Assuming demand continued to grow, how would Kate scale operations in Peru?

She
had already accepted a full-time job in Chicago and would be working on Mayu on a
part-time basis.

According to Johnson et al (2005) to scale operations means to implement an operational

Firstly, Kate admitted that the artisans may not be able to cope with the increased production
volume. Although Hill (2012) argues that the “learning effect” increases productivity of the
personnel involved in manufacturing over time, Kate should not rely on it, as this effect has
its limits. Johnson et al (2005) recommend solving the production volume issue by expanding
operations to the other villages specialising in producing alpaca woven goods. To avoid
further personal involvement, Kate could delegate this task to a local manager whom she
either employs or promotes. Since she already has assistance from Maria Rosemberg de
Huerta, Kate could assign her this role. Price (2011) suggests that giving additional
responsibility and decision-making power to an employee motivates them. As literature
shows, this solution has two risks: firstly, investing into establishing relationships with the
new village to ensure smooth operations may not pay off; secondly, shall Maria leave, Kate
will be left with more complex operations that she will have to manage until she finds a
replacement for Maria (Zhong et al, 2010; Moeller et al, 2006). If Kate prefers to leave her
operations limited to one village, she could use the less busy months of the year (from April
to August) to prepare for the “hot” season and order the most popular products in advance
(Laudon and Traver, 2016). This solution would require Kate to think about storage space for
the products that have been delivered but not sold yet. Furthermore, this would involve much
more careful cashflow planning, as the products will be ordered before the customers have
made a payment (Wood and Sangster, 2008)

Secondly, increased turnover means that logistical issues will aggravate. Currently, there is a
person responsible for delivering the goods to Lima and transporting the money paid for the
goods back to the village. Considering that the amount of money paid will increase, so will
the potential loss in case of robbery, which was described as one of the risks. Additionally,
depending on the volume of the produced goods, the person transporting them may not be
able to physically deliver them alone or in a single trip. Cavusgil et al (2008) illustrate that
one of the ways of solving the issue is though vertical integration by investing into a car that
can be used for transporting goods and money.

Johnson et al (2005) suggest that it is likely that with the increased volume the timeliness of
the delivery and the quality of goods may go down. Kate mentioned that even with the
current operations the quality of knitwear and the timeliness are inconsistent. This issue may
be solved by adapting decentralised approach (Schmitt et al, 2015; Yu et al, 2009). Having a
local manager whose responsibilities include quality control and ensuring the timely delivery
would provide some guarantee that the quality goods will be delivered timely (Bolumole et
al, 2016). As it was mentioned before, this manager could be either hired or promoted
(Maria). Since the average income in Peru is lower than in the USA, the cost of having a local
manager should be comparatively small. Sarin and Winkler (1980) recommend introducing
incentives, which should motivate the manager and the artisans to perform well. However, in
order to be able to measure their performance, Hill (2012) suggests to introduce measurable
metrics (e.g. the speed of production or the number of rejected items by quality-control
checks).

Finally, since Kate is going to work on Mayu on a part-time basis, she needs to think about
introducing an organisational structure that would delegate some of her responsibilities.
Stokes and Wilson (2017) argue that organisational structure should be constructed based of
the needs of the company. The need for a local full-time manager responsible for the
operations in Peru has been illustrated in the discussion above. Since Kate makes use of the
internship programme, she could delegate some of the low-level tasks to the students (e.g.
sending Maria shipping orders and chasing them, or finding a better marketing platform for
Mayu).
How would Kate take Mayu from an in-person, event-based company to a successful
online store if people couldn't see and feel the Alpaca fiber?

In order for Mayu to become a successful online store, Kate needs to further increase her
online presence and brand awareness. In addition to her current efforts, she could take the full
advantage of the social networking platforms (such as Facebook or YouTube) to post on
behalf of Mayu. Norbe and Silva (2014) argue that social networks are a powerful tool for
marketing. According to Mansfield (2016), one third of the internet users use social networks
when searching for information about a brand. One of the common marketing strategies is to
encourage existing and potential customers follow Mayu on social networks and share the
content (Powers, 2011). For instance, start a lottery event where sharing an advertisement by
Mayu allows the internet users to participate in a riffle and win some vouchers.

One of the ways to increase brand awareness is through collaborating with more established
brands. If Mayu products were sold by a great retailer with a big brand name, then the
customers of the big brand would eventually recognise Mayu. Being associated with a bigger
brand has its advantages (e.g. increased awareness) and disadvantages (e.g. if the bigger
brand gets negative publicity). Ideally, Mayu wants to be partnered with multiple brands that
have similar corporate values, as it will move Mayu closer to its target sustainability-
conscious audience.

Since Kate has already used some of the digital marketing tools, she should have collected
enough information about the demographical data about her potential and real customers,
repeating customers and the pathways they take to find Mayu’s website (Cheung et al 2014;
Google, 2017; Gacebook, 2017; YouTube, 2017). She should use agile approach that tracks
this information and utilises it for further marketing strategy (Stacey, 1996; Brassington and
Pettitt, 2007). For instance, she could readjust the tools that she uses for marketing, if she
finds that some of the platforms do not generate the number of customers to pay off the
expenditures for using this platform.

To move from the events to online store, Kate should make sure that during her events, she
promotes her online store. This way, the potential customers who have already seen and
touched her alpaca knitwear but could not buy it at the event could come back to Mayu’s
online store. Uncles et al (2003) highlight the importance of the customer loyalty programme.
Therefore, Kate should think of the ways of how to build and maintain her loyal customer
base.

How would Kate be able to partner with the many Americans who'd asked her to help
them also import knitwear from Peru? She didn't want to give away her "trade secret"
of the artisans who she'd worked hard to train.

If the other knitwear importers already have their own suppliers, but do not have logistical
means to transport it, Kate could share some of the shipping costs and ship the goods
collaboratively (Simatupang and Sridharam, 2008; Sunil et al, 2016). Depending on the
location of her partners’ suppliers, she could share some or all of the shipping costs.
If her partners had no suppliers, Kate could use this opportunity to sell her products.
Depending on the volume and frequency of such orders, Kate should adapt her pricing, going
for the economies of scales strategy if her partners buy alpaca products in large quantities
(Hill, 2012).

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