ibc final book
DESCRIPTION
My junior year at OU I opted to take the IBC course. Throughout the semester we worked to develop and market a product, sell at football games and on campus and donated all proceeds to charity. This is the book that summed it all up completed by myself and 4 other group members of the 20-person company.TRANSCRIPT
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December 11, 2009
Dear Stakeholders,
It has truly been my honor to serve as President of Sooner Shades. From the beginning, Sooner Shades
has been a company that strives for excellence, pushes the limits, and seizes opportunities. We have
proved ourselves to be a strong organization that surpassed the expectations of others. There is no
doubt that our success is directly attributed to the talents and perseverance of the individuals who make
up this company.
Though we were sometimes met with adversity, Sooner Shades has always stood behind our product.
We wanted to create a spirit, a trend, a symbol, and an outlet for Sooner spirit, and we definitely
succeeded. Our sunglasses came in both red and white with a contrasting white or red “Boomer Sooner”
on each side. We wanted to do something simple and light, something that could be affordable because
of our current economy, and strived for instant gratification for our consumers. We knew we had
succeeded when every customer that purchased a pair of sunglasses at football games immediately put
them on and we were thrilled with our product’s visibility and presence at every game. Each pair of
sunglasses sold for $5.00, thus creating a profit margin of approximately $3.48 per pair, which allowed
us to maximize our profits whenever a product was sold.
The major benefactor for our success was First Fidelity Bank. After our formal loan proposal First Fidelity
Bank awarded a loan of $3,400.00 with 6.5% interest rate. Without their help our success could not have
been achieved. With the awarded loan, Sooner Shades was able to turn approximately $4,631.00 in
profit over the course of the semester. We will be donating the full amount to Ally’s House, which will
go directly to the children and their families. In addition, through our participation in diversionary play
at the Oklahoma City Children’s Medical Hospital, we have donated 524 hours to Camp Cavett.
Though our company members have been the driving force of our success, it was the help of our IBC
Faculty and Advisor that steered us down the right paths. We could not have been as effective and
diligent without their constant support and advice. It is our persistence and optimistic attitude when
facing challenges that has allowed us to not only learn how to function in a company but how to make
an impact in the lives of others. Every move we have made has been precise, accurate, and well thought
out ranging from our inventory estimates to our financial records. We set high, yet achievable goals and
have met every one of them. I am so proud of our accomplishments this semester because, as trite as it
sounds, we truly have changed lives while shading eyes.
Sincerely,
Jillian Kirkconnell President Sooner Shades
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Table of Contents
Letter to our Stakeholders .......................................................................................................................................... 1 Table of Contents ....................................................................................................................................................... 2 Our Mission ................................................................................................................................................................ 3 Our Philosophy ........................................................................................................................................................... 4 Our Marketing ............................................................................................................................................................ 5 -Product ...................................................................................................................................................................... 5 -Price ........................................................................................................................................................................... 6 -Promotion.................................................................................................................................................................. 6 -Place .......................................................................................................................................................................... 9 Our Operations ........................................................................................................................................................... 10 -Ordering Process ....................................................................................................................................................... 10 -Game Day Accounting Procedures ............................................................................................................................ 10 -Inventory Control ...................................................................................................................................................... 12 -Auditing ..................................................................................................................................................................... 12 Our Finances -Financial Control ........................................................................................................................................................ 13 -Loan Repayment ........................................................................................................................................................ 13 -Cash Inflows .............................................................................................................................................................. 13 -Cash Outflows............................................................................................................................................................ 13 -Accounting Procedures ............................................................................................................................................. 14 -Challenges Faced ....................................................................................................................................................... 14 -Financial Statements ................................................................................................................................................. 14 -Summary of Finances ................................................................................................................................................ 15 Our Services ................................................................................................................................................................ 16 -Camp Cavett .............................................................................................................................................................. 16 -Ally’s House ............................................................................................................................................................... 17 Appendices Appendix A……………………………………………..I Appendix B……………………………………………..II Appendix C……………………………………………..V Appendix D………………………………………..…..VI Appendix E………………………………………….…VII
Figures
Figure 1………………………………………………………3 Figure 1.1……………………………………………….…..3 Figure 1.2…………………………………………………...4 Figure 1.3……………………………………………………5 Figure 1.4……………………………………………………5 Figure 1.5…………………………………………………………..6 Figure 1.6…………………………………………………………..6 Figure 2……………………………………………………………..7 Figure 2.1…………………………………………………………..8 Figure 2.2…………………………………………………………..8 Figure 2.3…………………………………………………………..9 Figure 3…………………………………………………………….11 Figure 4……………………………………………………………..12 Figure 4.1…………………………………………………………..12 Figure 4.2…………………………………………………………..13
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Our Mission
Our mission is to develop a company that places an unparalleled
emphasis on integrity and ethics, endeavors to maintain the highest
levels of customer service, and concentrates on solid, traditional
business practices.
In addition we will strive, to the best of our abilities, to dedicate our
time and efforts in order to make a difference in the community.
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Our Philosophy
Sooner Shades aspires to foster growth, leadership, and cohesiveness as an organization.
We demand that all members act with respect, understanding, and the utmost integrity at all
times. Ethically sound business practices will take precedence over the entire process and form the base from which the company will be built. Teamwork, creativity, and communication will
be central to our successes as individuals as well as a group.
We pledge to handle any and all obstacles with maturity, flexibility, and creativity; displaying confidence in our ability to find a workable solution for any problem. We will invest ourselves
in the achievable outcome of offering a quality product to our consumers and noteworthy service to our selected charitable organization.
As a company, we are fully invested in the IBC program, in hopes of attaining valuable skills and
experiences that will propel us forward in our pursuit of excellence in IBC, as well as in our future endeavors.
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Marketing
Product
At the beginning of the semester, our company brainstormed potential products and came up
with more than 30 products including: coasters, coolers, sunglasses, snuggies, and grip-n-sips.
After discussing each product, we narrowed the list to three potential products: a beverage
holder, a set of coasters, and sunglasses, which we ultimately chose. Our intention was to offer
both red and white sunglasses with an OU logo on each side.
After deciding on our top products, we divided company members into three focus groups. The
purpose of the focus groups was to find out which product was the most appealing choice to
our target markets as well as to receive valuable feedback improved our products’ appeal. By
reviewing and discussing the results of the focus groups, our company recognized that
sunglasses and coasters were the most appealing to our target markets. We continued our
market research by conducting surveys for both of the products and performing SWOT analyses
based on the results. As a company, we reviewed the results and determined that OU
sunglasses were the most potentially successful product.
Our decision to make the sunglasses our final product stems from the fact that these 80’s style
sunglasses are vey popular among college students and cannot be found in other stores. The
sunglasses are also very useful for football games, tailgating, stocking-stuffers, and everyday
use. Survey results concluded that “Boomer” on one side and, “Sooner” on the opposite was
the favored choice. The OU Licensing department at the University gave us permission to use
these logos on the sunglasses. We were also able to find a manufacturer, ID Solutions, who was
already licensed through the University of Oklahoma, which greatly sped up the licensing
process.
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Price
After thorough research, Sooner Shades was able to implement an effective pricing strategy.
When choosing a price, we took the economy, our target market, and OU students into
consideration. Not only was this pricing strategy appealing to our target market, but it was also
effective. More details on the effectiveness of our price can be found in the finance section of
this handout.
Promotion
We discovered several target markets through our focus group research including OU students,
alumni, football fans, and those individuals who support our charitable organizations. We soon
realized that many promotional techniques were needed to catch the attention of these
groups.
Non-profit Organizations
One of the biggest contributors to our selling success was mentioning the non-profit
organizations that we are contributing to: Ally’s House and Camp Cavett. Both of these
organizations are very well known throughout Oklahoma and the Norman community. This
provided an even greater incentive for customers to purchase Sooner Shades.
Figure 1: Company Members Volunteering Figure 1.1: Lindsey Ogan Volunteering at OU Medical Center.
Recognizing that Sooner Shades may not appeal to everyone, the marketing department
provided customers with the option to buy a pair of sunglasses to be donated to children at the
OU Medical Children’s Hospital. Details on how many sunglasses were donated can be found in
the finance section.
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Online Promotions
To create a positive buzz for Sooner Shades before receiving the physical product, the
marketing department created a Facebook “fan page” for our company. The fan page consisted
of over 670 participating fans, provided information about the sunglasses, and was updated
throughout the semester with upcoming selling locations. The Facebook fan page can be seen
in Appendix B.
The Vice President of Information Technology also created the Sooner Shades website. The
website enabled Sooner Shades to give customers information about our company, the
charities we benefited, and even featured an online order form. The website was also updated
throughout the semester with upcoming selling locations.
Media Exposure
Sooner Shades obtained a large amount of media exposure this semester. We had an interview
on OU Nightly and our sunglasses could be seen on channels such as ABC, ESPN, and FSN during
the OU football games. Our sunglasses were also seen on CNBC’s, “Mad Money” with Jim
Cramer, when he filmed an episode at the University of Oklahoma.
Figure 1.2: OU Students at OU vs. Texas football game, on ABC, October 17, 2009.
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Print Promotions
Sooner Shades also received a lot of visibility this semester through stories in newspapers.
Sooner Shades was featured in an article in The Oklahoma Daily along with other IBC
companies. Oklahoma City’s largest newspaper, The Oklahoman, also contacted Sooner Shades
and featured our company in an article. These articles brought significant recognition to our
product and our company. The article in the Oklahoman can be seen in Appendix B.
Advertisements
Sooner Shades further promoted it’s product through the use of advertisements around
campus. Chalking the sidewalks was the most commonly used advertisement by Sooner Shades.
Company members continually chalked throughout the semester to advertise the upcoming
selling location for the week. A picture of the chalking can be seen below.
In addition to chalking, the marketing department advertised to students and faculty at the
University of Oklahoma by posting flyers around campus. The flyer can be seen in the image
below. It includes a picture of our product, the price, and the non-profit organizations that it
benefits. Sooner Shades also created a flyer and order form that was given to students of
Washington Elementary in Norman. Both of these can be seen in Appendix B.
Sooner Shades also advertised by hanging up a large banner while selling. The banner, along
with a display of our sunglasses attracted many customers to our selling location during the
crowded game days. A picture of the banner can be found in Appendix B.
A unique aspect of Sooner Shades was that it was very effective at promoting itself. By simply
wearing the sunglasses, customers effectively advertised our product to other people on
campus. Throughout the semester, people continually confronted company members because
they were interested in purchasing Sooner Shades that they claimed to see people wearing
around campus.
Figure 1.3: Company Members chalking on campus . Figure 1.4: Flyer distributed around campus.
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Place A good location is necessary when selling on campus during the week and even more important during OU home game days. During the first home game, Sooner Shades sold at the top of the South Oval in front of the Bizzell Library. To increase exposure to fans walking to the game, the game day selling location was moved to the intersection of Lindsey and Asp. This location immediately showed an increase in sales and customer interest. Sooner Shades used the South Oval location during the week, however, to sell to students walking around campus Lindsey and Asp also served as a great central location for company members that used personal selling techniques to sell. Some locations included private tailgates, Lloyd Noble RV tailgates, OU Alumni tailgates, Greek houses, and Campus Corner during OU home game days.
Figure 1.5: Company members selling on gameday. Figure 1.6: Company members selling on campus South Oval. Aside from game days, Sooner Shades created a campaign at Washington Elementary where flyers were placed in the students’ Thursday folders. The company also posted flyers in several University department buildings. Company teams also used personal selling to reach customers in the OU department buildings, a well as other potential customers on Campus Corner. The marketing department contacted retail stores that sell OU products such as Balfour and Xcetera for bulk orders. Additionally, our company sold on campus during Parent’s Weekend, Sooner Saturday, and University Sing. Company members also sold to family and friends in their respective hometowns over the Thanksgiving break. Some company members sold in their classrooms to professors and students, and at OU clubs and organizations such as the Pride of Oklahoma marching band.
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Operations
Ordering Process
Beginning Order
At the beginning of the semester, Sooner Shades decided to order 2,500 sunglasses, half red
and half white. ID Solutions offered us a price of $1.52 per unit. We were extremely happy with
this quote, which is why we decided to use this particular merchant.
After getting design approval from the University, the design was sent to our contact person at
ID Solutions. This is when we encountered the first problem. Somewhere a communication
error occurred and ID Solutions thought we wanted printing on only one side of the sunglasses
when in reality, we wanted it on both. Two-sided printing significantly increases the per-unit
cost. Through negotiations, we were able to get the original price we were quoted, even though
it should have been much higher. ID solutions generously agreed to donate the difference in
price to us, and they would use this as a tax write-off.
We encountered another problem when the supplier did not have enough white sunglasses to
fill our order of 1,250. To solve this in a pain-free way, we took all the white they had and got
the rest in red, ending up with 900 white and 1,600 red.
The sunglasses came individually pre-packaged in a small clear plastic bag, which we left and
simply added a label to. Office Max kindly donated both the labels themselves and the printing
costs for the labels. We also used bags donated to us by Ally’s House to carry around the
sunglasses when selling.
Figure 2: Inventory under game day tent
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Reordering
When our inventory started to get low enough to reorder, we looked at the amount of time left
and amount of opportunities there were left to get our sunglasses sold. After much
consideration, we as a company decided not to reorder. We came to the conclusion that our
initial order of 2,500 was a perfect amount. If we had ordered more sunglasses, our per-unit
cost would have been drastically higher than that of our initial order. Due to this reason, we
decided that the amount of money to be made was not worth the risk of having extra inventory
at the end of the semester.
Game Day Accounting Procedures
At the first football game, we attempted to keep a log sheet for people to check out inventory
to sell to tailgaters. We found this to be incredibly difficult and came up with a new system.
When an employee needed to check out sunglasses, they counted the amount they were taking
as well as the amount of change, and recorded it on the envelope. When they finished selling,
they checked the amount they had turned in against the amount they had checked out to make
sure the money matched the amount sold. All discrepancies were handled at that time. A list of
the sales of each individual company member can be seen in Appendix C.
Figure 2.1: Lauren Jackson and Brittany Vertin with Sooner fan. Figure 2.2: Company members selling on game day.
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Inventory Control
At the beginning of the semester, an operations committee member volunteered a spare room
in their house to store the inventory. We planned to have a log for each game day and all
receipts accounted for to make sure no money or inventory was missing. Although we carefully
planned procedures to maintain accuracy, our company realized that some certain measures
would change along the way and flexibility would be necessary. Our inventory remained secure
in the extra room, and a log was kept and signed by a member of the operations committee for
any inventory exchanges. When a company member checked out inventory, they had the
option of holding on to the sunglasses or checking them back in. Most people ended up
keeping their checked out sunglasses until they were sold.
Figure 2.3: Tyler LaFour selling on campus.
Audits
As planned, an audit was done each week with the VP of Operations, the VP of Finance, and a
few members of the operations committee. The members counted the amount of inventory,
looked over the check out log, and checked receipts and money against inventory remaining.
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Finances
Financial Control
Financial control measures were setup in three different ways: receipts, financial statements,
and correspondence with inventory. Receipts were required for each sale made by company
members. The required information on the receipts included seller’s name, total amount sold,
and the form of payment the customer used. Financial statements were also kept in order to
monitor the company’s finances. A balance sheet, income statement, and transaction log were
turned in at the end of each week, as well as statements at the end of each month. The
financial statements were then compared to the inventory to make sure each reflected the
correct amount of inventory. Teamwork between all of the different departments was
paramount in keeping the financial information current and accurate.
Loan Repayment
First Fidelity Bank provided Sooner Shades with a loan of $3,400.00 to finance our company.
We were able to repay the loan as well as the 6.5 % interest on the note in two amounts of
$1,721.49 and $1,709.21. Both of these payments were made ahead of schedule. The accrued
interest on our loan was $30.70.
Cash Inflows
Sooner Shades’ company members were required to bring all proceeds from sales as well as
receipts written to the VP of Finance. The money was then deposited each Monday,
Wednesday, and Friday after the company meeting. All deposit slips, receipts, and checks made
out to Sooner Shades from that deposit were filed for financial control purposes. The VP of
Finance and a finance committee member helped with deposits for higher efficiency.
Cash Outflows
All invoices were brought to the VP of Finance a week prior to the invoice due date. A check
request was then given to financial support services, and was later picked up for mail or
delivery. Company members covered minor expenses. The receipts for those purchases were
brought to the VP of Finance along with a Reimbursement sheet. A check was then cut to cover
the reimbursement costs. All receipts and reimbursements sheets were copied and filed for
financial control purposes.
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Accounting Procedures
Accrual based accounting principles were applied to our financial records. A balance sheet,
income statement, and transactions log were updated weekly. Monthly reports were also made
for IBC records. The VP of Finance maintained the financial statements and records.
Challenges Faced
Sooner Shades did not encounter any major problems with their financial control procedures.
Our finances remained accurate with the help of our strict control measures and with
suggestions from our company consultant. One minor problem that was evident throughout
the first part of the semester was filling out receipts. After the importance of receipts was
stressed to the company members, that problem was soon corrected. Financial activity became
more and more efficient as the semester went on.
Financial Statements
Income Statement
Sooner Shades Company
Income Statement-September 28, 2009 - December 11, 2009
Income Expense Sales $ 12,012.00 Cost of Goods Sold $ 3,815.00 Sales Tax (8.25%) $ 983.80 Gross Profit $ 7,213.20 University Overhead $ 360.36 IBC Overhead $ 432.79 Office Supplies $ 395.53 Advertising Supplies $ 305.22 Selling Permits $ 256.00 Credit Card Expense $ 1.17 Credit Card Terminal $ 100.00 Rent $ 200.00 Consultant Fee $ 300.00 Interest Expense $ 30.70 IBC Closing Reserve $ 200.00
Total Expenses $ 2,581.77 Net Income $ 4,631.43
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Balance Sheet
Summary of Finances
Overall, the finance department of our company was run efficiently and effectively. Strict
control procedures and teamwork were the keys to our financial success. We are happy to
announce that we can donate approximately $4,631.43 to Ally’s House. We hope to give the
money to Ally’s House around December 15, 2009. We were also able to pay off our $3,400.00
loan to First Fidelity Bank ahead of schedule. Thanks to this program, the finance committee
members were able to gain valuable, real-life business experience.
Figure 3: Finance Committee in Price College of Business
Sooner Shades
Balance Sheet- December 11, 2009
Assets Liabilities Stockholders Equity Cash $ 4,631.43 IBC Overhead Payable $ - Retained Earnings $ 4,631.43 $ - Consultant Fee Payable $ - $ - Sales Tax Payable $ - $ - University Overhead Payable $ - $ - Credit Card Terminal Payable $ - $ - Rent Payable $ - Total Assets $ 4,631.43 Total Liabilities $ - Total Equity $ 4,631.43
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Services
Camp Cavett
Sooner Shades had the privilege of working with The Cavett Kids Foundation throughout the semester as Diversionary Play Volunteers at OU Children’s Hospital. Colored pencils in hand, we were given the opportunity to set up camp in the waiting rooms and share company with some of the bravest, most inspiring people we might ever meet: children with severe burns and scars, cancer, terminal illnesses, awaiting major surgery, and those with challenges and struggles that many of our company members could not even process. A job that we thought would be a simple effort to help pass the time for families anxiously waiting for their names to be called turned into something much more for our volunteers. We had the privilege to hear stories about these brave children as well as to lend a compassionate ear to concerned family members that have no one to talk to while their grandchild is taken into major surgery. We found that when human beings are often thrust into a terrifying situation and asked to be strong, venting to a mere stranger of the fear and weakness that tirelessly looms can lift the burden, if only for a moment. We were given the opportunity to show compassion and to offer a warm smile in a cold waiting room. We opened our hearts to those that were hurting. We learned lessons from fearless children that were completely unaware of their own bravery. We were touched. We were inspired. Our experience with Camp Cavett is one that will never leave us. We will forever live our lives with those children and their families in the back of our minds, drawing strength from the hope that they gave. We vow never to forget those beautiful children that changed the way we viewed this world.
Figure 4: Hailee Cocanougher volunteering at OU Medical Center Figure 4.1: Company Members volunteering.
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Ally’s House
Ally’s House sounded like a terrific charitable organization on paper. You can’t go wrong helping children with cancer. The money went to the families instead of to a building or mystery fund of some kind. It was perfect, as far as we were concerned. The five minutes that Belinda Anderson had to pitch her organization to our company was enough for her to win us over. Little did we know that there was so much more to this organization than we could have ever imagined. As Belinda was giving our company some Ally’s House bags and buttons, a frantic looking woman walked into the room. She was visibly stressed, in sweats and a ponytail, looking like she hadn’t slept in a few days. Belinda greeted her with a kind, warm smile and asked her how she was. Belinda immediately snatched an envelope off of her desk and handed it to the woman without any hesitation. The woman, in an obvious hurry, stopped for a brief moment in the middle of her frenzy, gazed directly into Belinda’s eyes and delivered the most sincere “thank you” ever witnessed. As the lady hurried back out door and into the car, Belinda turned and said “Gas cards”. Met with a confused look, she explained, “Her little girl just finished her round of treatments this morning. They live in Kansas (where the father and other children still lived) and had no money to buy gas to get home. Those were gas cards, so they can get home”. That is the truth behind the work Ally’s House does. That is the reality of hope that they give behind the impressive statistics and attractive packaging. Ally’s House keeps the lights on. Ally’s House pays the mortgage. Ally’s House steps in when a mother and father have the medical bill in one hand, the utility bill in the other, and only enough money in their account to pay one of them. That look of relief and uncontainable gratitude in that woman’s eyes told the story of why this organization exists today. That is Ally’s House.
Figure 4.2: Company members at Ally’s House Christmas Party with Linda Webb.