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Entrepreneurship in Timber Industry

Course developers

Replaced course

MatZB015 [GMTRB015] Entrepreneurship in Timber Industry

Course abstract

The course acquires theoretical and practical knowledge about the organization of sales (trade) of logging and roundwood primary products (lumber),
The course acquires the basics of market research, market strategy planning process and realization of market potential, the importance of business market acquisition and pricing policy in sales markets. Course gives basic knowledge about business administration in woodworking companies. Course covers questions like production functions and resources of woodworking enterprise, how to start the business and make business plan, how to make strategy, planning and evaluation of economic activities. Forms of entrepreneurship and their specifications in wood processing industry. Fixed assets: evaluation, utilization, wear and tear. Working capital, its calculation. Product unit cost and price calculation. Working hours and forms of payment for work. Break-even point analysis. Return of capital.

Learning outcomes and their assessment

Knowledge:
• about the process of sales organization of logging products and the current market situation and its potential, about the market research process and influencing factors;
• about core of business administration, production resources, supply of raw materials, distribution of production, planning and controlling of finances in woodworking companies. Students will have knowledge about forms of entrepreneurship in wood processing industry, fixed assets, working capital, forms of payment and evaluation of capital return.
Type of examination: discussions in classes, practical work and problem solving, questions in tests and test.
Skills:
• to analyze the situation in the market (current and future market), to assess the importance of market influencing factors and choose the best market strategy, to perform quality control of available market data and / or their sources - discussions in classes, practical work and problem solving, tests and exams;
• to analyze indicators of economic activity, to calculate amount of necessary resources for production, to make market analysis and to draw up business plan of enterprise.
Type of examination: discussions in classes, practical work and problem solving, questions in tests and test.
Competence:
• to practically solve logging products, incl. sawn timber ”sales opportunities in sales markets, to develop product sales plans for mastering the export market - practical work, questions in tests and exams;
• the student is able to analyse factors influencing entrepreneurship, to evaluate vitality of business idea, to understand importance of workforce motivation and control in wood processing.
Type of examination: practical work, questions in tests.

Course Content(Calendar)

. Business environment of logging companies, its direct and indirect influencing factors and their characteristics (2h). The process of product sales organization and a set of measures to ensure it (2h).
2. Company strategy planning for operation in local and foreign markets (2h).
3. Goods supply (procurement) and sales channels, economic bases of their selection and evaluation of their efficiency (2h). Business and intermediary markets and company activity in them (2h).
4. Basic principles of market evaluation and measurement of demand for round timber primary products (2h).
5. Evaluation of selected market segments and decision-making on their activities (2h). Market pricing strategies and market selection, product management, pricing policy making (4h). Practical works.
6. Market capacity and its filling strategies, evaluation of wood demand in the market (2h). Calculation of real and relative market share, its evaluation and forecasting (2h).
7. Purchase-sale agreement, its structure and conditions of conclusion (1h). Service contracts. Conclusion of felling sales and development agreements (1h). Timber cargo and other finished products insurance regulations, types of payment for timber transactions, their characteristics (2h).
8. Entrepreneurship, its essence, tasks and goals in wood processing companies, production resources and their characteristics, business environment (4h)
9. Preparation of a set of measures for starting the company's economic activity, organizational structure and involved staff (4h)
10. Basic principles of company's economic activity planning, company's materials - organization of technical supply (logistics) (2h)
11. Production process control incl. production quality control organization in the company, sales and sales (2h)
12. Basic principles of company's financial planning and evaluation of its economic activity (4h)
13. Business plan and basic principles of its development, crisis of economic activity and its overcoming and importance of foreign market (4h)
14. Nature of fixed assets, classification, valuation, calculation of value and depreciation, current assets (4h)
15. Costs, their types, characteristics, cost classification for the purpose of cost calculation, addition rates. (3h) Labor intensity, its types and calculation, organization of the company's working time and remuneration (3h)
16. Cost, its types and general structure of full cost, preparation of production cost calculation. (4h) Price, their diversity, price formation objectives and basic principles, break-even point and their analysis. (4h)
17. Profit, profitability, asset turnover ratio, return on capital. (4h) Business economic
economic evaluation of activity: indicators and their calculation (4h)
18. Future perspectives in wood processing (6h). Sales plan in market acquisition and economic evaluation of economic activity (presentation). (4h)

Requirements for awarding credit points

All practical work must be completed. A report must be submitted and presented. Must have a written test and exam. Final evaluation formed in a 10-point system.

Description of the organization and tasks of students’ independent work

In practical work students must learn the following topics:
• analysis and processing of available global forest market data;
• available Latvian forest industry, Central Statistical Bureau and industry association, incl. analysis and processing of business and market data;
• market environment analysis - SWOT / SWOT method, TOWS method, M. Porter model, PESTEL / PESTLE method, competitor profile matrix, resource analysis;
• product promotion in the market and analysis of sales channels, incl. organizing the flow of materials in the local and international market
• evaluation of sales prices of resources and finished products;
• evaluation of the target market and the target buyer's segment, as well as identification of market influencing factors and evaluation of their impact;
• the organizational structure of the company and their types, as well as the selection of appropriate staff;
• financial resources and their sources;
• • classification of financial assumptions and

Criteria for Evaluating Learning Outcomes

As a result of evaluation, it is important that the student's attendance is over 70% of all lectures.
In the study course, students' knowledge assessment takes in 3 parts, i.e. during the semester there are:
• complete a theoretical test on the topics taught in the course, where oral or written answers are successful, if at least 40% of the questions are answered correctly;
• prepare a report in accordance with the MF methodological regulations in the development of the final thesis and defend it in the form of a presentation;
• a work (exam) must be written where the written answers are successful if at least 40% of all tasks have been solved correctly.
The final grade consists of a weighted average grade (on a 10-point scale) – from a visit (10%), a tests (20%), a report (45%) and an exam (25%).

Compulsory reading

• Praude V. Mārketings 1.daļa, Rīga:Burtene 2011, 521.lpp.
• Praude V. Mārketings 2.daļa, Rīga: Burtene, 521.lpp.
• Kotlers F., Mārketinga pamati, Rīga: Jumava, 2006., 647.lpp.
• Tirgzinības pamati, Rīga: Jumava, 312.lpp.
• Juslin H., Hansen E. Strategic Marketing in the Global Forest Products Industries. Corvallis, OR, USA: Academic Press. 2003.
• Abizāre V. Ievads uzņēmējdarbībā: mācību līdzeklis. Rīga: RaKa, 2004. 140 lpp.
• Oļevskis G. Uzņēmējs un tirgus. Rīga: SIA Jāņa Rozes apgāds, 2007, 219 lpp.
• Krogzeme H. Komersantu darbības analīze un kontrole. Rīga: RTU 2013. 348 lpp.

Further reading

• Vestvuds D. Kā rakstīt mārketinga plānu. Rīga: Zvaigzne ABC, 2008, 128 lpp.
• Singh S. K., Gupta S. Entrepreneurship. SBPD Publications, 2016. 516 p.

Periodicals and other sources

• Laikraksts „Dienas Bizness” ISSN 1407-2041
• Žurnāls „Baltijas koks” ISSN 1407-6667
• Žurnāls “Forbes” ISSN 1691-6018

Notes

The study course is included in the 7th semester (full-time studies) and 9th semester (part-time studies) of the Forestry Faculty professional higher education bachelor study program “Wood processing”.