Schoolhouse lane Essays

Submitted By longhoang65
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Pages: 8
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Long Hoang
Professor Tevfic Dalgic
BPS 6310 – 0I1
April 19, 2013
Case Analysis: Schoolhouse Lane Estates

SCHOOLHOUSE LANE ESTATES’ ENVIRONMENTAL THREAT AND OPPORTUNITY PROFILE
Environmental Factors
Impact of Factor (A)
-5 Strongly negative
0 Neutral
+5 Strongly positive
-5----------0----------+5
Importance of factor (B)
0 Unimportant
+10 Very important
0--------------------10
Combined score as opportunity (+) or threat (-)
(A x B) = + or -
Economic
-3
10
-30
Political
-1
2
-2
Social
-1
3
-3
Technological
0
2
0
Competitive
-1
3
-3
Geography
-1
2
-2

Combined Score
-40

Economic
The economy affects all industries, from suppliers of raw materials to manufacturers of finished goods and services, as well as all organizations in the service, wholesale, retail, government, and nonprofit sectors. Schoolhouse Lane Estates needed an equity investment of approximately $2.4 million. However, the equity in the business was currently low and Jane would not be willing to give up control over her business. According to Nick, Jan’s brother who is a financial consultant, although investment returns are low for fixed-income instruments, venture capital is still expensive. Nick could offer Jan a 10-year convertible note with interest at 6 percent. Schoolhouse Lane Estates needed permanent equity capital to sustain its growth plans. While the longer-term outlook for the industry was quite favorable, the trading conditions for wine over the next two years (2009 and 2010) were not clear. Jan was not able to add to her personal investment in the business. A large amount of the family’s assets were already tied up in the business. Even given the most optimistic forecast of revenue growth rate at 20 percent for Schoolhouse Lane Estates and Nick’s “cheapest” financing alternative, Jan would lose more than one-half ownership in the company. However, Jan might never get an opportunity to purchase the property again if it was bought by another winery.
Political
Political processes and legislation influence environmental regulations with which industries must comply. New York remained the nation’s largest wine-producing state that did not allow direct shipments. Current law prohibited wine producers from shipping wine directly to consumers in other states. Thirteen states already had reciprocal wine shipment law enabling out-of-state shipments of wine, and eight had laws allowing the direct shipment of wine to customers. As defined by the truth-in-labeling standards of the Bureau of Alcohol, Tobacco and Firearms, one varietal – the name of a single grape – had to be used if more than 75 percent of the wine was derived from grapes of that variety and if the entire 75 percent was grown in the labeled appellation of origin. Schoolhouse Lane Estates was not an exception to this regulation. Social
Social forces influence the values, beliefs, and lifestyles of a society. The consumption of wine produced domestically, as well as imports, grew steadily during 1995 – 2007 period, but its volume remained significantly smaller, at less than 4 percent of soft-drink volume in 2007. Reflecting the changing tastes and preferences of the American consumer, the growth performance of table wine sales by color also underwent dramatic changes. This changing tastes of customers translated into difficult anticipation and forecasting of demand for Schoolhouse Lane Estates.
Table Wine Volume Share by Color (in U.S. supermarkets)
Color
1991
1995
2002
2003
2006
2007
Red
17%
25%
39%
40%
43%
43%
White
49
41
40
40
42
42
Blush/rose
34
34
21
20
16
15
Total
100%
100%
100%
100%
100%
100%

Technological Developments in technology lead to new products and services and improve how they are produced and delivered to the end user. Innovations can create entirely new industries and alter the boundaries of existing industries. In the fall of the year, usually late September to early November,
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