O-Fold Case

1. As CEO of LeToilette, a small regional, family-owned waste disposal company that specializes in porta- potties and pumping waste from RV's, I am looking to expand into western North Dakota, specifically The Bakken formation area.

Demographics are mixed, but are made up primarily of young single males, with a small percentage of young families included. There are a few older couples, but not many. There is a huge growth rate of upper middle class with a large expendable income and a growing number of upper class with an even larger expendable income. Housing is in short supply so many farmers and homeowners have parked trailer houses on their lots or allow RV parking on them. Very few of the RVs are actually hooked up to a sewage system, so their tanks need to be pumped on a regular basis. Porta potties are needed in all areas where undeveloped camping is allowed.

Social forces are changing; gender lines are becoming more blurred and the conservative culture is slowly being chipped away as many incoming people bring different norms and mores.

Regulations are a concern because all oil wells must be licensed and all housing must be approved and have permits. A special concern is the licensed disposal of human waste. Sewage systems in the area are near or at capacity so a contract would need to be negotiated to allow emptying the vacuum truck into a licensed sewage system. In the near future, there is a possibility the closest available system with capacity will be Bismarck, 250 miles and four hours away. Trucks will have to be in dependable running condition s newer, reliable trucks will have to be purchased. Transportation costs will be very high.

Natural environment concerns are substantial because of the possibility of harsh winter weather. Below zero temperatures can be common, along with blinding snow storms which create transportation hazards and dangerous working conditions. Summer weather can also be severe with thunderstorms, high winds, heat, and humidity. Water supply is not limited at this time, but may be a concern in the future.

The general economic conditions in western North Dakota are favorable to nearly any undertaking at this point, particularly if it concerns the serious lack of accommodations for workers in the area. The unemployment rate for the state is 3.5% but considerably lower in the western oil boom area although no one has put an exact number on it. The low unemployment is a concern because the lack of available workers will necessitate finding employees elsewhere and either finding accommodations for them in the area or commuting them to the area. Housing and transportation costs will be high because of this. Long commutes will make the available working hours shorter. The lack of available workers will also raise wages. High paying oil rig jobs will be more attractive so wages of competing industries will have to be comparable.

2. Scheel's All Sports. Rivalry for Scheel's in Bismarck is very small. Scheel's closest competition is itself, with stores in Minot, Fargo, Grand Forks, and Rapid City, SD. There are a few small rival firms in Bismarck, but so far Scheel's exemplary customer service has prevented them from becoming serious competitors.

New entrants have difficulty competing with Scheel's scale of economies and a high degree of customer loyalty. With stores in 23 locations and the plan to open at least one new store a year, Scheel's can buy in quantity. The cost of entering the market is high - the capital investment is huge and the risk of failure is substantial. Market growth in the area has been stable for several years. It is projected to increase with the influx of people associated with The Bakken development making it more attractive for competitors to hurdle entry barriers. The biggest threat of new entrants to the market is larger, more established sporting goods companies such as Cabela's or Gander Mountain opening a store in the area.

Substitute products are not particularly threatening. Scheel's carries most of the well known brand names in athletic wear. These brands are seen as superior in quality and performance. Any substitute products are already in the market, carried by Target, Kohl's and Wal-Mart.

Supplier power is not much of an issue. When Scheel's costs go up, they pass the price on to the customer. With little or no competition in the area, Scheel's has no motivation to slash prices and with the economic downturn in the rest of the country the suppliers have little or no leverage with Scheel's.

Buyer bargaining power and price sensitivity are very low. Scheel's will price match any competitor for the exact same product but they are very specific that it has to be identical. Color, size, everything must be exactly the same. They will price match internet prices. Typical Scheel's customers are not price sensitive - Scheel's is known as