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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