| Unresolved Issues
| Negative Aspects
* Cash injection * Opportunity to expand
| * Business management (Accounting) * Human resources (Staffing) * Imitability * Production costs
| * Control of firm * Restricts him as manager * Potential job loss in future
As Kootenay Bicycles does not have a mission and vision statement, the Company’s implied objectives are entrenched in the owner’s preferences and values. * Building frames is his passion, and he intends to keep bending metal into beautiful bikes and make his company a success.
* His goal is to ensure customer satisfaction as each bike is handcrafted to meet needs of its customers. Also, all frames and bikes are crafted with its own unique paint and artwork that show off Shackelton’s creative side. Angel Investor
Jacqi Alnan, the angel investor gave Shackelton two options which include either selling 50% to 100% of his company, where they intend to purchase the business and then sell them when they become larger (within two to four years). He has the opportunity to declare the price for the company, and if he makes a compelling case, they would inject more cash to fund expansion.
Although, there will be a considerable amount of cash inflow to pursue the expansion opportunity, if he sells 50% his company he would be restricted to staying on as manager, it does not fit his objectives since he is more interested in crafting bikes than managing his company. This is not a feasible alternative as he stands the chance of losing control of his firm and a potential job loss in the future if he sells 100% of his company and is made to sign a non-competition agreement that prevents him from working in the region for a certain period. or
* Plan to purchase 50% to 100% of company and sell them within two to four years. * With 50% he stays as manager, or he sells 100% he may lose his job in future, and sign a non-competition agreement. Positives
* Opportunity to name price for company
* Cash inflow for expansion
* Increased capacity to produce more bikes
* Lose ownership and control of firm
* Conflicts with owner’s preference by restricting him to manage bikes and not produce. * Potential job loss in future
Other Business issues and problems
Adequately handling orders and tubing: The debates and changes made to bike geometry in response to customer suggestions have been time consuming. Although this process has become faster in recent years as they can effectively make changes without compromising product quality. Another time consuming input is the cutting, handling of tubes and clamping them into jigs requires a lot of expertise.
Inspection time: Moreover, Shackelton insists on personally inspecting each bike, even the Entrée model. Bill Cullen is confident inspection is excessive because they are both experienced, and there is almost no waste/ mistakes in his welds and tubing. Moreover, he believes if the company wishes to produce more bikes, the excessive inspection process would have to be reduced and an extra staff should be added to complete the final assembly of the bikes.
Continuity: In the event of unforeseen circumstances, for example, If Shackelton dies, the business would be dissolved. Also, the business seems to be taking a toll on Bill since he has been working in the metal working industry for over 35 years. His health may be a factor to consider with regards to future operations, and he would need to hire more staff if the company expands. Marketing
Furthermore, Marketing has been minimal, and the company’s website is merely informational as Shackelton believes the bikes literally sell themselves. He may have to increase marketing if he intends to gain a foothold in the specialty-goods industry. *if we need to cut out things.. just cut out marketing and adequate handling of orders and tubing. APPENDIX...
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