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SU Act as a role model to fulfill the organization's standards/values

SU Adapt management style to the personality type of others

ON Adapt to changes in business environment

MN Adjust idea to create functional product

ON Analyze critical banking relationships

MN Analyze operating results in relation to budget/industry

MN Assess business risk

Business risk is the potential for business loss or failure

Three kinds of business risk: economic, natural and human

Economic - occur from changes in overall business conditions (competition, changing consumer lifestyles, population changes, limited

usefulness or stylishness of some products, product obsolescence, government regulation, inflation or recession)

Natural - result from natural causes (weather conditions-floods, fires, hurricanes, etc.)

Human - caused by human mistakes and the unpredictability of employees or customers (dishonesty, carelessness, incompetence,

accidents, illness, non-payment of accounts)

There are many types of risks businesses face—political, financial, social, economic, legal, theft, safety, disaster, loss of key executives, etc.

It is important that businesses anticipate possible risks and create plans to deal with these risks. If possible, businesses should find ways to

make certain that the risks are prevented before they occur

SU Assess employee performance

ON Assess global trends and opportunities for business ventures

ON Assess opportunities for venture creation

ON Assess risks associated with venture

ON Assess start-up requirements

ON Assess the costs/benefits associated with resources

Students should discuss and decide on a method financing.

RESOURCE BENEFITS COSTS

Family & Friends Easy to find and ask

Forgiving and flexible

Lower interest rate

If business fails, relationship is ruined

Meddling

Not considered a serious debt

Venture Capitalist &

Angel Investors

Can provide money, customers, investors,

supply chain, distribution outlets, advice,

experience and knowledge of the market

High interest rates

Ownership means surrendering unilateral

decision-making and claim on profits

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Contract-driven and inflexible

Banks a breadth of companies and industries, and

can provide excellent financial direction

Little knowledge of, or interest in, day-to-

day operations

Crowdfunding Easy to raise money Uncertain inflow of funds

Shared ownership (equity funding) with

inexperienced investors

Upper dollar limits ($250K – equity)

ON Assess the need to use external resources for concept development

ON Build corporate brand

Corporate brand-building is the art and science of building awareness, loyalty, preference and value for companies directly, as opposed to

the product brands they manage and market. Branding the corporation rather than the products allows a company flexibility when

introducing new products, expanding to new markets, using new channels of communication and/or distribution, and, it is clearer in

conveying the company image and purpose to the media and financial markets. A strong corporate brand also provides employees with

an identity that can drive morale and performance.

Developing and telling the brand story can help to inspire a sense of purpose, excitement and loyalty that can boost morale, support the

retention of talent, attract new talent, strengthen customer relationships, and more. Ultimately, these benefits can contribute to better

competitive advantage and increased productivity.

Students may suggest specific ways the company can build its corporate brand.

MN Build product/service brand

The brand is the company’s promise to the customer. It tells them what they can expect from your products and services, and it differentiates

your offering from your competitors'. The brand represents who you are, who you want to be and who people perceive you to be. The brand

conveys whether the company is innovative/staid, reliable/changeable, high/low quality, high/low price, service/self-oriented, etc.

Building a product or service brand permeates the breadth and depth of a company’s contact with its customers and aims at retaining the

loyalty of those customers over the long-term. The brand message will be consistent throughout all its contact points with the customer:

website, packaging, logo, slogan, advertising, employee training, etc.

There are some foundations of building brand loyalty: keep quality high, engage customers, solicit feedback, reward repeat business, stay

relevant, provide value, show appreciation

Students may suggest specific ways the company can build its product/service brand and customer loyalty.

MN Calculate financial ratios

ON Complete loan application package

SP Conduct an environmental scan to obtain business information

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ON Conduct an organizational SWOT

MN Conduct breakeven analysis

MN Conduct competitive analysis

MN Conduct market analysis (market size, area, potential, etc.)

How big are the market, market share, market trends, competitive analysis, and SWOT analysis?

MN Conduct SWOT analysis for use in the marketing planning process

MN Coordinate human, capital, and fiscal resources to meet business priorities

ON

/

MN

Create processes for ongoing opportunity recognition

ON Define business mission

MN Define strategies to protect business' digital assets, customer data, and other protected information

CS Demonstrate adaptability

SP Demonstrate connections between company actions and results (e.g., influencing consumer buying behavior, gaining market share,

etc.)

Most companies will compare their actions and results by having set some specific objectives and seeing how closely they are meeting them.

This involves:

• establishing what specific objectives the company wants to achieve

• what steps need to be taken to achieve those objectives

• how often will results be measured

• how will results be measured (how do you define successfully meeting objectives?)

• how results will be reported and acted upon

SP Demonstrate negotiation skills

Effective negotiators must have the skills to determine the interest of each party in the negotiation. Negotiators must be prepared for meetings

determining goals and alternatives to the stated goals. Negotiators also demonstrate active listening to find areas for compromise, exercise

emotional control even when meetings get frustrating, and have the ability to communicate clearly and effectively to avoid and/or clarify

misunderstandings.

CS Demonstrate problem solving skills.

Students are to demonstrate problem-solving skills.

One possible model to problem solve

Identify the specific problem and create a concise problem statement

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Determination of why/how this problem occurred

Identify the possible causes of this problem (situation analysis)

What are the possible solutions (alternatives)

Select the best possible solution (recommendation)

Create an implementation plan

ON Describe considerations in selecting capital resources

Should the company finance with debt or equity?

Cost of borrowing: rates of interest, length of term and amortization, restrictions and covenants (minimum balances, expenditure limits),

reporting requirements, risk of repossession of pledged assets

Benefits of borrowing: freedom to run business

Cost of investor ownership: shared decision-making, shared earnings

Benefit of investor ownership: experience and knowledge, customer lists, existing distribution channels and/or retail outlets, supplier

contacts

What investor relationship should be considered?

Family and friends

Venture capitalists and angel investors

Banks

Crowdfunding

SP Describe current business trends

The following are 2017/18 increasing trends:

Mobile device usage

Device security

Social media

Location marketing (e.g., restaurants near me)

Personalizing marketing

Better voice recognition (and customer service opportunities)

Artificial intelligence to find sales leads and new clients

Video usage

On demand delivery (ordering online, quick delivery)

Companies focusing on being more environmentally friendly

Companies that connect people with services (Uber, Airbnb)

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Remote employees (working from home)

Data analytics (garnering information from social media and websites to improve the customer’s experience and drive sales)

Crowd funding

ON Describe entrepreneurial planning considerations

Identify a real business opportunity - industry analysis, market analysis, products/services offered in the market, target market

characteristics and location

Plan strategically - set goals and objectives like sales targets, what the business will do to meet the goals, set budgets, plan for growth,

determine marketing mix (pricing, location, image, logo, slogan, promotions)

Plan tactically and operationally - how the goals will be executed and measured, employee requirements, logistics of day-to-day

operations, distribution, website and online ordering, money/finances needed, equipment/assets required, legalities, licenses, registrations,

suppliers, storage, inventory management, etc.

ON Describe external resources useful to entrepreneurs during concept development

MN Describe factors that influence management

SP Describe legal issues affecting businesses

CS Describe marketing functions and related activities

ON Describe methods of venture harvesting

SP Describe methods used to protect intellectual property

ON Describe processes used to acquire adequate financial resources for venture creation/start-up

To find an investor a person can: ask family and friends, access crowdfunding platforms, talk to a banker, inquire at the Business

Development Bank of Canada (BDC), visit a local business advisory office, contact a venture capital company, find an angel investor through

BDC or online, look for leads on social medium platforms.

To convince an investor to financially back a business idea, there must be: a sound idea, a business plan, proven sales (start-up amounts),

sales and growth projections, a spark of passion in the entrepreneur.

Businesses can be funded in stages: seed money (to assess the idea, do market research); start-up (business plan, prototypes, production

facilities set up, board of directors established); early production and operations; etc.

CS Describe relationship among innovation, learning, and change

SP Describe small-business opportunities in international trade

ON Describe strategies to protect intellectual property

SP Describe the components of a well-governed company (e.g., board of directors, reporting, transparency, internal and external audit

functions)

A well-governed company is one that has a board of directors, accountable managers who report, diligent audit and control, transparency,

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and equitable treatment of employees.

A well-governed company is one that is:

Law-abiding. Management adheres to behaviour that is universally and legally recognized to be correct and proper.

Transparent. Information is freely available and directly accessible to those involved. As well, policies and practices and their outcomes

should comply with established rules and regulations.

Accountable. Decision-makers abide by company policy and are answerable to stakeholders.

Equitable and inclusive. Prejudices and discrimination are not tolerated.

Socially responsible.

Fair. No particular group within the business has an unfair advantage.

Participatory. All employees are informed and organized, free to express themselves and work toward the best interests of the organization

and society in general.

With the new year-end, the month-, quarter-, and year-end will be finalized mid-January. The auditors and board of directors will be privy

to the results at this time. The annual report will be published by late March. Corporate income taxes are due within three months of the

year-end, and, in the year of a loss can be filed within six months without penalty.

MN Describe the concept of economies of scale

SP Describe the factors that influence business process design

MN Describe the financial needs of a business at different stages of its development

SP Describe the nature of business records

Participants should make the connection between business records and business decisions based on those records. Points to address this may

include:

Inaccurate records could lead to an under or over projection of the business’s financial position in its financial statements.

Since these statements are used to make business decisions by management and investors, it can lead to misinformed business decisions as

well as billing and delivery errors.

Business records are also used as reference points if and when the company is audited, thus these records must be accurate and maintain

for future use.

MN Describe the nature of cost/benefit analysis.

Do costs outweigh benefit derived from it, i.e. is increase in revenue greater than increase in costs

Take into account non-financial benefits (greater customer service, better reputation, etc.) and costs (opportunity cost, etc.)

SP Describe the nature of entrepreneurship

An entrepreneur is a person who sees an opportunity and sets up a business taking financial risk in the hope of profit. They are characterised

by being: hardworking, tenacious, visionary, creative, adaptable, ambitious, committed, determined, good decision-makers, calculated risk-

takers, positive, motivated, eager to learn and collect information, opportunistic, are challenged by problems, successfully manage chaos.

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SP Describe the nature of income statements

An income statement describes a company’s revenues and expenses along with the resulting net income or loss over a period of time due to

earnings activities. Participants should relate income statement accounts to the bakery industry.

Describes a company’s revenues and expenses along with the resulting net income or loss over a period of time

Shows how profitable the company is over a specified period of time

Shows Sales (Revenues) less cost of doing business (Expenses) = Net Income (Profit

SP Describe the nature of legally binding contracts

SP Describe the nature of taxes

Despite the common misperception, taxes play a positive role in our lives

By collecting taxes, government is able to improve the standard of living for all citizens – with better services and roads, transit, health,

education, recreational and cultural facilities and programs

With good jobs and low unemployment, the personal income tax base is stronger, and with prosperous businesses, the corporate tax base

is also healthy, fueling even more funding for city-provided goods and services

By levying reasonable taxes, the quality of life enjoyed in the city can be improved – they may wish to survey the public regarding this

The city may wish to begin dialogue with those businesses that will benefit from a new convention centre regarding a limited special sales

tax or surcharge to help with financing (a downtown improvement tax)

The large, successful home-based insurance company should definitely be approached first about “headlining” sponsorship or a corporate

municipal tax credit for a financial donation

CS Describe the need for marketing data

Marketing information management is the process of collecting and organizing data and information about customer attitudes, and about the

development, launch and success of new products. The procedures and outcomes must be organized so the business can make sense of the

findings and benefit from the research.

Marketing data is needed to understand the consumer (motivations, attitudes, perception, value ascribed to the product), the competition, the

products themselves, and the reason for product successes and failures. Analyzing the data and understanding these things will improve the

product or the service in ways that will satisfy consumers, and will also lead to accurate customer profiles which in turn can be used to

predict the success of new products.

Marketing data is also crucial in order to plan and carry out successful and cost effective promotional efforts – how do you advertise if you

don’t know who you are trying to reach? Marketing data informs businesses about sales trends and patterns and helps perfect the timing of

re-ordering, re-launching or discontinuing products. Marketing information can inform businesses about pricing levels and a customer’s

perception of value.

MN Describe the role of management in the achievement of quality

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ON Describe the use of operating procedures

MN Describe types of financial statement analysis (e.g., ratio analysis, trend analysis, etc.)

SP Describe word-of-mouth channels used to communicate with targeted audiences

Word of mouth advertising (WOM) is the unpaid spread of a positive marketing message from person to person. It can take place directly

using the human voice, or can be transmitted via any communicative means such as through e-mail, social networking sites, blogs,

review/referral channels, or text messages.

Marketers have long used "word of mouth" (WOM) promotion campaigns. The idea is to get people to pass information about a product

to other people. The idea in these kinds of WOM campaigns is to reach segments of consumers who distrust paid advertising by creating

the illusion that the message comes from someone who is like the message recipient.

Social networking has enabled marketers to make practical use of “viral marketing,” “buzz marketing,” “guerilla marketing,” and other

forms of "word of mouth" marketing that rely on social networking. The general idea of viral marketing is to "let the behaviours of the

target community carry the message."

CS Determine factors affecting business risk

Business risk is the potential for business loss or failure

3 kinds of business risk: economic, natural and human

Economic- occur from changes in overall business conditions (competition, changing consumer lifestyles, population changes,

limited usefulness or stylishness of some products, product obsolescence, government regulation, inflation or recession)

Natural- result from natural causes (weather conditions-floods, fires, hurricanes, etc.)

Human-caused by human mistakes and the unpredictability of employees or customers (dishonesty, carelessness, incompetence,

accidents, illness, non-payment of accounts)

There are many types of risks businesses face—political, financial, social, economic, legal, theft, safety, etc.

There are many types of risks faced in the restaurant industry—alcohol, underage drinking, fire, burns, food poisoning, spills, broken glass,

etc.

It is important that businesses anticipate possible risks and create plans to deal with these risks.

If possible, businesses should find ways to make certain that the risks are prevented before they occur

ON Determine feasibility of venture ideas

ON Determine financing needed for business operations

SU Determine hiring needs

MN Determine initial feasibility of product idea

ON Determine opportunities for venture creation

CS Determine personal vision

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Guiding principles that influence daily decisions as well as overall direction.

For a community – personal vision must encompass best interest of general population of community as a whole.

Creativity, personal beliefs, values and community expectations should be included.

MN Determine relationships among total revenue, marginal revenue, output, and profit

MN Determine services to provide customers

Create a “healthy value menu”

To attract customers to the newer products, we can offer a different healthy product at a reduced price for each day of the week

Always provide the best service for the customers. Create a pleasant atmosphere, and treat the customer as king/queen

Services include short and long term rental for individuals and/or groups

Group services for companies require office equipment availability, Internet service and perhaps event management assistance

Information about and assistance with area amenities should be available (discounts)

information about rental of mountain bikes, walking trails, historic sites should be available

long term rentals would require laundry facilities

dining room needs to provide for a variety of dietary needs e.g. vegetarian

community dining room provides a form of entertainment for guests and a unique dining experience not found in other restaurants

MN Determine stakeholder expectations

Students should be able to identify some of these stakeholders:

Investor – expects profitable return, social responsibility piece, very fresh healthy baby food, delivery with no minimums

Regular Customers – expect very fresh healthy baby food, timely delivery, ease of payment

Social Responsibility clients – don’t yet know about this company and as a result expect nothing

Business Owners – expect profitable returns, to make a quality product, to deliver in a timely manner, to increase the customer base by being

a socially responsible corporation

Employees – expect a company that consistently delivers what it promises, and treats employees and customers with dignity and respect

Suppliers – expect accurate shipping/receiving, prompt payment, and repeat business

CS Determine the relationship between government and business

MN Determine venture's information technology needs

MN Develop a risk management program

ON Develop action plans

CS Develop an achievement orientation

Achievement orientation is about getting results. It can be about working toward excellence or a personal desire to do better than before.

People who are achievement oriented set high standards. Achievement orientations have been shown to be associated with

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individuals’ academic achievement, adjustment, and well-being. An employee with strong Achievement Orientation will be:

Open to new challenges

Have a greater ability to anticipate obstacles

Willing to be held accountable for their actions

Focus on identifying ways to do things better

Learn how to initiate actions to improve personal performance

Cultivate new strategies for obtaining information

Become more successful in taking advantage of opportunities

Developing this orientation includes the activities to promote or enhance this orientation, such as: setting realistic goals, monitoring the

attainment and alignment of these goals.

ON Develop and/or provide product/service

Develop business plan

ON Develop company goals/objectives

MN Develop company's/department's budget

MN Develop customer profile

ON Develop exit strategies

MN Develop expense control plans

MN Develop marketing plan

ON Develop plan to invest resources into improving current products or creating new ones

ON Develop strategies for legal/government compliance

SP Discuss business process thinking and its impact

ON Discuss entrepreneurial discovery processes

MN Discuss factors to consider in choosing between debt and equity capital

MN Discuss limitations of using financial statements to assess business performance

CS Discuss the importance of corporate governance in business

SP Discuss the nature of business analysis

CS Discuss the nature of data mining

SP Discuss the nature of enterprise risk management (ERM)

CS Discuss the nature of human resources management

Human resources management refers to the management of a business’s workforce. Human resources management involves a variety of

functions including recruiting, hiring, training, evaluation, performance management, benefits, compensation, employee health and safety,

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ensuring adherence to labour laws, etc. Effective human resources management processes and procedures are critical to the efficient and

successful operation of a business, and can have an impact on the organization, its employees, and its customers.

Human Resources Management [HRM] is a set of organizational activities directed at attracting, developing, and maintaining an effective

workforce.

It involves processes such as hiring, orientation, professional development, counselling, and dismissals through which the department tries

to motivate and retain qualified personnel to operate the company effectively.

SP Discuss the nature of supply chain management

Supply chain management is the sourcing of materials, the manufacture of goods, and the warehousing and distribution of products.

A supply chain manager will research and analyze the marketplace; develop demand forecasts; evaluate suppliers’ capabilities to deliver;

utilize technology such as Systems, Applications, and Products in Data Processing (SAP); develop aggregate and master production

plans/schedules; and analyze business processes.

Industry-standard theories, methods, and techniques include:

• Six Sigma (a strategy to reduce the risk of manufacturing errors and defects)

• Total Quality Management (a principle that every staff member must be committed to maintaining high standards of work in

every aspect of a company's operations)

• Just-in-Time (a manufacturing system in which materials or components are delivered immediately before they are required in

order to minimize inventory costs)

• Lean (systematic method for waste minimization without sacrificing productivity)

Concepts and theories are applied to supply chain management strategies and problem solving.

MN Discuss the relationship between risk and business objectives

SU Dismiss/Fire employees

SU Encourage team building

Did the student explain the benefits (i.e. increased productivity, sales, # customers, etc.) of team building?

Did the student explain strategies for successful team building?

Explain team building skills –

Purpose – what are the shared goals?

Empowerment – provide clarity and structure, establish roles, encourage accountability

Relationships and communication – hold meetings to keep team cohesive

Optimal performance – shared accountability, performance depends on clear goals and timely feedback

Recognition and morale – recognize team’s efforts with compliments or even weekly discussions on what they are proud of

accomplishing

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CS Enlist others in working toward a shared vision

Show others the benefits of a shared vision (could be a positive work environment where employees want to go to work and enjoy being

there leading to increased productivity and cohesiveness).

Model behaviours from the top down so others see how it can and will work.

Gather feedback and input from others about what the vision should be and how it can be achieved.

Involve them in the process so they have ownership to it.

MN Establish efficient operating systems

MN Establish performance standards to meet organizational goals

MN Establish policies and procedures to maintain physical security of the work environment

MN Establish policies to protect company information and intangibles

MN Establish safety policies and procedures

MN Establish specifications for selecting hardware/software systems

MN Establish strategic relationships with others

MN Evaluate channel members

The evaluation channel members is important because the failure of one member can cause the failure of the whole. Channel members can be

employees as well as independent business firms.

When choosing a channel member consider the following:

• The nature of your product

• The degree of control you want over the passage of inventory through the channel

• The relative importance of channel member

• The number of channel members involved

The major criteria of evaluating ongoing channel members is sales, but there are others:

• Sales is the most popular performance criteria used in channel evaluation. Sales might further be subdivided into current sales compared

with historical sales, comparisons of sales with other channel members, and comparisons of the channel member's sales with

predetermined quotas.

• Maintenance of adequate inventory

• Selling capabilities

• Attitudes of channel intermediaries toward the product

• Competition from other intermediaries and from other product line carried by the manufacturers own channel members.

MN Evaluate customer experience

ON Evaluate options for continued venture involvement

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ON Evaluate risk-taking opportunities

MN Evaluate strategies for protecting business' digital assets (e.g., website, social media, email, etc.), customer data, and other protected

information

SP Evaluate vendor performance

The participant should consider the following when evaluating a vendor’s merchandise.

Will the merchandise suit their target customer?

Is the merchandise the right fit for their image and stores?

Is the quality and styling of the merchandise something that works with their reputation?

Costs of the merchandise - to the retailer (including shipping costs) – costs to the public

Production capabilities, past experience, product quality, the availability of special buying arrangements or services that correspond to

this vendor

When dealing with a vendor for the first time, buyers might solicit references to determine the vendor’s reputation. Many businesses

maintain resource files and journals that document past experience with vendors. Such a journal may include an evaluation of product

quality, delivery performance, and customer service. Returns relating to the quality of products may cause a vendor to be dropped.

Participant should address methods of determining success such as:

Sales

Customer satisfaction

Returning customers

CS Exhibit cultural sensitivity

Exhibiting cultural sensitivity may start with language lessons, but more often extends to learning the etiquette, protocol, communication

styles, and negotiation approaches of various international business associates and clients.

SP Explain communications channels used in public-relations activities

ON Explain considerations in making the decision to hire staff

MN Explain external planning considerations

• Outside influences that can impact a business and companies must plan with these factors in mind. Various external factors can impact the

ability of a business or investment to achieve its strategic goals and objectives.

• These external factors might follow the PESTEL analysis: political, economic, social, technological, environmental, legal. Competition

is another external consideration.

• In a SWOT analysis, the external factors would be Opportunities (gaps in the market or new markets) and Threats (new products or new

competitors)

SP Explain factors affecting pricing decisions

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Factors affecting a company’s pricing decisions include any or all of the following:

Price-quality relationship: Customers use price as an indicator of quality. When quality does not change customers will not expect a

pricing change.

Explicability: The company should be able to justify the price it is charging, especially if it is on the higher side. An increased price

may alienate customers who were attracted to the low cost.

Competition: A company should be able to anticipate reactions of competitors to its pricing policies and moves. Competitors can negate

the advantages that a company might be hoping to make with its pricing policies. A company reduces its price to gain market share.

Every company should research what its competitors are charging and have their prices strategically placed the market place.

The costs must be recovered.

The profit must adequately exceed costs.

Market Demand will determine how much can be charged. Both higher demand and lower supply will result in a higher price.

Competition also affects the price that can be charged. The more competition there is, the lower the price (in general).

Your business strategy and image will affect your price. The more elite or rare your product is, the higher the price.

Product Uniqueness and Improved Value can also substantiate a higher price.

Loyalty may affect price. Some companies will lower prices to loyal members to keep their business, while others may raise prices

knowing that their customers will buy regardless of the price.

SP Explain factors that influence customer/client/business buying behaviour

Buying Behavior is the decision processes and acts of people involved in buying products/services. Businesses need to understand:

Why consumers make the purchases that they make?

What factors influence consumer purchases?

The changing factors in our society.

There are 3 main categories of factors that influence buying behaviour:

Personal: demographics factors such as gender, race, and age

Psychological: motives, perceptions, ability and knowledge, attitudes, personality, lifestyles

Social: opinion leaders, roles and family influences, reference groups, social class, culture and sub-cultures

There are 4 types of buying behavior that vary in degree of the customer’s involvement in the process:

Routine Response/Programmed Behavior – buying low involvement frequently purchased low cost items; need very little search and

decision effort; purchased almost automatically. Examples include soft drinks, snack foods, milk etc.

Limited Decision Making – buying products occasionally. When you need to obtain information about an unfamiliar brand in a familiar

product category, perhaps. Requires a moderate amount of time for information gathering. Examples include clothes.

Extensive Decision Making/Complex – high involvement, unfamiliar, expensive and/or infrequently bought products. High degree of

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economic/performance/psychological risk. Examples include cars, homes, computers, education.

Impulse buying – no conscious planning

ON Explain factors to consider in determining a venture's human-resources needs

ON Explain loan evaluation criteria used by lending institutions

MN Explain management’s role in customer relations

CS Explain marketing and its importance in a global economy

ON Explain methods/processes for organizing workflow

ON Explain sources of financial assistance

MN Explain strategies for linking performance measures to financial outcomes

SP Explain the causes of business process changes

ON Explain the complexity of business operations

CS Explain the concept of accounting

Accounting is defined as the art of recording, classifying, and summarizing in terms of money, transactions and events which are financial

in nature

Bank reconciliation is the process of comparing and matching figures from the accounting records against those shown on a bank

statement

Accounting concepts that would be applicable to a bank reconciliation include:

Going Concern – where accountants assume that the company is not going broke

Consistency – valuation methods are treated the same way from month to month, allowing users to make more meaningful

comparisons of financial information

Matching – journal entries resulting from “outstanding” bank items should be matched with the income earned for a specific

accounting period

Participants should be able to identify and explain accounting fundamentals as they apply to this situation. The participant’s address may

include:

Accounting involves the careful and accurate recording of the transactions of a business.

These records are used to formulate financial statements that represent the financial position of the business.

Accounts payable handles invoices charged to the company on orders made

CS Explain the concept of competition

Competition is the rivalry between companies selling similar products and services with the goal of achieving revenue, profit, and market-

share growth. In any industry it is important that companies distinguish themselves from competition by promoting their competitive

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advantage – how/what makes the company better than competitors. This ultimately gives consumers a reason to choose one competitor over

another and drives sales. Competition benefits consumers by helping to maintain reasonable prices, providing new and improved products,

and providing a wide selection of products from which to choose. It forces businesses to operate efficiently. Competitors can be direct (the

same products are offered) and indirect (different kind of product that can satisfy the consumer’s need).

CS Explain the concept of leadership

Someone they respect

Someone who has a vision and is able to execute strategy to achieve that vision

Trusted by and has the confidence of subordinates

Communicates effectively – helps employees understand company’s business strategy, understand how they can contribute to the success

of the organization, share information with employees on how the organization and division is doing

Organizes groups of people to achieve a common goal.

Leadership styles differ among various individuals.

Is able to motivate others to work together while following goals/instructions.

Good leaders increase productivity of companies as well as creativity and overall effectiveness.

CS Explain the concept of management

CS Explain the concept of market and market identification

The market is the group of customers a company is most likely to try to sell to. The total market would be all of the potential customers the

company could reach. This total market would be divided into several smaller groups (market segmentation) based on demographic factors

like income, occupation, age, etc. and psychographic factors like attitudes, pet ownership, and lifestyles and geographic factors such as

where the customer’s homes are. The company would then study each segment to determine which group or groups they would like to focus

their efforts on selling to (target market). These decisions will be based on how easy it will be to reach or satisfy certain customers or how

easy it will be to make sales to them.

Student competitors should identify some of the characteristics of Millennials and Generation Z. (A brief list of Generation X and Baby

Boomers is provided in case the student competitor compares generational characteristics.)

Millennials (20-30):

Highly educated

Tech savvy

Civic oriented

Global citizens

Entrepreneurial

Generation Z (under 20):

Consume more media than ever

before

Globally oriented

Looking for cool products over

cool experiences

Gen Y & Baby Boomers (50-70)

Strong work ethic

Self-assured

Independent and self-reliant

Competitive

Goal-centric

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Pragmatic, idealistic,

Compassionate

Progressive, liberal

Results oriented

Entrepreneurial

Tech savvy

Passionate employees who want to

co-create culture

People-oriented, not profit-

oriented

Respond to edgy, visual marketing

tactics

Resourceful

Mentally focused

Team oriented

Disciplined

CS Explain the concept of marketing strategies

An organization's overall marketing strategy combines all of its marketing goals into one comprehensive

plan to achieve the desired goal. A good marketing strategy should be drawn from market research

and focus on the right product mix in order to achieve the maximum profit potential and sustain the

business.

The marketing strategy is an explanation of the goals you need to achieve with the marketing efforts.

A marketing strategy is a process that can allow an organization to concentrate its limited resources

on the greatest opportunities to increase sales and achieve a sustainable competitive advantage. The

overall marketing strategy identifies where the business wants itself placed within the market, and the

marketing plan consists of the techniques, and methods to get the business there.

Marketing strategies can also refer to the specific techniques and methods used to reach the overall goals; some examples are:

relational marketing (building loyalty)

transactional marketing (increasing the number of transactions by offering sales, coupons, etc.)

word of mouth marketing, cause marketing (corporate charity)

scarcity marketing (limited quantities)

viral marketing (use of social media)

Marketing strategies are the chosen mix of short-term and long-term marketing activities coordinated to achieve the goals of the business.

The strategies used vary depending on the stage of the product life cycle, nature of competition, and availability of resources to commit to

marketing efforts.

Students should provide some examples and will do so by describing ideas, or by giving the strategies labels like the ones listed here.

CS Explain the concept of private enterprise

Private enterprises are organizations owned and operated by individuals and not on behalf of government institutions.

SP Explain the concept of product mix The product mix includes all the product lines a company sells. A product line is a group of products sold that have some kind of similarity.

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Additions or modifications to a company’s product mix require research and development to ensure the proposed changes appeal to existing

or prospective market segments.

There are 4 dimensions to a company’s product mix:

Width (the number of product lines sold);

Length (the total number of products in the product mix);

Depth (the total number of variations of a product like size, flavor, colour, or other distinguishing characteristic); and,

Consistency (how closely related product lines are to each other in terms of how they are produced and distributed).

Small companies typically start out with a product mix limited in width, length, and depth, but high in consistency. Over time, the company

may want to he company may want to differentiate products or acquire new ones to enter new markets. A company can also sell the existing

products to new markets by coming up with new uses for their product.

CS Explain the concept of production

The participant should recognize some of the following characteristics of production:

Identify the job/task

Identify the resources or data required to transform resources into goods and services

The logistics of getting the job/task done efficiently, correctly, and safely

Impact of job/task on customer satisfaction/experience

Successful production focuses on achieving high production efficiency, low costs, and mass distribution.

CS Explain the concept of supply chain

ON Explain the impact of resource productivity on venture success

SP Explain the impact of supply chain on business performance (e.g., value, customer satisfaction, business design, sustainability)

CS Explain the nature and scope of channel management

Channel Management is how a business uses marketing and sales techniques to reach their customer base. Channel management

organizes all possible ways to communicate with customers. Organizations must consider their target markets in terms of their preferred

methods of communication while trying to reach their goals of gaining and maintaining customers. Regardless of the channels chosen, the

messages must always be consistent with the organization’s branding and position.

The Management of the channel refers to the ability of a business to operate all of its sales methods effectively. The scope of these

Channels of Distribution could include direct from manufacturer, retail, wholesale, import, or specialty channel (internet, home shopping,

catalogue, vending machine, etc.). When done properly, effective channel management allows a business to deliver products successfully

and a manner of its choosing to customers thus strengthening the relationship between the business and its customers.

Types of communication channels include but are not limited to: social media, print advertising, corporate website, online advertising,

telemarketing, email marketing, webcasts, tradeshows, direct mail promotions, white papers, and face-to-face events, on-line video

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streams, mail office try-on centres.

CS Explain the nature and scope of purchasing

The purchasing function of a business ensures that all production materials or inventory items are available for use when needed. Effective

purchasing must be cost effective and efficient and take into account the quality of raw materials, where they are coming from, and what

future costs are expected to be (will raw materials increase in price over time, will there be a shortage of raw materials due to external factors,

etc.). Purchases must stick to a budget communicate effectively with the accounting/finance department.

SP Explain the nature and scope of the pricing function

Pricing involves placing a monetary value on a product or service based on tangible things like adequately covering costs, and intangible

things such as company image and the product’s or service’s perceived value. The function of pricing involves the strategies used to set

prices of products, pricing computations such as discounts and markups, and the overall relationship between pricing and the company’s

profitability. The pricing function looks at costs, competition, and how much customers are willing to pay for a good or service.

Participants should be able to identify and explain factors affecting pricing in this situation. The participant’s answer may include (but is not

limited to):

• Cover overhead costs (building costs like rent and utilities, advertising, office expenses and employee costs) Must cover costs, be

competitive, and offer a profit

• Reflects the market value of visiting the location

• The location’s image must correspond with the price

• Pricing is an integral part of the 4P’s of marketing

• Customer loyalty can be built in to the pricing structure

The student competitor should some mention of the above information and how it relates to the pricing in the case.

CS Explain the nature and scope of the selling function

Participants should identify that the selling function provides consumers with the products or services that they want or need. Participants

should explain that the selling process is a personalized communication and influences the purchase of a product or service and future sales.

(It is not advertising or promotion.) They could also mention that this occurs at all levels of the distribution channel.

Participants should identify the various levels of personal selling as it relates to the image of the store, and, the level of interaction with

customers:

Stores that promote a discount image – may have limited sales staff who offer little service beyond checking out at the cash register

Stores that attract customers interested in exclusive, ‘pricey’ items have sales personnel to not only help customers make buying decisions,

but also make customers feel important

Planned communication – greetings, explaining specials, things that sales personnel say to all customers

Personalized communication – knowing what level of help will best suit each customer

Influences purchase decisions – knowing how to, and when to, close a sale

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Should ensure customer satisfaction

SP Explain the nature of balance sheets

Describes a company’s financial position at a given point in time

A snapshot of the company’s financial structure

Shows assets (what a company owns), Liabilities (what a company borrowed, its obligations) and equity (contributions from owners

– common stock – plus contributions from profit – retained earnings).

The Balance Sheet must balance

Sub-ledgers provide detail for all line items on the Balance Sheet

When compared with past years’ Balance Sheets, the health of the business can be determined.

Managers, owners and investors use Balance Sheets to analyse and evaluate the current operations of a business and suggest

changes/improvements.

MN Explain the nature of business plans

ON Explain the nature of businesses' reporting requirements

SP Explain the nature of change management

MN Explain the nature of channel strategies

A channel strategy is a vendor's plan for moving a product or a service through the chain of commerce to the end customer. Channels of

distribution can be short (manufacturer to customer) or long (going through intermediaries).

Other possible channel options include: importers, agents, wholesalers, distributors, warehousers, brokers, sales force, e-commerce (website,

social media), retail outlets, vending machines, value-added resellers (Amazon, shopping channel)

The choice of channel will depend on:

Time to market – for example perishable products need quick delivery

The costs of each option vs the benefits

Reach – where the customer expects to buy the product

Skill – complex products need the skill and expertise of a knowledgeable sales staff

Competition – mirroring the channels the competition uses may be the best alternative

Control – ensure product integrity and level of customer service

Cost of up front investment – whether there are funds to establish your own distribution network

Brand Image – e.g., Coach sells almost exclusively through its own stores

CS Explain the nature of channels of distribution

A channel of distribution is the road that a product or service takes from production to end user. Products and services may use direct or

indirect distribution channels to arrive to a customer.

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Direct distribution is when the producer sells the product to the end user. Indirect distribution involves one or more intermediaries who aid in

moving the product from producer to end user. Factors such as whether it is a consumer or industrial product, the cost and size of the product,

or the uniqueness of the product, affect what channel of distribution is selected.

SP Explain the nature of direct marketing channels

The participant should demonstrate an understanding that direct marketing is selling directly to the consumer without a ‘middle-man.’.

Direct marketing occurs when the "producer" connects with the end user. The end user may be a consumer or a business.

The participants could suggest several ways to use direct marketing channels including using a direct sales force, websites, online chats,

contact through various social media, email, text message, phone app, direct mail, telemarketing, seminars, trade shows, and other "one-

to-one" techniques to communicate with their fans/customers.

The participant will name/describe direct marketing and possible channels, and may suggest how direct marketing will be used for this

case.

SU Explain the nature of human resources regulations

SP Explain the nature of managerial cost accounting (e.g., activities, costs, cost drivers, etc.)

MN Explain the nature of managerial ethics

SP Explain the nature of marketing research Marketing research is the systematic collection, analysis, and interpretation of data/information and is used to solve a marketing problem.

Marketing research is typically either Secondary or Primary. Primary Research is conducted first hand and did not previously exist. Primary

research methods include: focus groups, product tests, questionnaires and surveys, test marketing, product sampling, or other experimental or

observational methods. Secondary research is the use of information that has already been collected by other people. Secondary research

methods include: the internet, periodicals, newspapers, databases, national census, etc. Research can be qualitative (subjective) or

quantitative (objective/measurable), formal or informal, extensive or cursory.

The research can focus on many issues: product, price, locations, advertising, motivations, perceptions, competition, media, etc.

CS Explain the nature of operations

Operations include all the activities involved in the day-to-day functions of the business conducted for the purpose of generating profits. It

is the organization of everything the company needs to do business. This includes facility location, facility layout, facilities management

and maintenance, purchasing, production scheduling, quality control, inventory management, supply chain management, logistics

management, administration, safety & security, and employee relations.

SP Explain the nature of overhead/operating costs

Overhead and Operating costs combine to add up to the costs of operating the business

Operating costs can either be fixed (overhead or operating) or variable (operating)

Overhead costs must be paid regardless of the level of production or sales and are relatively constant from month to month (insurance,

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rent, wages, utilities when they cannot be tracked for individual jobs, supervisor salaries). Fixed costs do not fluctuate due to the number

of items sold. The fixed cost per item decreases as more items are sold.

Variable costs are for the most part the materials and direct labour used to make the product, and are therefore dependent on the business’

level of production, and change constantly depending on the units of production. Variable costs fluctuate because of the total number of

items sold. The variable cost is constant as more items are sold.

SP Explain the nature of quality management

Explain the nature of remedial action

SP Explain the nature of Risk Management Risk Management strategies are used by business to mitigate the impact of business failures and to eliminate or reduce the possibility of

business failures. Businesses often use four strategies of Risk Management: Risk Transfer (moving the risk to another party), Risk Avoidance

(eliminating or reducing the likelihood of risk factors), Risk Insurance (purchasing insurance to cover costs associate with realized risks) and

Risk Retention (accepting the possibility of risk and not acting).

ON Explain the nature of tax regulations on business

SU Explain the nature of workplace regulations (including OSHA, ADA)

ON Explain the need for business systems and procedures

ON Explain the need for continuation planning

ON Explain the need for entrepreneurial discovery

CS Explain the need for innovation skills

Innovation skills are the use of new technology, materials, or processes to improve on existing products and services, or how they are

produced and distributed.

Background: There are many more innovators than there are inventors. Innovators conceive of ways to improve on existing products,

processes, or distribution methods. Most innovators develop as a result of the competitive markets; one business tries to become better than

another business at something.

Being able to think outside the box and share ideas with your employer for the betterment of the company. Innovation skills are needed to

meet the quickly changing realities of the banking and finance sector.

SP Explain the principles of data analysis

ON Explain the purposes and importance of obtaining business credit

MN Explain the role of customer service in position/image

Students should comment that the actions of every employee should reflect the position or image that the business wants to occupy in the

mind of the consumer.

Employees need to be made aware of the businesses position so that they can carry it out in every act of customer service. Effective

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customer service should reinforce the product image.

Hospitality industry sales are based on corporate image and reputation. Newly established small hotels need to establish their image and

reputation by providing additional services and amenities not possible in larger establishments

Excellent customer service and the accommodation of customer needs will increase the positive image of the hotel

Explain the role of customer service in positioning/image

Positioning is the process marketers use to determine how to best communicate their products’ attributes to their target customers based on

customer needs, competitive pressures, available communications channels and carefully crafted key messages. Positioning is finding a

niche, or competitive advantage for a company or product in the market place. One bad experience can undo all the marketing dollars spent

on an image, making customer service a key component in building a strong brand.

Customer service personnel are the first, and maybe only, contact with the company so it is essential for these employees to convey the brand

image and ensure that the customer’s experience is stellar. They can:

Present an attitude of valuing the customer and offering a consistently helpful, can-do service experience

Be consistently friendly and helpful in every means of communication (phone and online)

Build/pursue a professional personal and/or emotional connection to build loyalty

Be extremely well-informed about all aspects of the company and its products and services

Empower these personnel to ask for feedback, offer small thank you/incentive freebees, and, meet with them and listen to the information they

are getting from customers in order to offer more of what is desired.

CS Explain the role of promotion as a marketing function

Promotion is part of the marketing mix

Promotional mix includes personal selling, advertising, sales promotions and public relations/publicity

It is about promoting brand image and creating brand identity and loyalty, increasing awareness, and increasing sales

SP Explain the role requirements of entrepreneurs and owners

ON Explain tools used by entrepreneurs for venture planning

SP Explain types of advertising media

Nine types of advertising media available to an advertiser are: (1) direct mail (2) newspapers and magazines (3) radio advertising (4)

television advertising (5) film advertising (6) outdoor advertising (7) window display (8) fairs and exhibition and (9) specially advertising

The student may make mention of any of the above and comment on the effectiveness for this product, as well as the costs involved.

CS Explain types of business ownership.

There are essentially 4 types of business ownership: sole proprietorship, partnership, corporation and co-operative.

Sole Proprietor – you are the sole owner, and fully responsible for all debts and obligations related to your business. All profits are yours

to keep. Because you are personally liable, a creditor can make a claim against your personal assets as well as your business assets in

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order to satisfy any debts.

Advantages:

Easy and inexpensive to register

Regulatory burden is generally light

You have direct control of decision making

Minimal working capital required for start-up

Some tax advantages if your business is not doing well (for example, deducting your losses from your personal income, and a lower

tax bracket when profits are low)

All profits go to you directly

Disadvantages:

Unlimited liability (if you have business debts, claims can be made against your personal assets to pay them off)

Income is taxable at your personal rate and, if your business is profitable, this could put you in a higher tax bracket

Lack of continuity for your business if you are unavailable

Can be difficult to raise capital on your own

Partnership – A partnership is a non-incorporated business that is created between two or more people. In a partnership, your financial

resources are combined with those of your business partner(s), and put into the business. You and your partner(s) would then share in the

profits of the business according to any legal agreement you have drawn up.

In a general partnership, each partner is jointly liable for the debts of the partnership. In a limited partnership, a person can contribute to the

business without being involved in its operations. A limited liability partnership is usually only available to a group of professionals, such as

lawyers, accountants or doctors.

When establishing a partnership, you should have a partnership agreement in place. This is important because it establishes the terms

of the partnership and can help you avoid disputes later on. Hiring a lawyer or other legal professional to help you draw up a

partnership agreement will save you time and protect your interests.

Advantages:

Fairly easy and inexpensive to form a partnership

Start-up costs are shared equally with you and your partner(s)

Equal share in the management, profits and assets

Tax advantage — if income from the partnership is low or loses money (you and your partner(s) include your shares of the

partnership in your individual tax returns)

Disadvantages:

There is no legal difference between you and your business

Unlimited liability (if you have business debts, personal assets can be used to pay off the debt)

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Can be difficult to find a suitable partner

Possible development of conflict between you and your partner(s)

You are held financially responsible for business decisions made by your partner(s); for example, contracts that are broken

Corporation - Incorporation can be done at the federal or provincial/territorial level. When you incorporate your business, it is considered to

be a legal entity that is separate from its shareholders. As a shareholder of a corporation, you will not be personally liable for the debts,

obligations or acts of the corporation. It is always wise to seek legal advice before incorporating.

Advantages:

Limited liability

Ownership is transferable

Continuous existence

Separate legal entity

Easier to raise capital than it might be with other business structures

Possible tax advantage as taxes may be lower for an incorporated business

Disadvantages:

A corporation is closely regulated

More expensive to set up a corporation than other business forms

Extensive corporate records required, including documentation filed annually with the government

Possible conflict between shareholders and directors

You may be required to prove residency or citizenship of directors

Co-operative - A co-operative is owned and controlled by an association of members. It can be set up as a for-profit or as a not-for-profit

organization. This is the least common form of business, but can be appropriate in situations where a group of individuals or businesses decide

to pool their resources and provide access to common needs, such as the delivery of products or services, the sale of products or services,

employment, and more.

Advantages:

Owned and controlled by its members

Democratic control (one member, one vote)

Limited liability

Profit distribution

Disadvantages:

Longer decision-making process

Participation of all members is required in order to succeed

Possible conflict between members

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Extensive record keeping

Less incentive to invest additional capital

MN Explain ways to assess risk

ON File business tax returns

MN Forecast sales

MN Forecast sales for marketing plan

SU Foster “right” environment for employees

ON Generate venture ideas

SU Handle employee complaints and grievances

MN Identify and benchmark key performance indicators (e.g., dashboards, scorecards, etc.)

MN Identify business risks

ON Identify capital resources needed for the venture

SP Identify communications channels used in sales promotion

Marketing communications are the means by which firms attempt to inform, persuade, and remind consumers - directly or indirectly - about

the products and brands that they sell. Sales promotions are short-term incentives to encourage the purchase or sale of a product or service.

Sales promotion includes several communications activities that attempt to provide added value or incentives to consumers, wholesalers,

retailers, or other organizational customers to stimulate immediate sales. These efforts can attempt to stimulate product interest, trial, or

purchase. Examples of devices used in sales promotion include coupons, samples, premiums, point-of-purchase (POP) displays, contests,

rebates, and sweepstakes.

Personal communication channels - between two or more persons; It can be done face-to-face, or by a person to audience, over

telephone, or through post or couriers or through emails or through mobile messages

Non-personal communication channels - they include media, atmospheres, and events.

Media channels - include print media (newspaper, magazines, souvenirs, proceedings of conferences), broadcast media (radio,

television), display media (billboards, signs, posters) and electronic media (audiotape, videotape, videodisk).

Atmosphere - what firms create in their office environment. The office interiors and exteriors have a meaning to the potential buyers.

Events - occurrences designed to communicate particular messages to target audiences or audiences. Company arranged news

conferences, opening ceremonies of various kinds, and sponsorships of various events come under event communications channels.

CS Identify company’s brand promise

Brands are names, terms, designs, or symbols that distinguish a product from their competitors and they communicate features, benefits,

qualities and value. This company is new and currently has no brand promise or slogan.

Creatively and effectively using a company brand image and slogan will help build product recognition, customer loyalty and a positive

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corporate and product image.

The company’s brand promise is delivered through their brand name (the name of the company), their yet-too-be-developed slogan which

must direct their entire business philosophy and employee behaviour. Customers will come to have confidence in the product quality,

the delivery and the company’s social responsibility based on the brand and associated brand promise.

MN Identify company’s unique selling proposition

In general terms, the Unique Selling Position is described as:

The key to effective selling in this situation is what advertising and marketing professionals call a "unique selling proposition" (USP).

Unless you can pinpoint what makes your business unique in a world of homogeneous competitors, you cannot target your sales efforts

successfully. Pinpointing your USP requires some hard soul-searching and creativity.

One way to start is to analyze how other companies use their USPs to their advantage. This requires careful analysis of other companies'

ads and marketing messages. If you analyze what they say they sell, not just their product or service characteristics, you can learn a great

deal about how companies distinguish themselves from competitors.

Identify internal and external service standards

The participant must first show an understanding and explain the difference between the internal and external customer. An internal customer

can be someone that works within the same department or even another position, and the external customer is the individual/guest who is

buying from the company or using the company’s services. It is important to note that both internal and external are based on the needs and

expectations of the customers.

Internal service standards may include:

Treating employees with respect

Lead by example and be true to your word

Create a team atmosphere by ensuring that everyone is motivated to give 100%

External standards may include:

Being professional, courteous and treating customers with respect

Showing empathy and ensuring customers feel understood

Create unconditional loyalty by ensuring memorable experiences that will result in having customers feel the need to return.

MN Identify market segments

MN Identify potential safety issues

MN Identify potential security issues

Identify project benefit and costs.

Do costs outweigh benefit derived from it, i.e. is increase in revenue greater than increase in costs

Typical benefits: cost saving, better training, more flexibility, better quality, better performance, more efficiencies, better

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motivation/morale, reduced redundancies, better communication and teamwork, reduced risks

Take into account non-financial benefits (greater customer service, better reputation, etc.) and costs (opportunity cost, etc.)

ON Identify risks associated with obtaining business credit

SP Identify the basic torts relating to business enterprises

SP Identify the factors that impact governance structures

CS Identify the impact of small business/entrepreneurship on market economies

SP Identify types of public-relations activities

Participants should address that public-relations is a means of communicating with the target market that is mutually beneficial and can

include promotional materials that can lend itself to a strong public image. Public-relations activities may include helping the public to

understand the company and its products/services. Participant’s suggested activities may vary.

Some of the types of public relations activities that the participant might mention are:

• Sponsorship and philanthropy of product, sports, cultural or charitable events

• Awarding scholarships, and donations

• Lobbying

• Internal communication to employees through newsletters, posters, payroll stuffers, etc.

• External communication to mass media and social media by using pamphlets, brochures, blogs, vlogs (video blogs), YouTube

channels, etc.

• Special Events – the use of a project, program, action or happening, generally involving public participation, to meet overall goals to

obtain publicity or other exposure

• creating news releases (an announcement that a company sends to the news media)

Interpret financial statements

Answers will vary for this section. Students should be evaluated on the concepts and principles involved in financial statement analysis

Fundamental analysis that should be given are questions pertaining to profitability and repayment of debt

Basically, the income statement shows how much money the company generated (revenue), how much it spent (expenses) and the

difference between the two (profit) over a certain time period.

The income statement lets investors know how well the company’s business is performing - or, basically, whether or not the company is

making money.

Cost of goods sold is the expense most directly involved in creating revenue. It represents the costs of producing or purchasing the goods

or services sold by the company.

Companies with high gross margins will have a lot of money left over to spend on other business operations, such as R&D or marketing.

So be on the lookout for downward trends in the gross margin rate over time. This is a telltale sign of future problems facing the bottom

line. When cost of goods sold rises rapidly, they are likely to lower gross profit margins - unless, of course, the company can pass these

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costs onto customers in the form of higher prices.

High operating margins can mean the company has effective control of costs, or that sales are increasing faster than operating costs.

Operating profit also gives investors an opportunity to do profit-margin comparisons between companies that do not issue a separate

disclosure of their cost of goods sold figures (which are needed to do gross margin analysis).

Operating profit measures how much cash the business throws off, and some consider it a more reliable measure of profitability since it is

harder to manipulate with accounting tricks than net earnings.

When a company has a high profit margin, it usually means that it also has one or more advantages over its competition. Companies with

high net profit margins have a bigger cushion to protect themselves during the hard times. Companies with low profit margins can get

wiped out in a downturn. And companies with profit margins reflecting a competitive advantage are able to improve their market share

during the hard times - leaving them even better positioned when things improve again.

A common profitability ratio is:

Net Income

Profit Margin = -----------------

Sales

SP Interpret statistical findings

The purpose of analysing data is to obtain usable, useful information. To do this, it is important to determine WHAT we want analysed so

that the correct data is collected. To find meaning in large amounts of data, data is grouped and summarized, and/or statistically analyzed

(mean, median, mode, standards of deviation, frequency distributions, t-tests, regression, ANOVA, etc.)

Interpretation is the process of attaching meaning to the collected information and determining the conclusions, significance, and implications

of the findings. Patterns and relationships within the data are gleaned. The same data can be interpreted in different ways so to garner other

interpretations discuss the data with stakeholders and consider the data from various perspectives. Think beyond the data but don’t stray too

far. Focus on outlying data or data that seems to be the exception, as surprising, contradictory or puzzling data can lead to useful insights.

Limitations must be disclosed with honesty.

Students will reiterate the statistics they feel are pertinent in their analysis.

SU Interview job applicants

MN Leverage business relationships

SP Leverage personality types in business situations

SU Maintain human resources records

ON Make critical decisions regarding acceptance of bank cards

CS Make decisions

Students may select any of the choices available. Ensure that students explain WHY they have selected the given alternative

Making a good informed decision is not that different to sitting on a jury – all reasonable doubt has to be removed before you can pass a

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verdict one way or the other. Thankfully, though, corporate decisions are seldom a matter of life or death!

Don’t judge a book by its cover - You may be someone who’s big on first impressions when you meet people but you can’t let the same

thought process influence your decision-making. If on first hearing an idea strikes you as a really good one, you may well be correct, but you

mustn’t allow that first reaction to influence your ability to objectively weigh the cons as well as all the pros when they are presented.

Do your homework - Just because no significant cons are presented it doesn’t mean they don’t exist, so get someone on to digging them up

and evaluating them while you still have the time – discovering them after you’ve launched the deal doesn’t do you any favours. Insisting that

this homework is conducted becomes doubly important if and when everyone is unanimously in favour of going ahead with the project.

Nothing is perfect, so work hard at uncovering whatever hidden warts the thing might have and by removing them you’ll only make it better

still.

Avoid making decisions in isolation - Every decision has some degree of impact on your ability to adopt other future opportunities in what

the experts call ‘the decision stream’. This one may be a ‘too good to miss’ opportunity but how will it affect other projects or priorities and, if

now is not the best time to do it, what risks if any are there in putting the thing on hold for an agreed period of time? If you cannot manage

this project in addition to another that’s waiting in the wings, which one gets the nod and why?

Do everything you can to protect the downside - All wise investors go to great lengths to do this with their stock portfolios and when

setting up a new business you should try to employ the same strategies.

Give it time - If you have the time to use the ‘orchestrated procrastination’ approach then do so. Without getting into the ‘paralysis by

analysis’ mode, doing more rather than less homework on a project is seldom a bad thing. While looking at it more deeply you may find better

alternatives or the marketplace may change.

Making smart informed decisions is why leaders get paid the big bucks. There is really no science to getting it right every time which is why

(unfortunately) decision-making is not a process that can be programmed to come in ‘just in time’ across the board.

MN Monitor business's profitability

SP Monitor internal records for business information

Proper inventory control is necessary to prevent loss.

Inventory is an asset of the business that needs to be protected.

Internal records provide the history of the business which helps to predict and plan for the future.

Information is the foundation of control

The emails and phone calls should be monitored. The results should be communicated to the employees that are not adhering to the

policy and their managers. Employees that are not following the policy should be disciplined. This would entail being warned

verbally once, written up at the second offense, suspended without pay at the third and fired at the fourth offense. This process may

vary based on how the employees deal with these steps.

Employees that adhere to the new policy should be acknowledged.

This is a company that makes money by dealing with secure credit card information. All of the internal records (beyond emails and

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phone calls) should be monitored on a continual basis.

MN Monitor progress in achieving organizational goals

MN Negotiate lease or purchase of facility

MN Negotiate service and maintenance contracts

ON Obtain insurance coverage

SP Persuade others

Is the student convincing

Are they able to back up their decision with facts from the case

Convincing – do presenters believe their own role

Consistent ideas

Plan product mix

In the case of a newly established, independently owned, fast food restaurant, the owner has already decided on the main categories of the

product mix. Our job is to suggest the specific items. The main thing to keep in mind is that we are not selling a variety of different items,

but rather a selection and collection of items that reinforce the image of healthy eating. Even the items we list on our menu can include terms

like “low fat”, “diet”, “low calorie”, etc. The image is very important (we want to sell the sizzle, not the steak). The conditions established

by the owner are to help reduce food waste. The general food categories have already been provided (fast, fresh sandwiches and soups, low-

fat alternatives, some sides and beverages). Most of the customers would likely be people with average to higher incomes that have the

ability as well as the desire to pay a little more in order to get what they want. This suggests we should try and get more “upscale” items.

This is more likely with the soups. An example would be to have something like “Butternut Squash with Cinnamon”, instead of something

that sounds plainer.

MN Prepare cash flow statements

Calculate the amount of cash in, cash out and balance based on the transactions provided

Values listed in the judge’s instructions

MN Prepare complex written reports

SU Recognize/reward others for their efforts and contributions

MN Select and apply metrics for measuring organizational success

SU Select and hire new employees

MN Select channels of distribution

A channel of distribution is the road that a product or service takes from production to end user. Products and services may use direct or

indirect distribution channels to arrive to a customer.

Direct distribution is when the producer sells the product to the end user. Indirect distribution involves one or more intermediaries who

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aid in moving the product from producer to end user. Factors such as whether it is a consumer or industrial product, the cost and size of

the product, or the uniqueness of the product, affect what channel of distribution is selected.

ON Select form of business ownership

ON Select sources to finance venture creation/start-up

Sources of financing include: self (credit cards, savings, investments), friends/family, venture capitalists, crowdfunding, charter or secondary

banks and credit unions, angel investors.

The selection of a source of financing depends on the amount required, how much outside experience the venture needs, how open the

entrepreneur is to sharing decision-making and profits, whether any sales have been proven to date, whether there are assets to pledge as

collateral, what the cost of borrowing is and duration of the loan, how much of the company costs are fixed vs variable, and what the long-

term market expectations are.

Debt vs equity financing – debt is borrowing money and paying interest; equity is ownership in the business, having a say in its operations,

and a claim against earnings. Generally, the more risky the venture, the more heavily equity financed it will be because it can pay dividends

when money is available.

Students should discuss and select their source of financing.

MN Select target market

SP Select vendors

Set your criteria. ...

Define your process. ...

Call for bids. ...

Evaluate the bid submissions. ...

Monitor the supplier performance.

Vendors/suppliers must provide:

Reliability

Provide quality

Value for money (strike between cost, reliability, quality and service)

Strong service and clear communication

Financial security (check their credit to ensure they won’t go out of business)

A partnership approach - You want your suppliers to acknowledge how important your business is to them, so they make every effort

to provide the best service possible. And you're more likely to create this response by showing your supplier how important they are

to your business.

You can find suppliers through a variety of channels:

Recommendations - ask friends and business acquaintances

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Directories

Trade associations

Business advisors

Exhibitions

Trade press

Make sure you know what you need. Don't be tempted by sales pitches that don't match your requirements. Understand the difference to your

business between a strategic supplier, who provides goods or services that are essential to your business - such as high-value raw materials -

and non-strategic suppliers who provide low-value supplies such as office stationery. You will need to spend much more time selecting and

managing the former group than the latter.

Spend time on research

Ask around

Credit check potential suppliers

Price isn't everything - reliability and speed, for example

Agree on service levels before you start

Don't buy from too many suppliers - it will be easier for you to manage - and probably more cost-effective - if you limit the number of

sources you buy from. This is particularly the case with low value-added suppliers.

...but don't have just a single supplier – so you have an alternative supply source ready to help in difficult times

SP Sell ideas to others

MN Set marketing goals and objectives

Need a clear understanding of the purpose. What is to be accomplished.

Must know what the measurable results will be. For example, the program will increase sales by 10%.

Most important is being able to measure the results. In other words, if sales do increase, how do we know it was because of our marketing

program and not some other factor?

MN Share best practices with key individuals and groups

MN Spot problems in/issues with financial statements

SU Supervise staff

MN Track performance of business plan

SU Train staff

MN Translate performance measures into financial outcomes

SP Translate research findings into actionable business recommendations

Student answers will depend on how they interpreted the statistics in the case. This author would buy space in a strip mall that already

attracts both Millennials and GenX/Boomers and cater products, prices, service, image, and advertising to these two groups, and, keep an eye

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on GenZ when they enter their mid-twenties.

MN Use budgets to control operations

ON Use components of business plan to define venture idea

ON Use creative problem-solving in business activities/decisions

Problem solving can be a rational or intuitive process. Regardless, there are six standard steps in getting from the problem to the solution:

Identify the problem (the cause, not the symptoms)

Search for alternatives (this step is the creative part – outside the box, brainstorm and record even the most offbeat solutions because there

can often be the kernel of a unique, differentiating solution; inside the box, ask what additional information is needed, what has been tried

in the past)

Weigh/assess the alternatives and consequences (the impact on the organization, effect on public relations, impact on employees, cost,

legalities, ethics)

Make a choice

Implement the choice

Evaluate the results, and if necessary, begin again

Students may know of methods of spurring creative thinking:

SWOT – Strengths, Weaknesses, Opportunities, Threats – assess the business within the economy

PEST – Political, Economic, Social, Technological – how these factors affect the business

Porter’s five forces – Supplier Power, Buyer Power, Competitive Rivalry, Threat of New Entrants, Threat of Substitute products –

assessing a business’s attractiveness and its likely profitability

De Bono’s Lateral Thinking – Approaching a problem from an outside perspective (e.g. an engineer’s take on the mechanisms of the

body)

Van Oech’s Whack on the Side of the Head – apply unrelated objects and metaphors to your situation to foster unique alternatives to your

problem

Reframing – looking at your problem as an opportunity instead

Mind Mapping – seeing the aspects of a problem and solution and how these ideas interconnect

Pursuing Insight – loading up on information and alternatives then allowing time for the subconscious to let ideas and solutions formulate

Creative Flow – being “in the zone” artistically where there’s freedom to become fully absorbed in the creative process

ON Use external resources to supplement entrepreneur's expertise

SP Use time-management skills

ON Verify the accuracy of business financial records

MN Write proposals

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