Burts Bees

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                       TO: Dr. Brenda Massetti, BUS 1100 Instructor
                            FROM: Jennifer Specht, Student
                                  DATE: April 28, 2008
                                 SUBJECT: Burt’s Bees

As instructed for the second assignment, I will be providing information on the Burt’s Bees. .

                                      Business Model

 The primary Revenue Source for Burt’s Bees would be the sales of their beauty products such as
 the lip balms and lotions. Additional Revenue sources may include advertising and association; a
 customer may have knowledge that Burt’s Bees is owned by Clorox, which is a product they trust
 and already purchase. Buying products from the same company but under different product names
 may encourage consumers to purchase Burt’s Bees because of its association with another brand
 which consumers already buy and trust. Another additional revenue source could be from the sales
 of other bee by-products such as honey (for flavoring food and drinks) or bee pollen (often eaten
 as an immune system booster).

                                      Business Ethics

 One ethical issue Quimby had to consider was the relocation of the company to North Carolina.
 With this relocation, she had to tell 44 people that they would no longer have a job. However, with
 the change of location, she would be able to employ many more than 44 people and give more
 people a chance to make a steady income. Quimby stated in an interview that she made herself
 look at the positive changes the move would bring to her and the company which helped her
 support her decision to relocate although she had to make people lose their jobs. I agree with
 Quimby’s decision to relocate because was crucial to the survival and the growth of the business.
 In order to make her products better known, she had to move it to a larger city with skilled labor
 and lower transportation costs and taxes.

                                The Management Function

 Quimby’s main desire of going in business started off in her need to find a steady income. She had
 always had an “entrepreneurial spirit” and she saw an opportunity to make money producing
 products out of bees wax. Quimby had several goals for her business. One goal was to create a
 product that people (especially in urban areas) could purchase that was not super sophisticated, but
 still effective and composed out of natural ingredients. Another goal, one more obvious, was to
 never let the company go into debt and always make a profit off the bees wax products.

                                 The Marketing Function

 Quimby felt her main customers were people that lived in urban areas. She felt that people who did
 live in these urban areas would enjoy her products because they gave them an opportunity to get
 “back to nature." Quimby knew that in urban areas, one could not simply step out of their door to
 see and feel nature. She thought her products helped people to get “back to nature” because of the
 products’ simplicity and natural ingredients.

                                   The Finance Function

 One event where Quimby had to rely on the finance function was when she relocated the company
 to North Carolina. When the company relocated, Quimby updated their equipment to more
 specialized, automated machines. Quimby needed to investigate ahead of time how the change of
equipment would affect company profits and product quality. She didn’t want product quality to
decrease because then the value of the product would decrease, yet she wanted a more efficient
way to produce her products. She relied on the finance function when she had to estimate how her
profits would increase in order to make the relocating a good decision.

                                   The Law Function

One event when legal advice was needed was when Burt’s Bees started to allow employees to
purchase stocks and share ownership of the company. There was a lot of legal paperwork that
needed to be filed when the company shifted from a tightly controlled ownership by Quimby to
allowing employees to own stocks. A lawyer would be crucial in giving advice, informing
Quimby about the legal guidelines, and to make the change in ownership official. By allowing
employees to own stocks for the company they work for, it strongly encouraged them to work
harder and encouraged their loyalty to the company which would assist in company growth.

                    The Computer Information Systems Function

The computer Information Systems function can be very useful in the operation of Burt’s Bees in
many ways. Business software such as Microsoft Access, Microsoft Excel, and Microsoft Word
would be very helpful in keeping accurate records of sales, inventory, employees, accounts, and
many other aspects that require business bookkeeping.

                               The Accounting function

Accounting is very useful for Burt’s Bees for finding out whether or not they made a profit or a
loss. When a business uses accounting, they can track expenditures, analyze profits, evaluate labor
wages, and track other costs of running a business. Computer software such as Microsoft Excel is
very useful for accounting purposes and determining if a profit or a loss was made for each cycle.

                    The Risk Management & Insurance Function

One application of the risk management and insurance function used at Burt’s Bees would be used
to analyze what profits could be made from the automated machinery at the North Carolina
factory. Someone who specializes in risk management may look at how many products could be
produced with one machine vs. another while keeping safety and efficiency in mind. If a machine
is not safe, then an insurance company may charge more because of the potential safety risks

                               The Effects of Economics

It is very important for the executives at Burt’s Bees to be informed about the economic
conditions around the country and the world because it all indirectly will affect the sales and
profits made by the company. If we are in a recession, then people are not typically making as
much money and tend to spend their money a bit more cautiously. Consumers are not as likely to
spend money on a leisurely item such as lip balm if they need to spend their money on more
important things such as food. However, if the economy is very strong, people have more money
to spend and tend to be less cautious on how they spend it. Therefore, they may be more likely to
spend their money on items they would enjoy having but are not necessities. Burt’s Bees probably
makes more profits when the economy is stronger rather than in a recession and it is important for
the executives to understand the economic cycles and how they affect their business.

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