The Banatao Brothers Build Boards for the Green Wave - Assignment Example

1.2 Cost In USA cost of any entrepreneur to run the shop is at least $400 while average hourly manufacturing cost for Asian competitors is $2.50. Minimum purchase price for polyurethane board in the country is around $300 but Asian competitors can manufacture the same product at five times a cheaper price. 1.3 Stringent Business Environment Domestic surf board entrepreneurs are searching headway to compete against cheap import from Asia but till now there is no sign of relief for them. In 2005, surfboard blanks a domestic manufacturer closed their business due to stringent cost competition from Asian counterparts.

Government announced hike in the raw material cost to manufacture due untamable recession started in 2007. Clark Foam was the major supplier of polyurethane blanks for surfboard manufacturers but after recession price of polyurethane blank has increased. In this condition Clark Foam ceased production in the year 2007. After the closure of Clark Foam, small and midsized entrepreneurs do not have any choice but close business due to zero inventory of polyurethane blanks inventory. At that time big players banked on existing polyurethane blanks inventory while the condition was perfect storm for small entrepreneurs like Banatao Brothers due to various reasons like loss of main supplier, low priced import from Asia and slump in bottom line.

Domestic sales volume for surf board manufacturers has decreased ten percent in last five years due to low cost import from Asia (Rizzo). 2.0 Support Required for Entrepreneur & Source of Support 2.1 Import Quota According to Professor Hill, import quota can be described as direct restraint on quantity of imported goods. Import quota is directly connected with issuing import license to business organization or individual. For example, Federal Government can create trade barriers for Asian competitors by setting annual import limit for polyurethane blanks and other surf board materials.

In this way government can help small entrepreneurs from international competition and domestic big players (Hill 205-210). 2.2 Environmentally Friendly Materials Banatao Brothers have planned to manufacture Entropy surfboard with sugar beet foam core that is wrapped in hemp cloth instead of a polyurethane foam core encased in fiberglass. This is a green initiative by them and they need further research on creating bio surfboard. They can take help of various university research scholars having expertise in green technology.

Further research on chemical composition of sugar beet foam core might help them to create more diversified product line in future. The company is currently taking help from Bayer Corporation but in future taking help from USA universities will decrease their cost on research & development (Boone, and Kurtz 33). 3.0 Lifestyle Changes and Opportunity 3.1 What Customers Buy Surfing industry is worth of $7 billion and its business pattern is constantly evolving with respect to customer demand. In recent years customers of USA are showing their back to petrochemical based surfing board material due to its poor durability in contrast to