Ivey Publishing

New Venture Creation

Spinelli Jr., S., Ensign, P.C. , Adams Jr., R.J.,2/e (Canada, McGraw-Hill Ryerson, 2014)
Prepared By Eunika Sot,
Chapter and Title Chapter Matches: Case Information
Chapter 1:
Entrepreneurial Mind: Crafting a Personal Entrepreneurial Strategy

Chris Street, J. Robert Mitchell

Product Number: 9B14M140
Publication Date: 11/19/2014
Revision Date: 11/19/2014
Length: 2 pages

An entrepreneur has a venture idea that he believes can be successful. After his family’s farm was sold to a company, the entrepreneur was contacted by the new owners and asked for help finding farmers to rent the land. This request formed the seed of his idea that a website could be used to link farmers with landowners for the purpose of land rental. Following an invitation to submit an application to a local business pitch competition, the entrepreneur faces many questions about what steps he should take to launch the business, specifically what he should do, how he should do it and when and why he should take these actions. The entrepreneur is also challenged to act entrepreneurial in the face of uncertainty.

Teaching Note: 8B14M140 (20 pages)
Industry: Real Estate and Rental and Leasing
Issues: Uncertainty; growth; action; Canada
Difficulty: 4 - Undergraduate/MBA

J. Robert Mitchell, Ken Mark

Product Number: 9B14M015
Publication Date: 1/24/2014
Revision Date: 5/1/2015
Length: 6 pages

The president of General Mills Canada wants to build a culture of innovation in his firm. Prior to a senior management meeting in 2010 to review the company’s plans for 2011 and beyond, he met with the vice-president of Human Resources and asked him to provide feedback and suggestions about what the organization could do to change its corporate culture. A conservative organization with a collegial atmosphere where consensus and support were essential to moving projects ahead, General Mills Canada had developed an analysis-based, detail-oriented culture that was not necessarily conducive to innovation. This case provides an opportunity to engage in a discussion about the uncertainty faced by senior management in terms of specifically how to build a culture of innovation. While the senior leaders know they want to build a culture of innovation, the real question is how they should go about doing this. Also available is supplement case 9B14M016.

Teaching Note: 8B14M015 (20 pages)
Industry: Manufacturing
Issues: Culture; innovation; change management; marketing; human resources; Canada
Difficulty: 5 - MBA/Postgraduate

Simon Parker, Ken Mark

Product Number: 9B10M028
Publication Date: 3/22/2010
Revision Date: 5/4/2017
Length: 10 pages

Twitter has become an incredibly popular micro-blogging service since its launch in 2006. Its founders have ambitious plans for the service, and are backed by hundreds of millions of dollars of venture capital funding, which values the company at $3.7 billion in 2011. Twitter seems to attract a diverse audience of users, such as political organizers looking to disseminate information to their followers; businesses looking to reach out, in real time, to potential customers; and social users. The company charges consumers nothing for its service. By 2011, competitors have emerged, some of whom are financially strong. It remains unclear - at least to some observers - whether the company will ever make money from its service.

Teaching Note: 8B10M28 (10 pages)
Industry: Other Services
Issues: Social Networking Media; Strategic Positioning; New Venture
Difficulty: 4 - Undergraduate/MBA

Chapter 2:
Entrepreneurial Process

Yves Plourde, Jean-Louis Schaan

Product Number: 9B15M013
Publication Date: 4/10/2015
Revision Date: 4/10/2015
Length: 14 pages

In May 2011, the Public Bike System Company, based in Montreal, Canada, was preparing to answer a request for proposal by New York City to create a financially self-sustaining public bike-sharing system. Three years earlier, the company, owned by the Montreal Transit Authority, had created Bixi, a service that made bikes available to members through docking stations, powered by solar energy, spread across the city. Although its financial structure was still unproven, it was a promising solution that aimed to revolutionize urban transportation. In partnership with other private bike-sharing organizations, the company had successfully expanded to Minneapolis-St. Paul and Washington D.C. but had experienced problems with its implementations in Melbourne, London and Boston. Furthermore, the system in Montreal could not provide evidence of profitability, forcing the city government to step in by guaranteeing loans and providing additional cash flow. It also did not have a clear business plan as to how, when and where its international expansion should take place. Now, news of its problems in Montreal had made headlines in New York, putting the future of its expansion ambitions in doubt.

Teaching Note: 8B15M013 (13 pages)
Industry: Other Services
Issues: Growth; strategy; expansion; Canada; United States; Australia; United Kingdom
Difficulty: 4 - Undergraduate/MBA

Kanika Gupta, Melissa Leithwood, Oana Branzei

Product Number: 9B13M103
Publication Date: 9/26/2013
Revision Date: 9/26/2013
Length: 9 pages

SoJo is an online resource hub — optimized for web and mobile — focused on helping early-stage social innovators turn their ideas into action. Founded in Canada as a for-profit venture in 2010, the company depends mainly on volunteer part-time staff and competes for traffic in cyberspace with its own content providers. Many skeptics doubted the idea would ever work: why would content providers forego traffic on their own sites by relinquishing their “good stuff” to SoJo? Yet by 2012, with over 2,000 active users, 50 content partners, 1,300 Twitter followers, 80,000 articles viewed and more than 1,000 unique pieces of content that earned global praise from traditional business media outlets, SoJo is well positioned to grow even further and faster. However, its founder and chief catalyst, an award-winning social entrepreneur, is anxious to make the company self-sustaining by generating revenue through product and service extensions and by increasing its user base a hundred-fold. How can such a social enterprise be modeled to support the pace of growth it needs to remain the one best resource for change-makers the world over?

Teaching Note: 8B13M103 (11 pages)
Industry: Social Advocacy Organizations
Issues: social enterprise; social innovation; social change; youth entrepreneurship; Canada
Difficulty: 4 - Undergraduate/MBA

Adam J. Mills, Jan Kietzmann

Product Number: 9B13M064
Publication Date: 6/18/2013
Revision Date: 3/30/2016
Length: 9 pages

The founder of a non-profit organization that ran a cross-country ball hockey tournament in support of Food Banks Canada had to discuss the future of the organization with his team as it headed into its third year of operations. Foremost in his mind were questions about whether to continue Five Hole for Food as it had run for the first two years — organized exclusively on social media, managed completely by volunteers and funded by sponsorship donations — or else restructure it as a more formal organization, either independently or under the corporate social responsibility umbrella of a large corporation. The founder also faced serious challenges in assembling and organizing his management and operations teams: as the organization continued to grow, relying only on volunteer labour was going to become increasingly problematic. But if he started hiring and paying people for their time, would that change the organic nature of Five Hole for Food’s culture? He also wondered whether he should start to formalize the structure of the organization more, so it was less dependent on him as an individual. Could Five Hole for Food, which had raised over 50,000 pounds of food in its first two seasons, ever continue without him at the helm?

Teaching Note: 8B13M064 (13 pages)
Industry: Social Advocacy Organizations
Issues: Business growth; social media; startups; non-profit management; Canada
Difficulty: 4 - Undergraduate/MBA

Chapter 3:
The Opportunity: Screening, Creating, Shaping, Recognizing, Seizing

Ning Su, Yulin Fang, Yukun Yang

Product Number: 9B15M045
Publication Date: 6/1/2015
Revision Date: 6/1/2015
Length: 9 pages

Just before the celebration of the 2014 Chinese Lunar New Year, Tencent, the world's fourth largest Internet company, launched a mobile application for its popular WeChat platform: the Red Envelope. By clicking on a virtual red envelope icon, gifts of money could be sent to or received from friends and family to celebrate this special occasion. Combining a Chinese cultural tradition with modern social networks, this simple initiative soon became a major milestone in China's mobile market. It brought more than eight million users to Tencent's WeChat Payment platform in the first eight days after the New Year, helping the company break the barrier of mobile payment adoption among its vast user base and giving it a significant advantage in the country’s competitive mobile payment market. This somewhat unexpected, record-making success, also made many companies rethink how to survive and thrive in China's rapidly growing technology sector.

Teaching Note: 8B15M045 (5 pages)
Industry: Information, Media & Telecommunications
Issues: Mobile payment; innovation; China
Difficulty: 4 - Undergraduate/MBA

Kimberley Howard, William Wei, Vicky Nie

Product Number: 9B14A013
Publication Date: 9/11/2014
Revision Date: 7/26/2017
Length: 16 pages

An immigrant entrepreneur created Hi-Bridge Consulting Corporation, a company that imported and distributed alcoholic products in Canada, among other activities. In 2009, the entrepreneur brought Yanjing beer to Canada from China, even though the Chinese brewery did not have an articulated international expansion strategy in Canada at the time. Despite numerous challenges in the Canadian beer market, the entrepreneur made significant headway. However, six years after the product’s introduction, she understood that many Canadian consumers were still not aware of Yanjing beer and that she needed to find an effective way to increase its market share.

Teaching Note: 8B14A013 (6 pages)
Industry: Wholesale Trade
Issues: Immigrant; imports; exports; Canada
Difficulty: 4 - Undergraduate/MBA

Christopher Williams, Carolyn Burns

Product Number: 9B14M093
Publication Date: 7/30/2014
Revision Date: 7/30/2014
Length: 7 pages

While internationalization may present growth opportunities for Canadian small businesses, the challenges involved can be daunting. In August 2013 the founder and president of Maynooth Natural Granite was trying to decide whether he should expand his small business internationally. He was satisfied that he was able to turn his gravel pit into a well-recognized supplier of washed decorative rock in Ontario. However, the president was concerned that his success could be short-lived, as Ontario had a saturated gardening market. As he explored new international opportunities he must decide whether he would be able to replicate his success in the new markets while balancing the responsibilities of his Canadian business interests and his family life.

Teaching Note: 8B14M093 (6 pages)
Industry: Mining, Quarrying, and Oil and Gas Extraction
Issues: Formulating strategy; internationalization; cost and benefits; appraising; export locations; Canada
Difficulty: 4 - Undergraduate/MBA

Chapter 4:
The Business Plan

Peter W. Moroz, Simon Parker, Edward Gamble

Product Number: 9B15M049
Publication Date: 6/3/2015
Revision Date: 6/3/2015
Length: 13 pages

A young Aboriginal entrepreneur faces three major challenges to growing his lifestyle apparel business. First, he has been unable to find a trusted partner who is both competent and passionate about the venture. Second, he is spread thinly across the multiple roles involved with running and growing the business. Third, he has not yet fully tested any of the proposed business models to determine whether they will require considerable investment or abandonment. The entrepreneur lacks the time and space to think strategically about his best course of action. The case challenges students to evaluate his company’s business model and performance and to chart a successful strategy for the future, considering the dual perspectives of being a solo entrepreneur and an Aboriginal businessperson.

Teaching Note: 8B15M049 (14 pages)
Industry: Retail Trade
Issues: Aboriginal entrepreneurship; business modeling; pivoting; dashboarding; marketing; growth; Indigenous Peoples; Aboriginal Peoples
Difficulty: 4 - Undergraduate/MBA

Raymond Pirouz, Ken Mark

Product Number: 9B14A029
Publication Date: 7/8/2014
Revision Date: 7/8/2014
Length: 7 pages

In December 2011, the co-founder of Unbounce, a Vancouver-based software services start-up, is considering expanding into the enterprise user space. Unbounce got its start providing turnkey landing pages — web pages specific to current advertising campaigns — to the small and medium-sized enterprise market. Within 18 months, the company has achieved thought leadership in this space, has a list of paying customers and has built its support team from six to 25 people. The challenge is that since the entire company is focused on its core market segment, entering the enterprise user space means that different capabilities will have to be developed. Will developing the enterprise user market prevent the competition from invading this space or will it mean alienating and perhaps losing its current customers? What is the best plan for going forward?

Teaching Note: 8B14A029 (4 pages)
Industry: Information, Media & Telecommunications
Issues: Social media; landing pages; monetization; growth; pricing strategy; Canada
Difficulty: 4 - Undergraduate/MBA

Edward Gamble, Peter W. Moroz, Stewart Thornhill

Product Number: 9B11M079
Publication Date: 10/5/2011
Revision Date: 10/25/2011
Length: 14 pages

After working together on a university business plan, two entrepreneurs worked for three years to develop their venture: Shutout Solutions Inc. Their start-up venture was established in response to an issue familiar to most hockey players: notoriously smelly equipment. While their familiarity with hockey equipment helped them identify a specific problem, subsequent research revealed a much broader issue: the need to clean products made of micro-fibre. Utilizing a technology that addressed the micro-fibre odour issue, they believed they had a five-year opportunity window to develop and profit from the business before it was imitated or superseded. As they considered their options, they realized that they might have to choose to focus their resources on a single product line rather than continue to develop their current portfolio of a detergent, body wash, and spray. They also questioned whether they were using the right channel - gyms and sporting goods stores - to reach customers. The opportunity to pursue bulk institutional sales was also intriguing, though it would require a different sales, pricing, and distribution strategy. Also, they considered how they might respond to an offer to sell the company in its current form.

Teaching Note: 8B11M079 (4 pages)
Industry: Retail Trade
Issues: Entrepreneurial Business Growth; Entrepreneurial Opportunity; Feasibility Analysis; Growth Strategy; Intellectual Property; Hockey; Hill
Difficulty: 4 - Undergraduate/MBA

Chapter 5:
Entrepreneurial Leader

Anne Snowdon, Alexander Smith, Heidi Cramm

Product Number: 9B14M025
Publication Date: 4/7/2014
Revision Date: 4/4/2014
Length: 20 pages

In January 2005, the vice-president of International Affairs at the Hospital for Sick Children in Toronto, Ontario, must decide how to respond to a request for proposal from the Hamad Medical Corporation of Qatar. In order to reach its global mission of “Healthier Children, A Better World,” the Toronto hospital, which had an international reputation for excellence in pediatric medicine, had established an arm called SickKids International. In addition, it was anxious to find new ways to recover from an operating deficit caused by the aftershock of the SARS outbreak. Hamad Medical Corporation, a major state hospital medical supplier in Qatar, was looking for international centres that would want to partner with it in the development of what it hoped would become the best children's hospital in the Middle East. The vice-president understood the enormous benefits that the partnership had to offer but recognized the need for a comprehensive strategy to mitigate all of the associated risks, such as the difference in cultures between Canada and Qatar, the pressure on the Toronto hospital’s staff to make the project successful and the uncertain political and business environment in the Middle East. Should she recommend to her executive team that they go ahead with their first international request for proposal?

Teaching Note: 8B14M025 (6 pages)
Industry: Health Care Services
Issues: Globalization; health care; cross-cultural; leading change; Canada; Qatar
Difficulty: 4 - Undergraduate/MBA

Mary M. Crossan, Mark Reno

Product Number: 9B12M031
Publication Date: 3/26/2012
Revision Date: 2/5/2014
Length: 1 pages

This six-part video case series features social entrepreneur Craig Kielburger as he faces pivotal moments in his life and the remarkable evolution of his organization. The primary dilemmas are strategic in nature and their solutions rely on leadership and social entrepreneurship. Students assume the role of Craig Kielburger in each case, which begins with a video set-up, followed by a short one- or two-page case and a discussion, and concludes with Craig describing what happened in a video clip. (This product consists of one of the six cases. Use product #9B12M031B to order the remaining five cases.)

Teaching Note: 8B12M031 (8 pages)
Industry: Social Advocacy Organizations
Issues: Strategic Renewal; Leadership Character; Social Entrepreneurship; Canada
Difficulty: 4 - Undergraduate/MBA

Gerard Seijts, William T. Watson

Product Number: 9B12C003
Publication Date: 1/30/2012
Revision Date: 1/30/2012
Length: 4 pages

Noel Biderman was the president of Avid Life Media, a profitable Canadian growth company whose main businesses were various online social networks for groups seeking sexual partners and romance. Biderman was seeking to raise $60 million via a private placement offering to acquire a privately held online advertising sales company, merge the companies, and take the new and improved entity to the TSX Venture Exchange or the Toronto Stock Exchange. The Avid Life offering represented a legal and potentially lucrative investment. Nevertheless, only one investment bank (GMP Capital) was willing to help Biderman raise capital — because among the various social networks Avid Life owned the notorious Ashley Madison online community for married people seeking to commit adultery. GMP’s relationship was short-lived; after media coverage of the Avid Life offering started to focus on the bank’s willingness to service Biderman’s company, GMP withdrew its support. Possibly it was the bank’s desire to avoid being linked to someone known, rightly or wrongly, as the king of infidelity, that led to GMP’s withdrawn support, leaving Biderman unable to take a potentially lucrative investment opportunity to market.

Teaching Note: 8B12C003 (4 pages)
Industry: Finance and Insurance
Issues: Leadership; Values; Ethics; Investing; Social Networks; Canada
Difficulty: 4 - Undergraduate/MBA

Chapter 6:
New Venture Team

Anne Snowdon, Alexander Smith, Pardeep Sidhu

Product Number: 9B13M093
Publication Date: 9/13/2013
Revision Date: 9/13/2002
Length: 7 pages

In February 2004, a physician working in the intensive care unit of a Toronto hospital wondered how to implement a strategy whereby an entire health care team could work towards better and consistent patient care based on best evidence. Doctors’ orders varied from one physician to another, and oftentimes the health care team had little insight into what worked best, what the best evidence was and how they could be sure their patients were receiving the best care possible. He wondered if it would be possible to adopt the airline industry’s “order sets” — step-by-step, evidence-based checklists that could be used by clinicians to order treatments for patients. He recognized that there were problems in implementing such a program, especially the lack of a standardized information technology strategy across the provincial health care system and physicians’ fear of losing their autonomy in making care decisions. Physicians already had access to clinical practice guidelines, which were designed to assist them to make informed, evidence-based decisions by removing the burden of tailored research and intervention design, but many found these to be too long, sometimes outdated and not integrated with the clinical process. How could these guidelines be integrated with physician orders to create a standardized process to ensure that every patient had access to the best care possible?

Teaching Note: 8B13M093 (8 pages)
Industry: Health Care Services
Issues: health care; process improvement; stakeholder management; innovation; Canada
Difficulty: 4 - Undergraduate/MBA

Derrick Neufeld, Jake Santora

Product Number: 9B13E024
Publication Date: 8/13/2013
Revision Date: 9/18/2013
Length: 9 pages

A student has just completed the first day of an Executive MBA program. He had completed his undergraduate business degree more than a decade earlier and now ponders how to best tackle the demanding program workload, while continuing to fulfill his commitments both at work and in his personal life. Even greater, though, are the challenges of effectively communicating and coordinating schoolwork assignments with his seven-person virtual learning team. The teaching note provides a Virtual Team Characteristics Framework to highlight the critical variables associated with effective virtual team outcomes.

Teaching Note: 8B13E024 (7 pages)
Industry: Educational Services
Issues: Virtual Teamwork; Communication; Project Management; Productivity; Canada
Difficulty: 4 - Undergraduate/MBA

Gerard Seijts, Leah Noble

Product Number: 9B12C002
Publication Date: 1/26/2012
Revision Date: 1/23/2012
Length: 10 pages

In 2008, a senior associate at Richard, Wood and Hulme LLP (RWH) was amazed at the speed with which the audit team for an important client of the firm was rapidly falling apart. Two members had just been fired presumably because they did not pass their chartered accounting qualification examinations; team morale had grown non-existent; there were difficulties in completing the engagement due to lack of preparation from both RWH and the client; there were doubts about the commitment of particular individuals; and with the audit falling behind schedule, the senior associate perceived an absence of strong leadership from the partners of the firm. He did not understand why the team had been so unfocused from the start of the engagement, as prior years’ engagements had been quite successful. He was unsure how to proceed. What would he tell the client? What should he do to keep this audit on track and keep the team together?

Teaching Note: 8B12C002 (18 pages)
Industry: Professional, Scientific, and Technical Services
Issues: Teams; Leadership; Coaching; Conflict; Auditing; Canada
Difficulty: 4 - Undergraduate/MBA

Chapter 7:
Ethical Decision Making and the Entrepreneur

Stefanie Beninger, Simon Pek, Karen Robson, Adam J. Mills

Product Number: 9B14A039
Publication Date: 9/10/2014
Revision Date: 9/10/2014
Length: 9 pages

Lululemon, a successful yoga and athletic apparel company, faced a number of controversies notably those surrounding comments made by the founder and regarding employee and public relations. Many of these controversies seem out of line with Lululemon's Manifesto, a one-page collection of sayings that guide the company's actions. These issues culminate with issues regarding one of their most popular products, resulting in a product recall in 2013. As Lululemon enters 2014, facing drops in their share price and a revenue growth below expectations, Lululemon's new CEO has to make some decisions about the best way forward for the company.

Teaching Note: 8B14A039 (10 pages)
Industry: Retail Trade
Issues: Public relations; product recall; ethics; controversy; Canada
Difficulty: 4 - Undergraduate/MBA

John S. Haywood-Farmer, Kaitlin Thanasse

Product Number: 9B14D007
Publication Date: 6/24/2014
Revision Date: 3/6/2015
Length: 13 pages

At 6:05 a.m., the head office at Golden Horseshoe Constructors (GHC) was understandably empty and very quiet. The vice-president (VP) of purchasing settled in at his desk to review the bids for an upcoming condominium project and to then decide which window and door installation firm he would recommend for that portion of the job. GHC's president was expecting the decision first thing that morning. Just a day earlier, the president had strongly suggested that the work be given to Monyash Doors and Windows, a firm that had not submitted the lowest bid. In practice, all else being equal, the firm with the lowest priced bid would win the contract, but the VP was unsure how to proceed with the president’s request and which of the four bids he should recommend.

Teaching Note: 8B14D007 (6 pages)
Industry: Construction
Issues: Contracting; ethics; management of professionals; firms; purchasing; Canada
Difficulty: 4 - Undergraduate/MBA

W. Glenn Rowe, Sharda Prashad

Product Number: 9B13C005
Publication Date: 11/20/2013
Revision Date: 12/2/2013
Length: 8 pages

The interim president and chief executive officer (CEO) of Ontario’s air ambulance service is reflecting on the first challenging months of his tenure. Previously a deputy minister in the provincial government, he now has to deal with ongoing issues of accountability within the organization and the safety of its fleet of helicopters. In the middle of a media storm of accusations of mismanagement, questionable business and spending practices that had wasted millions of dollars of public funding, problematic hiring of unqualified staff and extravagant salaries, along with possible personal improprieties of the previous CEO, he is wondering what new allegations might surface and how he might not only remedy the internal management problems but regain the public’s trust in the organization.

Teaching Note: 8B13C005 (5 pages)
Industry: Health Care Services
Issues: Ethics; leadership; non-profit organization; Canada
Difficulty: 4 - Undergraduate/MBA

Chapter 8:
Resource Requirements

David Sparling, Ken Mark

Product Number: 9B14M062
Publication Date: 3/6/2015
Revision Date: 3/6/2015
Length: 13 pages

In early 2011, the founder of REfficient, an asset recovery service based in Hamilton, Ontario, was thinking about how she should manage the rapid growth that seemed just around the corner. Founded in 2010 to help cable firms generate value from their stock of surplus equipment, REfficient, with no direct competitors in the Ontario market, had grown rapidly and had a list of corporate customers, two warehouses and five employees. The company was positioned as the efficient way for customers to recover value from their surplus assets; it would collect and inventory them, provide an online list and track the environmental impact of selling or discarding them. The company was now looking to secure a pilot project with the Ontario provincial government. Innovative in the “green” sense because of its innovative reuse, recycle or resell model, as well as its integrated carbon footprint estimator, REfficient was a good match for the program. But how would it deal with an increasingly large variety of items, given its limited resources and space?

Teaching Note: 8B14M062 (7 pages)
Industry: Other Services
Issues: Operational change; strategic choices; process flows; project management; efficiency; Canada
Difficulty: 4 - Undergraduate/MBA

Peter W. Moroz, Edward Gamble, Stewart Thornhill, Peter Mayne

Product Number: 9B12M061
Publication Date: 6/8/2012
Revision Date: 6/8/2012
Length: 14 pages

The chairperson of the United Church Housing Corporation (UCHC) of Regina, Saskatchewan, received some information from an external consultant who was hired to assess the state of affairs of the UCHC. This non-profit organization had operated for over 50 years and had built accommodations for many seniors that were both affordable and offered personal independence. In 2005, the UCHC board approved a new four-storey assisted living facility, Wascana Wing, which was to be built in response to long waitlists. With this decision, the UCHC board had taken out a $3 million mortgage to finance the project. Since opening the new facility, UCHC had been plagued by high vacancy rates as new for-profit competitors entered the market for senior accommodations. The combination of high vacancy rates and UCHC's highly leveraged financial position were the source of losses from 2006 to the present. The board's break-even mentality was not working. UCHC was at a major crossroads - the housing situation of more than 100 seniors residing in assisted living apartments and cottages would need to be decided upon at the next meeting. The question was whether or not June, a retired nurse, would recommend that the board proceed with winding up UCHC or make suggestions that would call for major changes to the current business model.

Teaching Note: 8B12M061 (14 pages)
Industry: Accommodation & Food Services
Issues: Social Enterprise Management; Non-profit Decision Making; Feasibility Analysis; Business Models; Financial Analysis; Break-even Analysis; Canada
Difficulty: 3 - Undergraduate

Colette Southam, Jeff McDonald

Product Number: 9B10N013
Publication Date: 4/8/2011
Length: 8 pages

Joseph Vigneault and his entrepreneurial partners wanted to raise $500,000 to pursue a new venture through the purchase of a currently existing company in the $4,000,000-5,000,000 price range. A boutique investment bank introduced them to the features of the Capital Pool Company (CPC) program. Vigneault needed to decide if a CPC was an option that he and his partners should consider. He needed to consider the effect on their ownership stake in the company and calculate the return on their investment.

Teaching Note: 8B10N013 (8 pages)
Industry: Finance and Insurance
Issues: Entrepreneurial Finance; Stock Exchange; Canada
Difficulty: 4 - Undergraduate/MBA

Chapter 9:
Financing the Venture

Stephen Sapp

Product Number: 9B13N007
Publication Date: 4/30/2013
Revision Date: 3/19/2015
Length: 9 pages

A small startup firm in the environmental services industry has spent the majority of its time developing its technology and overcoming the significant regulatory hurdles involved in bringing its technology to market. Having achieved success with the technology, the company must now decide which path to take to grow. The owners can try to raise the money themselves through a bank loan and do the expansion on their own terms. On the other hand, they can forge a financial partnership with a venture capital firm or a strategic partnership with another firm, or they can issue preferred shares to a local investment fund or corporate bonds to a local insurance company. These alternatives will share the risks and expense of expansion, but the company may lose some autonomy in its decision making in future.

Teaching Note: 8B13N007 (9 pages)
Industry: Administrative, Support, Waste Management and Remediation Services
Issues: Capital Raising; Debt; Equity; Venture Capital; Canada
Difficulty: 4 - Undergraduate/MBA

Federico M. Berruti, Heng-Yih (Gordon) Liu

Product Number: 9B11M123
Publication Date: 1/20/2012
Length: 12 pages

Green-Tech Inc., a Canadian company founded in 2006, was dedicated to developing, manufacturing, and marketing portable and stationary systems for the production of bio-oils and bio-char from biomass residues and wastes. Green-Tech was a recent spinoff from a large university research centre with a very good reputation for providing bio-energy solutions. Although focused and well positioned, Green-Tech had to manage relationships with large companies such as Shell that controlled vast and complete supply chains of oil-related businesses, as well as small firms and clients that were unable to manage their waste effectively. Large firms could provide plenty of business opportunities for Green-Tech, but could also jeopardize the company’s autonomy. Small customers on their own might not bring in enough cash flow, but could give Green-Tech sufficient freedom to pursue its own strategic goals. Both relationships seemed to lead to a promising future for this entrepreneurial start-up company, but also created serious risks. At the time of the case in 2011, Fernando Bruteque, vice president and one of the principal engineers of Green-Tech, was seeking the appropriate growth approach for Green-Tech. Being in charge of business operations, Bruteque also had to maintain a balance between research and development (R&D), investor and client concerns, and business opportunities. What would be the appropriate growth strategies and business operation strategies for a resource-constrained firm such as Green-Tech? How should it proceed?

Teaching Note: 8B11M123 (10 pages)
Industry: Professional, Scientific, and Technical Services
Issues: Bio-fuels; Renewable Energy; Research and Development; Canada
Difficulty: 4 - Undergraduate/MBA

Kenneth G. Hardy, Eric Janssen

Product Number: 9B10A028
Publication Date: 12/13/2010
Length: 13 pages

The founder and chief executive officer (CEO) of Teksavvy Solutions Inc. has achieved sales of $18 million in just more than 10 years as an Internet service provider (ISP) across Canada but he must decide whether to distribute his service via cable carriers, telecom carriers or both, or even integrate forward into laying fiber-optic cable in homes and businesses himself. If he invests in last mile connections to homes, he will need a great deal more funds and he will need a healthy uptake by the new customers, most of whom would be located in smaller cities and towns. The added investment for this option would require him to look seriously at bringing in a venture capital company for major investment but he would have to sell it some equity and live under its covenants and guidance until some type of liquidity event would buy out the venture funder.

Teaching Note: 8B10A28 (10 pages)
Industry: Information, Media & Telecommunications
Issues: Service Mix; Target Segment; Vertical Integration; Venture Capital
Difficulty: 4 - Undergraduate/MBA

Chapter 10:
The Deal: Valuation, Structure, and Negotiation

Colette Southam, Annabel Yee

Product Number: 9B14N038
Publication Date: 3/26/2015
Revision Date: 3/25/2015
Length: 15 pages

In August 2013, an intern at Slatestone Group, an Arizona-based boutique investment bank, was working on a targeted sell-side deal. Paterson Publishing, a Fortune 200 company, had expressed interest in acquiring Slatestone’s client Bluntly Media Holdings, a private direct marketing agency. The intern was assigned to help prepare the deal marketing material and assist with the valuation assessment of Bluntly Media. He needed to use a variety of valuation methods and propose a strategy that could assist Bluntly Media in attaining a higher price.

Teaching Note: 8B14N038 (13 pages)
Industry: Information, Media & Telecommunications
Issues: Mergers; acquisitions; valuation; United States
Difficulty: 4 - Undergraduate/MBA

Parvinder K. Arora

Product Number: 9B14N039
Publication Date: 4/13/2015
Revision Date: 4/13/2015
Length: 6 pages

The founder and chief executive officer of Human Touch Connect Pte. Ltd. was hard at work in his office in Singapore. He had been working on the detailed valuation of his latest venture, EatOnline.Asia, to be presented to the partner of Top Line Ventures, a venture capital firm. He was hoping to be able to convince the firm to invest the required amount of SGD1.5 million. The founder wondered what method(s) of valuation he could use to reflect the fair value of the project. The second issue that was troubling him was, in the event that he was successful in convincing Top Line Ventures, how much stake he could offer for an investment of SGD1.5 million.

Teaching Note: 8B14N039 (5 pages)
Industry: Accommodation & Food Services
Issues: Venture capital; mobile app; startup; Singapore
Difficulty: 4 - Undergraduate/MBA


Product Number: 2012
Publication Date: 10/1/2002
Length: 11 pages

This is an enhanced edition of HBR article R0210E, originally published in October 2002. HBR OnPoint articles include the full-text HBR article, plus a synopsis and annotated bibliography. The traditional growth strategies of organic expansion and acquisition require up-front investments in additional assets, with an uncertain payoff. So the pursuit of growth almost always narrows margins, for a time or, in the worst case, forever. But another kind of strategy--leveraged growth--doesn't require companies to trade profitability for growth. That's because, instead of owning assets, a company leverages the assets of other businesses operating at many levels of the value chain, capturing value for itself as a knowledge broker. The Hong Kong-based trading company Li & Fung, for instance, owns none of the facilities involved in processing raw material into the finished goods it supplies to European garment retailers and designers. It does, however, have privileged access to some 7,500 companies around the world that possess specialized production and distribution capabilities. Li & Fung uses its knowledge of the apparel market to leverage those companies' assets. Orchestrating such a process network is one way to leverage other companies' assets. Another involves aggregating their resources, as Charles Schwab does when it makes the services of many related companies available through its web site or IBM does when it sponsors user groups. And Microsoft and Intel engage in possibly the subtlest of the leveraged growth strategies--shaping an economic web--by placing themselves at the center of a vast, ever-shifting group of companies that build on the Wintel computing platform. In a world of leveraged growth, the key question becomes, Which of your assets would give you the greatest power over other organizations? The company with the most powerful assets will have the greatest growth potential.

Issues: Acquisitions;Assets;Competitive advantage;Growth strategy;Outsourcing;Profitability;Supply chain

Chapter 11:
Obtaining Debt Capital

David M. Currie, Kyle S. Meyer

Product Number: 9B15D001
Publication Date: 4/17/2015
Revision Date: 4/17/2015
Length: 5 pages

The operator of a dairy farm in Tennessee has begun renting goats for landscaping (see Goats: The Green Alternative (A) 9B11B018). The business proved successful so he considered expanding the operation (see Goats: The Green Alternative (B) 9B11B025). Now, he consults with a statistician to learn how to incorporate uncertainty into the decision about expanding. The case incorporates three types of uncertainty into a spreadsheet analysis of the expansion decision and then uses Monte Carlo analysis to produce an array of outcomes from the capital budgeting process.

Teaching Note: 8B15D001 (12 pages)
Industry: Agriculture, Forestry, Fishing and Hunting
Issues: Monte Carlo; risk analysis; modelling; capital budgeting; United States
Difficulty: 4 - Undergraduate/MBA

David Simpson, Colin McDougall

Product Number: 9B11N001
Publication Date: 2/3/2011
Length: 5 pages

Late in August 2004, Chris Higgins was forced into the unenviable position of determining the future of Ring-A-Wing, a London, Ontario-based fast food producer of premium chicken wings for home delivery. After making a personal loan to a friend wishing to invest in the business, the situation devolved in less than nine months from Higgins being a passive lender to being a significant investor to sitting in a bankruptcy meeting trying to determine the future of the business. The issue in the (A) case is whether the Higgins group should reopen Ring-A-Wing.

Teaching Note: 8B11N001 (4 pages)
Industry: Accommodation & Food Services
Issues: Personal Loan; Reopen; Bankruptcy; Food Delivery; Small Business
Difficulty: 4 - Undergraduate/MBA

David J. Sharp, Ken Mark

Product Number: 9B05B006
Publication Date: 1/31/2005
Revision Date: 9/24/2009
Length: 4 pages

A loan assessment officer at Export Development Canada is evaluating a proposed deal involving the export of refurbished machines used in the forestry industry. He must decide whether Export Development Corporation should extend loans to a foreign firm that is interested in purchasing from a Canadian supplier. Issues include international business risk and the role of an export development agency in facilitating a country's exports.

Teaching Note: 8B05B06 (4 pages)
Industry: Agriculture, Forestry, Fishing and Hunting
Issues: Uncertainty; Risk Analysis; Forestry; Exports
Difficulty: 4 - Undergraduate/MBA

Chapter 12:
Leading Rapid Growth: Entrepreneurship Beyond Start-up

Ron Mulholland, Cameron Brooks, Benoit Roy, Katarina Schwabe, Cassidy Stewart

Product Number: 9B15A004
Publication Date: 5/21/2015
Revision Date: 5/21/2015
Length: 9 pages

Stack Brewing, a start-up craft brewery, has a capacity of approximately 5,600 litres per month based on twelve 117-litre batches per week. A government grant based on growth and job creation potential will help boost production capacity by five times, necessitating the development of additional distribution and marketing communication strategies. The owner cannot afford a listing in the Beer Store, the distribution monopoly owned by Labatt Breweries of Canada and Molson-Coors Canada Inc., and his budget for communications is small. While this case provides an opportunity for students to perform quantitative analysis based on revenues and market size, the focus of the case, however, is on an improved distribution and communication plan.

Teaching Note: 8B15A004 (10 pages)
Industry: Accommodation & Food Services
Issues: Communications; segmentation; management of growth
Difficulty: 4 - Undergraduate/MBA

Rod E. White, Hadi Chapardar, Ryan White

Product Number: 9B15M038
Publication Date: 4/8/2015
Revision Date: 8/31/2015
Length: 15 pages

The founder and owner of YU Ranch is selling all of the Texas Longhorn beef the ranch can produce. YU Ranch's grass-fed, sustainable beef is substantially leaner and healthier than conventionally produced beef. This highly differentiated product is sold at a premium to selected restaurants, food service companies and at the farm-gate. The local consumer segment has been tapped, while local businesses and distant customers need to be supplied. With the farm operating over its current capacity, expansion is inevitable but extremely expensive. What are the best ways to acquire new land, grow new business and leverage YU Ranch's core competencies — brand and reputation?

Teaching Note: 8B15M038 (18 pages)
Industry: Agriculture, Forestry, Fishing and Hunting
Issues: Sustainability; differentiation; growth; core competence; Canada
Difficulty: 4 - Undergraduate/MBA

Brian Anderson

Product Number: 9B12M002
Publication Date: 8/14/2012
Revision Date: 8/9/2012
Length: 8 pages

In 2011, Cate & Levi is a specialty gift manufacturer — primarily of children’s toys and clothing — based in Toronto, Canada. The founder of Cate & Levi is pondering growth options for his firm, recognizing that the business model so successfully employed to earn the company its first $1 million in revenues is not likely to sustain the company’s momentum. Just three years old, the company has grown dramatically in no small part due to its unique business model and design. Looking ahead, however, the founder is concerned that the business is not sustainable — the predominant raw materials used for the products are reclaimed wool sweaters, and each product is cut and sewn by hand both in-house and through contract labour across Canada. The case presents a series of growth alternatives for students to analyze and consider, contrasted against the constraints found in an adolescent business: constrained capital and human resources, limited brand recognition, and an underdeveloped supply chain.

Teaching Note: 8B12M002 (6 pages)
Industry: Manufacturing
Issues: Organizational Growth Strategies; Managing Growth; International Expansion; Entrepreneurial Management; Canada
Difficulty: 4 - Undergraduate/MBA

Chapter 13:

W. Glenn Rowe, Christopher Williams, Sharda Prashad

Product Number: 9B11M082
Publication Date: 8/19/2011
Revision Date: 11/18/2014
Length: 10 pages

New York Fries’ president and executive vice president were preparing for the next biannual meeting of domestic and international franchisees. They planned to provide an update on all aspect of corporate strategy and planning for the year ahead, but they only had a few days to formulate a new international growth strategy. The president and executive vice president were hesitant to expand into new territories partly due to poor experiences in Australia and South Korea, yet international franchisees had encouraged them to investigate promising areas of expansion into China and India. Complicating matters was the future development of the company’s chain of premium hamburger restaurants. While New York Fries was a well-received brand in Canada, it had not yet decided if and how to internationalize the brand. How could the president and executive vice president pursue new opportunities while maintaining their premium brands of French fries and hamburgers?

Teaching Note: 8B11M082 (10 pages)
Industry: Accommodation & Food Services
Issues: Location Selection; International Growth; Brand Management; Franchising; Fast Food; Canada
Difficulty: 4 - Undergraduate/MBA

Gregory S. Zaric, Hui Zhang

Product Number: 9B07E020
Publication Date: 1/8/2008
Revision Date: 3/10/2009
Length: 3 pages

An entrepreneur is looking for business opportunities since she immigrated to London, Ontario. She has come across a franchising opportunity with Williams Coffee Pub (WCP). The promotional material for WCP indicates that annual sales for a typical restaurant can be up to $1,700,000 with a profit margin of 17.5 per cent. This business opportunity seems very attractive, however, she must do some additional investigation. The purpose of this case is for students to build a spreadsheet-based cash flow model and to use the model to perform basic sensitivity or What if? analysis.

Teaching Note: 8B07E20 (6 pages)
Industry: Accommodation & Food Services
Issues: Sensitivity Analysis; Franchising; Small Business; Spread Sheet Application
Difficulty: 4 - Undergraduate/MBA

Stewart Thornhill, Ken Mark, Jordan Mitchell

Product Number: 9B05M071
Publication Date: 4/28/2006
Revision Date: 10/1/2009
Length: 12 pages

An entrepreneur has received additional information on the Cartridge World franchising concept - a store focused on the refilling of printer cartridges. The idea for Cartridge World began in Australia in 1988 and has grown to almost 200 locations in Australia, New Zealand and the United Kingdom. The entrepreneur must look at the market opportunity in Canada and decide whether he should apply for the country's master franchise, a single franchise, or abandon the concept altogether. Students will evaluate a franchise concept based on market opportunity and the franchise contract.

Teaching Note: 8B05M71 (13 pages)
Industry: Retail Trade
Issues: Models; Franchising; Investment Analysis; Market Analysis
Difficulty: 4 - Undergraduate/MBA

Chapter 14:
Family as Entrepreneur

Paul W. Beamish, Majid Eghbali-Zarch

Product Number: 9B10M093
Publication Date: 11/12/2010
Revision Date: 9/21/2011
Length: 13 pages

In June 2010, Naser Tavazo, one of the three owner/manager brothers of both Tavazo Iran Co. and Tavazo Canada Co., was considering the company's future expansion opportunities, including further international market entry. Candidate cities of interest were Los Angeles, Dubai and other cities with a high Iranian diaspora. Another question facing the owners was where to focus on the value chain. Should the family business use its limited resources to expand its retailer business into more international markets, or to expand their current retailer/wholesale activities within Canada and Iran?

The objectives of this case are: (A) to discuss the typical problems that small companies confront when growing internationally and the implication of being a family business in this transition; (B) to provide a vehicle for developing criteria for market selection; (C) to highlight the importance of focus in the value chain regarding horizontal vs. vertical integration.

This case can be used in international business, strategic management or family business (entrepreneurship) courses. In international business, it may be used as an internationalization case and positioned early in the course. In a strategic management course, it might be positioned in sections dealing with managerial preferences, or diversification.

Teaching Note: 8B10M93 (9 pages)
Industry: Agriculture, Forestry, Fishing and Hunting, Manufacturing
Issues: Market Selection; Family Business; Internationalization; Imports; Exports; SME
Difficulty: 4 - Undergraduate/MBA

Stephen Hummel, Kenneth Harling

Product Number: 9B08M082
Publication Date: 11/10/2008
Length: 20 pages

This case deals with H&R, a company that distributes sewing equipment in Toronto, Ontario, Canada. Its future is in jeopardy because of fundamental changes in the global sewing industries stemming from changes in trade restrictions. The consequence is that Canadian sewing activities are in decline as activities in low-cost foreign countries grow rapidly. As Canadian activities decline, H&R's performance has been suffering. But the management of the family-owned company has had trouble seeing the challenge it faces because it has been highly successful for two generations. The case asks what the new CEO and third generation owner should do to save the company.

Teaching Note: 8B08M82 (7 pages)
Industry: Wholesale Trade
Issues: Competition; Strategy Development; Managing Industry Change; Tariffs
Difficulty: 4 - Undergraduate/MBA

Tom A. Poynter, Paul W. Beamish

Product Number: 9B08M037
Publication Date: 4/15/2008
Revision Date: 5/18/2017
Length: 12 pages

Victoria Heavy Equipment (Victoria) was a family owned and managed firm which had been led by an ambitious, entrepreneurial chief executive officer who now wanted to take a less active role in the business. Victoria had been through two reorganizations in recent years, which contributed to organizational and strategic issues which would need to be addressed by a new president.

Teaching Note: 8B08M37 (7 pages)
Industry: Manufacturing
Issues: Growth Strategy; Organizational Structure; Leadership; Decentralization
Difficulty: 4 - Undergraduate/MBA

Chapter 15:
Leading through Trouble, the Harvest and Beyond

Dante Pirouz, Kelly Huang (Arman)

Product Number: 9B14A034
Publication Date: 10/15/2014
Revision Date: 10/17/2014
Length: 4 pages

Near the end of November 2013, Lululemon Athletica (Lululemon) became the subject of a viral firestorm after a series of negative events seriously ruptured the company's reputation. The company found itself facing its worst quality control problem to date, with a recall of 17 per cent of its Luon pants due to issues with sheerness. In addition, the company’s chief executive officer had stepped down. Was Lululemon destined to follow Blackberry as another example of a failed Canadian company, or could it resurrect its former glory by facing its critics head on?

Teaching Note: 8B14A034 (3 pages)
Industry: Retail Trade
Issues: Retail; public relations; Canada
Difficulty: 5 - MBA/Postgraduate

Raymond Pirouz

Product Number: 9B13A020
Publication Date: 7/26/2013
Revision Date: 7/26/2013
Length: 4 pages

Inspired by software development boot camps in New York and San Francisco, Bitmaker Labs has just launched a similar offering but without considering the operational constraints unique to doing business in Canada. The result is governmental scrutiny just as the business is taking off with 42 students enrolled, each having paid $7,000 for a nine-week web development boot camp. Government investigators raid Bitmaker Labs, confiscating financial documents and threatening penalties and possible jail time for running an unregistered career college.

Teaching Note: 8B13A020 (11 pages)
Industry: Educational Services
Issues: Innovation; Design Thinking; Canada
Difficulty: 4 - Undergraduate/MBA

David Wood, Dina Ribbink

Product Number: 9B12D020
Publication Date: 8/31/2012
Revision Date: 7/17/2017
Length: 7 pages

This case investigates issues of obsolescence and inventory control in a local sportswear company that is competing on the global stage with both multinational corporations and foreign, low-cost distributors. Athletic Knit, a family-owned company in Toronto, faces the need to balance peak-season demand during the third quarter of the year with the available knitting production capacity. Inventory, if it serves a purpose, can be an asset to a company, but too much inventory can be a liability. Trade-offs between capacity, inventory, and flexibility to meet custom orders must be met to support corporate strategy. Given the competitive nature of the industry, tighter inventory controls are essential, but the company must weigh endangering its reputation for fast responses to custom orders with managing inventory to prevent stock-outs and/or overruns of stock that cannot be sold.

Teaching Note: 8B12D020 (9 pages)
Industry: Arts, Entertainment, Sports and Recreation
Issues: Inventory Analysis; Economic Order Quantity; Aggregate Planning; Cost; Canada
Difficulty: 4 - Undergraduate/MBA