Amaru-Native Spirit from Araucanian Llamas
CASE TITLE: Amaru – Native Spirit from Araucanian Llamas (PDF)
AUTHORS: Soledad Etchebarne, Camilo Drago
UNIVERSITY: Universidad Diego Portales
BABSON FACULTY ADVISOR: Brad George
PUBLICATION DATE: 2010
PAGE LENGTH: 25
ABSTRACT: In August 2009 Alejandra von Baer was preparing the business plan for her new company so she could apply for funding from INNOVA-CORFO, a Chilean government agency for innovative ventures. Alejandra was hoping that the US$75,000 grant she was requesting would allow her small firm, Amaru, to implement the critical actions that were necessary for its success. Alejandra, in her early 30’s, had created Amaru in 2008 to produce high-fashion clothing out of wool from Llamas del Sur, her family’s camelid-breeding business. Her parents had started breeding and selling camelids (alpacas and llamas) in 1989, and Alejandra is currently the veterinarian and general manager of the farm. She began creating clothing from the wool as a way to diversify from an unstable and declining niche market. Amaru was selling its products at about a dozen locations in hotels and boutiques in Chile. But the sales, financial results, and resources were modest and the challenges were daunting, starting with the business plan. Alejandra had received support from a business incubator and her family in identifying and implementing several actions critical for success in the local and international markets. She realized, however, that she needed more professional marketing skills. Her main challenge was to develop a clear business plan based on limited market information that she could use for her grant application and to run the company. She also needed to define her target market in order to maximize her limited financial and marketing resources.
TOPICS: Family business; business plan; Timmons model; market feasibility; target market; fashion retailing; managerial capabilities; spin-off company; industrial analysis; SWOT analysis; internationalization; government funding; social issues (Mapuche people); labor-intensive versus capital-intensive (standardization) production; role of incubator
COURSE POSITIONING: Early in a new venture creation course or when teaching business plan writing Overall teaching objective: The first is to allow students to analyze a real-life situation by applying the Timmons model. The second is to audit a weak business plan in terms of market information and analysis, segmentation and targeting, among others. However the company continues to do business despite doubts about its future.