Business Finance – Management Assignment Case Study

690

Case 1

Panda Sunglasses How Should a Start-Up Business with a Social Mission Market Its Sunglasses with Bamboo Frames?

Vincent Ko showed his entrepreneurial potential in high

school in Rockville, Maryland, when, as a young hockey

player, he invented a drying rack for hockey pads that he sold

to his teammates, then on eBay, and finally on a Web site for

the company he created. A few years later, while attending

George Washington University in Washington, D.C., Ko and

two friends, Luke Lagera and Mike Mills, were inspired by

the growing social entrepreneurship movement and the suc-

cess of companies such as TOMS shoes, a company founded

by Blake Mycoskie that donates a pair of shoes to some-

one in need for every pair it sells. One day while walking

through the Georgetown shopping district, the friends no-

ticed a display of sunglasses and decided to create a business

that would market cool sunglasses and provide eye examina-

tions to someone in need for every pair sold. In keeping with

the idea of a socially responsible company, Ko suggested

that they make their sunglasses frames from eco-friendly

bamboo, a lightweight, sturdy wood that grows extremely

fast. Having grown up in China, Ko was familiar with the

properties of the renewable wood and knew that it was the

perfect material from which to make sunglasses frames.

They created a company, Panda Sunglasses, and set out

to find companies that could make the product they envi-

sioned. Ko knew bamboo was the most commonly used wood

in China, so the team began looking for a company in China

to manufacture the frames to their specifications. Not only

did they find a Chinese wood shop that would make their

sunglasses frames, but they also located a Chinese eye wear

manufacturer to produce the polarized lenses. Pairing the two

companies gave them their unique, stylish sunglasses, which

float. They created a Web site and began selling them at $120

a pair. Through a connection that Lagera had, the young

entrepreneurs found an ideal partner in the Tribal Outreach

Medical Association (TOMA), a nonprofit organization that

provides eye examinations and other health services for tribal

communities. They quickly reached a deal: For every pair of

Panda Sunglasses sold, the company would pay for one eye

exam through TOMA.

The entrepreneurs’ next challenge was to market their

unique sunglasses and their potential to help people in need.

They knew that without sales, their effort at “conscious capi-

talism” would be for naught. None of the three cofounders

had any experience in the retail industry, but they learned

quickly on the job. The young men had just graduated and

took “regular” jobs to pay their bills, but they remained

dedicated to making Panda Sunglasses a success. After test-

ing sales of their sunglasses online, the trio began applying for

spots in various trade shows geared toward accessories. One

of the shows they applied to was the prestigious ENK Inter-

national trade show, which attracts more than 250,000 buyers

and press members from across the globe. Companies that are

accepted to the juried show find sales leads that generate total

sales of more than $1 billion. Mills sent Ko an e-mail in which

he joked that they would be willing to set up in a broom closet

at ENK if their application were accepted. Ko forwarded that

e-mail to executives at ENK, who responded with, “We’ll find

you a booth instead.” At the ENK show, Ko says he and his

cofounders, fresh out of college, created a booth that featured

a giant bamboo backdrop that attracted a great deal of atten-

tion. At one point, they struck up a conversation with three

women, who they learned were buyers from the retail chain

Nordstrom. The trade show opened many doors for the young

company, and less than two years after starting, Panda Sun-

glasses was generating annual sales of $350,000.

Questions

1. How can social entrepreneurs such as the founders of

Panda Sunglasses use their companies’ social missions

to attract customers and promote their businesses?

2. How should the founders of Panda Sunglasses define

a unique selling proposition for their company that

resonates with customers?

3. Write a brief memo to the founders of Panda

Sunglasses outlining a bootstrap marketing plan

for the company.

4. Use the business model canvas to illustrate Panda Sun-

glasses’s business model. Can you identify other revenue

streams that could support the company? How can the

company strengthen its relationships with customers?

5. How should the founders of Panda Sunglasses use

social media to market their company and its products?

What can they do to increase the traffic to and generate

more sales from their company’s Web site?

Sources: Based on Nancy Dahlberg, “Start-up Spotlight: Panda,” Miami Herald, June 29, 2014, http://www.miamiherald.com/2014/06/29/v-print/ 4207736/startup-spotlight-panda.html; Olga Khazan, “Panda Glasses Are TOMS Shoes for Your Face,” Washington Post, May 24, 2012, http:// www.washingtonpost.com/blogs/on-small-business/post/panda-glasses- are-toms-shoes-for-your-face/2012/05/23/gJQAsOPhlU_blog.html; Alicia Ciccone, “Vincent Ko, Panda Sunglasses: Sustainable Bamboo Eyewear That Gives Back,” Huffington Post, May 25, 2012, http://www .huffingtonpost.com/2012/05/25/vincent-ko-panda-sunglasses_n_1544043 .html; “Panda Sunglasses Are More Than Meets the Eye,” Asian Fortune, April 25, 2014, http://www.asianfortunenews.com/2014/04/panda- sunglasses-are-more-than-meets-the-eye/; Zach Gordon, “Alums’ Business Aims to Help the Needy,” The Hoya, May 17, 2012, http://www .thehoya.com/alums-business-aims-to-help-the-needy/.