Revo Island

1. Yes, the Zander's dilemma is a very common problem that most entrepreneurs face. The reason can be attributed to something as simple as ignoring your original customer base in a hurry to diversify your business. It is important for entrepreneurs to understand the importance of business consolidation before business expansion or diversification.

2. Suggest them to consolidate their pre-existing business and do proper market research before looking for expansion or diversification. The first step would be to get the website up and running. Then reduce expenditure on marketing and advertising for the new business for the time being, until more cash can be arranged so that first employee salaries are paid, then there is a need to boost employee morale by convincing them that it is just a minor setback and we will come out of this stronger than ever before. For the time being they should drop their line of fabric and stick to selling wool and knitting but they should not drop their plans of becoming a 100-million-dollar company, because a stagnant company is a dead company in the long run.

3. According to the textbook, the Zanders need to develop a website to the look, feel, efficiency and navigability of the website. You want to develop the customers first impression of the website and I feel the company. So keep the website easy to use. The target customer will need to be defined; give the customer what they want, convenience, lead them to sale; select a good domain name, one that defines your business or relates to it, short, and memorable; again, keep the website easy to use.

4. Zanders should look at the three primary causes of cash flow problems, accounts receivables, accounts payable and inventory. For accounts receivables they should try to collect money in a timely fashion and try reduce credit sales or extending credit. They should have workable credit and collection policy in place. Perhaps even review the collection blunders and how to avoid them.

5. My recommendation to the Zanders would be to take a step back. With the marketing department start working the website back up, as that is where the success of the business originally started. Start getting back to the basics that started the business, make the customers feel like special. Perhaps, if they do not need all the space at the site in Reno, maybe look at selling it. I would reevaluate the added inventory of fabric; if it is not making money downsize and keep only the moneymaking fabric; unless none is profitable, then discontinue it. I would then start working on a strategic plan for the growing of the business. Come up with a mission and vision and after the business is back on its feet, then start an expansion in phases. Make time for evaluating the plan with the progress. The evaluation would assure the Zanders are following the plan, mission and vision and not forgetting about the customer.