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

2015 Option 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 Requirements High Medium Low
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
2015 2014 2013
Gross Revenue / Sales 8510000 8015000 8200000
Cost of Goods Sold 4445000 4215000 4250000
Gross Profit/Operating Profit 4065000 3800000 3950000
Operating Expenses 3640000 3595000 3435000
Profit Before Taxes 425000 205000 515000
Consolidated Balance Sheet
2015 2014 2013
Assets
Current Assets 1430000 1320000 1415000
Fixed Assets 485000 340000 250000
Tot. Assets 1915000 1660000 1665000
Liabilities & Equities
Current Liabilities 570000 600000 650000
Fixed Liabilities 720000 700000 635000
Total Liabilities 1290000 1300000 1285000
Equity 200000 155000 -145000
Net Income 425000 205000 515000
Total Liabilities & Equity 1915000 1660000 1655000

 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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