Small Business Management - Missoma Life Cycle Study PDF

Preview

Summary

Download Small Business Management - Missoma Life Cycle Study PDF

Description

Missoma Life Cycle Study Report 16051987 Jeeven Virk 11/11/2019 Business and Marketing Small Business Management 6BUS1065 Dr Nicholas Thompson Word Count: 2100

1

Table of Contents 1. Introduction………………………………………………………………………………3 1.1 Company Background………………………………………………………………3 2. The Life Cycle……………………………………………………………………………3 2.1. Stage 1 – Introduction………………………………………………………………3 2.2. Stage 2 – Growth……………………………………………………………………4 3. Growth Strategies used by Missoma………………………………………………………4 4. Theories and Frameworks…………………………………………………………………5 4.1. Eric Pries’ Lean Start Up Approach…………………………………………………5 4.2. Missoma’s Pivot……………………………………………………………………..5 4.3. Griener’s Growth Model…………………………………………………………….6 4.4. Scott and Bruce’s Growth Model 1987……………………………………………..7 5. Has Missoma Matured…………………………………………………………………….7 6. Barriers and Recommendations……………………………………………………………7 6.1. Barriers………………………………………………………………………………7 6.2. Recommendations…………………………………………………………………..8 References…………………………………………………………………………………….9

2

1. Introduction The following report on Missoma will be carefully analysing and dissecting the life cycle of the brand, from its introduction to its current stage. Moreover, the report will examine the future growth of the company and any barriers the business may face, currently or in the foreseeable future. 1.1. Company Background Missoma is a company that specifies in trading demi-fine contemporary jewellery, founded in 2008 by Modern History student Marisa Hordern. Hordern sells her brand in various high-end departments, such as Harvey Nichols, Selfridges, Fenwick and Fortum & Mason and now online on her own e-commerce website that ships worldwide (Missoma 2019). Hordern started off by making her jewellery on her kitchen table as a hobby, slowly gaining attention from boutiques she decided to sell at. As her popularity increased, she gained attraction from fashion magazines and managed to move her products to higher end department stores. After Hordern launched Missoma, she sourced her gemstone materials from Jaipur in India and Shenzhen in China (Sunday Times. (2019). Figure 1. 2. The Life Cycle The product life cycle is a model that has 4 phases each business or product goes through. The 4 stages each have their own characteristics that determine where the business or product is and how they are being managed in the market. (Anonymous. (2019). The black line shows the generic journey of a products life cycle. The blue line represents the life cycle of Missoma. It depicts the journey of the brand and where it is positioned at the moment in the cycle. As you can see in figure 1, the generic route of a products life increases steadily, whilst Missomas route has a steep and intense increase in the growth phase. However, Missoma is still in the growth stage and still have room to grow before they reach their maturity phase. 2.1. Stage 1 – Introduction This is the first stage and the most expensive stage for a company to launch their product. The sales are low, which means the growth is small. However, as the journey goes, it increases. (Anonymous. (2019). Missoma was launched in 2008, starting the life cycle of the product. The company was mainly wholesale. In 2014, Missoma still hadn’t made a major breakthrough in their market, as shown through their turnover made that year, £384,365 (Missoma LTD. (2019). However, they were introducing themselves to the market and gained some attention from new stockists 3

such as Jeremy France and Boutique Hoco. Hordern said “Missoma is reaching more high streets than ever before”. (Staff Writer. (2014). 2.2 Stage 2 – Growth This is the second stage of the life cycle and is represented by a growth in sales and profits for the company. Companies are able to gain more profit to invest in product promotion to maximise growth. (Anonymous. (2019). Missoma is currently in their growth stage. They have been continuously growing for the past 3 years. In 2016, Missoma had a turnover of £637,762 (Missoma LTD. (2019). This was a significant increase from their turnover in 2014. Missoma teamed up with Lucy Williams, who is a fashion blogger and released a fang necklace in 2016, which sold out in a matter of days. The collaboration with Lucy Williams is a reason why the brand has become so successful. Lucy Williams influenced a lot of other female social media influencers such as Anna Vitiello and Florrie Thomas to wear Missoma products which ultimately increased the growth of the product within that year. (Banks, H. (2016) In 2018, Missoma’s gold signet ring caught the eyes of the Duchess of Sussex, Meghan Markle who is a social media influencer with 9.8 million Instagram followers. Furthermore, Meghan Markle has Missoma as a go to brand for jewellery as it is high-end and affordable. Moreover, the brand has also caught movie icon Margot Robbie’s attention and she was spotted wearing the Lucy Williams x Missoma collaboration necklace, also in 2018. In addition, Margot Robbie has over 17 million followers on Instagram and posts pictures of herself wearing the product, promoting the brand. 70% of Missoma’s customers come through Instagram which shows the impact social media influencers (such as Meghan Markle and Margot Robbie) have on the brand and how significant they are to the brand as social media is the predominant platform that attracts Missoma’s consumers (Fasttrack. (2019). These marketing strategies by Missoma, in 2018, made an incredible impact on their growth as the company managed to obtain a turnover of £5,969,830 (Missoma LTD. (2019). This shows an increase in turnover growth of 836% from 2016 to 2018. In 2019, Missoma is bigger than ever but is still growing. In October, Missoma released an advent calendar in time for Christmas. The price of the calendar costed £395, which featured 12 Missoma products, including products, such as a trinket tray and hair slide that cannot be purchased outside the calendar. The calendar had a waiting list of over 300 customers before it was even launched and sold out within the week of its release. (Hailes, S. (2019). 3. Growth Strategies used by Missoma From the above research, Missoma’s growth strategy seems to involve a lot of celebrity endorsements. Missoma have countless amounts of iconic celebrities representing and promoting their brand. For example, Meghan Markle, Margot Robbie, Kate Middleton, Bella and Gigi Hadid, Dua Lipa and many more (Gerard, B. (2019). Furthermore, social media, such as Instagram plays a very significant part for Missoma as majority of their customers are the followers of the celebrities that promote their brand. Hordern says that Instagram gets the ‘message out there’ and most of the customers discover Missoma because ‘they’ve found us on Instagram’. The brand adds 59% of its sales to Instagram, however, Hordern admits a lot of it is down to people discovering the brand on the platform which has allowed Missoma to grow so much. 4

Hordern also says that Instagram creates a whole new narrative for the brand, especially in relation to the “Story” feature Instagram has. The “Story” feature helped angry consumers on Black Friday when the website crashed after 70,000 new visitors tried accessing the website. The “Story” feature allowed Missoma to communicate live with their consumers, to show them their hard work and effort they were putting in to fix the website. Consumers ended up creating a new trending hashtag to support the situation, which ultimately increased the awareness of the company, impacting the growth. (Fleming, M. (2018).

4. Theories and Frameworks 4.1. Eric Pries’ Lean Start Up approach Essentially, this approach involves identifying consumer pains and offering monetizable and accessible solutions large, quick expanding markets. Pivoting is an approach to keeping a business alive. It involves growing, altering direction, adapting, readjusting objectives and evolving. It helps a company understand what their consumers think about their product and whether they will need to change it in order to fit the needs of the consumer. (Aggelos, M. (2019).

4.2. Missoma’s Pivot

Strategy – Using department stores Obstacle – Not making enough money

Initial Idea – Selling Jewellery Learn – Profit on ecommerce Pivot – Start own business

Adjusted strategy – Selling her business online to new customers

Learn – Celebrity endorsement Pivot – Using social media as a platform for exposure

Obstacle – Low Growth

Adjusted Strategy – Using social media influencers to promote the brand

Figure 2.

Successful idea – High growth 5

Figure 2 demonstrates Hordern’s journey of selling her products. Before Missoma, Hordern sold products through department stores such as Harrods and Harvey Nichols. However, Hordern wasn’t getting much money out of it. She saw an opportunity arise from an online business and decided to take her idea of selling her jewellery online through her own company. Hordern wanted to “take back control”. In addition, due to the introduction of her business in 2008, Missoma, she recognised her business had low growth and saw an opportunity in promotion through social media over the years. In 2016, Hordern collaborated with Lucy Williams on social media, which ultimately was one of the main reasons for her exponential growth over the past couple of years as the collaboration didn’t only attract Lucy Williams’ followers, but also attracted various celebrities who have larger followings.

4.3. Griener’s Growth Model

Figure 3. The Growth model designed by Griener represents the different phases an organisation goes through as they grow. Each phase depicts the growth of the company, including an inevitable crisis that the business needs to solve in order to grow further. (Mindtools. (2019)

Missoma’s position

From the research above, Missoma are still in Phase 1, however, they haven’t reached their first crisis, ‘LEADERSHIP’. Missoma is still a young company, that has been exposed to the market, through creative strategies such as social media marketing and celebrity promotion. Missoma have utilised these strategies effectively as the company has grown at an exponential rate in the past few years. Missoma haven’t endured their first crisis yet due to the fact that Marisa Hordern is still, comfortably the Director of the company.

6

4.4 Scott and Bruce’s Growth Model 1987

Figure 4. This growth model designed by Scott and Bruce represents a classic product life cycle. It portrays the same curve, in which a business will progress through each stage at their own pace. However, before entering the next stage, the organisation will encounter a crisis Missoma in which the company will have to deal with in order to grow further. This model is very similar to Griener’s Growth Model. (Scott and Bruce. (1987). From the research conducted throughout the report, Missoma should be positioned in the 3rd stage of their life cycle. Missoma has encountered 2 crises. The first crisis involved Hordern recognising the lack of income she was making, solely trading her jewellery in wholesale. Hordern overcame this barrier by moving her business to her own e-commerce. After her year of survival, Hordern encountered her 2nd crisis. This involved the lack of growth she realised after the few years in operation. Hordern challenged this crisis by utilising different marketing strategies to increase her brand awareness through celebrity collaborations with Lucy Williams, ultimately increasing her growth. However, Missoma is still in the 3rd stage as Hordern can find other strategic methods to grow her company further. 5. Has Missoma Matured? From the research gained throughout the report, Missoma has not matured yet. They still have room for growth, in which, Hordern will be taking advantage of throughout the next couple of years before the company starts to mature and move up the stages of their life cycle. Missoma can still use their social media strategies to increase their following and awareness on the platform through campaigns and further collaborations.

6. Barriers and Recommendations 6.1. Barriers With Brexit around the corner, Missoma needs to prepare for the worst scenario if there is a hard Brexit. Links and sources in Europe will be affected and delivering goods across the border will be much more difficult and more expensive. Furthermore, if there is a hard Brexit, this may mean consumers have less money to spend on Missoma goods due to the collapse of the Great British Pound. Internationally, with Brexit happening, the tariffs into the EU and 7

other foreign exchange taxes will have a detrimental impact on Missoma’s income. (O'Connor, R. (2019). In relation to Brexit, it will be hard for Missoma to avoid any direct changes it will have on the business. However, Missoma should prepare themselves so then they will be ready for different outcomes that may occur from the situation. Missoma, nationally, can start to look at decreasing prices in order to suit the income of their consumers, resulting in a lower chance of their consumer sales decreasing, leading to a continuing satisfaction felt by their consumers.

6.2 Recommendations On the other hand, in the foreseeable future, Missoma has a lot of potential to grow further. Hordern can use new marketing strategies to increase her growth. Strategies such as campaigns that involve celebrities, such as Meghan Markle and Kate Middleton as the mascots, who have a strong and diverse following can help Missoma’s awareness nationally, and internationally. Additionally, throughout the Missoma campaign, they can announce that the company will be opening their own store and will give the consumers an opportunity to see and maybe meet specific social media influencers at the opening and over major events and collaborations Missoma may do. In relation to Missoma investing into their own store, it will help provide a much more intimate and rememberable experience for their consumers. It will give customers the opportunity to see the product first-hand and try it on before purchasing it. Moreover, Missoma could also do a brand deal with different social media influencers to specifically promote their product on social media, which will attract a more loyal consumer base as the consumers will want to buy the same products as the influencer. Overall, Missoma is in a strong position in their market. They have turned over larger amounts of revenue each year which shows the strength in their growth. Missoma still has years to grow and plenty of opportunities to support their growth.

8

References Missoma. (2019). About Us. Available: https://www.missoma.com/about/ . Last accessed 07/11/2019. Sunday Times. (2019). Markle sparkle fired up profits; HOW I MADE IT MARISA HORDERN FOUNDER OF MISSOMA. Available: https://advance-lexiscom.ezproxy.herts.ac.uk/document/?pdmfid=1519360&crid=940ea97f-7a2f-4574-b6def2039c589f90&pddocfullpath=%2Fshared%2Fdocument%2Fnews%2Furn%3AcontentItem %3A5WH9-3H51-DYTY-C18B-000. Last accessed 07/11/2019. Staff Writer. (2014). Missoma to launch silver and diamond line for 2014. Available: https://www.professionaljeweller.com/missoma-to-launch-silver-and-diamond-line-for-2014/. Last accessed 07/11/2019. Anonymous. (2019). Product Life Cycle Stages. Available: http://productlifecyclestages.com/. Last accessed 07/11/2019. Banks, H. (2016). These Are The Buys That Broke 2016- And Some Are Still In Stock!. Available: https://www.look.co.uk/fashion/buys-broke-2016-still-stock-568687. Last accessed 07/11/2019. Missoma LTD. (2019). Missoma Limited. Available: https://fame-bvdinfocom.ezproxy.herts.ac.uk/version-20191030/Report.serv? _CID=80&context=3BJPHF19LDG0ZNV&SeqNr=0https://www.harpersbazaar.com/uk/fashi on/fashion-news/a26810306/missoma-jewellery-brand. Last accessed 07/11/2019. Whitbread, L. (2019). Missoma Sale: Meghan Markle's Favourite Jewellery Brand Has 50% Off. Available: https://www.huffingtonpost.co.uk/entry/megan-markles-favourite-jewellerybrand-has-got-a-sale-on-heres-our-favourite-pieces_uk_5d1b14cce4b07f6ca582d4e8? guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ. Last accessed 07/11/2019. Lee, A. (2019). The Best Meghan Markle-Inspired Holiday Gifts -- Rothy's Flats, NARS Blush and More. Available: https://www.etonline.com/the-best-meghan-markle-inspiredholiday-gifts-rothys-flats-nars-blush-and-more-133694. Last accessed 07/11/2019. Anonymous. (2018). royal visit to scotland. Available: https://www.blog.missoma.com/blog/as-seen-on-fashion-month-2018. Last accessed 07/11/2019. Hailes, S. (2019). Missoma advent calendar attracts wait-list of over 300 customers . Available: https://www.professionaljeweller.com/missoma-advent-calendarattracts-wait-list-of-over-300-customers/. Last accessed 07/11/2019. Fasttrack. (2019). Missoma. Available: https://www.fasttrack.co.uk/company_profile/missoma-2/. Last accessed 07/11/2019. Gerard, B. (2019). Kate Middleton's Gold Missoma Earrings Are A Fun, Trendy Statement For Fall. Available: https://www.elitedaily.com/p/kate-middletons-gold-missoma-earringsare-a-fun-trendy-statement-for-fall-19222791. Last accessed 07/11/2019. 9

Fleming, M. (2018). Brand building on Instagram: What marketers need to know. Available: https://www.marketingweek.com/instagram-brand-building/. Last accessed 07/11/2019. Aggelos, M. (2019). Problem-Solution Fit: When it’s the Right Time to Pivot?. Available: https://www.growthsandwich.com/resources/problem-solution-fit-time-to-pivot/#4. Last accessed 07/11/2019. Humphrey, J. (2017). 12-Min Guide to Lean Canvases and Pivots. Available: https://medium.com/swlh/12-min-guide-to-lean-canvases-and-pivots-e7bd80764fd5. Last accessed 07/11/2019. Mindtools. (2019). The Greiner Curve. Available: https://www.mindtools.com/pages/article/newLDR_87.htm. Last accessed 07/11/2019. O'Connor, R. (2019). ‘We were probably forced to make changes sooner because of Brexit’. Available: https://www.irishtimes.com/business/retail-and-services/we-wereprobably-forced-to-make-changes-sooner-because-of-brexit-1.4053836. Last accessed 07/11/2019. Hailes, S. (2019). NAJ issues expert guidance on Brexit to help jewellery trade prepare. Available: https://www.professionaljeweller.com/naj-issues-expert-guidance-onbrexit-to-help-jewellery-trade-prepare/. Last accessed 07/11/2019. Scott and Bruce. (1987). Five Stages of Growth in Small Business. Available: http://citeseerx.ist.psu.edu/viewdoc/download? doi=10.1.1.462.4083&rep=rep1&type=pdf. Last accessed 07/11/2019.

10...