Part 1A: Industry Analysis
Broad Environment: PEST Analysis
The Dallas Fort Worth (DFW) area and specifically Denton County is experiencing rapid economic development and population growth due to the close proximity of airports and many large and convenient transportation paths which link the Town of Cross Roads with an abundance of employment locations in cities such as Dallas, Frisco, Denton, and McKinney. DFW has experienced a large increase in population size in the past 50 years or so. There have been several economic pressures such as a rise in the number of foreclosures and diminishing credit. DFW is known as one of the fastest growing metropolitan areas in the United States, and from 1990 to 2000 it grew by approximately 29% and gained a little over one million residents. From 2000-2009 the population grew to nearly 6,637,230. DFW is adding nearly 100,000 new residents annually. One population movement trend in DFW in recent years is for people to move away from the busy downtown city areas into less dense communities like Frisco and Little Elm and even smaller country towns like Cross Roads. Planned communities are very popular now as well. McKinney is rated the second best place in the country to live in 2012 by Money Magazine and USA Today named Denton in 2012 Best Small Towns in America. These towns along 380 are bringing in residents and increasing traffic.

Specific Industry: Five Forces Analysis
Some of Cross Roads main competitors are Savannah, Paloma Creek, Providence Village, Little Elm, McKinney, Frisco, Aubrey, and Krugerville. A lot of the surrounding towns and communities are very similar to Cross Roads and are trying to take advantage of the rapid growth. They also allow 0.2 acre or less size of lots in many new developments. Suppliers (such as businesses that want to move in to town or city service providers such as utility providers) have little power because there are many service providers and businesses that are substitutable and the towns can strongly encourage or discourage relationships with certain retail or service providers. The towns also have limited resources to pay for service providers such as sales tax and property taxes. Buyer powers (residents) have a lot of power because towns are not-for-profit organizations that exist to provide services for residents. The towns usually conform to the residents’ preferences focusing needs, desires, and expectations. Residents will go to the place that best fits their preferences for a town or city and like many small towns, choose to stay in the city for 5 or more years. When changes are being made, existing residents have a huge voice in what is acceptable and what is unacceptable. There are a lot of substitute cities and towns that people can choose from in the industry because there are a lot of towns that offer the same services and benefits such as large residential lots, fire/EMS, law enforcement, recreational activities, and community facilities for example. The threat of new entrants is low because it is hard to differentiate yourself as a town or city and it is expensive to establish, build, and sustain a town due to high infrastructure and land costs.

Drivers of change
The key drivers in the urban planning are sustainability, accessibility, density, diversity, and the city-specific incentives. It is critical for towns to make decisions today with the future in mind. Towns cannot just make decisions for today or else they will fall behind and won’t be able to meet the demands of population and economic growth in the future. They need to consider the quality of life, town environment, and economics. Density is important because it affects city zoning, commercial business sustainability, revenues, and the amount of services and amenities that are necessary. Diversity affects the community culture and preferences. City-specific incentives affect the amount and kind of businesses that move into a town which in turn affects the economic status and growth of a town.

Key Survival Factors
The key survival factors of the urban landscape are the ability to build community, ensuring an economically sustainable entity, and providing amenities that sustain the eco-system such as power, communications, water, services, sanitation, and the ability to respond to change. A town is a social entity that centers on people interacting with one another in business, schools, recreation and etc. So building strong community is what will help sustain community health, interest, service, and participation. Without these it is not a community. Towns and cities provide and sell services to residents that are necessary for sustaining life. A town or city must be economically sustainable or else they will not be able to provide city services which are expected by residents. Without proper amenities and services, residents cannot live in a town or city.

Overall Attractiveness
This overall attractiveness of this industry/environment is low due to the many competing cities and towns, the many substitute cities and towns, and the high rivalry between growing cities such as McKinney and Denton. It is also very costly to develop and sustain a town or city, therefore developing and sustaining and healthy town or city takes a lot of work, planning, and adjusting. New DFW residents already have so many towns and cities to choose from that provide their preferred lifestyle and quality of life. It would be extremely hard to start a new town or city and try to provide better value for residents and businesses than cities and towns that already exist. There is such a wide variety of kinds of cities and towns that new residents already have plenty of places to choose from. Thus, it would be hard for a new town or city to distinguish itself as providing greater value than most others.

Part 1B: Current Status of the Firm
Operating performance
The town of Cross Roads is a not-for-profit entity and is not a publicly held company. They currently have no outstanding debt.

Market Performance
Cross Roads has a small budget with low revenues. Their revenues are mostly from sales tax as there is no interest in collecting a property tax. The rest of their revenues come from other miscellaneous fees. They expect revenues to grow up to 5 times the current levels due to a new CVS and Wal-Mart. This increased commercial activity will cater to the current residents as well as the commuters along TX 380. Other major projects within the proposed budget are small based and cater to the country feel of the residents, for example, the town hall center with limited employees.

Organizational Health
Overall, Cross Roads is a healthy town. They are in a prime position for economic growth. Turnover is very low. About 75% of the population has lived in Cross Roads for 5 or more years and about 50% for over 10 years. Satisfaction is very high with 88% of the population rating the quality of life in Cross Roads as excellent or good. Nobody rated the quality of life as poor or very poor. 80% of the population rated the performance of the town's elected officials as excellent or good. Most people are highly satisfied with the town's Code Enforcement, fire services, garbage pickup, parks/recreation, police services, recycling program, road maintenance, street lighting, and water services. On the other hand, people are fairly dissatisfied with the town's inspection services, permit processing, and sanitary sewer service.

Current Goals 1. Agricultural Development Goal: Preserve the rural character by maintaining a balance between the expanding urban area and the rural nature of the community 2. Residential Development Goal: Ensure housing development is compatible with existing and adjacent land uses and has access to key community features and natural features. 3. Commercial Land Use Goal: Expand and diversify the town’s sales tax base by appropriate commercial development as depicted on the future land use plan. 4. Service Goal: New town services should be planned and designed to be reflective of anticipated population growth and sales tax revenue. 5. Transportation Goal: Develop an integrated transportation plan that reflects cooperation with surrounding communities, Denton County, and the Texas Department of Transportation.

Mission/Vision
Cross Road has a ten point vision statement for future growth. The ten aspects of this vision statement are continued managed growth within the incorporated area, natural resource protection, continued agricultural identity, sense of community and a sense of place development quality, low density housing development, fiscal responsibility, city and county coordination, public services and utilities coordination, quality transportation, and predictability and public involvement.

Product/Market Focus
Cross Roads product focus is narrow. They simply provide genuine Texas country living and plenty of land. Their market focus is narrow as well. They are not currently interested in rapid population growth. Their focus is on people who are farmers, ranchers, or just simply people who desire country living away from the city with plenty of land.

Value Proposition
Cross Roads offers residents a Texas country atmosphere, close proximity to the growing DFW metroplex, and no property taxes to both residents and businesses.

Core Activities
Cross Roads plans and implements economic development strategies. They also maintain relationships with the town service companies such as Mustang Water Supply and CoServ Electric. As Cross Roads grows and changes town leadership creates town ordinances and regulations. Cross Roads also does quite a bit of road repair and maintenance. They hold town council and economic development committee meetings to plan and strategize for the future of the town.

Current Capabilities
Customer capabilities:

Innovative capabilities: Cross Roads has the ability to expand their services and economic growth strategies through planning and providing incentives such as no property tax, high traffic location, and sales tax rebates.

Operational capabilities: Cross Roads has the ability to repair and maintain their roads. Even though the Texas Department of Transportation is primarily responsible for repairing and maintaining the roads, the town leadership prefers to do some of their own road work as well. Cross Roads has been able to do this because they are financially healthy. They have the ability to provide basic town services such as water and electricity. Due to their limited resources, Cross Roads relies on surrounding communities for many services such as fire/EMS, police, and public schools. They have the ability to control the growth of Cross Roads despite the rapid growth around them. Residents and town leadership are both satisfied with the current state of Cross Roads. They enjoy the country living environment and are not eager for rapid population growth. They control the town growth through ordinances and regulations such as their 1 acre lot minimum.

Overall Strategic Fit
Strategy – Environment: Cross Roads does fit very well with its surrounding environment. This is partly due to the fact that they have different goals than the surrounding communities such as maintaining a country atmosphere and large 1 acre or more lot sizes. So in some ways they don’t want to be like the surrounding environment. On the other hand, they do not fit very well with their environment because they do not currently offer outstanding government services. They do offer services such as fire/EMS and law enforcement, but these major services are not as fast, effective, or satisfying as they could be if they were provided by Cross Roads itself. They also do not offer as much in the area of food and dining, entertainment, recreation, etc. Also, some of their utilities are inadequate and underdeveloped such as commercial sewer line and fresh water lines.

Strategy – Business Capabilities: Cross Roads does not have many capabilities at this point which makes sense because their current strategy is pretty simple. For the most part their current capabilities line up with their current strategy. They are able to control population growth and land development through ordinances. They are able to provide basic services to residents. They are even able to meet almost all of their current goals. Some of the strategic gaps are their inability to provide all of the major safety services such as fire and police due to their minimal financial resources. They want to maintain a fluid transportation system along with high quality roads. One problem they may face is that they are limited in the amount of road repair and maintenance they can fund each year, and the Texas Department of Transportation will be responsible for the rest, which Cross Roads cannot control. They are currently lacking in an integrated transportation plan.

Changes to Current Goals and Strategic Orientation
Their current goals do not need to be changed. All of our proposed strategic changes will fall under one or more of the current goals.

We propose that Cross Roads needs to attract three new full service restaurants including Babes Chicken Dinner House, Cracker Barrel, and Rudy’s Country Store and BBQ, one new Dairy Queen as a fast food option, extend new sewer lines along US 380 west of Naylor Road to promote business development along the commercial corridor, upgrade their inadequate fresh water lines, and start a small police department to help manage and prevent increased amounts of crime due to new businesses such as Walmart. Full Service restaurants are definitely lacking in Cross Roads. Residents really want some high quality full service restaurants to eat at that not only provide option for them but that will bring in more sales tax revenue. What is unique about Cracker Barrel is that it is not only a restaurant that provides a popular breakfast option, but it is also a country store which acts as a tourist attraction. Rudy’s Country Store and BBQ is similar in that it is a high quality country style restaurant that serves as a tourist attraction because it has a country store as well. Another bonus of having a Rudy’s Country Store and BBQ is that it also serves another gas station for the town. So in one entity, Rudy’s offers Cross Roads the benefit of a high quality restaurant, a tourist attraction as a country store, and a gas station for residents and people traveling on US 380 through Cross Roads. Residents also mentioned that they would like to see more fast food restaurant in the near future. Dairy Queen is commonly found in country towns and would get a lot of business not only from local residents but from people passing through Cross Roads who would like to stop off for a treat. With a new Walmart Cross Roads will encounter a great increase in crime. Even though residents do not currently see a need for local law enforcement, they will definitely want it and benefit from it once hundreds of crimes start taking place in their town. We believe a local Cross Roads Police force is the answer. A Cross Roads Police department is actually quite affordable. We propose that they need only one Police Chief and one other full-time officer. These two officers will provide 16 hours of service per day combined but will be on call 24/7. This will involve buying two police cars and all the related equipment. They will also need some kind of existing or new infrastructure to serve as a police officer headquarters. With a lot of new commercial development taking place in the near future it is necessary to extend more sewer lines along US 380 west of Naylor Road. Businesses will expect this service. This is in fact an expensive project to fund costing at least $1.5 million according to Cross Roads representatives, but they can fund it using grants from the U.S. Department of Agriculture and also by issuing revenue bonds according to the city manager of Coppell, Texas. We believe that this project is affordable given the opportunities for grants and bonds. This is probably the most important aspect of our proposal. Cross Roads has to have sewer lines along the rest of US 380 or else they cannot effectively attract or sustain large amounts of commercial development. Also, 78% of Cross Roads’ residents want the new sewer lines according to the town survey. Lastly, we propose that according to the desire of 78% of the residents, as indicated in the town survey, that Cross Roads needs to upgrade their undersized fresh water lines. This is also a fairly expensive project, but they can complete this project in stages. We propose that Cross Roads should upgrade the water lines on 3 streets every year for 4 years starting in the summer of 2014. It will cost Cross Roads an average of $240,000 per year to upgrade 3 streets per year (based off of price for this project http://www.t-g.com/story/1808863.html). These major projects are affordable if they are timed properly. The new Walmart, CVS, and restaurants will fund these projects over the next 5 years as seen in the financial viability analysis.