Gone Rural Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Gone Rural Case Solution

Introduction

The company Gone Rural was founded in 1992 by the mother-in-law of the current managing director Ms. Philippa Thorne as a center for women's employment in Swaziland rural communities. The company employed around 750 women consisting mainly of grandmothers looking after orphans amongst the dynamic death rate of people affected with AIDS. They used to make hand-woven baskets and other crafts which received great attention in the foreign market.

Jenny Thorne, founder of the firm had analyzed the remarkable artwork by the women of Swaziland's rural areas and wanted to give them an opportunity to make a living via this skill which can gain international recognition as well. The raw material consisted of dried grasses that were collected by the firm’s ladies and then died with the eco-friendly German dyes.They were heading towards new and improved methods including glass, ceramics, and metals. (Perold, 2010)

Jenny Thorne and her daughter-in-law had aimed to improve the living conditions of the women residing in rural areas and provide them with maximum wages. The firm performed well as it received local as well as international attention. The local customers consisted of mainly Tourists. The firm’s main aim was the expansion of the facilities so as to generate successful revenue and benefit these women. This deemed great concern for Thornes as she was not reluctant to take any loans and relied upon international retailers to fulfill their demands.

Problem Statement

The firm’s core problem lies with the funding process so as to increase the external facilities benefitting the women working there. They could not rely on bank loans for these as there might be restrictive terms for a loan of around R1 million. They had to rely on external funding methods so they are heading towards external retailers in fulfilling their financial needs. There is an in-depth need foranalysis in adopting this method or searching for new ways. (Perold, 2010)

Alternatives

The major problem lies with funding the firm in order to increase the livelihood of women working there. This calls for an in-depth need for an alternative course of action in order to overcome the problem. The company has two major options either to opt for an increment in the current plan and then achieve its goals or to invest in the plan immediately. Both of these plans need deep insights into the financial outcome and thus selection and implementation of the plan that best suits the course of action and achieving company goals.

Alternative A (Lower Depth and Slower Growth)

Gone Rural can avoid investment directly and first take deep analysis in slower growth and lower depth formula.The company aims to develop its revenue base by 5% annually for the next five years and then achieve its goals of financial funding. This involves a check on the investments and per capita so as to generate a reasonable revenue. This strategy might be helpful and is a long-term plan which needs deep analysis and experts in having proper market research work and therefore proper implementation. (Pineiro-Chousa, 2019)

Alternative B (Spending on New Facilities)

Another plan that can be implemented is regarding the immediate expending plan for the purpose of achieving the goals. The plan requires an investment of R1 million for the purpose of expanding and gaining facilities on an immediate basis rather than waiting for five years and growing slowly. These new facilities would cost heavily but with these new facilities, the chances of growth are nearly 20% in annual revenue growth. The firm needs to think deeply before implementation as it might cost the whole asset to the firm. Deep analysis should be done in order to understand the need of gaining new facilities now or after 5 years.

Evaluation of Alternatives

The overall analysis of both approaches present by the organization is calculated on different scenarios. This evaluation helps the organization to understand the best-fit approach for this expansion in business in the new market and introducing new designs with different materials. It also presents which approach is best to increase the income of producers annually to complete the commitment of the owner of the organization, which ultimately increases its sales in the coming years....................

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