Case study summary
Alder and Calla Wilde, from rural Vermont, founded Wilde’s Bramble, an organic food company. In their tiny farm with land from both sets of parents, the Wildes decided to grow and sell organic items. After selling their items at farmers’ markets, local shops and restaurants started buying and reselling them due to their excellent quality and taste. Since more customers meant more pressure to produce, the Wildes leveraged savings to lease more farms and expand output. They required new equipment, power, and a barn. Alder and Calla used credit cards to cover expenses. As credit card payments and finance costs rose, they took out a farm mortgage, and Calla got a job outside the farm to manage cash flow. Growing debt—which aided cash flow but added to the overall crunch—threatened to overwhelm them, dimming the outlook.
Wilde’s Bramble Systems Thinking Analysis
Occurrences/events
- The first event includes implementing the idea of owning “Wilde’s Bramble,” a small organic food company in rural Vermont.
- While still in rural Vermont, where the couple grew, they sold their products locally to the farmers.
- Their business grew more prominent and attracted more customers, thus expanding to local shops and restaurants from a small organic food company.
- Due to increasing demand, they lease more farmland, thus investing in facilities and equipment, boosting their production.
- They met their increasing costs by depending on credit cards.
- Due to the debt, they end up taking out a mortgage.
- The last event is when Calla finds a financial source away from the farm to boost their cash flow.
Trends/patterns
- The trends can be explained using a positive feedback loop. Positive feedback loops increase changes, making a system more unstable near equilibrium. From the start, the company increased its customer’s demand due to the delicious and high-quality products, which increased the demand for them or the urge to produce more products.
- In addition, a balancing loop can explain the trend. In a balancing loop, a change in one variable causes a corresponding change in another variable at the other end of the loop. In this case study, the increasing credit card payments and debts resulted in financial strain, forcing Calla to find a job that would balance the cash flow.
Underlying Structure
Cash Flow Management Loop
Behavior Over Time Graph
The case study of Wilde’s Bramble can be explained using Graph 2: sales, profit, and debt. Based on the facts in a case study of Wilde’s Bramble, the sales initially started rising after the business started but gradually increased after the production of high-quality products, which resulted in increased customer loyalty and, thus, a period of sustained and accelerated growth. However, despite the increase in sales, the company recorded fluctuations in profit margins due to the increased cost of using credit cards and business expansion. Lastly, a sharp increase in debt, particularly during the cash flow issues and the periods of scaling up production, explains the consistent increasing trend in debt.
Analysis
- Increased customer loyalty, expansion, and demand indicate that Wilde’s Bramble experienced success in the early stages.
- A reinforcing loop of financial strain was developed in the company after the debt accumulation and reliance on credit cards.
- Calla searching for a job and taking out a mortgage represents the company attempting to manage and balance the resulting financial pressure.
Recommendations
- The best strategy to help the company overcome the financial strains is finding a suitable financing option to reduce debt and dependence on credit cards (Betley et al., 2021).
- The other strategy would involve adopting an adequate cash flow management plan.
- The third recommendation would involve adopting growth strategies and a suitable long-term sustainability approach that does not depend on debt.
References
Bruce, J., Yulmetov, R., King, T., Ralph, F., & Younan, A. (2021, June). Development of iceberg profiling technology. In International Conference on Offshore Mechanics and Arctic Engineering (Vol. 85161, p. V006T06A038). American Society of Mechanical Engineers. https://doi.org/10.1115/OMAE2021-62950
write