Why Lean: Safety

Reasons for Lean: Safety

Lean management is a great way to get a better handle of your operations. As someone that helps companies put their processes on a diet to make them more manageable, I have heard just about any and all reasons why a company wants to implement lean.

Reasons I have heard go from their key supplier or customer is doing it, or they heard it is a great way to save money. Personally, I would consider those to be a weak reason for implementing lean. If the right reason and the right culture is in place, your company can avoid being on the bad side of a lean implementation statistic. I have heard from a number of sources that 80% of companies that implement lean revert back to their old habits after 5 years.

Few think safety when implementing lean. Safety of your employees can be a beneficiary of lean.

Re-work: If the amount of re-work you have to do decreases, it decreases the opportunity for a repetitive injury.

Hazards: With lean, and particularly the 5S exercise, you have a home for everything. When hoses are hung up or ladders are properly placed, it decreases the chance of someone tripping or having something fall on them.

Movement: When you are evaluating your processes during a lean project, there are some steps or movements that could potentially hurt someone. The review allows the evaluation and possible change of those steps so future injuries can be avoided.

What reasons can you think about why you should implement lean? I will blog about the reasons why I think a company should implement lean….and it is not about profit.

Have an awesome and productive week.

Kevin

Kevin MacDonald is a Business Consultant at L6S Business Consulting Inc (www.L6SBC.ca). L6S offers services in management consulting, Controller and CFO contracting, and lean management with either project work or teaching/mentoring of staff. Kevin has his CMA accounting designation along with a Black Belt in Lean Six Sigma.

Kevin is active in the community by volunteering for different groups and donates platelets at the Canadian Blood Services clinic on a bi-weekly basis.

Kevin is hosting a workshop series known as Entrepreneurial Community Edmonton. The workshops cover different areas of business, including finance, human resources, and collections. You can find more information at http://www.l6sbc.ca/ecyeg.html

For help with your business, contact Kevin at kevin@L6SBC.ca or 780-868-1867. You can also follow Kevin on Twitter at @L6SBC or Facebook.com/L6SBC

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Book Review: Five Key Principles of Corporate Performance Management

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As many of you know, I am constantly in learning mode. I am looking to learn the different perspectives of various items to not only help me, but my clients.

Recently, I finished reading ‘Five Key Principles of Corporate Performance Management’ by Bob Paladino. Mr Paladino is a specialist in helping companies to set up Corporate Performance Management offices (CPM). The CPM is a mechanism which can be used to link your corporate strategy, process improvement, and operations.

The strategic side of the CPM deals with the handling of the strategy map and the balance scorecard. The strategy map, as the name implies, maps out your strategy from the perspective of key operational processes to the higher level executive strategy. The balance scorecard is comprised of a set of Key Performance Indicators (KPI) for each step of the strategy map. Based off the two strategy tools, operational improvement projects are identified to be worked on.

Mr. Paladino takes the reader through a number of case studies of actual work he has done as an employee or consultant. It is much appreciated to see how all of these tools (Strategy Map, Balance Scorecard, Lean, and Six Sigma) are used together to help improve a company.

The concepts delivered from the book are great but the book is hard to read. Not because it is too technical but some examples lack certain pieces of information which will help to put the pictures together. In other portions of the book, there are some concepts which are revisited a number of times which make it hard to read due to boredom.

If you are a lover of strategy or process improvement, there are better books out there for you. If you are interested to learn how the two can be placed together, this might be the only book for you to read.

What is your most favorite business book?

Have an awesome and productive week.

Kevin

Kevin MacDonald is a Business Consultant at L6S Business Consulting Inc (www.L6SBC.ca). L6S offers services in management consulting, Controller and CFO contracting, and lean management with either project work or teaching/mentoring of staff. Kevin has his CMA accounting designation along with a Black Belt in Lean Six Sigma.

Kevin is active in the community by volunteering for different groups and donates platelets at the Canadian Blood Services clinic on a bi-weekly basis.

Kevin is hosting a workshop series known as Entrepreneurial Community Edmonton. The workshops cover different areas of business, including finance, human resources, and collections. You can find more information at http://www.l6sbc.ca/ecyeg.html

For help with your business, contact Kevin at kevin@L6SBC.ca or 780-868-1867. You can also follow Kevin on Twitter at @L6SBC or Facebook.com/L6SBC

Is It Time to Start Now?

Thanks to the BusinessLink for the opportunity to write this blog a few weeks ago. You can find the original posting at:http://businesslink.ca/blog/now-time-start-business

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With the recent developments in the economic landscape, Albertans have experienced significant change. Companies have seen a decrease in sales and are right sizing their operations to be affordable, but yet meet the current demand. More than 70,000 Albertans have been affected by company restructuring and they are looking for their next opportunity.

In many cases, the next opportunity may lie in starting up their own business. But is it the right time? Everyone is cutting back.

A number of strong and vibrant companies started during an economic downturn. Microsoft, FedEx, Hyatt Hotels, and Smashburger are a part of a long list of companies that started during an economic downturn. Here are 5 suggestions on how you can make your startup a success.

Lean and Mean: Seeing that ‘times are tough’, your first priority should be to run your business within a strong and realistic budget. That skill will become valuable in the future.

Innovate: Are you stuck in a pattern of running your business the way you always have? This is the time to re-examine your strategies and processes.

Marketing: For many companies, their first reaction to a slowdown in sales is to cut their marketing budget. Look at this as an opportunity to get your message in front of your target market with less noise from the competition.

Relationships: Spend more time with your current clients and target market. Get to know them on a deeper level. Find out what their pinch points are and reverse engineer them.

Improvement: Listen to your customers and use that knowledge to improve your offerings. Maybe use that information to create a new product line or service offering?

Be realistic! Start a new product line because it is within your budget and it solves a problem for your target market. You have limited resources. Remember when you develop a new product or offering, you are taking resources away from your core product.

An economic downturn is a fruitful time to start up a new venture. This was my perspective when I started my business in the last recession of 2008-09. This is your opportunity to be open to new ways of thinking, and build on what you have.

Have an awesome week.

Kevin MacDonald is a Business Consultant at L6S Business Consulting Inc (L6SBc.ca). L6S offers services in management consulting, Controller & CFO contracting, and lean management with either project work or teaching/mentoring of staff. Kevin has his CMA accounting designation along with a Black Belt in Lean Six Sigma.

Kevin is active in the community by volunteering for different groups and donates platelets at the Canadian Blood Services clinic on a bi-weekly basis.

Kevin is hosting Entrepreneurial Community Edmonton, a series of workshops with the goal of helping business owners/managers with their company. For more information, please visit L6SBC.ca/ecyeg.

For help with your business, contact Kevin at kevin@L6SBC.ca or 780-868-1867. You can also follow Kevin on Twitter at @L6SBC or Facebook.com/L6SBC

Lack of Uniqueness Part 5 of 6

Victory Stick Figure Line Up

Over the last 4 weeks, I went over 4 of the most common reasons why companies are not successful, according to the Small Business Administration of the United States. You will see that there are some common elements to each of the 6. Feel free to look at the original article here.

In the world of corporate strategy, there is one place that all companies, at one time or another, would like to get to. At this place, competition becomes irrelevant. It is not for a lack of effort, but in most cases, it is a place that most companies don’t get to. During that time, you can build your brand and improve your business so you are always the one and only who is on the island.

With a complete Blue Ocean Strategy, a company is able to carve out a market space which is uncontested and establishes a new demand for a product or service where there is no equivalent.[1]  The most common company which has developed a Blue Ocean Strategy is Circle de Soleil. There is no alternative to going to an adult show which mixes opera, gymnastics, and the circus together. Overall, building a Blue Ocean Strategy is a means to developing uniqueness to your company which allows it to stand out.

What are the different elements of a unique company? What are different ways your company can stick out?

Business Model: Does your business fulfill a market need in a different manner than established competitors? A very current example would be Uber. The business model is based on saving time for the consumer and allowing the consumer to have greater control or transparency during their experience.

Product: Does your product look, feel, or act the same as your competitors? What level of uniqueness does your product bring to the marketplace? Does your product solve an unknown problem that the consumer is just getting at?

Experience: How is your customer experience different from others? Do you interact with your customer on a basic level in person or on social media? Do you develop an experience for your consumer where they are happy and wanting to deal with you again?

Uniqueness can be something very hard to define and develop. Depending on the industry and how hard it is to start a business in that industry, your uniqueness is constantly being challenged and has to be reinvented.

What makes your business unique? How do you protect that uniqueness?

Have an awesome week.

Kevin

Kevin MacDonald is a Business Consultant at L6S Business Consulting Inc (www.L6SBC.ca). L6S offers services in management consulting, Controller and CFO contracting, and lean management with either project work or teaching/mentoring of staff. Kevin has his CMA accounting designation along with a Black Belt in Lean Six Sigma.

Kevin is active in the community by volunteering for different groups and donates platelets at the Canadian Blood Services clinic on a bi-weekly basis.

For help with your business, contact Kevin at kevin@L6SBC.ca or 780-868-1867.

Kevin is hosting three social media workshops at 14920 Stony Plain Rd NW, Edmonton, AB T5P 3X8 (Pura Vida Mind Body Soul). The March 29, 2016 workshop will be about Facebook, April 26, 2016 will be about Twitter, while the May 24, 2016 workshop will be covering LinkedIn. All session run from 6.00pm to 8.30pm. Food and refreshments will be available. Contact Kevin to register.

[1] https://en.wikipedia.org/wiki/Blue_Ocean_Strategy

Victory Stick Figure Line Up

Not in Touch with Customers’ Needs Part 4 of 6

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Over the last 3 weeks, I went over the 4th, 5th and 6th most common reasons why companies are not successful, according to the Small Business Administration of the United States. You will see that there are some common elements to each of the 6. Feel free to look at the original article here.

Customers are the lifeblood of any business. Without any customers, it is hard to have a sustainable business. The needs of your customers are constantly changing and evolving. At any time, your product or service may fall out of favour with your target market. A competitor may have developed a product which is a replacement to yours. Maybe a product developed by an indirect competitor was able to mitigate or completely solve the problem that your product was servicing. Being out of touch with what your target market is thinking can be a painful experience.

A company that was not in touch with its customers was Blockbuster. As Netflix was becoming more popular and well known, Blockbuster was getting less foot traffic into their stores to rent movies.  According to Blockbuster, people enjoyed the experience of going to a retail space, searching for a movie to watch, and putting the disc into the machine to watch.  Blockbuster did not stay in touch with their service consumer and moved their services into an online basis.

Staying in touch with your consumer does not have to be something overly complicated.

Competition: Watch closely what your competition is doing. Have they unveiled a new product with certain features? Are they growing at a faster rate than the industry or your company?

Feedback:  Add the ability for your consumer to give you feedback on their experience with your company. You can ask for feedback at reception while a second appointment is being booked or send out a very quick survey (4 questions as a maximum) on how your company performed.

Social Media:  Keep in touch and read what consumers are saying about your company and its services. Monitor feedback sites like Yelp. Search social media sites like Twitter and Snapchat to learn what your target market is saying. If you are connected with the correct people, you can get insight on how your product or service is being used which will give added ideas on improving your offering.

There are still different ways on getting feedback from consumers like a focus group or a phone survey. Use the method you think you will get the most truthful answer from and within your own budget.

Most importantly, the feedback that you do receive, make sure you take it with a grain of salt and use what you can to improve your company.

Do you get feedback from your consumer? How do you get it? How did you use that information in the end?

Have an awesome week.

Kevin

Kevin MacDonald is a Business Consultant at L6S Business Consulting Inc (www.L6SBC.ca). L6S offers services in management consulting, Controller and CFO contracting, and lean management with either project work or teaching/mentoring of staff. Kevin has his CMA accounting designation along with a Black Belt in Lean Six Sigma.

Kevin is active in the community by volunteering for different groups and donates platelets at the Canadian Blood Services clinic on a bi-weekly basis.

Kevin is hosting three social media workshops at 14920 Stony Plain Rd NW, Edmonton, AB T5P 3X8 (Pura Vida Mind Body Soul). The March 29, 2016 workshop will be about Facebook, April 26, 2016 will be about Twitter, while the May 24, 2016 workshop will be covering LinkedIn. All session run from 6.00pm to 8.30pm. Food and refreshments will be available. You can register here.

For help with your business, contact Kevin at kevin@L6SBC.ca or 780-868-1867.

Unprofitable Business Model Part 3 of 6

Model- North Carolina National GuardOver the last 2 weeks, I went over the 5th and 6th most common reasons why companies are not successful, according to the Small Business Administration of the United States. You will see that there are some common elements to each of the 6. Feel free to look at the original article here.

Every business has a model from which it is based upon. That model, in most cases, helps the business to increase its revenue. There is nothing wrong with having a different business model from others in your industry. For some companies, that is the point of uniqueness that they bring to the market and allows themselves to be differentiated from the rest of the market. That is how some companies have been able to take over the market, with that alternative business model.

Two recent examples of companies which have alternative business models in comparison to the traditional competitors is Uber and Airbnb.

Traditionally, you called a cab company or hailed a car on the street to be able to get from point A to point B.  With Uber, you are able to go onto the application, find a car near you that is available, find out the price of your proposed trip, and contact the vehicle to have it pick you up.

When travelling, you traditionally contact a hotel chain to book yourself a room. Now with Airbnb, you are able to book a room within someone’s house. You are travelling but you have the full services available to you as if you were in your own house, for a small cost.

When you are evaluating your business model, there are certain things you should be looking for.

Show Me The Money: Is your business model set up so that you can generate transaction revenue, at the very least? During the internet bubble of the 1990s, there were a number of companies that were commanding high valuations from the equity market but yet did not have a plan on how to generate revenue from their model.

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Uniqueness: Is your business model unique or a divergence from the norm within your industry? Does your customer interact with you in a way that the rest of your industry does not? Are your internal systems set up to allow for productivity gains? Companies that are able to develop a unique business model are greatly able to disturb their market, like Airbnb and Uber.

Sustainable: Is your business model sustainable and scalable for when you grow? You may have a customer centric business model which requires a new customer experience person every 25 customers. Are you able to find someone in a timely manner to help your newest customers?

What is the most interesting business model have you seen? Do you see it replicated in other industries? Would you consider it to be a failing or winning business model? I would love to hear.

Have an awesome week.

Kevin

Kevin MacDonald is a Business Consultant at L6S Business Consulting Inc (www.L6SBC.ca). L6S offers services in management consulting, Controller and CFO contracting, and lean management with either project work or teaching/mentoring of staff. Kevin has his CMA accounting designation along with a Black Belt in Lean Six Sigma.

Kevin is active in the community by volunteering for different groups and donates platelets at the Canadian Blood Services clinic on a bi-weekly basis.

Kevin is hosting three social media workshops at 14920 Stony Plain Rd NW, Edmonton, AB T5P 3X8 (Pura Vida). The March 29, 2016 workshop will be about Facebook, April 26, 2016 will be about Twitter, while the May 24, 2016 workshop will be covering LinkedIn. All session run from 6.00pm to 8.30pm. Food and refreshments will be available. You can register here.

For help with your business, contact Kevin at kevin@L6SBC.ca or 780-868-1867.

Photo Credit: North Carolina National Guard

Growth & Expansion: Part 1 of 6

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Over the next 6 weeks, I will be going over the top 5 reasons why companies are not successful, according to the Small Business Administration of the United States. You will see that there are some common elements to each of the 6. Feel free to look at the original article here.

When someone starts a new full time business venture, in general, they want that venture to earn enough for them to live a comfortable life. When you start from nothing, and you want it to develop into something, growth is needed.

I have seen and heard a number of stats in regards to business and the need for growth. Some people say that if your company is not growing, it is dying. That would have to come with certain parameters. For example, there are not many companies that grow during a recession or an economic depression. The second interesting statement I have heard is that if a company has the same revenue level over a 2 year period, there is an 85% chance that the company will not exist 5 years from now. In other words, your company needs to be able to constantly grow to be able to survive and thrive into the future.

As you can tell, growth is a very important part of a business. Sadly, it is also considered to be the 6th most common reason why a company fails. You might be thinking now, how could a company fail that is growing? Very easily, there is no proper plan or research conducted.

Plan: What is the strategic plan with the new product or service? Who are your competitors? How are you going to differentiate your offering from others that are currently in the market? What is your budget and timeline for future viability of the product?

Research: With a new product or service that you are offering, are you actually fulfilling a market demand? What problem are you solving for the consumer? One reason why growth hurts company because no research is done in terms of the product or service they are offering and the target market. Asking your loved ones or friends does not constitute research.

Resources: Do you have the internal resources to be able to expand with a new product or service? Do you have to hire extra people? What will their skill set be like? How much will it costs to hire those people? Can your business model handle those costs? Do you have the internal capacity to make or deliver the product? Is a capital investment required?

I personally know a local Edmonton firm that underwent a parabolic growth profile. Sadly, their growth was not properly managed. Currently, this firm is letting go staff because their customers, new and old, became very displeased with the services they received. The decrease in revenue is not economically driven. They deliver an essential service and their customers are now spending their dollars with their competitors.

Have you seen growth backfire on a firm? How was it handled?

Have an awesome week.

Kevin

Kevin MacDonald is a Business Consultant at L6S Business Consulting Inc (www.L6SBC.ca). L6S offers services in management consulting, Controller and CFO contracting, and lean management with either project work or teaching/mentoring of staff. Kevin has his CMA accounting designation along with a Black Belt in Lean Six Sigma.

Kevin is active in the community by volunteering for different groups and donates platelets at the Canadian Blood Services clinic on a bi-weekly basis.

For help with your business, contact Kevin at kevin@L6SBC.ca or 780-868-1867

Are the Walls Moving?

Walmart somewhat surprised a number of people last week in closing 269 stores around the globe.[1] For many retailers, this would drastically effect the company but in the case of Walmart, the stores being closed only reflect 1% of total sales and square footage.  The majority of the stores being closed are of the small variety, while Walmart still plans to open over 135 larger format stores within the next fiscal year starting February 1. In total 16,000 people will lose their jobs due to this restructuring.

Seeing that the majority of stores being closed are of the small variety, it can be ascertained that Walmart is looking at decreasing their own internal costs by increasing the retail square foot per employee at a store.

Walmart has developed a poor reputation in numerous communities by driving prices down where local stores can’t compete and paying employees’ minimum wages. In many cases, this has increased the strain on the social services offered by governments. Walmart, somewhat to its own credit, has started to increase wages for its employees, at least in the States.[2] While Walmart has grown with the number of locations it operates, it has become harder for it to find employees to operate the locations.

As you can see, a large proportion of Walmart’s decisions are financially based. Of the 4 value propositions (low price, customer experience, product leadership, and quality), Walmart is competitimg with the proposition that many consider to be the weakest to defend. It should be noted that of the largest companies in the world. Walmart stands out as being possibly the only company that competes fundamentally on price to the consumer.

Has the value proposition undertaken at Walmart starting to hurt the giant? It is widely known that its suppliers are expected to decrease their unit costs over a set period of time.  Has that sponge been squeezed dry? With prices going up at other retailers, do this allow Walmart some availability to also increase their prices?

I recently read an article (you can find it here) stating that this could be the beginning of the end for Walmart. I see this as a small reorganization of the company. Walmart has closed stores in 2013 and has actually abandoned Germany as a market.

What are your thoughts on the Walmart store closures? Is this the beginning of the end?

Have an awesome week.

Kevin

Kevin MacDonald is a Business Consultant at L6S Business Consulting Inc (www.L6SBC.ca). L6S offers services in management consulting, Controller and CFO contracting, and lean management with either project work or teaching/mentoring of staff. Kevin has his CMA accounting designation along with a Black Belt in Lean Six Sigma.

Kevin is active in the community by volunteering for different groups and donates platelets at the Canadian Blood Services clinic on a bi-weekly basis.

For help with your business, contact Kevin at kevin@L6SBC.ca or 780-868-1867

[1] http://news.walmart.com/news-archive/2016/01/15/walmart-continues-sharpened-focus-on-portfolio-management

[2] http://www.wsj.com/articles/wal-mart-to-increase-wages-for-most-u-s-store-workers-1453315937

1 Quick Tip for All Businesses

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I came across an article which interested me, mostly because it involves start-ups and the article involved ‘Quick tips’. You can find a link to the article here.

The suggestions given within the article are all thoughtful and I would consider something that all start-ups should use. I will admit, cultivating a company that would attract employees would be father down on my list. I would much rather focus on making my business model or my means of competition a profitable alternative for the market.

Speaking of the market, I was very surprised to notice that there was no mention of the market in any real way. Yes, the first point is about being aware of the processes and business model of your competition and industry standard to ‘play within’. But those elements of your industry might be the main point for your consumer that has created the opportunity.

Warren Buffet Blog2

Many companies have become successful in developing a new business model or ignoring the industry standards that are currently set. If Uber decided it wanted to follow the industry standards of the taxi service industry, would they be unique? Would they be a viable alternative to the rest of the industry? My answer is no.

Most surprisingly, the article did not mention that you need to identify what problem you are helping the consumer to solve? I had a conversation with a young local artist about her custom vases around this point. She stated that people bought her product because it is art. True, but the reason they bought that one piece is because it fit well into the environment (proper size, dimensions, etc.) but it a sense of emotion that missing. In general, people who do buy art have a place in mind or a look that they want to have in their next piece. Purchasing that item helps to solve that goal.

Can you think of an item or a service that you have purchased that did not solve a problem or a pinch point? I originally thought candy but it helped solve problem of craving something sweet.

What are your thoughts? If you were to give one quick tip for all businesses, what would it be?

Have an awesome week.

Kevin

Kevin MacDonald is a Business Consultant at L6S Business Consulting Inc (www.L6SBC.ca). L6S offers services in management consulting, Controller and CFO contracting, and lean management with either project work or teaching/mentoring of staff. Kevin has his CMA accounting designation along with a Black Belt in Lean Six Sigma.

Kevin is active in the community by volunteering for different groups and donates platelets at the Canadian Blood Services clinic on a bi-weekly basis.

For help with your business, contact Kevin at kevin@L6SBC.ca or 780-868-1867

 

 

The Good, the Bad, and the Ugly…..Again!

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This past Saturday, Canadians woke up to some ‘surprising’ news in regards to a Canadian brand which was owned by Best Buy. Best Buy decided to close down the majority of Future Shop stores, which were bought in November 2001 for $580 million[1].  In total, there are 66 Future Shops stores which will be closed down. All other Future Shop stores will be rebranded to the Best Buy brand[2].

Personally, I am not surprised with the decision to close and rebrand the remaining stores, but I was surprised with how it as done. As with many cases, and as I had shown with the closure of Target across Canada, there is the good, the bad, and the ugly in this decision.

The Good: Shareholders of Best Buy should be able to see their margins increase. No longer are there two different flyers, with the same sale items (and at times laid out in the flyer the same way). Some Future Shop and Best Buy stores were geographically close to each other. This possibly could of caused cannibalism of consumers for the chain and redundancies. Lastly, even with the closure of the 66 locations, the average Canadian will still be a 15 minute drive from a Best Buy location.

The Bad: Landlords, many who are also losing Target as a key leaseholder, will have more space which will be required to be filled. Lease prices could decrease with all of the supply now hitting the market. When Target’s leases became available on the market, there was nervousness about which companies would be able to fill the key spaces. The amount of space is smaller, but in many facilities, the Future Shop and Best Buy locations are key to shopping district.

The Ugly: With the closure of the stores, there are 1,500 jobs lost in the Canadian retail market.  Coupled with the departure of Target, there are a large number of customer service skilled people now available on the job market. This could make the market for those looking for a job harder.

What do you think of the decision for the closure of the stores and the Best Buy re-branding? Is this an opportunity for a regional electrical retailer like Visions? Do you see another retailer closing their doors?

Have an awesome week.

Kevin

Kevin MacDonald is the CEO of L6S Business Consulting Inc. L6S offers services in management consulting, Controller and CFO contracting, and lean management with either project work or teaching/mentoring of staff. Kevin has his CMA accounting designation along with a Black Belt in Lean Six Sigma.

Kevin is active in the community by volunteering for different groups, his condo board and donates platelets at the Canadian Blood Services clinics on a bi-weekly basis.

[1] http://en.wikipedia.org/wiki/Future_Shop

[2] http://www.bestbuy.ca/en-CA/press/best-buy-canada-announces-the-consolidation-of-future-shop-and-best-buy-stores-and-websites-under-the-best-buy-brand/pc8312.aspx?path=53a0703be5f505561482b04ce90acd48en08312.aspx?path=53a0703be5f505561482b04ce90acd48en08