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Entrepreneurship in Timber Industry

Course developers

Replaced course

MatZ4014 [GMTR4014] 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 analyse 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 analyse 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.
Competences:
•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)

In full-time face-to-face studies:
1. The business environment of woodworking companies, its direct and indirect influencing factors and their characteristics. The process of the organization of production realization and the complex of measures to ensure it. Planning the company's strategy for operation in the domestic and foreign markets (4h).
2. Product delivery (procurement) and sales channels, the economic basis of their choice and evaluation of their operational efficiency. Business and intermediary markets and company activity in them (4h).
3. Basic principles of assessment and measurement of the demand for round timber pre-processing products in the market (2h).
4. Evaluation of the selected market segments and decision-making on activities in them. Market price strategies and market selection, product management, price policy formation (2h).
5. Market capacity and its filling strategies, assessment of the demand for wood products in the market. Calculating the real and relative share of the market, its assessment and making a forecast (4h).
6. Purchase - sale agreement, its structure and closing conditions. Service Agreements. Conclusion of felling sale and development contracts. Terms of insurance of timber cargo and other finished products, payment methods for transactions with timber, their characteristics (4h).
7. Commercial activity, its nature, tasks and goals in woodworking companies, production resources and their characteristics, commercial activity environment. Preparation of the complex of events for the start of the company's economic activity, organizational structure and involved personnel (4h).
8. Basic principles of planning the company's economic activity, company materials - technical supply (logistics) organization (4h).
9. Production process control incl. organization of production quality control in the company, realization and sales (4h).
10. Basic principles of the company's financial planning and evaluation of its economic activity (4h).
11. Business plan and the basic principles of its development, the crisis of economic activity and its overcoming, and the importance of the foreign market (4h).
12. Nature of fixed assets, classification, evaluation, value calculation and depreciation, current assets (4h).
13. Costs, their types, characteristics, classification of costs for cost calculation purposes, surcharge rates. Working capacity, its types and calculation, organization of the company's working hours and wages (4h).
14. Prime cost, its types and the general structure of full prime cost, preparation of production prime cost calculation. Price, their diversity, goals and basic principles of price formation, break-even point and their analysis (4h).
15. Profit, profitability, asset turnover rate, capital profitability. Economic evaluation of the company's economic activity: indicators and their calculation (5h).
16. Future perspectives in woodworking. Implementation plan in market study and economic evaluation of economic activity (presentation) (5h).
In part-time correspondence studies: All topics indicated for full-time attendance are implemented, but the number of contact hours is 1/2 of the number of hours indicated

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 independent 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 risks, inlc. evaluation.

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 MVZF 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 MVZF professional higher education bachelor study program “Wood processing”.