Eastwind Trading Company Essay

761 Words Jan 13th, 2011 4 Pages
Eastwind Trading Company.

The potential opportunity and long term sustainability of Eastwind Trading Company lies in the uniqueness of their product. The Swanson pearls are the only remaining collection of handmade freshwater pearl buttons in the world. The amount is limited and cannot be easily duplicated due to current environmental condition. Therefore, the fact that no one else carries these types of buttons is the main competitive advantage the Eastwinds Trading Company posses. This exclusiveness, however, can also result in the company’s weakness: very perishable, expensive, and difficult to handle small items that require careful organization and specialization to control costs. The company is still in the existence stage. Gail
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Martha and Gail have experience in management and marketing which makes a good addition to the development and success of their future business. Their experience can be applied in the development of a new strategy that will re- introduce the pearls in the market while expanding the product in areas that were never covered by the previous owners. The fact that the raw material could be cut off leaving a semiprecious stone that could be mounted as earrings, necklaces or rings is a plus for the business and needs to be exploit at its maximum. Despite the fact that the pair was advised by the financial counselor that they will be working in an “anemic lending environment, they sell the bankers only the concept of the buttons business, ignoring the more profitable concept of selling them as jewelry. As a result their offer was rejected by about 10 financial institutions. Finally, Stadium Bank would lend the money but only if guarantee by the Small Business Administration (SBA). By having the SBA guaranteeing their debt Martha and Gail may be removing the bank’s incentive to work directly with them. If they encounter a financial problem they may be ignored by the bank instead of getting assistance as borrowers since SBA is guaranteeing the loan by 90%. The fact that the company’s loan has to be personally assured by their owners may be a downside for the negotiation. Gail and Martha’s personal assets may be affected if this

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