TOROMARK DIGITAL MARKETING
REPORT TO THE BOARD OF DIRECTORS
ANALYSIS AND DECISION FOR
EXPANSION LOCATION
Introduction
Toromark Digital Marketing has now been in business for 7 years, and I am pleased to say our
company has done an excellent job in growing and expanding. From having only 4 clients to 24
clients, revenue growing every year, recognition growing among businesses.
However, Toromark has created a target: $12 million in revenue (an increase from $7.8 million),
and $3.5 million in profit (up from $2.35 million) within the next three years. If we want to
achieve this goal and continue to thrive in our industry, we need to expand geographically,
beyond Toronto, for a new, untouched market. Fortunately
As a company, we would aim for a middle-sized city in the United States, that has convenient
transportation links from Toronto to the location, and within the city. A steady population and
economic growth rate, business friendly environment, well-educated and tech savvy workforce,
as well as high quality educational institutes.
After rigorous hours of discussion, research and analysis, we have concluded that Charlotte City,
North Carolina, would be an excellent location to meet our needs. The following report will
outline the benefits Charlotte can provide to acquire new customers and grow Toromark’s
overall revenue, as well as the company’s ability to hire and retain talent which could enable
growth.
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If Toromark expanded to Charlotte, it would face a multitude of benefits in their ability to
acquire new customers and grow its revenue based on:
1.1 The level of economic growth
1.2 Size of the population
1.3 Convenience of transportation
1.4 Amount of consumer expenditure
1.5 Amount of disposable income
1.6 The level of productivity
The following aspects would increase the attractiveness of Charlotte which allow Toromark to
hire and retain the talent, hence, will enable growth:
2.1 The cost of living
2.2 The rate of particle pollution
2.3 The mental health ranking
2.4 The gini coefficient
2.5 The poverty level
Potential concerns for Toromark’s expansion to Charlotte:
3.1 Local education levels
3.2 Amount of real GDP
3.3 Unemployment rates
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1.1 The level of economic growth of Charlotte, North Carolina
According to Milken Institute’s report on the Best Performing Cities 2021, Charlotte ranks 26
and is a tier 2 city with a High-tech GDP of 178 from 2018 to 2019, and shows a 2.67% growth
from 2014 to 2019 (Galdamez et. al., 2021).
1.2 Size of the population
According to the World Population Review, Charlotte has a population of 912,096 in 2021.
Whereas the land area is 307.2 sq mi. Therefore, the density of the population is approximately
2969 people per square mile (World Population Review, 2021).
1.3 Convenience of transportation
According to The Charlotte Observer, a newspaper that reports on events that occur in Charlotte
and North Carolina, Charlotte is implementing a transportation fee reduction to benefit lower
income earners and those who do not own a car. This is aimed to be completed and operating
by June 2022 (Editorial Board, 2021).
1.4 Amount of consumer expenditure
According to Euromonitor Internationals’ statistical database, the amount of consumer
expenditure in 2020 was $104,459.8 million USD. In 2019, it was $105,095.4 million USD. This
indicates a decrease in consumer expenditure by 0.605% (Euromonitor International, 2021).
1.5 Amount of disposable income
According to Euromonitor Internationals’ statistical database, the amount of disposable income
per person in 2020 was $119,155.1 million USD. In 2019, it was $119,307.3 million USD. This
shows a decrease in disposable income by 0.128% (Euromonitor International, 2021).
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1.6 The level of productivity
According to Euromonitor Internationals’ statistical database, the level of productivity in 2020
was $140,535 USD per person employed at constant prices and $136,092.3 USD per person
employed at constant prices in 2019 (Euromonitor International, 2021). See figure 1 for a
configuration of the productivity in Charlotte from 2016 to 2020.
Figure 1: A line chart showing the productivity in Charlotte, North Carolina, from 2016 to 2020
(*Data taken from Euromonitor Internationals’ database)
When examining figure 1, we can see there is a general upward trend in productivity in
Charlotte. Starting with a slow and steady increase in the beginning, a slight drop from 2018 to
2019 and a 3.264% increase between 2019 and 2020.
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2.1 The cost of living
According to the United States Census Bureau, the median gross rent, otherwise known as the
midpoint monthly expenses for rent, was estimated to be $1,135 from 2015-2019 (United States
Census Bureau, 2021).
2.2 The rate of particle pollution
According to the American Lung Association, the weighted average of particle pollution in a 24
hour time span was 0 (American Lung Association, n.d.). Indicating that the air pollution in
Charlotte is very clean.
2.3 The mental health ranking
According to Mental Health America’s Adult Ranking in 2020, the state of North Carolina ranked
21 (Mental Health America, n.d.) , which indicates they have a lower prevalence of mental
health diseases and more access to support systems.
2.4 The gini coefficient
According to a report by the United States Census Bureau that presents the median household
incomes in 2019, the general state of North Carolina had a gini coefficient of 0.474 (United
States Census Bureau, 2021). The closer the gini coefficient is to 0, the more income equal it is.
Whereas the closer it is to 1, the more unequal the income.
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2.5 The poverty level
According to the United States Census Bureau, the percentage of people in poverty was 12.8%
in 2019 (United States Census Bureau, 2021). See figure 2 for a comparison between Charlotte’s
level of poverty with other tier 2 cities.
Figure 2: A bar chart showing the percentage of persons in poverty among tier 2 cities, and a
comparison with the percentage of persons in poverty in the United States.
The data was organized by gathering the percentage of persons in poverty of tier 2 cities found
in Milken Institute’s report on the Best Performing Cities 2021, and comparing that with
Charlotte, North Carolina as well as the United States. From the bar chart, it can be seen that
Charlotte has a lower percentage of persons in poverty with the other tier 2 cities, but a higher
poverty percentage than the United States. However, since the scale of a whole country
compared to a city will have varying measures, it can be concluded that Charlotte has a
relatively low poverty level.
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3.1 Local education levels
According to the United States Census Bureau, from 2015 to 2019, 89.1% of people aged 25 and
above are high school graduates or higher, while 44.3% have obtained a bachelor’s degree or
higher. In comparison to the education levels in the United States, 88% of people aged 25 or
older are high school graduates or higher, while 32.1% have obtained a bachelor’s degree or
higher (United States Census Bureau, 2021).
3.2 Amount of real GDP
According to the Bureau of Economic Analysis, the real GDP in North Carolina in 2019 was
$511,539,864 USD. Since cities often do not produce statistical data for their level of GDP, the
data was taken from the state instead. The real GDP in the United States in 2019 was
$19,091,662,000 USD (BEA, 2020). Therefore, North Carolina takes up 2.679% of the United
States’ real GDP.
3.3 Unemployment rates
According to Euromonitor Internationals’ statistical database, the unemployment rate in
Charlotte in 2019 was 3.068%. Whereas in 2020, the unemployment levels increased to 8.092%
(Euromonitor International, 2021).
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Analysis
As mentioned in the introduction, Toromark Digital Marketing aims to expand geographically in
order to reach the goals of earning: $12 million in revenue (an increase from $7.8 million), and
$3.5 million in profit (up from $2.35 million) within the next three years. Toromark has come a
long way since 2013, and can only benefit from expanding to Charlotte, North Carolina. As
mentioned, Toromark would need to hire and relocate employees to Charlotte.
The biggest selling point of Charlotte would be the low costs of living. Not only would this be
beneficial for employees moving from Toronto to Charlotte, but also beneficial for rent of office
buildings. The lower costs could decrease the company’s expenditure, and hence make
increasing profits easier.
With the consideration of the global impact that the pandemic, COVID19, has had on the
economies worldwide, the statistical data is a promising indication of potential growth in the
business. First focusing on productivity, despite the pandemic, the productivity per person
employed still increased by 3.264%. A graphical representation can be seen in figure 1. As for
consumer expenditure and disposable income, while that decreased, it was only by 0.605% and
0.128%, which does not even reach the 1% mark. As a result, this reveals that the city, as well as
the businesses, did very well in sustaining themselves.
Charlotte provides potential for an increase in the number of business transactions and the
clients for the company. This is indicated through the high level of consumer expenditure and
disposable income, as well as the dense population size. With an effective marketing technique,
Toromark will be able to reach out to potential consumers and convince those who have the
ability to, to invest or purchase Toromark products. Based on the amount of disposable income
per person reveals that a vast majority of the population would have the ability to put money
into Toromark to assist in the expansion and growth. Henceforth, resulting in growth in revenue.
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As a result of the implemented plan to improve the transportation system, it will allow
Toromark’s new location to become geographically accessible. Therefore, making travelling to
and from the office more affordable and convenient for employees of Toromark, as well as
potential buyers who wish to receive in-person consulting services.
The ability for Toromark to hire and retain talent would be highly dependent on the living
conditions in the city. As mentioned above, the low costs of living would be a major selling point
for both employees and the company. However, additional factors such as the excellent air
quality, close to income equality statistics, and the support systems in mental health, make
Charlotte a very attractive place for people to move and build a life in Charlotte. With the
numerous on-going social, political and environmental issues, these statistics become major
decision influencing factors as the world approaches the desire for equality across all platforms.
Toromark should therefore stress the significance of these factors, and the up and coming
transportation fee reduction as a selling point to relocate employees to Charlotte.
Potential limitations
However, the local education levels reveal less than 50% of people have a bachelor’s degree or
higher. Nonetheless, compared to the statistics in the United States, Charlotte is above that.
Therefore, the proposed action would be to hire the majority of the talent outside of Charlotte
and relocate them into the city to run the business, alongside a small percentage of the top
students who have studied or have a background in Charlotte.
Real GDP of an economy is often a big issue with companies. Real GDP is an indicator for how
well the economy is performing. Although North Carolina does not have the highest standing
real GDP, it is still relatively high and takes up 1/10th portion of the United States’ real GDP.
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As for the increased unemployment rate, although it more than doubled from 2019 to 2020, it is
important to consider the impact the pandemic has had on the economies worldwide.
Nonetheless, despite the pandemic, the unemployment rate is still relatively low. Additionally,
this could be a good opportunity for Toromark to hire local talent that may have been let go of
during the pandemic but could be a valuable asset to the company.
Nonetheless, while most people have the preconception that expansions should occur in a fully
developed city, for a somewhat small company such as ourselves, our competition in fully
developed cities would be companies like Accenture Interactive based in New York, SEO Digital
based in Philadelphia, or WebFX based in Pennsylvania. While these could be companies to aim
for in the future, our company size is not merely enough to compete with such big companies,
and could risk being bought out. Additionally, by doing that, the costs incurred for setting up,
renting office spaces, and salary could all become more expensive. In order to save costs during
the expansion, selecting a location, such as Charlotte, which is still developing and has low costs
of living would be perfect. Toromark will still receive a relatively high chance of making an
earning when considering the high level of disposable income and consumer expenditure, and
potential to buy out smaller digital marketing companies in the area.
Ultimately, these factors are not significant enough to significantly impact the decision to
expand to Charlotte.
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Conclusion
Charlotte City, North Carolina. While it may not be where the big shot companies are, we must
acknowledge that although we have done incredibly well over the past 7 years, we are still a
company that is making its way to the top. However, we must also acknowledge how well we
have done, and should aim for bigger and better, aim for a challenge.
As mentioned, the next big step for this company will be expanding geographically. This process
in itself will be a challenge. However, the conditions of Charlotte will make it easier: timely
transportation, low cost of living, high levels of consumer expenditure and disposable income,
all make the move much easier.
In the foreseeable future, I believe that if our company opens an office in Charlotte, we will gain
revenue, increase profits, and tap a whole new market to drive our client numbers up. We will
also gain the advantage of expanding our network, reaching out to people with a different
experience, different outlook, which may be advantageous to Toromark’s approach or
techniques.
All in all, Charlotte, North Carolina is a great fit for Toromark and it’s future employees, from
both the aspects of business and lifestyle.
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Reference list
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