Sendwine.com was established to help people send wine as gifts to their friends and family members in different parts of the world. The objective of the organization was to help people sell wine without being limited by any laws. Sendwine.com was established in 1998. Its purpose was to improve the overall performance of the company in the wine industry.
The company broke the record of online retail buying patterns in 1998. This allowed the company to increase its capital base significantly. The establishment of Sendwine.com made the online shopping experience a reality. However, websites that offered gift items over the internet increased thus limiting the growth of Sendwine.com.
In the mid-1999, Sendwine.com encountered challenges while trying to penetrate new markets. When the company was established, it became a prominent player in the online retail industry. However, when Sendwine.com realized a remarkable increase in its capital base, the managers of the company were unable to cope with the intense competition that had hit online retail business activities.
Problems with the case
Many managers face problems while recruiting new people to work in their organization. Managers face difficulties while trying to support new personnel when the size of their organization increases. The remarkable growth of Sendwine.com is attributed to the influx in capital that the organization accumulated from its online transactions.
Because of this rapid growth, the managers of Sendwine.com hired many new employees to work in the organization. However, most of the newly hired employees did not have sufficient training to help them cope with the complex operations of the organization.
The performance of an organization is disrupted when managers hire employees who lack adequate training on how an organization operates. However, the explosive growth of Sendwine.com forced the managers to hire employees on a short notice. This state of affairs disrupted the operations of the company.
The managers of the company were forced to invest in corporate and training programs in order to ensure that the newly hired employees would improve the overall productivity of the company. The influx of employees in the company made it difficult for the managers and employees to communicate effectively. As a result, the productivity of employees was not addressed in an appropriate manner.
The company experienced an explosive growth when its capital base grew. The immense inflow of capital enticed the managers to create many projects so as to increase the competitiveness of the company. However, most of the projects that the managers had proposed remained unattended because of ineffective management practices.
As a result, the managers and staff of the company decided to spend more time on projects that created more value for the company. This is because the capital base was more than the company could manage. Moreover, the managers of the company were not adequately prepared to handle the large number of employees who were hired as a result of increased capital base.
For an organization to be efficient in its operations, it should prioritize and organize projects in an appropriate manner. However, the sudden influx of capital in the company confused the managers and staff of Sendwine.com. They were unable to prioritize essential projects in the organization. This is because they tried to pursue many projects at once thereby leading to slow project execution.
Sendwine.com distributes wine to local and medium sized wine stores. However, when the company realized capital influx, it did not invest in standard inventories. The managers of Sendwine.com did not order a consistent supply of inventory from the company’s distributors. This made the company to run out of stock thereby making its customers to look for substitute products from other companies.
All business ventures have competitors. Therefore, it is the responsibility of the managers of an organization to devise ways in which their company can cope with competition. This is because competition can drive a business out of the market indefinitely. The major competitors of Sendwine.com include Amazon, Yahoo and 911gifts.
These companies have become successful in the online retail market thereby making Sendwine.com to be invincible. As a result, the customer base of the company has gone down drastically. This is because the competitors of Sendwine.com are creative, innovative and flexible thus making it difficult for the company to compete with them in an effective manner.
Customer retention strategies
To be successful in retaining its customers, Sendwine.com should increase the range of products that it offers to its consumers. Most internet businesses face new challenges every day. Therefore, it is important for companies that wish to succeed in internet transactions to adopt strategies that can help them drive other competing businesses out of the market.
This would allow them to increase their customer base significantly. In this perspective therefore, Sendwine.com should implement an E-commerce platform that would allow its customers to carryout online transactions effectively.
Companies should understand that customers have different needs. Therefore, it is important for the managers of Sendwine.com to ensure that the products they offer to their customers are stylish and that they are designed to meet the needs of all customers. Moreover, managers need to understand that the issue of online trust frightens many internet users.
Therefore, it is vital for the managers at Sendwine.com to upgrade the website thereby allowing the customers to carry out their transactions in a secure, flexible and simple manner.
Most businesses are not able to implement effective recruitment strategies. In this perspective therefore, the managers of Sendwine.com should ensure that they recruit talented and experienced employees in order to allow the company to remain competitive and profitable. The managers should be also able to handle the needs of employees in an appropriate manner thus allowing the company to win its customers’ confidence and trust. This would make the profitability and competitiveness of the company to grow significantly.
From the analysis therefore, it is true that the success of a business does not depend on capital availability alone. The managers of a company also play a vital role in terms of boosting the productivity of an organization. Managers are the ones who select the right employees to work in an organization.
They are also the ones who allocate resources in a company. In this perspective therefore, it is true that inefficient management practices led to the collapse of Sendwine.com in 1999. The company failed despite having accumulated a huge capital base.
The managers of the company were unable to cope with huge capital base and the large number of employees. Therefore, in order to be successful in the market, Sendwine.com should hire competent managers who are competent in terms of handling a large number of employees and huge capital base. This way, the company would be able to compete effectively with its competitors.