How far should Courtney and Carter Reum go in their efforts to be “green”?
Going green is one of the most effective strategies that organizations use to gain a competitive edge. It involves using energy, water, and other resources efficiently, with the aim of reducing the impact of organizations’ operations on human health and the natural environment. In reference to the case study, it is obvious that Courtney and Carter Reum are aware of the benefits of going green. For instance, they incorporated the green color in their brand logo.
They changed the design of the VeeV bottle by keeping it simple to promote “going green.” This is confirmed by the use of a glass frosting method, which uses only 10 gallons of water, instead of thousands. Furthermore, they rewarded their employees basing on green measures.
Courtney and Carter Reum should employ other strategies in their efforts to be “green.” They should develop groundbreaking technologies that promote sustainability and ensure that quality is observed at all stages of production. They need to train their employees on matters pertaining to eco-consciousness. Most importantly, they should employ an environmental marketing mix. This includes promotional tools such as the ISO 14001 and advertising campaigns for creating awareness on the ecosystem.
Producing environmentally friendly products (environmental-friendly products), as well as reducing costs and increasing profits (pricing strategies), should also be encouraged. The environmental marketing mix also includes environmental place strategies, whereby products are taken to consumers at the exact time of distribution. All these will help them achieve success in “going green.”
How should they split the equity of the new company? Defend your answer.
Basing on equity, Courtney and Carter should get 62.5% and 35%, respectively. This is premised on the contribution of each partner in the business. The remaining 2.5% is the stake that is claimed by the two. In a fair equity split, there are four dimensions that should be considered. Assuming that each dimension weighs 1, first, the decision should be made, basing on the origin of the idea. Courtney had the original idea of Veev liquor. However, Carter equally contributed to redefining the idea. Basing on this, Courtney and carter take 60% and 40% of the shares, respectively.
Capital contribution is the second dimension. Courtney raised 90% of the total start-up capital. The investors raised the remaining percentage. This implies that Courtney takes 0.9 of the total capital weight, and 0.1 is taken by the investors. Carter gets 0. The third dimension is the time committed by each partner. Both Courtney and Carter equally participate in the running of the business. Therefore, the equity should be split on a 50/50 basis. The last dimension is the opportunity cost or the sacrifice that each made. The Reums left their work to venture into the production of the Veev liquor. Therefore, the equity should be split on a 50/50 basis. This information is analyzed in the table below.
What grade would you give the Reums for the way they handled the first discoloration episode? Why?
The way the Reums handled the first discoloration episode was poor. They should not have accepted the discoloration process, which involved a large distillation-run in taking place without confirming the effect it had on the environment (oxidation effect). They should not have ignored the legal procedures pertaining to eco-consciousness. Their poor handling of the first discoloration episode made them face an immediate crisis, considering that they had taken thousands of VeeV in the target markets. Explaining to customers and winning them back would not be easy for the Reums.