Bandals Footwear: Innovators of Design and Strategy

Shortly after the economic downfall in 2008 began, Tom Sesti started Bandals, a new footwear company through which he introduced a line of women’s sandals with interchangeable  multi-colored tops – their slogan being “Changeable by design.” The sandals were an instant classic and the five employee company was suddenly facing manufacturing and raw materials cost increases of 15-30%. Sesti knew he needed to figure out a strategy to deal with this issue – and two strategies he came up with involved moving the company overseas or introducing a new product.

Tom Seski took a look at how to improve the quality of his product and the strategy of where to locate his business. He gave a lot of thought about how to penetrate new markets. He realized if he could take something like sandals, which are sold mainly in warm months, and make them something one can wear year round, then they wont only sell for one season. Two ways he did this were by adding jewelry that could be taken off and used with other shoes such as boots in the winter, and also expanding his company to new countries where the weather was warm year round.

It took a lot of hard work and research, but Testi was able to figure out how to effectively manufacture his product as well as expand it to multiple countries. He estimated the cost of making his jewelry in China, the cost of promoting strategies, and assessed how many items he could sell and determined it was possible to break even in a year. He also estimated the costs of expanding his company to 15 countries overseas. These strategies had a high chance of being successful, so he decided to go about implementing them.

Tom Sesti’s operation strategies proved to be successful. Through the use of focus groups, multiple designs, bio-mechanicals, market research, marketing campaigns, location strategies, and design of goods and services, Bandals was able to improve revenues by 250 percent and more than triple annual profits. Sesti figured out cost effective strategies that addressed two major obstacles he saw within the seasonal footwear industry and made the right decisions on how to put his plans to action.

Warren Buffet makes largest personal plane purchase of all time!

In these hard financial times, owners of private jets are finding themselves unable to afford their lavish lifestyles. In March of 2011, business tycoon Warren Buffet’s company, Berkshire Hathaway, made history by making the largest personal plane purchase of all time. His foresight of luxury air travel for the corporate elite gave him the confidence to make a purchase of over 400 jets from Bombardier Inc., the world’s largest business-jet maker. The fall of the housing market in America inhibited Americans from a budget for luxury travel. With the slow and steady increase in our housing market, Berkshire Hathaway feels confident that the global economy will bounce back and luxury travel could be bigger and better than ever before. Scott Ernest, the CEO of Cessna planes, believes Buffets purchase showed “confidence in the growing strength and long-term outlook of the clobal economy and the aviation industry.”  Even revolutionaries like Sir Richard Branson of Virgin Galactic are on the verge of launching cutting edge space travel – the ultimate experience in aviation.

The power Buffett possesses with his net worth of $44 Billion enabled him to make a great deal with manufactures of the aircrafts. When you are able to make such a significant order, obviously the cost of goods will go down considerably. Basically, Buffett cornered the market of 8-12 passenger small business jet planes that are affordable for the 10% – .001% instead of larger jets. This allows more business men opportunities to travel in style, and the options of available places to fly is now almost limitless and it opens them to new opportunities such as creating new jobs for struggling economies. Warren Buffett has almost created his own industry and no-one will be able to compete in that sector of the market place because of his net worth. It will be interesting to see how this will play out and if this can be added to Warren Buffett’s repertoire of successful ventures for Berkshire-Hathaway.