Catfish Creek

Topics: Variable cost, Costs, Total cost Pages: 6 (1500 words) Published: November 30, 2011
Executive Summary
Meet Steve Davidson. For more than 20 years, Steve has been an avid recreational canoer. In addition, Steve also acquired wood working skills during 15 of his 20 years canoeing, and for the past 10 years Steve has combined his love for canoeing with his wood working abilities. This combination of hobby and skills resulted in the design and construction of three canoes which Steve sold after using each for one season. During an attempt to purchase a canoe, Steve was aghast at the price and quality of retail canoes. Steve used his disappointment as an opportunity to embark on a business venture: he will build handcrafted canoes fashioned from cedar; and sell them for a premium. Steve enlisted the help of the faculty and graduates of the Richard Ivey School of Business, at the University of Western Ontario, by enrolling in the 12-week business program at the Entrepreneurial Manufacturing Generator (EMG) in St. Thomas. After successful completion of the business course, Steve proceeded to rent workspace from EMG to commence his business venture. This location gave Steve access not only to the EMG workshop, but also to instructors and a variety of business resources. Armed with these resources, Steve set out to open his business in August of 1998 with the plan of completing 30 canoes annually. The following analysis details Steve’s marketing and pricing strategies for his business, Catfish Creek Canoe Company (CCC), and his estimated income and expenses for 1998.

SWOT Analysis
Conducting a SWOT analysis will be helpful to Steve in determining whether it would be profitable to enter the canoe building industry. In order to make such a decision; Steve would need to examine his strengths, weaknesses, opportunities and threats. Strengths:

• Experience and Skills: Steve has over 20 years of canoeing experience and 15 years of woodworking experience; a combination of which will contribute positively to the construction of handcrafted canoes. • Networking Alliance: Completing the 12-week program provided the resources and support network for Steve’s start-up business. • Marketing: The use of the World Wide Web will make CCC visible to anyone with internet access. Weaknesses:

• Staff: The lack of staff means that Steve will have to take time away from building to take orders and ship completed canoes. • Sole Craftsman: By crafting the canoes himself, Steve could fall behind schedule if he becomes ill and cannot work for a period of time; or if he encounters any other mishaps. • Direct Labor Cost: CCC did not detail its direct labor cost per canoe; hence, this omission can distort the true total cost of the canoe, which will subsequently affect other totals. Opportunities:

• Branding Strategy: Authenticating its canoes leads to branding which will distinguish CCC’s canoes from those of other manufacturers. Brand-conscious customers will associate CCC’s canoes with quality and uniqueness. • CCC may be able to move into providing other complementary water sport products to its loyal customers. • Target Market: Professionals with above-average income are usually attracted to higher quality products which are usually higher priced. Threats:

• Other Manufacturers: The market for canoes has already been established; hence, CCC may experience setbacks as a new entrant. • Economic Effects: The market for higher-end canoes is vulnerable to recession. • Other Leisure Activities: Person may choose to participate in other activities instead of water sports.

Marketing Strategy
CCC’s main mode of promotion will be the use of the World Wide Web. This strategy will make the company visible to anyone with internet access; hence, increasing its potential customer base. In addition, advertising in the main canoeing magazine will provide access to canoeing enthusiasts. Also, the use of press releases to communicate the advent of new models to industry and recreational associations will assist CCC with its...
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