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Deliverable 2 - ISA Report

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					                 Innovative Communication Consulting Inc.
                 Interoffice Memo


To:           Neil Balan, Project Manager
From:         ICC, Group 1
Date:         February 8, 2012
Subject:      Industry & Stakeholder Analysis
              Odin Creations, Custom Cabinets & Design


Odin Creations is a new custom cabinet business in Saskatoon. According to owners, Brian Adamiak and
Kraig Ollenberg, the strength of the company lies in their flexibility in design, product and finishing.
They pride themselves on their personal approach to customer service. Possible expansion (space and
employees) makes the timing of this communication plan ideal.


Cabinet manufacturing is a viable business

Cabinetmakers are skilled trade’s people who produce furniture, kitchen cabinets, and other fabricated
wood products. They use many types of materials in this work including veneer, fiberboard, particle
board, hardboard, plywood, adhesives, abrasives, hardware and metal fastening. Today sophisticated
equipment, basic woodworking machines, and portable power and hand tools are used to perform many of
the job functions. According to census data, approximately 68% of all cabinetmakers worked in the
furniture and related product manufacturing industry. The average annual employment income is $28,233
which applies to the 59% of people in this occupation who worked full time. Cabinet makers generally
are able to remain profitable and cash flow positive in any economic climate due to the fact that they are
able to render a service that is in constant demand among the general public.
http://www.servicecanada.gc.ca/eng/qc/job_futures/statistics/7272.shtml


Saskatoon offers a variety of choices for those seeking cabinets

Odin Creations has just over 1 year experience as a business in the Saskatoon market place. The Yellow
Pages lists 45 cabinet makers in our city. This does not include businesses ordering prebuilt cabinets,
dealers selling cabinets made elsewhere (i.e. Home Depot, Costco, etc), or those working at home.

The cabinet industry is made up of both large and small cabinet makers. Most competitors are
streamlined with specific product lines and materials. Larger cabinet makers tend to work on an assembly
line system. This allows for a larger volume to be produced in a shorter amount of time, but limits custom
design. Odin Creations sources materials and designs products outside the “norm”, meeting customer
specifics without being limited to the “cookie cutter” approach of cabinet design.
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Odin Creations has separated themselves from other small players

Cabinet makers operate with variant staff sizes, different equipment, and diverse product specialities.
Many smaller cabinet businesses work from home to keep overhead low. Odin Creations made a choice to
operate out of leased workspace in the industrial area of Saskatoon, allowing for future expansion.


The industry is affected by the boom in Saskatoon

Odin Creations has entered the industry during a time of economic boom in Saskatchewan. There is a
high demand for new home construction, home renovation, and commercial needs. “Owners of small,
independent businesses in Saskatchewan were among the most optimistic in Canada during the first
month of the new year” as stated by the Canadian Federation of Independent Business. “Saskatoon has
one of the best operating and fiscal environments in North America right now” said Anthony Marino,
President & CEO of Baytex Energy Trust. (this is 2 separate quotes with separate documentation needed)

Financial criteria with lending institutions have tightened as a result of the economic growth in
Saskatoon. This ensures new ventures have a solid business plan to prove viability and stability. Lenders
are hesitant to provide credit to a business not yet established. This is a challenge for Odin Creations who
must secure capital in order to expand.


Other factors that influence the industry

The insurance industry is also part of the wider economic operating environment. It allows Odin
Creations to protect their business in the event of a financial crisis. Insurance is an option to be used in
Crisis Management planning in an organization.

Government involvement also has an economic impact. Odin Creations is subject to proper reporting
procedures with SK Finance, Workers Compensation Board, and Revenue Canada. The Saskatchewan
Government is a strong supporter of new business. This is backed by the following article in the National
Post. “According to the Canadian Federation of Independent Business ranking of Canada’s Top 10
Entrepreneurial Cities, this year’s top-ranked entrepreneurial city in Canada is Saskatoon.


Saskatoon is the place to be and our disposable income allows Odin Creations to prosper

Saskatoon’s quality of life is high, while the cost of living is low. Saskatoon is abundant in its natural
beauty, as well as its resources and opportunities. Saskatchewan is renowned for innovation in many
sectors, including oil and gas, mining, science and technology, and arts and culture. According to
Saskatoon Regional Economic Development Authority’s website, “Saskatoon outperformed all major
cities in Canada for GDP growth in 2007, with an amazing 5.5% increase. Saskatoon has consistently
been one of Canada’s top five growing economies this century”.

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This steady growth of our economy is due to our natural resources such as potash and oil. Rapid growth
has resulted in more homes and businesses being constructed.

This makes Saskatoon a great place to live and raise a family, and perfect for a cabinet making company
like Odin Creations. Housing costs are lower in Saskatoon than in most other major cities in Canada and
owning a home is affordable and achievable. Homeowners have more disposable income to upgrade and
build new homes. We live in a society where if you don't have newest or most chic possession, people
tell you that you are hopelessly out of style. To keep up with the Joneses, you replace your existing
belongings with new and improved ones. Focus is less on functionality and more on design.


Environmental awareness is a popular trend influencing consumer demand

Attention to sustainability and environmentally friendly products is on the rise. Customers increasingly
choose to patronize businesses doing their part for the environment. Odin Creations can fulfill customer
wants and needs by providing environmentally friendly products.


Building to customer demand separates Odin Creations from assembly line producers

Odin Creations is in direct competition with not only the large manufacturers in this region, but also
numerous side operations operating in residential workspaces. Other major competitors include retail
giants like Rona and Home Depot, who can offer standard size cabinets at discounted prices.

One of their largest competitive advantages is flexibility. They are true to custom work and will create
exactly what is requested. Other companies use standard sizing, materials and finishes. Often, products
outside these standards are not available or large up-charges are added to the base pricing. This is a key
factor in securing commercial jobs and differentiates Odin Creations from other operations. It also makes
them attractive to the interior designers and architects involved in these projects.


Industry connections and direct customer approach proves advantageous

36 combined years in the industry has allowed Brian and Kraig to develop strong relationships with key
individuals. They rely heavily on their reputation to secure business. These connections have proved
favourable in the form of references leading to sales and ability to lease equipment from suppliers they
know personally. They also enjoy repeat business as a result of their ability to support customers from
start to finish. The customer is provided the unique service of speaking with the individual who is not
only designing their order, but also building and installing it. This allows foresight of potential problems
and simplifies the entire process for the customer.




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Fostering a family atmosphere will entice qualified future employees to join the team

Brian and Kraig have a clear view on the kind of company they want to build. Research shows that
employees are happier when they feel valued, included, and appreciated. A family oriented atmosphere is
extremely important to them and will aid in attracting and keeping qualified and talented future
employees. This is an advantage over larger companies where it is more difficult to control their
corporate culture and possibly less of a priority.


Their operating budget and standard product pricing limits retail sales

Odin Creations cannot compete with the pricing of standard products offered in retail stores. It is more
cost effective for customers to purchase these products at places such as Home Depot. This shrinks their
market and reduces their ability to generate the quick revenues that come from these types of orders.

They lack capital and must operate on a limited budget. Funds allocated to marketing are very restricted.
Their current advertising products include a website, yellow-page ad, and Facebook page. They work
within the restraints of their budget by coming up with creative solutions, such as bartering their services
in exchange for other services like professional photography and website design.


Odin creations interacts with a very diverse group of stakeholders

The business requires an adaptable approach to communication with their stakeholders, as these
individuals vary from professional white collar business people, to hands on blue collar workers.
                          Customers include home and business owners, dealers, builders, contractors,
                Customers
                           architects, and designers. Recognizing the key factors that entice each group to
                                        buy is critical, and tailoring the channels and methods of
    Competitors             Suppliers
                                        communicating to the individual is the key to effectively marketing
                                       their service. To the homeowner it may be cost, while the business
                ODIN                  owner looks for functionality. Dealers need to know they are capable
                                       of filling orders, and builders need them to be on time and on budget.
    Outsourced
      work
                           Government  Architects and designers will likely focus less on cost and more on
                                       design and creativity.
                Business
                partner




Strong relationships with suppliers help to establish a credit position

Their experience in the industry has helped develop business relationships with suppliers quickly;
however, building credit with these suppliers has been more of a challenge. Most suppliers initially
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insisted on cash payment which tied up money until accounts were settled by their customers.
Fortunately, they have now established credit positions with many suppliers, freeing up funds that are
needed for other immediate operating expenses.


Outside capital is required for expansion

Odin Creations has a desire to expand and needs to secure capital to accomplish this. Lending institutions
are typically reluctant to issue an operating loan or line of credit to a new business. Communicating with
them in a manner that reflects a solid safe investment is vital. With no current outside financing and the
need to draw a salary, they have been forced to develop a lean attitude toward spending. Completion of
their business plan is critical.


Internal communication is affected by differing priorities and opinions

Communicating effectively with each other is essential. Brian and Kraig have varying interests and
strengths, and tend to view problems and solutions from different perspectives. Kraig is the master
designer, and worries little about the financial side of the business, whereas Brian pays attention to
details, ensuring ordering and scheduling are accurate. These differences make them ideal business
partners, but may create conflict in planning and future direction. Learning to take advantage of their
individual strengths, while still considering the greater good of the company is important to their future
success.


SWOT Analysis
Strengths                                           Weaknesses
Flexible product & design                           Visibility
Exceptional “start to finish” customer service      Marketing expertise
Experience in industry (36 combined years)          Space & time
Industry contacts                                   Financial management
Opportunities                                       Threats
Web site development                                New competitors & price wars with competitors
Hiring                                              Financial stress
New market segments                                 Mergers
Commercial market                                   Economic slowdown & consumer reluctance to spend


Odin Creations has entered the market at the most opportune time in recent history. With the economic
boom in Saskatoon, Odin Creations will benefit from the demand for new construction. Flexible design
and exceptional customer service provides their competitive advantage. Securing capital will allow for
expansion as they work to build their new company into the company they both envision.




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Works Cited




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