個案總覽

By fourth quarter, 2019, Lisa Sedlar, CEO of Green Zebra turned her attention to revenue and margin growth for the Oregon-based, healthy convenience-store (c-store) chain she founded six years earlier. Feedback from investors convinced her to push her startup closer toward profitability, before expanding her three-store Portland operation. To help with her planning, Sedlar brought on a veteran of the local tech sector, Lenka Jelinek, to evaluate Green Zebra's operational readiness to scale. Jelinek's first assignment involved an evaluation of Zebra Cash, the customer loyalty program launched in 2013. As Sedlar explained, "Frankly, I haven't designed our loyalty card program well. My guess is there's more we could do there." Although LPs had become a growing trend among c-store competitors, Sedlar had nagging concerns about their cost effectiveness. She needed an objective analysis of the Zebra Cash revenue and margin potential, an assessment made more urgent by the fact that she had cash in the bank to fund operations only through Q1, 2020. Although Sedlar realized that an optimized LP wouldn't solve all her cash flow challenges, the question was whether it could relieve some of the short-term financial pressure. Beyond the cash flow impact, there was also the question of whether the Zebra Cash program had strategic value given future expansion plans.

Spreadsheet supplement for case NA0643.

The CEO of Green Zebra weighs the implications of growth for a small chain of innovative, organic neighborhood grocery stores. The firm was at the forefront of both healthy food and convenience trends but faced fierce competition from larger players entering the market. A rapidly diminishing cash position forces the CEO to compare how two investing-financing alternatives contribute to growth and to reducing the cash burn of current operations. A slow growth option requires less financing and may allow the company to achieve a positive cash flow more rapidly. The alternative, rapid expansion into a new market, has the potential to rapidly scale operations and enhance competitive position. Students develop financial forecasts, calculate the weighted average cost of capital (WACC), estimate cash flows, prepare net present value (NPV) and evaluate financing alternatives. This is an integrated case that illustrates the financial implications of growth and the capital rationing issues faced by small firms. It can be used as a final exam case for an MBA-level course in corporate finance and as a vehicle for structured case analysis in an upper division undergraduate course in finance or entrepreneurship.

Student spreadsheet for case NA0619.