from the scale of 1 to 10, 1 being the weakest.

Understand What You Offer: As an entrepreneur, Lutke know what he is offering and how it fits into market. He made his software totally customizable according to the users need, he provided multiple sales channels, alternative payment options, unlimited inventory, and the ability to track the sales and growth. I would rate 10 out of 10 for Lutke’s this ability.

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The reasons why Shopify did not fail in 2008 was:

Excellence was Lutke’s main driver: unlike many of the entrepreneurs Lutke was not a money Minded, he treated every task of learning to be a CEO like a software problem he had to solve. He achieved success because he was focused on developing incremental improvements in the product as well as he created a smoothly functioning organization. He build a strong management team.

Elegance and Versatility of the Software: It was also a factor of success of Shopify as it is very simple to use and all the things are well organized in the software so that merchant don’t get in trouble. Software offers over 100 themes and 1500 apps from which a merchant can choose.

The stages in the life cycle of Shopify

2004 Before Shopify was a platform for creating online stores, it was an online store itself. That was the original vision—when the company was created, it was never intended to be a platform for ecommerce. The site didn’t even initially plan to create its own software for the e-commerce side of things. The first iteration of Shopify was an online store that sold snowboards. When Shopify was a store selling snowboards, it was called Snow devil.

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2006 Shopify was originally launched in Ottawa by Tobias Lütke, Daniel Weinand, and Scott Lake. 2008 Lutke attracted a venture capitalist, John Phillips, who invested another $250,000 in the business. Under Phillip’s guidance, Shopify soon sold shares, raising another $100 million.

2015 Crowned Employer of the Year in the 2014 Canadian Startup Awards, Shopify started the new year by showing off impressive numbers for 2014: 140,000 stores, $3.7 billion in sales, and massive growth in mobile commerce. It was soon after named one of Canada’s most innovative companies. But the company’s biggest news this year has been its initial public offering, which it filed for in April. The company went public in May, raising $131 million, valuing Shopify has $1.3 billion. Shopify generated $45 million during its first quarter as a public company, doubled from the year-ago quarter. For all of 2015, the company forecasts generating $182 million in revenue, losing $22 million. Shopify posted $105 million in revenue in 2014. Harley Finkelstein, the company’s chief platform officer, told CBC News that “we want to build a company for the next 100 years,” which is not common among Canadian companies, who often get acquired by larger US firms before ever approaching IPO territory [ CITATION bor15 \l

1033 ]. 2017 The Shopify staff had grown to 1,750, working in modern off ices in Toronto, San Francisco,

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Montreal, and Waterloo, Ontario, and in its headquarters in Ottawa. That same year it had 325,000 merchants (customers) selling retail online, doing $24 billion worth of business, operating in 150 countries.

Financing used at each step of the life cycle 2008 A venture capitalist, John Phillips invested $250,000 in business when he found the fast growth of Shopify in near future. Under Phillip’s guidance, Shopify raised funds by issuing shares.

2015 when it went public with an IPO and raised an additional $131 million with a valuation of $1.27 billion. During that time, the company also changed its business model from charging merchants a percentage of sales, to selling monthly subscriptions, which was a more reliable source of revenue.

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References

borndigital. (2015, september 04). Retrieved from borndigital: https://www.borndigital.com/2015/09/04/a-brief-history-of-shopify-2015-09-04

wikipedia. Retrieved from wikipedia. https://en.wikipedia.org/wiki/Shopify

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