This is a four-part case series. In 2012, Leigh Nicholson, a self-employed IT consultant with a successful career that had spanned South Africa, Dubai, and London under her belt, joined forces with three friends to form Hanging Gardens, a cottage business that sold homemade hanging plant holders in their local suburb of Auckland, New Zealand, on the weekends. After spending the summer introducing customers to the products at the weekly market, Nicholson began to wonder if there was a way to grow the business alongside her demanding full time job. As she examined the financial projections for setting up a weekend stall at several other markets around Auckland, she considered the difficulties associated with scaling up, such as her limited capacity for manufacturing and the unpredictable demand for the novel product. Eventually, the team decided to drive sales by putting Nicholson on the road to perform demonstrations at garden societies and trade shows around New Zealand, alongside a website launch that sold the products online. In 2013, sales and demand boomed, and the company outsourced all manufacturing, while Nicholson faced increasing demands from her consulting business. Before long, she realized she had to either go full time into the hanging garden business or shut it down. Dissension and opposing views from her partners followed, and Nicholson ultimately decided to buy them out and throw herself into the business full time with a new ownership structure. The year ahead, however, presented unforeseen challenges when competitors with lower prices and quality started to flood the market. Struggling to compete on price, Nicholson quickly decided the best way to differentiate the Hanging Gardens offering was to partner with structural rigging experts in the commercial installation space and provide large-scale hanging-garden solutions for commercial clients. After increasing the size and complexity of these projects, the company had to develop a service orientation, with a new range of expertise requiring planting and architecture skills, among others. How should Nicholson adapt to this new service line and develop adaptable human resource capabilities without a clear indicator of future project scope? In part C of the series, Nicholson struggles with how to confront low-quality competitors competing on price.
Darden Business Publishing – University of Virginia