Timbuk2 is a manufacturer and retailer of backpacks, laptop bags, and accessories such as cell phone holders and protective strap pouches. Several years ago, the firm was experiencing a decline in sales and had to reorganize in terms of its management and objectives. Top-line growth (increased sales) became the new objective for the firm, given that the company needed an infusion of cash. Timbuk2 needed to expand through increased sales in new product lines (a product portfolio) and new markets in order to generate cash.

The firm's original goal was to generate $25 million in revenue in five years. It not only achieved that goal but surpassed it. The company has now revised its growth estimates. Timbuk2's management recognizes the importance of business funding to facilitate growth. It also emphasizes forecasts. The controller of Timbuk2 says that everyone has to be on the same page with forecasts. This is accomplished through meetings between management and staff, where successes and shortcomings are recognized. The company also focuses on daily numbers. More information on Timbuk2 is available at http://www.timbuk2.com.

Questions

1. Why did the new managers of Timbuk2 decide to finance growth with increased sales, rather than by borrowing more funds?

2. How does a reputation for excellence in its market help Timbuk2 improve top-line growth and bottom-line performance?