BOOKS FOR PROGRESS (B4P)

It was May 2019, and Maria Robinson, chief executive officer ofBooks for Progress (B4P), was evaluating the success of B4P's Apriltextbook drive. In addition to B4P's textbook drives in SouthernCalifornia, for the first time, Robinson’s team had run a textbookdrive through a student group at San Francisco University, CA. Thisnew drive had been successful, and Robinson was consideringdeveloping a more permanent presence at San FranciscoUniversity.

This new endeavor would involve establishing relationships withstudent groups, professors, and university administration so thattextbook-collection boxes (drop boxes) could be permanently locatedin central areas on campus. The boxes would then be monitored sothe textbooks could be picked up regularly and shipped to the B4Pheadquarters, where the books would then be donated to schoolsacross South Africa, sold online to fund shipping andimplementation costs, donated to student clubs at Californiauniversities, or recycled appropriately. While considering thiseastward expansion, Robinson also wanted to investigate theviability of undergoing similar expansions to Victoria University,Victoria, CA and the University of Sacramento (U of Sacramento).She wanted to evaluate the financial feasibility of each of theseproposed locations before making any final decisions.

History

B4P was Inspired by a trip Robinson took to South Africa in2017. While teaching at the University of South Africa of Financeand Banking, Robinson noticed a deficit in the educationalmaterials available at the institution. She knew there werethousands of textbooks in California that were no longer beingused, which could be redistributed to students in need in SouthAfrica. After graduating from Southern University with an honorsdegree in business from the Elite Business School (San Diego, CA)in 2017, Robinson partnered with an acquaintance William Hartnessto found B4P at the Southern University, CA.

In the beginning, B4P collected textbooks from the SouthernUniversity campus and soon expanded to other schools in California.A list of campus locations with B4P drop boxes can be found inExhibit l. To be more central to the textbook collections, Robinsonand her team were in the process of moving B4P's headquarters fromSouthern University, California to San Francisco. The move would becomplete by August 2019, before textbook collections

from the 2019-20 school year would begin. Textbook collectionshad grown by over 200%, so Robinson was optimistic about B4P'sfuture.

Operations

Post-secondary textbooks were inserted by their owners into dropboxes or given to student representatives through student-clubtextbook-collection drives on behalf of B4P. California's academicschool year ran primarily from September to April, so the majorityof textbooks were collected in April. The textbooks were collectedand transported to B4P headquarters at a cost of .20 cents 1 permile and $ 14 per hour for the drivers' wages. Six hundred bookscould be shipped in a single shipment, although the averageshipment consisted of only 250 books. Drivers were located in SanFrancisco and were compensated for the round trip from thecollection school to headquarters, as well as for one hour of timeat the collection school. After reaching B4P's warehouse, the bookswere sorted by warehouse workers. Warehouse workers were paid $ 11per hour, and they scanned, sorted, shelved, and tracked 30 booksin an hour.

25% of the textbooks collected were sorted for listing onAmazon; half of those books listed had been sold at an averageprice of $40. After a period of time, any listed unsold books weredeemed unsalable and were then donated to schools in South Africa.50% of the textbooks collected were immediately categorized fordonation to South Africa. Donated textbooks were shipped to SouthAfrica once 24,000 books (deemed appropriate for donation) had beencollected. Shipping costs fluctuated widely due to a variety offactors (e.g. distance from the South African coast and the numberof border crossings required) and averaged $ 16,000 per shipment.The remaining 25% of books collected were too out of date to sellonline or to donate, so they were recycled. Since textbooks weredifficult to recycle responsibly, all textbook recycling was donethrough an eco-reliable partner in the United States at a recyclingcost of $ 15 (including transportation) for every 500textbooks.

Management Team

B4P had five members on its management team, including Robinsonand Hartness, who assumed corporate financial officer roles. Thesemembers were employed full time by B4P. All were recent graduatesof Western University, McMillen University, or Mary & WilliamUniversity. All five management team members had travelled toAfrica to witness B4P's impact on the post-secondary educationsystem, and to learn how they could maximize their contributions onbehalf of B4P.

Outcomes

As of May 2019, B4P had donated 24,000 books to South Africanuniversities, provided $69,300 in micro loans, donated $37,600 toCalifornia non-profits,' and reused or recycled

1 All currency amounts are in U.S. dollars unless otherwisespecified.

  

37,000 textbooks. In the 2018-19 post-secondary academic year,88,000 books had been collected. Robinson was proud of thecontribution her team was making to their local and globalcommunities, but she was eager to further that impact through moregrowth and expansion.

Expansion Opportunities

B4P had already executed successful expansions into the LosAngeles & Baja. Eventually, Robinson wanted to expand B4Ptextbook collections to other states, but she understood thatachieving successful local expansion should be the first step.Expansions were executed by forming relationships with studentclubs, school administration (staff), and faculty departments andmembers. Through these relationships, B4P obtained permission toplace drop boxes in central locations and hired student ambassadorsat each institution to monitor the drop boxes. The majority ofstudent ambassadors were volunteers, but B4P paid one studentambassador at each school an annual salary of up to $ 1,750.

Any expansion to a new location would follow the same collectionprocess, and textbook collections would be similarly shipped toB4P's warehouse. In order to manage additional student ambassadorsand relationships with collection schools, Robinson planned to hirea campus community manager if the eastern expansion was pursued.The campus community manager would work full time and earn anannual salary of $ 40,000. 75% of the manager's time would be spenton managing the eastern expansion, and 25% would be spent onmanaging existing drop box locations where B4P presence waslacking. Robinson expected that historical proportions of textbookssold, donated, and recycled would be the same for all newlocations. An expansion would be considered successful if B4P couldbreak even and increase its exposure and book donations; however,Robinson and Hartness would consider an expansion a financialsuccess if B4P could earn a 5% profit.

B4P's new warehouse would have the capacity to sort and storetextbooks from all three proposed universities. However, Hartnesswas concerned about potential roadblocks to transporting textbooksfrom the collection universities to B4P's warehouse. The textbookswould need to be stored at the collection universities until enoughbooks had been collected to warrant the driver's pickup time. Ifpickups took longer than anticipated, the driver might need to stayovernight in the region due to regulatory requirements. Hartnesswas unsure how this constraint would affect the financialfeasibility of the expansion, so she wanted to ensure that anyexpansion that B4P pursued would have a healthy margin ofsafety.

Victoria University

1
Victoria was located in Fresno, approximately 330 miles east of SanFrancisco . Victoria was

home to 17,400 full-time, undergraduate students and over 4,000graduate and post-graduate students. These students studied at oneof the university's six facilities, the largest of which was theFaculty of Arts and Sciences. Victoria was known for its schoolspirit, its long history, and its attractive waterfront campus.

Victoria student government, the Alma Mater Society (AMS),included the Campus Activities Commission (CAC). CAC wasresponsible for running campus events and programs to promoteschool spirit and social awareness (including mental-healthawareness initiatives) at Victoria. If B4P decided to start anon-campus textbook collection at Victoria, Robinson thought CACwould make a good partner. B4P had hosted a textbook-collectiondrive in April 2019 with AMS members and potential campusambassadors. Based on this experience, Robinson was optimisticabout Victoria students' support of on-campus drop boxes, so sheestimated that 12,250 books could be collected in the 2019-20school year at Victoria.

Brownstone University

2 Brownstone was located just south of Riverside, 520 miles eastof San Francisco . The

university enrolled 24,100 undergraduate students and 3,700graduate students. Brownstone was known for its interdisciplinaryand flexible degree program options, a global focus, and itsself-contained campus that fostered a sense of campus community.Brownstone offered more than 65 degree programs across a wide rangeof disciplines.

Brownstone's undergraduate students were represented by theBrownstone University Student's Association (CUSA). CUSA did nothave a committee similar to CAC at Victoria, but CUSA regularlyfunded and supported over 250 student clubs. Since B4P had not yetperformed any on-campus marketing at Brownstone, Robinson estimatedthat 5,500 books could be collected from Brownstone in B4P's firstyear.

The University of Sacramento

Located in California's capital city of Sacramento, U ofSacramento was the largest bilingual

(English-French) university in the world, and it was situated540 miles east of San

3
Francisco . The campus was also within walking distance ofCalifornia's government

buildings on Capitol Hill. The school was known for itsco-operative education program, bilingualism, and research. Over36,000 undergraduate, 4,500 masters and 1,900 doctorate andpost-graduate students studied on U of Sacramento's campus. At U ofSacramento, the

1 Driving from Victoria to the B4P headquarters tookapproximately 3 hours and 15 minutes. 2 Driving from Brownstone toSan Francisco took approximately 5 hours.
3 Driving from Univ. of Sacramento to San Francisco tookapproximately 5 hours.

  

largest faculty was social science, which registered almost 25%of the student population. The balance of the students studied atone of U of Sacramento's nine other facilities.

The Student Federation of the University of Sacramento (SFUO),the university's student council, managed over 250 clubs andorganized awareness campaigns, philanthropic initiatives, andon-campus social events. The federation was committed to advocatingfor affordable post-secondary education in California; therefore,Robinson believed that B4P's mission to support education indeveloping regions would align with the interests of U ofSacramento's students. Since U of Sacramento was larger thanBrownstone, Robinson estimated that 12,250 books could be collectedfrom U of Sacramento in B4P's first year.

Decision

B4P had already established partnerships with students atVictoria while conducting its April textbook drive, so Robinson wasconfident that B4P would be able to do the same at Brownstone and Uof Sacramento. It would, however, take time to gain permission toplace the drop boxes around each campus. Robinson was open toexpanding to all three schools eventually, but she wanted to selectone school to expand to first, if at all. This approach would giveRobinson and her team time to improve the textbook collection andtransportation model without expanding too quickly. Since B4Pmanagement would not be able to visit campuses very often, it wouldbe important to hire a dedicated team of volunteer campusambassadors. Robinson was anxious to make a decision about her nextsteps so that B4P's team would have time to place drop boxes on thecampuses during the first semester of the 2019-20 academicyear.

EXHIBIT 1: CAMPUS LOCATIONS WITH B4P DROP BOXES

l. Western University

1. Shawe College

2. Mary & William University

3. Mary & William University — Brantford Campus

4. University of Waterford

5. University of Gulliver

6. Shenandoah College

7. McMillen University

8. Northeast College

9. Branford University

10. Humboldt College

11. University of Sacramento – St. George Campus

12. York University

Required:

1. Qualitatively, what are the pros and cons of expansion?

2. Qualitatively, what are the pros and cons of partnering withVictoria University, Brownstone University, and the University ofSacramento?

3. Identify the fixed and variable costs relevant to anexpansion.

4. Calculate how many textbooks B4P would need to collect to breakeven at each of the three universities: Victoria, Brownstone, and Uof Sacramento.

5. As Maria Robinson, what would you do? Defend your decision usingyour analysis.

Responses should be typed in paragraph format and use propergrammar and punctuation. Recommendations must be thorough and fullysupported by evidence from the case study. Responses to questions 1-5 above require at least one page of content or more. Therefore,the case study paper should be, at a minimum, five pages ofcontent, excluding calculations and tables. Please be sure toinclude all tables, calculations, and analysis in an Appendix tothe report.