FROGBOX: Integrated Choices - Case Study Example

FROGBOX: Integrated Choices Name: Course: Instructor: Date: FROGBOX: Integrated Choices Introduction FROGBOX is a company that was established in 2008. It was founded by Doug Burgoyne and Trevor McCaw. The founding was driven by the need to provide environmentally friendly options for the American people who were moving from a location to another. The first location was in Vancouver but the company has grown and expanded and has locations in United States, Canada and in North America. The main products that the company offers are reusable plastic boxes, reusable plastic wardrobes, moving dollies and recyclable. This business decision was a solution to the fact that moving people bought cardboard boxes that had negative impacts on the environment (FROGBOX). Environmental drivers for FROGBOX To understand the environmental drivers it is important to know the problem that the two co-founders hoped to solve as they started the business. Whenever a person moved they had to buy several card boxes using hundreds of dollars. After the expensive purchase, they had to rebuild the boxes, pack goods into them and after moving they unpacked and were left with a pile of cardboard boxes that could not be used again. The cardboard boxes became useless and sources of dirt and stench depending on what they had carried. The corrugated boxes in 1990 contributed more than 12% of national waste (DuPont 2012). Once a cardboard box is used it could not be reused but was recycled. It is important to note that some of these were poorly disposed in dumpsters which were polluting the environment. The recycling process was a good alternative but presented its own disadvantages. According to DuPont (2012), the recycling process is a form of pollution because it generates harmful chemicals and emissions into the environment. The recycling process of paper requires a lot of water and energy. It is reported that the paper industry consumed about 11.5% of total industrial energy and was the largest consumer of industrial water (Lowe, 2012). In addition to that the boxes can only be recycled about six times after which the cellulose fibers in the boxes turns into sludge which requires the addition of virgin fibers to remake a good box. This sludge is then decomposed in a process that emits methane which is a greenhouse gas that enhances global warming. This sludge and chemicals used in the recycling process also reached water sources through the ground and hence endangering aquatic and wildlife habitats. The decision by the co-founders to use plastic products that were reusable in place of card board boxes presented an environmentally sensitive solution to the pollution problems. It also avoided using print media during marketing to reduce environmental pollution. To enhance the environmental impact of the organization, FROGBOX used biodiesel in the delivery trucks and ensured that it minimized distance covered through optimizing delivery routes. . It also used plastic boxes made from High Density Poly-Ethylene (HDPE) which is easily recycled into household items and other useful plastic products. In the pricing options that customers reviewed before ordering services, there was an allowance to choose between new plastic boxes and recycled boxes. Reuse is a method of reducing pollution. The company had committed one percent of its revenue a frog habit restoration. FROGBOX Competition It will inappropriate to say that FROGBOX faced no competition but it is true that it was in an attractive industry. In the report by Bigus (2013), several companies that had businesses that were similar to FROGBOX have been mentioned. It is stated that the competition came from most companies in the moving industry. They included small groups that rented boxes locally, companies that sold moving supplies and companies that were involved directly in the moving by renting out trucks or helped companies to move. Examples of these companies include Rentacrate which rented plastic boxes that were reusable to companies that were in the moving business. It was well established in several areas and was a threat. Rent-A-Green box was also a rival company. It rented out reusable plastic boxes. Although it was just starting up, it was a strong opponent as it did exactly what FROGBOX was doing. A different rival was Say No to Boxes which was a small company. It was not a significant threat but it had must have developed a market base in its location. Additional competition came from retail stores that moving people bought card board boxes from. Therefore, the company had competition from the beginning. Diamond strategy model The diamond model was one method that was aimed at giving clarifications on business strategy. In the report Hambrick et al (2001), report that most businesses do not understand what strategy is and with the aim of informing them on strategy they came up with the diamond model. The model has five elements of strategy. These elements include economic logic, staging, differentiators, vehicles and arena. The vehicle defined how a business planned on achieving its goals. These included factors like internal developments, franchising and acquisition. The arena meant areas that a business planned to be active in. this included location, market areas, products and technologies that would e used. The differentiators were used to determine how a business will stand out or win above its competitors. This includes methods such as good client relationship .the economic logic is the most significant part of the strategy; it defines how to generate profits. The staging involved determining the right speed and sequence of moves the company will make in achieving its goals. This includes the speed of expansion and order of planned events and initiatives. Diamond strategy model in FROGBOX In the company some of the five strategies of the diamond are being used while others were not. In terms of arena, the co-founders of the company had clear objectives on what products they were to sell. The company was clear on renting out plastic boxes that were to be used when moving. The goal of the co-founder was to expand the company and dominate Canadian moving market. The co-founders started in Vancouver but wanted to expand the business to many geographical areas. In addition to that the company had a website where customers could request the boxes to be delivered then payment was done on delivery. In terms of vehicles, the company started in the garage of its cofounder but this situation changed when the business started to grow. In its expansion process, the company was involved in franchising. This involved opening a branch in a location and franchising the branch to other organizations. In the first franchise with Jeff (2011), there was more than 100% increase in revenue in five years. Franchising was an important tool in increasing revenue. The franchising method had helped the company to expand into 17 Canadian cities and 5 American states (Jensen 2012). In terms of speed, the co-founders could not predict how the business will succeed and hence did not have a clear plan of expansion when they were starting. In 2012, as reported by Jensen (2012), the chief executive officer of the company stated that the company’s goal was to have the company in more than 100 United States cities. This was a goal but it does not state the sequence of initiatives that will be used to achieve the goal and how fast it planned to expand. It is clear that the company had not set timelines on the expansion. In terms of differentiators, the company had done a lot of things to ensure that they were on top of their rivals and competitors. Its three main objectives were to have superior customer service, product reliability and operational effectiveness. One of these methods was packing which involved packing FROGBOX delivery trucks at strategic positions in highly visible areas. These trucks were covered in highly attractive graphic designs. During the founding, the branding of the company was one of the factors that would give the company an edge above its competitors (Bigus, 2013). To enhance customer awareness, the company used available technology. It had a website that customers could access to make orders or learn about the company. It was also involved in internet marketing through Google Ads. It also sought services a form to have a Search Engine Optimization which made it to be among the top answers when customers used search engines to find moving boxes. The company also used social networking sites like Facebook and twitter to make customers aware of it and to use it to receive and review customer feedback. The last segment is the economic logic. FROGBOX was focused in enhancing the revenue by making more orders so as to increase revenue. The only price difference was on the cost of new plastic boxes which was due to the fact that they were of better quality. The main agenda of the company was to have products and services that were affordable in comparison to the cardboard boxes. Therefore, it decided on boxes that were affordable. Due to his, the company economic plan could not be based on the price. It was instead focused on making more rentals. The economic logic was to improve rentals. This was achieved through relationships with other companies in the same industry which would lead to win-win situations. These partnerships increased the number of customers that the company had as well as the number of contracts that they could get. In order to increase the revenue more, the company ventured in alternative business like paper shredding that required very little input. The [participation of the co-founder in Dragons den was very helpful as it allowed the company to get more investors. This would enhance the expansion process (Jensen 2012). Proposed strategy for Frogbox This is a proposal on an effective strategy that will benefit FROGBOX based on the five elements of strategy explained by Hambrick et al (2001). In consideration to Arena, the company is focused on the areas of North America, United States and Canada. It plans on expanding this coverage to about 100 locations in the United States cities. The moving company’s main product is reusable plastic boxes that are used when moving from a location to another. A proposal is the addition of moving trucks so that some of these may be used in the moving and not delivering only. This additional service will improve revenue generated. Since franchising is presenting a challenge to the company, it is recommended that franchises are avoided and instead a more corporate system is put in place. This will ensure that the managers of branches of FROGBOX are fully devoted to the success of the company. It will also allow the top management team to be in control of all business processes through the managers in different locations. In addition to this, the company should be involved in more strategic relationships and partnerships which play a big role in improving the revenue generated. In terms of staging, the company should outline a clear timeline on when it plans to open more offi9ces. Although Burgoyne had a clear goal of having offices in 100 United States offices by 2016, it is important that there is a plan that is outlined to ensure that it is achieved. This will involve goals that are set for a specific time such as which offices will be opened in 2014 and in which cities and the decision on the franchiser if it will run by a franchiser. This method enhances the staging process (Jensen, 2012). The differentiators of the company such as branding, online advertisements and superior customer service have been very effective in ensuring that the company is ahead of its competitors. However, the decision to have branch offices that are controlled by the head offices instead of franchisers may will require the company to invest in an electronic system that will be in control of all the company activities, personnel, revenues and payments. The system will ease the expansion process compared to expansion when a franchiser is involved (Davenport et al, 1990) The information system will be accessed through portals. For example, the human resource team can only access employee and applicant’s information while managers can only access details of their respective branches and the top management team will access all the details required when analyzing the company. This method will ensure that loses that are encountered by franchisers that are not fully devoted to FROGBOX will be eliminated and consequently more revenue is generated. It will also help the senior management team to track performance of the branches effectively (Thong, 1999). Conclusion FROGBOX is a company that was started to solve a problem and has continually grown since then. Its main goals are environmental conservation and superior customer care so as to improve revenues of the company. The success of the company is highly dependent on the business strategy that it has especially the economic logic. The current decision s by the company to get involved in franchising, partnerships, develop strategic relationships and work with other investors are all ways that will improve company revenue. The diamond model is important in coming up with a strategy and will increase the revenues. List of references Bigus, B., 2013. Frogbox. The University of West Ontario. Davenport, T. H., & Short, J. E. 1990. The new industrial engineering: information technology and business process redesign. Sloan management review, 31(4). DuPont, M., 2012. Reuse vs. Recycling. [Online] Available at [Accessed 11 Sept 2014]. FROGBOX, 2013. About Us. [Online]. Available at < http://frogbox.com/about-us>[Accessed 10 Sept 2014]. Hambrick, C.D. & Fredrickson, J.W, 2001. Are you sure you have a strategy? Briarcliff Manor, United States. Jensen, C. (2012). Frogbox Founder says case study rewarding experience. [Online] Available at [Accessed 11 Sept 2014]. Lowe, L., 2012. It’s not easy being corrugated. Available at [Accessed 11 Sept 2014]. Jeff, H., 2011. Saved my business by investing in a startup. [Online] Available at [Accessed 11 Sept 2014]. Thong, J. Y., 1999. An integrated model of information systems adoption in small businesses. Journal of management information systems, 15(4), 187-214 Read More