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Anasazi Exclusive Salon Products Inc Case Solution

Solution Id Length Case Author Case Publisher
2551 1405 Words (6 Pages) Jason Green Harvard Business School : 295111
This solution includes: A Word File A Word File

The case study delves deep into the financial and business analysis of Anasazi Exclusive Salon Products Inc. The case starts off with an introspection into the current financial condition of Anasazi in which they, although gained profits and penetrated the professional beauty industry, did not meet the financial projections for the current year. The case then highlights the formation of the company with its founder, Sue Krukonis, and Co-Founders, Bob Lupinacci and Dwight Miller who left their former company Zotos in which they discovered gaps in the industry and developed a business model in which they eliminated the intermediary independent distributors and aimed to directly distribute to Top 20% of professional salons. The founders of the new company emphasized on being client instead of product-driven. The new business, however, had operational losses and required considerable outside capital, particularly from venture capital firms. Krukonis and her team decided to re-evaluate and adjust their business strategy after assessing their financial predictions after two years of operation in order for the firm to develop significantly and fulfill future financial projections.

Following questions are answered in this case study solution

  1. Do you agree with Anasazi’s new strategic plan to meet its milestones? Why or why not? What specific managerial action should be taken to implement the recommendations?

Case Analysis for Anasazi Exclusive Salon Products Inc

1. Do you agree with Anasazi’s new strategic plan to meet its milestones? Why or why not? What specific managerial action should be taken to implement the recommendations?

Anasazi’s New Strategic Plan

Anasazi’s new strategic plan to meet future financial projections and the subsequent growth of the company is quite well-structured and refined up from the basic level to account for the deficiencies in the business model and the implementation structure but it still has some inherent flaws which can be addressed by some specific managerial actions. The following paragraphs do a comprehensive analysis of the new strategic plan with some specific managerial actions.

Geographical Targets

Anasazi’s decision to downsize their geographical reach by refocusing their human and financial resources from the entire to a fixed set of cities in which they can invest more capital and human resources is a well-versed decision.

For a company that was a new entrant in the professional beauty industry which is already concentrated and dominated by leading companies which includes Matrix Essentials, Nexus, and Loreal, the marketing strategies and sales efforts required for Anasazi to penetrate into the market would have been extremely difficult and costly. The company is already incurring operating losses and the capital structure of the company is such that there is a majority share of the venture capital firms. Moreover, Krukonis has also taken a big amount of debt for investment in the company. If this outside capital is not invested into proper projects and invested in achieving unrealistic projections as the aforementioned targeting professional salons in every geographical region in the country, there is a high probability that things do not according to plan and all of their investment in marketing and sales would go to waste which would inevitably lead to major losses for the company and no future investment from venture capitalist firms. Therefore, by refocusing their financial and human resources to a few concentrated cities, Anasazi can achieve operating profits. Moreover, by focusing on a few concentrated cities, Anasazi can actually target their marketing and sales strategies towards the Top 20% professional salons in those regions and cater to their demands and concerns more prolifically, which can lead to subsequent reorders from the salons.

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