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Unformatted text preview: cs to the internet. Many employees have
enhanced their friendship by inviting the Franklins to countless baptisms, weddings, and
graduations over the years. Steve and Eileen value these relationships with their employees
greatly, citing them as one of the main reasons that they love coming to work each day and as
essential to Beauti-Phil’s success in the future.
As in all goods markets with low barriers to entry, competitors have been moving into the
northwest Pennsylvania region where Beauti-Phil operates over the past five years. Steve
recently received a call from Curtis Howser, the president of the Inner Circle, the group that
organizes and operates the Groundhog Day Festival. Curtis told him that another company had
made a pitch to become the official clothier of the festival. Steve analyzed the proposal but
regretfully declined to match the offer because his cost structure could not compete with the
Beauti-Phil still has a loyal customer base, but the loss of the Groundhog Day Festival account
will undoubtedly dampen the company’s revenue stream. In anticipation of this kind of new
competition for souvenirs, the Franklins have been expanding their sales efforts to companies’
logo merchandise and festivals and events in other areas such as Erie, Du Bois, and Oil City,
Pennsylvania, and Conneaut and Ashtabula, Ohio. These efforts have been met with mixed
success thus far; while they will lessen the loss of the Groundhog Day account, the Franklins are
skeptical that they will be able to match the prior level of revenue in the future. Drake et al. 2004 Georgia Institute of Technology 3 The Groundhog’s New Clothes 3 The Factory
The Beauti-Phil factory in Punxsutawney is a 20,000 square-foot facility with quality but
somewhat antiquated machinery. The factory is leased from a major industrial landowner at a
monthly rate of $0.75 per square foot. This equipment is mostly the original capital that the
Franklins used to start the company fifteen years ago. The Franklins own most of the equipment
used in the factory, but they still have two $10,000 payments due in February and August 2005
on the note they signed to pay for the newest piece of equipment...
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This note was uploaded on 11/19/2013 for the course ISYE 3104 taught by Professor Staff during the Fall '08 term at Georgia Institute of Technology.
- Fall '08
- Systems Engineering