Can you provide Five Forces, Case Analysis and Alternatives for this case study?

The Wool Bin is a yarn and fabric retailer with one physical location in Toronto , Canada and a website for on-line sales. Its customers are individuals who enjoy knitting or making clothes at home. The company which now has 35 employees was owned by Rachelle and Ian Harris. Rachelle had worked in sales for an investment firm for ten years when she saw a niche in the knitting market that wasn't being satisfied and established the company in 2009 with $25,000 in savings. The Company was successful from the outset. growing from revenue 100.000 in 2009. to $1 million in 2015and to $4.5 million in 2017. Rachelle put in place numerous strategies to maintain revenue growth and to increase it further. However, in early 2018the Wool Bin's sales increases had declined to zero percent and soon sales declined for the first time since the company was started. The decline continued. and the Harris's had to stop taking salaries and in some months pay employees out of their savingsas the company was not generating sufficient cash.

Background

Yarns are used in knitting. They are made from Natural (wool or cotton) and synthetic (man- made) fibres Knitting is the process of using two or more needles to manipulate to create loops that result in a textile or article of clothing (scarf, socks. sweater etc.. most clothes sold in stores and online are massi produced made by machines in low wage countries ilke Bangladesh Vietnam, and others primarily in Asia Some high end designers produced hand made knitwear but this was a very small segment of the clothing market.

The yarn industry is made up of two segments Craft Yam and Premium sold at big box stores Wal- Mart and at craft stores while premum is sold through local and online stores There are several thousand local yarn shops in North America Almost are relatively and many are business.

In recent years , approximately 30 million people in Canada and the United States participated in knitting spending approximately $3.0 billion annually . Seventy percent of knitters are women . The age of knitters is spread evenly from 18 - 75 75. That is young people are just as likely to knit as older peopleThe number of knitters has fluctuated over the past decades - it enjoys brief bursts of growth and popularity before sinking back to its core market five to seven years later. Wool Bin was founded near the beginning of one of these knitting ' booms Knitters overwhelmingly favour physical stores to purchase their supplies, although most do online research before purchasing77buy their supplies exclusively in a store: 4 buy exclusively onlineand 19% buy both at a retail store and online.

Wool Bin The Wool Bin was originally a small storefront operation in Toronto that opened in 2009. Rachelle was astute in using social media, most notably posting product reviews and instructional videos on YouTube almost from the beginning This increased the customer base of the store from its original neighbourhood to wide The Company purchased most of its craft from one of three main distributors in North America - Kertzer Diamond, and Coats Premium those with particular textures or colours) are higher priced and purchased from a number of independent producers. There were approximately 150 premium yarn producers in North America - most were relatively small Craft accounted for 20% of revenue premium yarn for and other knitting supplies for revenue In 2014 , quit his job in the technology industry and joined Rachelle in the Wool Bin At first he focused on establishing and growing the on -line business Combined with the social media presence , the company sales took off $ in The majone came from the store which was crowded from morning to On line sales slow over years.

Espansion

in 2017 the Harris decided to add The Company invested product other knitting supplies n ge in the together cotton, nylon, wool, silk, or other threads and is used by home sewers for making things like clothes, curtains, cushion covers, etc. At the same time, the Harris's left their original 3500 ft the retail outlet for a 20.000 square foot space that included retail showroom, warehouse and offices. They spent \$50,000 Not only was the new location much larget, but was in a better part of the citywhich meant that their rent making modifications to the space. payments skyrocketed . Staff also had to be added . The size of the new store was roughly the same as a Michael's craft and hobby store . Michael's is a chain store that sells some and knitting supplies , but that was only a small part (15% ) of Michael's business. In addition , Michael's generally sold lower quality craft yarns . The other large retail chain that also sold the lower quality craft yarn was Wal -Mart. Other competition came from small local shops, most of which were the same size as the original Wool Bin location The personality of the owner and staff were key to generating repeat sales, as price competition was relatively low. The new location of the Wool Bin was the largest knitting store in the GTA by a wide margin . Rachelle spent less time on guiding the day- to- day operations of the company and more time on becoming an ambassador for the Wool Bin She left management to one of the long term employees and spent time trying to grow the company in both the Canadian and US markets in order to make it a household name . She introduced numerous initiatives , including sponsorships , support of charities , and increased on- line advertising In order to support the growth the Company increased its marketing staff to eight full - time employees . Previously three people had contributed to the marketing effort at the same time as working in the warehouse . The Company also hired two IT professionals to help lan with that side of the business Despite the extra help . Rachelle had less time to knit herself and stopped posting on YouTube For the next year. Rachelle travelled constantly . She joined a campaign to get athletes to embrace knitting which made numerous promotional stops at professional sports training facilities . She also recorded a 30 minute infomercial for FSC - The Shopping Channel and discussed potential partnerships with a number of candidates . Her next project was to see if they could develop a line of business teaching knitting at corporate conventions and supplying yarn to the attendees While all this was going on, Rachelle even managed to publish a book ( primarily on airplanes and in hotels while travelling ) which showed witter sports enthusiasts how to knit their own garments and accessories By the end of 2017 she was exhausted.

Disappointing Results

Rachelle had been confident that all her efforts would pay off in increased sales and profits . However sales stopped growing and then declined . The on -line store was a particular disappointment - despite all the effort in developing it, revenues from on-line sales stopped growing at about 20% of total revenue Expenses had also spiralled - largely as a result of their marketing efforts . In a matter of months , the company had nearly run out of cash . Employee morale suffered - Wool Bin was no longer a small family business where employees shared personal updates during morning meetings Ian and Rachelle's attitude had changed - "we re trying to be a big company we should act like it

Desperate to get the Wool Bin back on track , Rachelle hired an external consultant for advice . Working with himRachelle realised that the very steps she d taken to expand the business had hurt sales. They spent too much money, and Rachelle got away from the hands -oncreative leadership that had given rise to the YouTube videos and other successful initiatives . Maybe she realised she should go back to spending more time in the office. But, how would the Wool Bin become a $ 25 million company? Was that even the right goal ? Working with their consultant, the Harris's developed a whiteboard full of ideas. One of their biggest questions was whether to commit to selling fabric or stick with yarn and knitting supplies . "Who are we? became the issue. Rachelle said Should we even consider shrinking the size of the store, subletting the extra space and return to our family business roots? They considered opening more stores around the country with company- owned locations , franchises or both" Brick and mortar is still very important in our industry. Rachelle said. While expansion could spur the growth they sought, they wondered about the lifestyle choices it would entail including the travel and the need to manage retail emplovees from afar. They also considered simply continuing to build their brand online possibly with a greater emphasis on international sales. The Wool Bin could begin advertising internationally and form cross- border partnershups But growing outside North America would entail some of the same lifestyle choices as expanding domestically In effect, Rachelle said , they would be starting a new business that would require travel and money to master