Make a part of organizational plan

Craft Guitars

Company address: N/A Company phone number: N/A

Website: N/A

Plan prepared February, 2021 by

Emily Hinckley Linh Dinh

Madeline Juarez Yayun Dong

Robert Corona

Organizational Plan

● Summary Description of Business Craft Guitars was created by Mary Garcia in 2015. The manufactory is famous for producing personalized and highest quality guitars. The products CG plans to sell are custom orders, acoustic, and electric models. The CG continues to produce creative models using exotic woods and the highest quality. And customers can also choose the pictures or hand drawn images on the guitar, they can also choose the Materials used to make guitars. CG sells through the "make-to-order" module. The order service and post sales service are a part of CG sales.

● SWOT analysis

Strengths ➢ Experienced key officials. ➢ A member of the National Association of

Music Merchants → build reputation. ➢ Innovative and unique creations → build

reputation. ➢ Good customer segmentation strategy:

○ Highest quality workmanship and multiple suppliers of exotic woods for producing limited high-end designs → attract high-income customer segments.

○ Production of standard guitars → appeal to broader base of customers

➢ Make-to-order improves the specialization of guitars → offer efficient customer service.

➢ Good financial management, especially a high payable turnover ratio and a relatively stable current ratio → attractive to lenders/ creditors/ investors.

Weaknesses ➢ Marketing strategy need improving:

○ Depends much on traditional marketing channels.

○ Digital marketing and social media uses are still limited.

➢ High cost of goods sold and general and administrative expenses (about 60% and 20% of sales respectively).

➢ A high inventory day ratio of about 60 days indicates that 2 months are needed to sell goods → high inventory cost.

Opportunities ➢ Future trends in custom guitar would be

more and more popular. ➢ Standard guitar production line with

affordable prices → attract potential customers

Threats ➢ Not many physical stores and people can

not find it easily. ➢ More competitors enter the market.→

more competitive

● Products & Services ○ Standard, custom-designed & limited unique guitars ○ Extensive customer service and customer interaction

■ Self-design services ■ Direct design discussion between customers and craftsmen. ■ Guitar production watch.

○ Expansion will include: ■ Developing a bass guitar model ■ Connecting with smaller music stores to sell CG standard model guitars ■ Branding lines for clothing (Shirts/hats), instrument cleaning products and

other music accessories ● Customers:

○ Customers are segmented based on their income levels and purposes of buying, which then determine which types of guitars purchased.

○ Craft Guitars sells to multiple channels such as music stores, guitar centers, and is still growing.

● Administration Plan ○ Legal Structure

■ To handle legal affairs, we contract with Blank Rome LLP, a firm that is ranked National Tier 1 in corporate law. We have been contracting with them for two years now with no problems.

○ Capital structure ○ Management

➢ Projects of producing other related products (clothing, cleaning tools, cases, accessories, …) → expand markets.

➢ It is a luxury goods sales company, and can be easily affected by economic fluctuations.

Income level Buying purpose Product type

High income Collection (guitar collectors) Limited unique guitars

Mid income Collection (guitar collectors) or play (guitarists)

Custom-designed guitars or standard guitars

Mid-low income Play (guitarists) Standard guitars

marketing Manager Marketing M

○ Personnel ■ Board of Directors:

● Mary Garcia - Board Chair ● Michael Stull, PhD ● Connie Liu, CPA ● Don Edwards, Esq. ● Susan Rodriguez ● Sheri Moore

■ Recently, employed 78 workers in the San Bernardino production facility. ■ Expectedly, employ 4 full-time sales employees.

○ Legal & Accounting ■ For accounting, we have our own accounting department that our CFO-

Miss. Connie Liu takes control over it ■ For auditing, we contract with Deloitte Touche Tohmatsu Limited, which

is one of the Big Four accounting organizations reputable for its accounting and auditing services.

○ Insurance: ■ Craft Guitars is insured by Farmers Insurance Group. This insurance

company has headquarters in California and is an insurer group for automobiles, homes, and small businesses.

○ Security: - Since Craft Guitars has an online presence, their website is possibly

threatened by hackers. To mitigate this threat, Craft Guitar is protected by a company called Duo Security. This company is in the cloud security and network security industry that is located in Ann Arbor, Michigan. Duo

Security protects Craft Guitar and other businesses by preventing data breaches, and credential theft among many other attacks.