West Paw Design: B Corp Certification And Growth Harvard Case Solution & Analysis

West Paw Design: B Corp Certification And Growth Case Study Solution

Recommendations

WPD’s key differentiation point of being a B-Corp. certified company,and the founder’s reluctance to drift away from it, it is recommended for the company to pursue the third alternative of entering the pets’ insurance industry. As, it will provide a moderate instant financial growth without any substantial investment, and will preserve the company’s main differentiation point of socially and environmentally responsible firm. Hiring of trained staff from the field of insurance will further reduce the risks of a failure.

WPD’s approach to business practices is exemplary, but in today’s business world where the competition is becoming increasingly intense, the companies has to outsource some of its operations to reduce its costs of production, and the supply chain network’s efficiency is extremely important to stay relevant in the competition.

 

Appendices:

EXHIBIT 1

Alternative Options Analysis

2015Option 1
Nether land
Option 2
Mob. App
Option 3
Insurance
Profit & Loss Statement
Revenues  8,510,000       12,339,500    9,020,600     9,786,500
COGS  4,445,000         2,667,000    4,445,000     4,445,000
Gross Profit  4,065,000          9,672,500     4,575,600      5,341,500
Operating Expenses  3,640,000         4,914,000    4,186,000     3,822,000
EBT / Profit Before Tax     425,000          4,758,500        389,600      1,519,500
Capital RequirementsHighMediumLow
Option 1 (Nether land)
45% increase in revenue due to the europe an market demand.
40% decrease in COGS due to availability of cheap labor & raw materials.
35% increase in Operating expenses due to expansion in Netherlands.
Option 2 (Mobile App)
6% increase in Revenue.
Same % increase as preceding year.
15% increase due to R&D, maintainance and marketing.
Option 3 (Pet Insurance)
15% increase in Revenue.
Same % increase as preceding year.
5% increase in operating expenses due to entering pet insurance industry.

EXHIBIT 2

WPD Financial Statements

Consolidated Income Statement
201520142013
Gross Revenue / Sales851000080150008200000
Cost of Goods Sold444500042150004250000
Gross Profit/Operating Profit406500038000003950000
Operating Expenses364000035950003435000
Profit Before Taxes425000205000515000
Consolidated Balance Sheet
201520142013
Assets
Current Assets143000013200001415000
Fixed Assets485000340000250000
Tot. Assets191500016600001665000
Liabilities & Equities
Current Liabilities570000600000650000
Fixed Liabilities720000700000635000
Total Liabilities129000013000001285000
Equity200000155000-145000
Net Income425000205000515000
Total Liabilities & Equity191500016600001655000

 EXHIBIT 3

Decision Criteria

 

Time to Scale

 

Potential Returns

 

Improving the WPD B-scores

 

Strengthening the Company’s Cash Flow Position

 

Fitting with WPS Competencies

 

Engaging with Employees

 

 

 

Manufacturing Plant in Netherlands

 

No.

 

It will consume a lot time to setup an operational facility.

 

Yes.

 

The revenues will increase by 45% which will expedite the financial growth process.

 

No.

 

Operations in foreign countries will affect the points tally in the B-Corp. assessment matrix.

 

Yes.

 

The start of operations will increase the cash flow substantially.

 

Yes.

 

It will fit with the manufacturing competency and will provide an extra facility to cater the increase in demand.

 

Yes.

 

Their core principle is to make employees take personal responsibilities to improve the overall process and reduce costs, by giving them autonomy.

 

 

 

 

Pet Insurance

 

Yes.

 

It can be made operational within a month, through proper planning & structuring.

 

Yes.

 

It will provide returns without a significant capital investment.

 

No.

 

It will not affect the scores of the company.

 

Yes.

 

It will provide instant cash flows to strengthen the company’s financial position.

 

No.

 

No prior experience and expertise in this field.

 

Yes.

 

The management will remain same and so do the culture, even with new hirings.

 

 

 

 

Pet-Related Phone Apps

 

 

 

 

Yes.

 

It can be developed within 3 months.

 

 

Yes.

 

A slight increase in returns, as the market is relatively new.

 

 

Yes.

 

It will not impact the B-Corp ratings negatively because of outsourcing.

 

 

Yes.

 

The cash flow will increase as more customers will be reachable through a new platform.

 

 

No.

 

No expertise in the field will force to outsource.

 

 

Yes.

 

The management principle will remain the same, to engage employees through empowerment.

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