CASE SOLUTIONS
Case 1: United Apparel Liquidators https://shopual.com/
Related Chapters:
Chapter 5: Crafting a Business Plan and Building a Solid Strategic Plan
Chapter 9: Building a Powerful Bootstrap Marketing Plan
Chapter 14: Choosing the Right Location & Layout
1. What steps should the Cohens take to find other locations for new U.A.L. stores?
What criteria should they use to screen potential cities? (Chapter 14, LO 1) (AACSB:
Application of knowledge)
2. Which of the three basic business strategies is U.A.L. using? Explain. How well are
the Cohens executing their strategy? (Chapter 5, LO 7) (AACSB: Application of
knowledge)
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A cost leadership strategy (within a focused geographical market) requires having a low–cost
operation that enables the firm to sell at low prices. Here, there is evidence that the Cohens are
executing their strategy well. The following are key points:
Locating their stores in small southern cities such as Hattiesburg, Mississippi, and
Metairie, Louisiana. The argument here is that the rental and other operating costs will
be lower here as compared to the big cities.
Even in these small towns, the Cohens have been careful in their choice of store location.
As the case notes, “with fluorescent lights hanging from chains and concrete floors, their
stores resembled Goodwill stores than the luxurious stores in the big cities that originally
sold their merchandise.” One of their stores is in a strip mall in a building formerly used
by a car dealership.
3. Develop an outline of a marketing strategy for U.A.L. How should the company
promote itself? (Chapter 9, LO 1 and LO 4) (AACSB: Application of knowledge)
4. How should U.A.L. incorporate social media into its marketing strategy? Which
social media tools should the Cohens use? What steps should they take to build a social
media following? (Chapter 9, LO 4) (AACSB: Application of knowledge)
Case 2: Bark &Co. bark.co
Related Chapters:
Chapter 1: The Foundations of Entrepreneurship
Chapter 3: Creativity and Innovation: Keys to Entrepreneurial Success
Chapter 5: Crafting a Business Plan and Building a Solid Strategic Plan
Chapter 15: Sources of Financing: Equity and Debt
1. What advantages does a subscription pricing model offer a business? (Chapter 5,
LO 2) (AACSB: Application of knowledge)
2. Notice that several of Bark & Co.’s idea for new businesses have failed. Is this
unusual? Why is it important for businesses to continue to innovate, even when their
founders know that many of the innovations will fail? What steps can Meeker, Werdelin,
and Strife take to encourage creativity in their company? (Chapter 1, LO 7; Chapter 3,
LO 1) (AACSB: Application of knowledge)
3. Explain the advantages and disadvantages of using venture capital to finance a
company’s growth. (Chapter 14, LO 2) (AACSB: Application of knowledge)
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Venture capital companies are private, for-profit organizations that assemble pools of capital and
use them to purchase equity positions in young businesses they believe have high-growth and
high-profit potential, producing annual returns of 300 to 500 percent within five to seven years.
One advantage of using venture capital to finance a company’s growth is that such firms are
typically interested inequity ownership rather than debt, which would call for interest and loan
repayments. This means the start–up doesn’t have to worry about interest and loan repayment
that would adversely affect its cash flow. The second advantage is that such firms look at early
stage investment and so a start-up can seek such funding early in its life. Venture capitalists also
provide advice and mentoring which help the founders of the start-up. The principal
disadvantage is the immense pressure that venture capital firms put on the start–up to deliver.
They look for substantial returns – 300 to 500 percent – in 5-7 years which may be very difficult
for many firms.
4. Because of the risks associated with their investments, venture capital firms, which
become part owners of the companies in which they invest, demand big returns within
relatively short time frames. What impact do these expectations have on business founders
such as Meeker, Werdelin, and Strife? Do investors’ expectations affect entrepreneurs’
decisions about their businesses? Explain. (Chapter 14, LO 2) (AACSB: Application of
knowledge)
5. What strategies should Meeker, Werdelin, and Strife use to continue their
company’s impressive growth rate? Are there other related businesses that they should
enter? Explain. (Chapter 5, LO 7) (AACSB: Application of knowledge)
Case 3: Cousins Maine Lobster https://www.cousinsmainelobster.com/
Related Chapters:
Chapter 8: Franchising and the Entrepreneur
Chapter 16: Global Aspects of Entrepreneurship
1. Suppose that your best friend is considering purchasing a franchise such as Cousins
Maine Lobster. What advice would you give him or her about the right way to go about
purchasing a franchise? (Chapter 8, LO 4) (AACSB: Reflective thinking)
2. What advantages do entrepreneurs who purchase a franchise get? What
disadvantages do they encounter? (Chapter 8, LO 2A and 2B) (AACSB: Reflective
thinking)
The benefits of owning a franchise are the following:
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A multitude of options
A business system
Management training and support
Brand-name appeal
Standardized quality of goods and services
National advertising programs and marketing assistance
Financial assistance
Proven products, processes, and business formats
Centralized buying power
Site selection and territorial protection
Greater chance of success
However, there are also disadvantages associated with franchising, such as:
3. What is the Franchise Disclosure Document? How can it help prospective
franchisees evaluate the various franchise operations in which they are considering
investing? (Chapter 8, LO 3) (AACSB: Reflective thinking)
4. Cousins Maine Lobster wants to expand its franchise internationally. How popular
is franchising as an “export” to other nations? What steps should Tselikis and Lomac take
to cultivate a successful international franchise operation? (Chapter 8, LO 5 and Chapter
16, LO 1) (AACSB: Application of knowledge)
Case 4: ThinkImpact http://www.thinkimpact.com/
Related Chapters:
Chapter 2: Ethics and Social Responsibility: Doing the Right Thing
Chapter 5: Crafting a Business Plan and building a Solid Strategic Plan
Chapter 6: Forms of Business Ownership
Chapter 15: Sources of Financing: Equity and Debt
1. Which organization structure should Garlick use for ThinkImpact? Explain.
(Chapter 2, LO 4 and Chapter 6, LO 4) (AACSB: Application of knowledge)
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because it takes care of the fund raising part via the for–profit business and yet the nonprofit part
allows Garlick to focus on the organization’s mission.
2. If Garlick chooses to create a for-profit entity, either to replace the current
nonprofit organization or as a subsidiary, what potential sources of funding might he be
able to tap? (Chapter 15, LO 2) (AACSB: Application of knowledge)
3. What steps should Garlick take before approaching some of the potential sources of
funding you described in question 2? (Chapter 5, LO 1) (AACSB: Application of knowledge)
Case 5: Intertech Construction Corporation http://www.iccbuild.com/
Related Chapters:
Chapter 12: Creating a Successful Financial Plan
Chapter 13: Managing Cash Flow
Chapter 17: Building a New Venture Team and Planning for the Next Generation
1. Identify possible causes that could explain Intertech’s declining profitability. What
steps can the Stadlens take to reverse this alarming trend? (Chapter 12, LO 3)
2. What can the Stadlens do to manage their company’s cash flow more effectively?
(Chapter 13, LO 1) (AACSB: Application of knowledge)
3. What steps should the Stadlens take to avoid problems with the company’s accounts
receivable? How dangerous is this threat? Explain. (Chapter 13, LO 4) (AACSB:
Application of knowledge)
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Use techniques (send invoices when job is completed, not a week or so later) to
accelerate accounts receivable collection
Offer incentives (e.g., discounts) to incentivize early or on-time payments.
4. What should Art and Ilene Stadlen do to ensure a smooth transition in handing over
the Intertech reins to their sons? What tools can they use to transfer ownership? What are
the implications for waiting as long as they have to address management succession issues?
(Chapter 17, LOs 4 and 5) (AACSB: Application of knowledge)
Case 6: Bluffton Pharmacy
Related Chapters:
Chapter 12: Creating a Successful Financial Plan