1 case study answers > labrador rewinding 1. Examine Labrador Rewinding and state three advantages of having a business in the family. 1. The opportunity to work in the business from an early age and learn the product(s) and/or service(s) and the network of clients and contacts. 2. Family members come to see owning a business as part of life. Jeannot says My father planted entrepreneurship in my head since I was five. 3. There is opportunity to take over a well-known, viable business from a trusted entrepreneur. 2. The economy of Labrador West is projected to have continued growth. What does this mean for the demand for Labrador Rewinding s services? And could this create any issues? It could mean an increased demand for services. Labrador Rewinding would have the challenge accessing sufficient skilled labour to meet the demand and accessing accommodations for workers. 3. How has Labrador Rewinding historically and currently tried to address the labour shortage? By providing on-the-job rewinding training to trades-people with related skills. By providing competitive wages and benefits. By bringing in workers from outside the country. 4. Labrador Rewinding is conscious of its competition but confident that in spite of local and out-of-town competition that they will retain their current customers and continue to grow. Why? Out-of-town competitors have to deal with lost time and added expense in shipping motors Labrador Rewinding has good relationships with local mining companies and offer 24/7 service with prompt turn-around times for repairs. The industry is growing, as is demand for motor-rewinding services.
2 5. By what methods does Jeannot market his products to maintain and expand his customer base? He prefers personal meetings and maintaining a good company reputation based on years of reliable service. He does, however, recognize the growing importance of webbased internet advertising. 6. Jeannot s father saw opportunity two decades ago and seized it. Demonstrate how Jeannot has his father s entrepreneurial vision and ability to take action. He is engaged in research and development to expand the products and services offered by the company. He is looking to expand his electric motor sales to the island portion of the province. He wants to ensure that companies in Labrador West do not send their motors out-oftown for servicing. He does not see limitations in their geography and is exploring opportunities as far away as Morocco.
3 > clearrisk 1. What is Craig s product? And why is there a growing demand for it? It is a software product /service that assists small and medium sized businesses to develop risk management strategies. Because society is more litigious, insurance claims have increased and with it so have insurance rates. Businesses need risk management strategies to keep their insurance costs lower. 2. Craig says that Everyone invests in people. What does he mean? A person or a team of people may have a good business idea and a good business plan but investors will only invest in people they believe in - people who they believe can implement and develop the business. 3. How was Craig influenced by other successful entrepreneurs? Paul Johnson inspired him as a business person who took risks and implemented innovative business practices in the insurance business. He grew the small business he inherited from his father to a multi-million dollar company. Mr. Johnson also has a social conscience. He has contributed much to his community and Craig does as well. 4. How does Craig say a business should proceed to access the necessary capital to finance a growing technology company? 1. A business plan must be developed. 2. Then business owners must commit their own money. This may mean accessing an operating loan from a bank based on personal guarantees. 3. Acquire additional funding to implement the business; the business plan can be presented to agencies such as ACOA, CBDC, or the Research Council of Canada. 4. A technology company may also apply to the Genesis Centre at Memorial University. If the company is fortunate enough to be accepted, it will obtain assistance with office space and expertise. 5. The added credibility of being a client of the Genesis Centre, along with the company s good product/service and reputation, may attract the attention of angel investors and investment companies such as Growth Works.
4 5. How does Craig market his business? He uses web-based marketing and social media such as Facebook, MySpace and Twitter He uses in-bound marketing strategies. Referrals and word-of-mouth are becoming more important in the marketing of Craig s business. 6. Go to the Genesis Centre website and explain the function of the centre. The Genesis Centre is a campus incubation facility that assists local start-up technology companies in the early stages of development and growth. It provides office and administrative resources, assistance with planning and marketing, and access to a network of technical, managerial and financial advisors and mentors. The Genesis Centre provides a range of business, technical and research resources to new technology businesses. It also introduces these companies to potential investors.
5 > hey rosetta! 1. Many young people who start a band they often do not realize that they are starting a business. As in any business arrangement the participants should have a written contract or agreement. Explain how a band agreement is similar to a partnership agreement. Like a partnership agreement, a band agreement sets out the expectations and obligations of each of the band members and it sets out a formula for the division of revenues. It also should set out any individual rights to the band name as well as rights to music and lyrics. 2. What risks is a band taking in not have a band agreement? The risk of misunderstanding and conflict increases. When there is conflict, there is potential for band members to be unhappy and the very existence of the band is threatened. 3. What are the sources of revenue for Hey Rosetta!? Cd sales, downloads, royalties form airplay, show ticket sales, merchandise, and synchronization as well as funding form agencies such as Music Newfoundland and Labrador and FACTOR and Radio Starmaker Fund and sometimes awards such as the $25,000 Verge Award. 4. Hey Rosetta!, like many businesses, is incorporated. What is the advantage of incorporation to the band? Incorporation protects band members from unlimited liability. As the business grows and assumes greater financial risks in producing the music and touring, individual band members will not be responsible for the debts of the business should insolvency occur. Also band members would not be personally liable if an audience member were to be injured at a concert. 5. Hey Rosetta! has a developed business plan. Why is this to their advantage? Studio time, record marketing, and tours are all expensive. A business plan gives them credibility when accessing funding or financing from agencies or investors.
6 6. Marketing is important in the music business. What channels does Hey Rosetta! use in marketing the band and its music? Multi-media advertising, publicity interviews and appearances, song play and radio promotions, the band webpage, Twitter, Facebook, and blogs
7 > marble zip tours 1. Show that Martin demonstrates three qualities common to successful entrepreneurs. 1. Vision: He saw the possibility for a Zip Line Tour business at Marble Mountain. 2. Determination: Despite pessimistic responses from some experts as well as challenges relating to finances, insurance and construction, he did not give up. 3. Adaptability: Rules for zip lining did not exist in the province so he and his team researched and wrote them. 2. By what means does Martin promote his business? Internet based advertising using social media such as YouTube and Facebook is his most important method. He also uses road signs, brochures, posters radio ads and merchandise. He also values media publicity as these news stories create awareness of his products and services. 3. Who is Martin s customer base? During the summer his customers are tourists; many are Newfoundlanders and Labradorians vacationing in the province. These include families, couples and groups of all ages. In the winter, snowmobilers and skiers stop by for the zip line experience as well as to avail of his snowmobile tours. 4. How does Martin s advertising reach these customers? The on-line advertising reaches people planning their vacation. They see video and photos posted by Marble Zip and its customers and they want to experience the thrill as well. The road signs, posters and brochures create awareness in people who are on vacation. For example, children who spot the road side may entreat their parents to take them there. The merchandise, such as t-shirts purchased and worn by customers, also spreads the word to current and future vacationers.
8 5. Martin says that the province has great potential in the tourism sector. What natural attractions are you familiar with in the province in general or in your region that would be of interest to people seeking an adventure tourism experience? Be as specific as you can. Some possible responses: The East Coast Trail The Skerwink Trail Whale watching Fishing and Hunting with outfitters on the island and in Labrador Snowmobiling Downhill and cross country skiing Ocean kayaking Spelunking in Corner Brook Rock Climbing 6. Design a logo for Marble Zip then go to the Marble Zip website and compare your logo with the actual logo. This question invites student to think creatively about business logos. Students should focus on the purpose of a logo and incorporate lessons they have learned in class regarding logos.
9 > hi-point industries 1. List the 4 P s of Marketing and explain how these apply to Hi-Point. 4 Ps: Product, Place, Price and Promotion Product Oclansorb a peat based oil absorbent product - Other products necessary for oil spill clean-up - Cranberries Place - the product is produced and processed in the peat fields of central NL and then distributed globally Promotion trade shows and the internet Price- Hi-Point does not discuss pricing, however, the product must be priced to cover expenses and leave a profit for the business. He must also consider demand for the product and the pricing of the competitors products. 2. Who is Hi-Point s competition and how does Hi-Point differentiate its product from its competition? The competition is made up of large, multinational companies such as 3M. Hi-Point s product is all natural, environmentally friendly, 100% organic and does not release oil. Many competing products are synthetic. 3. Bill says that the internet does not replace trade shows as a means of promotion. Why? Trade shows allow customers to see the product and ask in-depth questions directly to a company representative. They also facilitate relationship building among consumers and distributors and allow Bill to keep up with what competitors are doing. 4. What global trends should ensure the health of Hi-Point industries? Concern for the environment and the obligation of petroleum-based businesses to be ready for oil spills. A growing horticultural market A growth in the demand for antioxidant food sources such as cranberries.
10 5. How is Bill s cranberry business a fortunate by-product of his quest for sustainability? The peat bog s needed new growth to be rejuvenated. The berry bushes ensure the sustainability of the peat bogs and at the same time give Hi-Point a new product line and source of revenue.
11 > subc control 1. Why is NL the place to be for an entrepreneur in Chad s business? Chad cites the many organizations available to assist entrepreneurs in Newfoundland and Labrador. He states there is more support for ocean technology in the province than anywhere else in Canada. Furthermore, the on-going development of off-shore oil exploration and other ocean industries mean that there is a demand for ocean-related products and services. As his clients are global, Chad is able to operate his business from anywhere! Memorial University and College of the North Atlantic also provide a source of ready skilled labour for his business. 2. How does Chad promote his product? He promotes his product by cold calls to the technical people of major ocean industry companies. He knows that he has to target these specific people for only they will understand the technical specifications and capacity of his product. He has also begun to use the internet and social media to create awareness of his product. 3. Who is Chad s competition? What is his strategy to lure customers to his business and away from the competitors? His competitors are well established major corporations such as Kongsberg and Tri-tech. Chad makes a superior product at a better price. He has to infiltrate the market, gradually creating awareness of his product and building his reputation for quality so his potential customers will come over to his new and, as of yet, largely unknown brand. 4. What support is available for a technology business like SubC Control in NL? Chad found a number of organizations which were able to assist him in starting a business in the province. In particular, the Genesis Centre at MUN provided support. Chad says that he really needed support on the business end as he had no background in business and the Genesis Centre is assisting with this. Through the Genesis Centre, Chad has access to potential investors and lenders who may wish be involved in the financing of his company. This would provide the necessary capital to grow.
12 5. Chad sees unlimited potential for his company and his goals reflect this. What are his long term goals? There is huge potential to capture the business of ocean industries around the globe. However, he does not view his technology company as limited to designing for deep ocean environments. He sees potential to design technological products needed in other hazardous environments such as high temperature conditions and even outer space.
13 > the norseman restaurant 1. How has Gina conducted or availed of market research? Customer surveys Utilized research findings of the provincial Department of Tourism, Culture and Recreation, and the Canadian Tourism Commission Market tested new ventures such as a dinner theatre Comparison of products and services, tourist accommodations, restaurants and gift galleries during their own travels 2. What impact does Gina feel the province s tourism campaigns have had on her business? Tourism in her region increased in 2010 and her revenues increased 30%. She credits the colourful and captivating ads with attracting tourists. The websites of Tourism NL and Hospitality NL have also helped by providing these tourists with accessible and relevant information. 3. Gina and Adrian plan on expanding their business to include a greater number of vacation homes. What evidence do they have that there is a demand for more of these self-contained accommodations? Her current guest properties start to book up during the preceding fall. She looks to the Fisher s Loft in Port Rexton as a model for the success of such properties and services. The numbers of tourists visiting the province and the region has increased. 4. How have Gina and Adrian demonstrated that they are adaptable and able to learn from ventures that had little or no success. They attempted the dinner theatre but found that considering the hours and resources required to run it, it did not produce sufficient profit. They instead focused on casual fine dining. Because they noted that there was a demand for evening theatrical productions, they assisted the non-profit community organization Norstead with accessing funding to mount professional theatrical productions in the evening. Tourists can now have dinner at the Norseman and attend a show at the village, but Gina and Adrian do not have to carry the overhead for the show.
14 5. L Anse aux Meadows is a UNESCO World Heritage Site. What implications would this have for the tourists in the area and how has Gina catered to these tourists. The site would attract well-educated, seasoned world travellers with disposable income, among others. Gina has catered to these tourists by providing high quality cuisine focusing on local products. Her gift shop has high end products produced by local artists. She also provides modern self-contained accommodations in a traditional outport setting.
15 > twisted metal & silver & silk 1. Jason and Rosalind both make jewelry but they are not in direct competition with each other. Explain. Jason makes inexpensive pieces that appeal to young people. He also makes intricate chainmaille inspired high end jewelry priced as high as $1500 a piece. Rosalind makes silver and silk jewelry priced from $35 to $150 dollars. Her jewelry appeals to women age 30 and over. Their prices target different groups. The different styles of their jewelry also attract different customers. 2. How does Rosalind conduct market research? Observing products sold in craft shops and at fairs and discussing their marketability with the owners and sales people. Test marketing by making a few samples of a product to gauge the reaction of customers. 3. A. How is Jason and Rosalind s pricing affected by global markets? The price of silver is rising so they will have to raise their price. B. How might this impact the demand for their products? It is possible that the demand may drop off especially for the less expensive pieces as people may be looking for jewelry within an affordable price range and may not be willing or able to pay the higher prices. People willing to pay for expensive pieces may not be averse to paying the higher prices. C. What advice do you have for Jason and Rosalind to alleviate this challenge? They could switch to other materials to make jewelry that is affordable for teenagers, students and people on fixed budgets. 4. How will the growing tourist market in NL impact their businesses? This should impact their businesses favourably because tourists spend money on vacation; therefore, more tourists means more money being spent. It may also mean more tourists will travel to the Bonavista peninsula where they are opening a store.
16 5. A. Jason and Rosalind each has a business that is a sole proprietorship. What does this mean and why is it to their advantage at this point? A sole proprietorship is a legal form of business where the individual is personally responsible for the financial and legal aspects of the business. The profit or loss becomes a part of the owner's personal income tax return. This is usually a one person business, but the proprietor may have employees. All assets are owned by the sole proprietor and all business liabilities are personal liabilities. At this point they do not have significant capital invested in the business nor is their business a high risk venture so they are not at great risk from unlimited liability. They will also gain tax advantages by keeping the revenues from the businesses separate as the revenue for each business is less than it would be for a combined business. 6. Design a store sign for the business the Crafty Privateers. This question invites student to think creatively about business logos. Students should focus on the purpose of a logo and incorporate lessons they have learned in class regarding logos.
17 > king s point pottery 1. By what channels have Linda and David marketed their product? They have attended craft fairs around the province. They erected road signs to direct people to their shop. As a result of Linda s previous position in craft business development, they had a network of crafts people and business connections to assist in promotion. The Craft Council NL and the provincial government also provided assistance. 2. Define wholesale and retail. Why has King s Point Pottery shifted its focus from wholesale to retail? Wholesale involves selling a product, usually in quantity, to another business who will sell it to the customer. Retail involves selling a product directly to the customer. King s Point found that wholesaling their products involved additional paperwork as well as shipping and distribution costs. They also saw smaller profit returns on each item. In retail they net a higher profit margin on their own items and they also accrue profits on selling other people s products. 3. What factors must Linda and David consider in pricing their products? The cost of the materials and labour in each product must be considered. Also the hidden business costs such as breakage, unsuccessful batches, equipment maintenance and repair must be factored in. The unique quality and beauty of each product is also considered when valuing art or crafts in combination with customer demand and willingness to pay. 4. How does the success of King s Point Pottery affirm the business potential of rural Newfoundland and Labrador? They opened their business in the era of the cod moratorium when many people were leaving the outports and have operated successfully for 20 years. They have no other sources of income other than the revenue generated by King s Point Pottery. Their business is growing.
18 5. Linda says that it s your business skills that will put food on the table. What does she mean by this? Good business practices are necessary for the success of any business. Linda and David did a business plan to lay out what they knew and to map out where they wanted to go; they have a network of contacts; they have good marketing and accounting practices. It is these things, in combination with their art, that puts food on the table.
19 > seaknife kayaks 1. How did Lindy Rideout s growing up near the ocean point him in the direction he took as an entrepreneur? a. Students should discuss how the local environment influences peoples lives on many levels. Students may point out that entrepreneurs are sensitive to identify opportunities in their local environment for potential business ventures. 2. Assume that Lindy was to visit your classroom to be interviewed by the class, what questions would you prepare in advance of his visit? a. Student may suggest a range of questions, based on (i) the ideas they engage with from this case study, (ii) their prior learning, and (iii) new insights / ideas that they generate as part of the creative process. Therefore, it is suggested that students brainstorm with partners and then create a master list of questions as a class. It will be useful to note both common questions that students generate, as well as unique questions. At the end of the class discussion, label questions according to category, such as marketing, finance, operations, etc. Once questions have been categorized, ask students if there are areas of inquiry that have been overlooked. Students may then wish to generate questions to address those deficits. 3. Find evidence in the case study to support the following statement: Innovation is fundamental to success as an entrepreneur. a. This case study identifies several issues that suggest challenges where Lindy needed to be innovative: Unwilling to pay the obscene price for imported kayaks If he could not buy one, then he would make one. Lindy Rideout had stumbled across one of the worlds fastest kayak designs. It took him roughly a whole year to build a fiberglass boat. But it was well worth it.
20 And just like that, tourists started getting kayaks custom built 4. If you were to advise Lindy about how to market his venture, what steps would you recommend? a. This is an open ended question that is intended to encourage creative thinking and problem solving. Students should clarify who are Lindy s primary and secondary target customers and what the customers are purchasing. (Note: Students sometimes struggled with this last point. While it is obvious they are purchasing a kayak, students need to consider why they would purchase a Sea Knife Kayak? What are this company s competitive advantages?) Students should then examine the various ways in which these different customers can be reached. In order to recommend specific steps, students should develop their recommendations based on criteria such as cost, or the number of potential customer reached. 5. What lesson would you take away from this case study about how to be successful as an entrepreneur? a. It is expected that answers will vary. However, students should (i) clarify what it was in the case study that caught their attention, and (ii) explain how this idea has informed / changed their thinking. If completed as a reflective journal, the following may be useful as a prompt: In this case study I realized that. This is important because. 6. Go to Lindy s website and view the logo for his company. Explain why this logo is or isn t an effective one. a. It is expected that answers will vary. It is suggested that students complete this activity using a think-pair-share cooperative learning structure. Students should use a t-chart to record the strengths and limitations of the logo, and then share their response with their partner, before reaching a conclusion. As an extension, teachers may ask that partners collaborate to create specific recommendations to improve the logo.
21 > dynamic air shelters 1. What market needs are served by Dynamic Air Shelters? a. Students should note that Dynamic manufactures temporary, inflatable shelters that can be easily shipped and quickly erected in tough weather conditions. These are used in four key markets: rapid response, promotional, industrial construction and warehousing, and oil and gas refinery sites. 2. Why is it important for a company like Dynamic to diversify its markets? a. Any business that relies on a single client or single product is exposed to changes in the marketplace. If there is a change where the primary client leaves or the demand for the product declines, then the business may fail. 3. To what degree does Dynamic s emphasis on innovation help explain the company s success? a. Students should note this quote in the case study: Continuous improvement is embedded in everything we do at Dynamic says Harold Warner, we can always do things better. Continuous improvement is an opportunity to meet and exceed customer expectations. It provides opportunities to grow by ensuring that customers get what they want. Students should also note that this focus was applied to the company s decision to relocate operations to Newfoundland and Labrador, thus helping to provide a stable and loyal work force. 4. Why is it important to have strong leaders from the local area run an operation, especially one that is from another province? a. Successful decisions in business are usually the result of specific / detailed information. If an operation is centered in another province, then it would be important to have detailed information of the local area in which it operates in order to have accurate and reliable data upon which to make critical decisions. This insight is needed for both operational and marketing decisions. 5. When a company decides to leave one province to move its manufacturing operation to another, explain how this might affect the morale of the
22 community and province they are leaving and the community and province where they are going. a. Students response should include two critical considerations: employment and economic spin-offs. Students may wish to use an idea web to help illustrate their ideas. This type of graphic organizer is useful as it allows student to concisely identify the varied direct, indirect and unanticipated consequences of two scenarios. As an extension, students can be invited to consider the various issues that businesses need to wrestle with when deciding where to locate operations. This could then lead to a discussion of the role of chambers of commerce, as well as municipal and provincial governments, in promoting business development. Possible issues may include: availability of workers, rate of pay for employees, tax rates, building rent, transportation costs, etc. 6. Assume that you have been asked by Dynamic to develop a company motto for a letterhead to capture what it is about. With a partner, write a phrase or sentence that describes Dynamic s distinctiveness. a. Students should be encouraged to identify Dynamic s (i) key target markets and (ii) competitive advantages. Students should then identify the most important of these factors to use as they create the company motto.
23 > lighthouse picnics 1. Setting up a business in a remote lighthouse was a risky venture. Why are some people, such as Jill and Sonia, motivated to take a risk and pursue their dream? Depending on their prior knowledge, students may raise a number of factors that motivate entrepreneurs, including: desire to be their own boss, earning a profit, and a sense of personal achievement. In the case of Lighthouse Picnics student may also note that Jill and Sonia were able to use skills they already possessed and that for Sonia it had always been a dream to own her own business. 2. What did Jill and Sonia need to start their business? To start the business, Jill and Sonia needed permission to use the building and restore it to functional use. They also needed the appropriate skills, which they obtained from their schooling in public relations and cooking. 3. Lighthouse Picnics began as a partnership but became a sole proprietorship. Using Lighthouse Picnics as an example, what are the advantages and disadvantages of each form of ownership? Depending on their prior knowledge, students may raise a number of benefits and challenges associated with organizing as a partnership and sole proprietorship. In particular students may note that one of the primary benefits of partnerships is the sharing/distribution of responsibilities. A significant challenge of partnerships relates to the settling of differences of opinion when key decisions need to be made. Regarding sole proprietorship the opposite may be cited: ease of decision-making as a pro and not being able to share responsibilities as a con. For more information, see The World of Business: Newfoundland and Labrador Edition (2011) pp What are other ways in which the lighthouse could be used during the offseason? Which might be most likely to succeed based on providing a source of revenue for the business? This question invites student to think creatively about other uses. Students should focus on identifying possible opportunities/needs that this facility may satisfy. Once students have identified several options, they should then make an evaluation based on the criteria of maximizing revenue.
> clearrisk inc. 1. Craig s educational process was one of life-long learning. Explain. Craig was educated in the insurance business on the job. He completed many insurance designations and business courses
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