Case Study: Strategy and Sustainability The Maritime Eco-Cabins case study demonstrates how businesses can balance economic prosperity with environmental stewardship and social responsibility. As you read the case, think about how productivity measurements can be used to increase operational effectiveness and achieve various strategic priorities. August Ralph is the owner of Maritime Eco-Cabins, a 4-star housekeeping cabin resort located in Newfoundland, Canada. Maritime Eco-Cabins' location near the UNESCO World Heritage Site Gros Morne National Park makes it an ideal location for guests who enjoy outdoor activities such as hiking, sea kayaking, whale watching, and iceberg watching. This tends to attract eco-conscious guests who are aware of how their actions can impact the natural environment around them. Maritime Eco-Cabins has seen a substantial increase in the demand for their cabins and has been operating at a 0% vacancy rate for several years. Therefore, Mr. Ralph is looking at building several new cabins on the property to serve their growing clientele. He is very certain he would be able to fully rent any new cabins for the foreseeable future. Mr. Ralph has also recently secured project financing from the Newfoundland & Labrador Credit Union for up to 2 million dollars. This expansion project will ultimately be managed by Mr. Ralph who has experience in the construction industry and several local contractors have been asked to submit designs and quotes for their work. Various proposals for the cabins have been received and final estimates for the project are given below: Building Costs per Cabin # of Cabins Square Feet Capacity Nightly Rate Labour Materials Energy Option 1 6 800 4 $300 $75,000 $150,000 $90,000 Option 2 5 1000 6 $400 $120,000 $240,000 $25,000 Option 3 4 1150 8 $500 $100,000 $210,000 $125,000 Mr. Ralph is leaning heavily toward 'Option 2' which uses environmentally friendly materials and building practices. 'Option 2' would also use much less energy in the form of fossil fuels and therefore have much lower greenhouse gas emissions versus the two other options. However, he does not want to totally disregard the economics of a project that will require a seven-figure investment by the business. Mr. Ralph's background in construction makes him well suited to manage the project but he does not feel as confident in his financial analysis skills. Should he just look at maximizing his revenue? Could productivity measures help him? He really wants to balance efficiency and profitability with environmental stewardship but he isn't sure where to start. Can you help Mr. Ralph evaluate the project options? Questions 1a.What is the problem/issue addressed in the case? 1b.Give at least two pros and two cons to your preferred solution. 2.Should Mr. Ralph just look at maximizing his revenue? 3.Could productivity measures help Mr. Ralph? Discuss how you answered this question and provide any calculations in an appendix. 4.Mr. Ralph really wants to balance efficiency and profitability with environmental stewardship but he isn't sure where to start. Help Mr. Ralph evaluate the project options. Discuss how you answered this question and provide any calculations in an appendix