Instructions:

• Read the Case
• Answer the questions in the template below.
• You have 2 hours and 30 minutes to complete and submit.

Answer the following questions (use as much space as required):

1.Environment Analysis: Prepare an Environmental Scan for Edge Marketing Solutions (EMS)		15 pts
2. SWOT Analysis: Prepare a SWOT Analysis for EMS		15 pts
3.Strategy / Positioning:    a) Prepare a BCG Growth Matrix for EMS considering the growth and profitability of the different services.    b) Do you believe that EMS should continue to provide broad digital marketing services to small businesses or focus on a few specific digital marketing services to provide to medium-sized businesses? Explain the rationale for your decision?		25 pts
4.Finance:    a) Is the 2019 income statement from the previous owners a true reflection of the profitability of EMS? Why? Why not?    b) Based on the 2020 YTD income statement and Balance Sheet, how would you determine whether $40,000 is a fair price for EMS today?		20 pts
5.Operations: What would be the additional annual revenue required to cover the cost of hiring a full-time resource to manage the digital marketing operations of EMS? Show your Break-Even analysis calculation.		15 pts
6.Leadership: As Juan Diaz, would you: a) Sell EMS and accept the offer from MLB. b) Resource EMS to be able to provide all the technical services for his clients in-house c) Ride out the pandemic and hope that business will rebound by summer 2021. Explain your reasoning based on your analysis of the business, the environment and Juan’s personal circumstances.		10 pts
TOTAL		100 pts

SYNOPSIS In late November 2020, Juan Diaz was not sure what his next steps should be. After 10 months trying to get Edge Marketing Solutions off the ground, his newly acquired business had ground to a halt. The 30 clients that he acquired in January 2020 were generally no longer interested in doing any new business because of the declines in their own business due to the COVID-19 pandemic. As he started exploring his options, he received a contract job offer from Maple Leaf Bread (MLB) to be a Senior Marketing Manager. This position would require him to relinquish his own business which could be construed as a conflict of interest. He has two weeks to make a decision. JUAN DIAZ Juan Dlaz moved with his family from Mexico to Canada in January 2020, to provide better opportunities for his children. His first steps were to get his Canadian driving permit, buy a car, select a townhouse to rent in a neighbourhood with good schools for his children, and to register his two daughters into elementary school. While his wife Carmen was able to secure a contract accounting position at National Bank, Juan was keen to start his own business in Canada. After a successful career as a Marketing Director for Bimbo, one of Mexico's largest bread and snack producers, he was determined to try to avoid the pressures and politics of corporate life, and to finally pursue his lifelong dream of starting his own business. s of Juan and Carmen moved to Canada with combined savings of $200,000. They intended to keep about half of this as a downpayment for a house, and the balance to invest in a business. He thought that starting a business from scratch in a new country without any connections or local market knowledge would be difficult, so he researched online for businesses for sale. One business, Edge Marketing Solutions (EMS) particularly appealed to him. They provided website development and other marketing services to about 30 clients in Ontario. They were asking for $90,000 for their business, which Juan believed was a good price as this was equivalent to about 1 times annual sales or about 2 times annual profits. He felt that this would be a good customer base he could build on to provide additional services and secure additional clients. Where Juan did not have the technical capabilities himself to perform certain services, he felt that he could outsource these support services and still make a profit. MARKET TRENDS The marketing services landscape in Canada and globally has changed dramatically over the past 10 years. Digital marketing services such as social media and search marketing (Google advertising) have grown tremendously through the dominance of Facebook (FB, Instagram, Whatsapp) and Google respectively, while Marketers have hence allocated a lower percentage of their marketing budgets to traditional media such as television, newspapers, radio and outdoor advertising. Social media marketing, search marketing and email marketing were most in demand as these would generate revenue for clients. They were also the more