La Casa De Las Botas

Recommendation & Implementation

La Casa de Las Botas

We recommend alternative #3, Jorge should maintain his sales in the equestrian and fashion markets as is.

• Jorge is close to retirement. No one to replace him.
• Difficult and lengthy to train new employees.
• Market will steadily increase.
• Cost of acquiring and preparing leather is expensive.
• The process to receive funds is a hassle.

Analysis of Alternative #3

Analysis of Alternative #1

• Larger quantities of production risked going against La Casa's high standards of quality and customer service.
• Good employees were difficult to find, at least five years to train.
• Production capacity was very limited, current space was limited
• Collapse of economy was near (the last one was in 2001)
• Jorge was close to retirement with no replacement.
• Potential buyers for fashion boots was large.
• No direct competition for luxury, fashion boots.

• Jorge's sales in the equestrian market make up 70% of overall sales.
• Professional users are important to satisfy because of their advocacy power.
• Free advertising and promotion in magazines/newspapers and at shows/competitions by satisfied users.
• Production tied to number of craftsman.
• Difficulty of receiving payment.

Problem

Analysis of Alternative #2

Should Jorge and La Casa de Las Botas increase production of boots and if so, should he concentrate his efforts in the Equestrian or Fashion market?

• The fashion market makes up 30% of overall sales.
• The number of potential buyers is much larger than the Equestrian segment.
• Lack of direct competition may lead to high margins.
• Moves away from La Casa's core business.
• Customers demand customization.
• Production was almost at max capacity.
• International orders take about a month to be received.

Alternatives

• Jorge should increase sales in the equestrian market and maintain sales in fashion.
• Jorge should increase sales in the fashion market.
• Jorge should maintain his sales in the equestrian and fashion markets as is.

Summary

• La Casa de Las Botas is located 10 KM West of downtown Buenos Aires.
• Jorge Da Silva Villagran (owner) bought the company from Mr. Pierri who retired in 1989
• In 2000, the company internationalized, starting with the set-up of the website.
• 60% of the sales came from outside of Argentina (Latin America, U.S., Japan, Hong Kong, and the Arab Emirates).
• Jorge was not interested in expanding his business significantly.
• Larger quantities of production risked going against La Casa de Las Botas' high standards of quality and customer service.
• Expanding foreign sales would continue to strain limited production capacities.
• Economy is predicted to collapse every 8-10 years
• Jorge was planning to retire in the next decade. His sons were not interested in taking over.
• 70% of overall sales came from the equestrian market. 30% came from the fashion market.