Wildwood Lake Canoe Company
In January 2010, Allan Monroe was preparing for the April opening of the Wildwood Lake Canoe Company (WLC), a canoe manufacturing shop in St. Mary’s, Ontario. Monroe planned to build 30 canoes per year and he wondered what strategy and tactics would maximize his profits.
The initiative for WLC evolved from Monroe’s canoeing and woodworking hobbies. Monroe had canoed recreationally for more than 20 years and had built three canoes, which he sold after using them each for a season. Last spring, when Monroe decided to purchase a canoe for the first time, he suffered what he described as “sticker shock.” He could not believe the price and poor quality of retail canoes. Monroe saw an opportunity to build
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Monroe planned to produce 30 canoes in the first year and average one canoe every ten days, which would leave 65 days to buffer any unforeseen production delays[1]. Monroe would have to work seven days a week to maintain the production pace; however, he felt that he could handle a seven-day schedule for two to three years. Although the first canoes were scheduled to take almost 12 days to build, manufacturing time would gradually decrease. Monroe knew that he would have to invest in some equipment which would include an estimated $5,530 for power equipment and accessories; hand tools at $835; cutters, blades and bits at $800; benches, stands and cabinets for $1,600; forms and jigs for $160; and office equipment for $3,055. Monroe projected that variable costs would total $1,161 per canoe[2] and annual operating expenses would total $8,644[3].
The market for canoes followed the business cycle. In recessions, canoe sales suffered as many prospective customers stopped recreational spending. Sales of premium-priced canoes were especially vulnerable. The statistics showed that many companies were unable to survive the recent recession that began in 2008; however, industry sales had been strong and improving over the past year or so. Monroe was optimistic that growth would continue in the immediate future.
Promotion would consist of a website, advertisements in canoeing magazines and
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