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Chapter 9: Problem 14

An article in the New York Times discussed the number of innovative food companies, particularly those selling natural foods, that have become established in Boulder, Colorado, in recent years. According to the article, Boulder has a large number of people with experience in managing food companies, lenders who know the industry, food distributors, and food processing plants. The article quoted one entrepreneur as asserting: "There's an ecosystem here that supports food entrepreneurs that you just don't find in other places. Everything you need, including a lot of experience and expertise, is right here." What advantages does being located in Boulder give to startup natural food firms? In what circumstances can natural food firms located elsewhere overcome these advantages? Are Boulder's advantages likely to persist over time?

Short Answer

Expert verified
Boulder provides numerous advantages to startup natural food firms including availability of experienced professionals, supportive lenders, local food distributors, and processing plants, and overall ecosystem congruent to the needs of food entrepreneurs. Firms located elsewhere may overcome these advantages through technology, efficient supply chain management, collaboration, or clustering. The persistence of Boulder's advantages is contingent upon it continuing to foster a supportive business environment and keep pace with changes in the economy and consumer preferences.

Step by step solution

01

Identify Boulder's Advantages

From the article, it appears that Boulder has several key advantages for natural food startups. These include: 1) A large number of experienced food industry professionals, 2) Lenders familiar with the food industry, 3) Local presence of food distributors and processing plants, and 4) An ecosystem that supports food entrepreneurs. This seems to imply that startups in Boulder have supply chain, financial, and knowledge advantages.
02

Consider How Other Companies Might Overcome These Advantages

Natural food firms located elsewhere could potentially overcome Boulder's advantages through several ways. For example, they could leverage technology to increase their access to knowledge and expertise or find ways to manage their supply chain efficiently. They could also seek financial support from lenders who understand the food industry, wherever those lenders might be located. Collaboration with other similar firms or clustering in another region with similar characteristics could also help offset Boulder's advantages.
03

Think About Whether Boulder's Advantages Will Persist

The issue of whether Boulder's advantages will persist over time depends on various factors. If Boulder continues to foster a business-friendly environment (for instance, through regulations that encourage entrepreneurship or investments in infrastructure), its advantages might persist. However, changes such as a slowdown in the local economy, an influx of competing firms, or changes in consumer preferences could challenge Boulder's standing as a hub for natural food startups.

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