Case Study: Starting Right Corporation

Case Study: Starting Right Corporation

Question 1
Sue Pansky should not try to be involved in the starting right because she has got a risk avoider
nature and conservative while an entrepreneur can never be a risk avoider, instead entrepreneur
dare to take risk for the new start up with broader view of vision. There are also four alternatives first
alternative is to do nothing, invest in preferred stock, invest in corporate bonds and invest in
common stock. For the investment of $30,000 there are four alternatives over the period of 5 year.
Alternative Profit (13% return) Guaranteed Return
Alt. 1 − Corporate $25,273.05 (Profit $20,000 (Profit
Bonds (13%) Favorable Market) Favorable Market)
Alt. 2 – Preferred + $90,000 (400%) −$15,000 (−50%)
Stock
Alt. 3 – Common + $210,000 (800%) −$30,000 (−100%)
Stock
Alt. 4 – Not Investing + $7,385.46 +$7385.46
(4,5% inf.)

From this case and figures, it has been analyzed that Sue Pansky is a risk avoider and very
conservative in nature. So it is recommended that they she should make use of the utmost decision
approach. She should not make an investment in Starting Right. I would recommend that Sue
Pansky should invest in corporate bonds for the reason that her investment of $30,000 is protected
to the degree of $20,000 while this amount has been guaranteed by Julia whereas; she attains a
steady income at the rate of 13 percent per year.

Question 2
Ray Cahn should take an aggressive start up in the baby food business because he has a good
experience in conducting business and have a good knowledge about the trading and business
tactics. He can deal with the adverse or sudden situations in the business as he has been working in
a business environment and experience in the public and supplier dealing associated in the
business. Moreover, he has got an optimistic nature as he views the business success to be 11%
and this estimation could be based on his prior market survey or personal knowledge. Being a
commodities broker, Ray has got better knowledge about the financial funding systems and their
appropriateness which is necessary for Starting Right.

Question 3
According to my recommendation, Lila Battle should not attempt in investing in Starting Right
because of her risk avoiding and conservative nature. The business of Starting Right requires an
open vision and perspective for the solutions and higher ability of risk taking. This is because the
initial investment of the business requires effective and innovative method of financial funds
collection that can minimize the risk of failure of the business and these fund collection methods
could be risky and uncertain due to their innovativeness. On the other hand, Lila has got a positive
view as she considers that Julia has got good chances of success, which is a good characteristic in
an entrepreneur of having positive expectations for the business scope but these expectations and
views should be realities and facts based.

Question 4
The belief that George Yates has developed are very optimistic and reality based as Julia’s business
has got an equal likely chance of success and there is equal likeliness of failure in her business. This
is because Julia’s business is based on the corporate bonds in which she has just estimated the
expected return rates on the basis of market analysis and personal estimation and there is a degree
of uncertainty in her business.

Question 5
Peter Metarko’s optimism about the market of baby food is obvious and reality based. This is due to
the fact that parents are always willing to adapt and use those food products that have the minimum
harmful health ingredients or side effects so that the baby can grow stronger and healthy. Baby’s
health is always been a great issue for all parents that’s why there is good scope of the baby food in
the food market that claims the minimum or negligible amount of preservatives and harmful
ingredients in the baby food.

Case Study: Blake Electronics

Question 1

Success Figures for Iverstine and Walker

Survey Results
Outcome Favourable Unfavourable Total
Successful Venture 90% - 90%
Unsuccessful Venture - 80% 80%

The additional information that Steve requires from Iverstine and Walker marketing research team is
about the previous success records of the company and the highlights of the marketing researches
and the industrial sector in which the company had done market researches so that he may identify
the performance and experience of Iverstine and Walker about the electronics market. Additionally,
Steve also need to know about the grounds on which basis the company has claimed 90% success
and 80% failure chances so that he may realize the reliability and validity of their expert opinion.

Question 2
Steve should not invest a considerable amount in hiring the marketing research companies as he is
already facing a financial crisis of the company so he should conserve the amount for the
manufacturing, processing, distribution and marketing of the Master Boxes. He should rely on the
market survey results done by his own marketing team and should start to work on the
manufacturing of Master Boxes with profound accuracy, consideration and preciseness so that
Master Boxes can generate excessive amounts of profits for the company.