Running Head: SOKO JEWELRY, FAST FASHION, AND BUILDING A VIRTUAL

FACTORY

Thelma Landeros
Research Paper 3: Soko Jewelry, Fast Fashion, and Building a Virtual Factory
Capstone II - ORG 4361
Rebecca Lynch, Ph.D.
Jun 06, 2019
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Organizations use different types of methods that include a process of identifying goals

and mapping a technique to attain them. Building a central idea with emphasis on relationships

between a particular design for a company, can support creative thinking. This artifact will

mention the challenges and opportunities entrepreneurs and startups face when scaling an early-

stage success in an emerging market, Ella Peinovich’s dilemma, and in terms of data, the Soko’s

mobile-to-web planner called the Soko’s Virtual Resource Planner (VRP), and how it is being

used (Waldman-Brown & Campbell Flatter, 2018).

Starting a business must be critical for an entrepreneur to grasp the business finances. A

start up is a company that is in the first stage of its operations (McKee, 2014). Challenges

occurred in the Soko’s company during its starting face. None of the co-founders had ever run a

retail business, and in Soko’s early days, the team lacked a sustainable business solution to reach

profitability (Waldman-Brown & Campbell Flatter, 2018). One can understand that during a

startup, job descriptions like the artisans in the Soko’s company, are often vague, sales are

tactical and growing.

Furthermore, companies must design and create new products, by not oversupplying the

current market. This happens without affecting the value of the manufactured article in the

market as a long seller. Production facilities simulators may assist in simulating facility

behaviors using signals and data from a real world, and a soft-wiring system which logically wire

real world data and simulation world data on the production facilities simulator, and are

proposed in a distributed real manufacturing simulation environment (DRMSE) (Hibino, 2006).

In the Soko’s case study, Ella P. wanted to deliver benefits via the collective improvement of all

her suppliers, artisans, and the end products. Consequently, Soko’s was able to provide the

expertise and organization needed to keep its suppliers globally competitive. All its artisans,
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secured the benefits of training with new tools, improving the quality of the jewelry production,

and Ella P. was able to provide her designs sooner (Waldman-Brown & Campbell Flatter, 2018).

With this, the Soko business will continue to generate a new line of jewelry every six months.

Moreover, co-founder of Soko’s company, Ella Peinovich struggled to properly manage

everyone’s expectations and discovered the Etsy model failed. Soko’s estimated price of its

handmade goods and the actual price that customers were willing to pay were not going to

provide a reasonable net profit margin. This is a key indicator of how well a company is run (i.e.

how efficient it is and how well it controls its costs), as a low net profit margin could indicate too

high operating costs or a wrong pricing structure (Marr, 2012). As Ella Peinovich discovered,

the Etsy model was unsuccessful. Artisans had no exposure to international trends, no concept of

foreign customer preferences, and no experience with quality control standards. Soko’s team

were unable to consistently grow sales for their products after six months, lacked a sustainable

business solution to reach profitability.

In addition, Soko’s marketing team had to analyze the performance impact of marketing

strategies to implement the emerging-market exporter, targeting developed nations such as the

United States, European Union, and Japan. This means, the extent of marketing strategy

adaptation (or standardization) is situation specific, needing suggestions to a particular product

or product line and market. Firms promote a range of merchandise in a variety of markets and

may use different plans in each targeted market. Accurate and reliable data about the exporting

strategies have to be obtained so it can be designed for a specific targeted market (Chirapanda,

2019). The key challenge, for the artisans, in Soko’s company was the fact that it was unknown

to them what international customers wanted to buy.

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Peinovich’s company team built a mobile-to-web planner called the Soko’s Virtual

Resource Planner (VRP). After reading a chapter over workplace essentials, creativity supports

both innovation and entrepreneurship where one can compare the support of creative thinking

called mind mapping to the VRP. Mind maps are diagrams with a central idea from which other

concepts branch off, with more important concepts nearer the idea and not as far away, and these

branches show relationships between concepts (McKee, 2014). One can imagine the VRP

designers had probably pictured the Soko’s ideas and company necessities, and then link them

with the different kinds of information. The VRP has eight sections, which are the design, the

capture demand, the artisan network inventory, the quality, the order management, the workshop,

fulfillment and the logistics. The eight sections are connected to the company Soko, where Ella

P. will submit her designs out via mobile app to an artisan workshop. She was able to provide

training and support to the artisans. The jewelry was sent to headquarters for quality control,

packaging, and to distribute all orders (Waldman-Brown & Campbell Flatter, 2018).

In conclusion, Ella P. reached her goals to large-scale distribution and competition with

major fashion brands. Ella P. impacted positively the organization, with assertive training for the

workers, and her problem-solving skills, eventually led Soko’s team to create the pre-industrial

model to distribute production, with modern technology, and smart algorithms to select the right

artisans for the specific jobs (Waldman-Brown & Campbell Flatter, 2018). With this

information, one can conclude that by building a central idea with emphasis and relationships

linked to the design of a company, can support creative thinking. Most importantly, Ella P. sense

of effective innovation, creativity, and entrepreneurship skills, inspire her company, employees,

and potential leaders like me, to set goals, achieve progress, and succeed in the future business

organization.
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References

Chirapanda, S. S. (2019). International Marketing Strategy in Emerging-Market Exporting

Firms. Journal of International Marketing , 20-37. Retrieved from https://doi-
org.ezproxy.southtexascollege.edu/10.1177/1069031X18812731
Hibino, H. I. (2006). Efficient manufacturing system implementation based on combination
between real and virtual factory. International Journal of Production Research, 3897.
Retrieved from https://doi-
org.ezproxy.southtexascollege.edu/10.1080/00207540600632224
Marr, B. (2012). Net Profit Margin. In B. Marr, Key Performance Indicators (p. 9). Gosport:
Ashford Colour Press Ltd.
McKee, A. (2014). Workplace Essentials: Creativity, Innovation, and a Spirit of
Entrepreneurship. In A. McKee, Management A Focus On Leaders Second Edition (pp.
279-285). Saddle River: Pearson Education Inc.
Waldman-Brown, A., & Campbell Flatter, G. (2018). Soko Jewelry, Fast Fashion, and Building a
Virtual Factory. MIT Management Sloan Group, 6-10. Retrieved from
https://mitsloan.mit.edu/LearningEdge/Leadership/sokojewelry/Pages/default.aspx