Stampline - A Case Study

In 1991, Lithuania regained its independence after 50 years of rigid Soviet control and the transition from a planned economy to a market economy had started. The beginning was difficult: after the disintegration of the Soviet-bloc, Lithuania had to reintroduce entrepreneurship and a market mentality (that once existed in the years of political autonomy between World War I and World War II), as in the former communist regime private enterprises practically did not exist, and most of the companies were state-owned and basically controlled by the centralised government in Moscow, with very little autonomy given to them. Despite the disadvantageous circumstances of the past, some people managed to adapt to the changing situation, and to recognise the emerging opportunities more quickly than others. Vladislav Bobin, born in 1965, was one of them.

Just after Lithuania’s regained independence, the Soviet Union had terminated all the investment into governmental military companies. Therefore, Bobin who had worked in one of them lost his job. He did not stay unemployed for long; he was offered a position in a relatively new yet quite successful private company ‘Veidrodis’ (‘Mirror’). For his hard work and commitment to the company, Bobin expected to get more involved with the management of ‘Veidrodis’ as the business developed. However, during a conversation with the owner of the company, Bobin was told that he would never become a partner. He then made the decision to leave the company in search of greater control of a business and the freedom to make his own decisions.

After some time, he became acquainted with two businessmen – Estonian, Ants Aarne Viirma and Swedish, Thomas Ingemar Bengtsson, who co-owned a firm that produced and sold ink stamps in Tallinn. Bobin had instantly realised the potential for such a business in Lithuania. After some negotiation, ‘Echo Stamp’ was founded in 1993. Both Viirma and Bengtsson were reluctant to invest any money into the company, as at that time, a party that consisted of ex-communists were in Government, and the partners were afraid their investment would be lost. Therefore the businessmen agreed that Viirma and Bengtsson would provide the business with the essential equipment (office furniture, a telephone and computer), a set of stamps and the promise to provide ‘Echo Stamp’ with flexible buying conditions (including deferred payment). The foreign partners also agreed to not intervene in the company’s management, and not to take any dividends, until the company was well-established. Essentially, despite ‘Echo Stamp’ having three owners from the beginning in theory, Bobin was given the sole responsibility for its operational activities.

Bobin knew that in order to succeed, he had to approach the management of the company strategically, as the resources available to him were somewhat scarce. In addition to having good organisational and financial management skills, Bobin was also highly energetic and commited to the enterprise, therefore the business did well. Soon the company had a large clientele base that mostly consisted of other businesses, and the necessary equipment from the profits was bought so the company could engage in stamp production itself, more people were employed and ‘Echo Stamp’ was ready to expand!

In 1994 the company had started selling office products, computer hardware, software and peripherals to clients. A stationery shop was also set up with the primary focus being to sell to customers directly as opposed to other businesses. At the same time, the brand and logo ‘Stampline’ was created and registered. The business’s growth and development was appreciated by the Swedish partner, so in 1995 ‘Echo Stamp’ became the Lithuanian representative of the Bengtsson’s company ‘Hans & Thomas Forvaltnings’. This change symbolizing ‘Echo Stamp’s’ credibility has greatly improved the image of the company, and consequently, attracted even more new customers.

Bobin further enhanced the company in 1998 by beginning production of business gifts. As Bobin had an engineering degree and a great interest in the production side of the business, these new activities were hugely beneficial for the company. The time had arrived to reduce ‘Echo Stamp’s’ business concentration, so a subsidiary company ‘Stampline Office System’ was established in 2004. Since then ‘Echo Stamp’ has continued to engage in the production and trade of stamps and business gifts, whilst ‘Stampline Office System’ has taken command of the office products, computer hardware, software and peripherals sold to the trade industry.

(For further case information, please visit: www.stampline.lt)

Discussion Questions

• How important was the recent independence of Lithuania in the development of Stampline?
  Consider: - How different the organisation would have been if the country had still been under Soviet control.
• How important was the initial investment of Viirma and Bengtsson to the company?
  Consider: - The advantage this provided Bobin with. How would he have begun his business without them?
• Complete a SWOT analysis for the company and provide recommendations for overcoming the threats and weaknesses identified.
  Consider: - The strengths, weaknesses, opportunities and threats imposed/enjoyed by the company.