Red Box Case Study 1a. What are the chief elements of Redbox’s strategy? * Low price advantage (allows rentals for as little as $1 a day) * Strategic partnerships to raise volume (place kiosks in many high trafficked areas such as groceries or convenience stores) * Rapid expansion (have almost doubled amount of kiosks each year since 2006) * Customer experience (Redbox focuses on the customer having a fast transaction by allowing customers to obtain DVD’s under 1 minute if they were aware of which one they wanted, and returns in 20 seconds) 1b. Which of the five generic competitive strategies most closely fit the competitive approach that Redbox is taking? Low-cost provider * Redbox is using the low-cost provider strategy by offering DVD’s at roughly a 75% discount compared to their competitors * Also by placing their kiosks in areas of different industries that also use the low-cost strategy such as McDonald’s the kiosks are surrounded by their market 1c.
Quaker was acquired by Pepsico namely for Gatorade which supplanted Powerade as the chief “sports drink” in the portfolio. Frito-Lay has come a long way from its roots from when, in 1932, Elmer Doolin made Fritos one batch at a time and sold them locally out of a café in San Antonio while an entrepreneur named Herman W. Lay began his potato chip business in Nashville. In 1961 they merged into the Frito-Lay, Inc. These brands now account for nearly 60% of the U.S snack chip industry. They have fought against many threats during their history including a notable battle with Eagle brand potato chips in the 80’s.
However, C_Fad came out of development and was able to be sold, so a price was set at $35, since it was slightly bigger and a whole unit slower than Cake. C_Fad was created to help appeal to both the low tech and high tech markets, so the price was a compromise for both markets. Marketing budgets were set based on the idea that Cake had been out for 3 years and C_Fad was just getting kick-started. Cake’s Promotions and Sales budget was reduced by $100, down to $1,100, and C_Fad’s Promotions and Sales budget were both set at $1,400. C_Fad was a brand new product appealing to both markets; therefore more money was needed to ensure awareness and accessibility to our customers.
Twinkies Fun Facts. Twinkies [wiki], and American icon, and for some, the symbol of junk food, is the snack food that people love (or love to hate). Today, the "golden sponge cake with creamy filling" snack is ubiquitous: it's virtually in every supermarket, gas station, and snack vending machine - but how much do you really know about Twinkies? Here're some fun facts to ponder while you munch on one of America's favorite snacks: The History of Twinkies Twinkies were invented in 1930, at the beginning of the Great Depression by James A. Dewar, a plant manager at Continental Baking Company (Hostess' parent company). At the time, Continental was a relatively new company and Dewar was worried that the company might not survive the hard economic times.
Firstly, as this essay has already mentioned, HFCS can reach the same sweetness as the traditional cane sugar does with less amount, and the price of a metric ton of HFCS is even cheaper than a metric ton of cane sugar. Therefore, using HFCS saves a huge amount of money for soda companies. However, this phenomenon isn't for no reason, but for the protection towards corn production in the U.S.. A system of sugar tariffs and sugar quotas imposed in 1977 in the United States significantly increased the cost of imported sugar, and U.S. producers sought cheaper sources. HFCS derived from corn is more economical because the domestic U.S. prices of sugar are twice the global price and the price of corn is kept low through government subsidies paid to growers. HFCS became an attractive substitute and is preferred over cane sugar by the vast majority of American food and beverage manufacturers.
You find the following contract written by Little Candy Company: “Giant Candy Company (Giant) agrees to buy and Little Candy Company (Little) agrees to sell all of the candy coating that Giant requires for a period of five years. The candy coating shall be purchased at the current list price as determined by Little. Orders will be shipped ten days from the placement of order. Applicable taxes extra. Contingencies beyond the control of Little to be sufficient excuse for failure to comply with the contract.
On February 9, 2006, Tesco announced that it planned to move into the United States by opening a chain of small format grocery stores in the Western states (Arizona, California and Nevada) in 2007 named Fresh & Easy. The initial planned capital expenditure is up to ($436m USD) per year. After Tesco CEO Terry Leahy announced serious resources had been committed to developing a format that would be popular with American consumers, investors responded with some skepticism with a small drop in the company's share price. The markets were expected to be around 1,400 square meters (15,000 sq. ft.) good-sized supermarkets in many countries, but about one-third the size of an average supermarket within the US.
Cracker Jack valuation-discounted cash flow ($ in millions) 1997 figures taken from Cracker Jack proposed income statement 1997-2001. Sales increase from 1996 to 1997 was expected to be 2%. 1997 1998 1999 2000 2001 Residual Value Fair Market Value sales increases taken from Pepsico Annual Reports 1998-2001 7% 6% 8% 6% NET SALES $50.50 $54.04 $57.28 $61.86 $65.57 Cost of goods sold 27.3 29.21 30.96 33.44 35.45 GROSS MARGIN $23.20 $24.82 $26.31 $28.42 $30.12 Operating expenses 19.9 21.29 22.57 24.38 25.84 EBIT $3.30 $3.53 $3.74 $4.04 $4.28 Income tax provision on EBIT (40% of EBIT) 1.32 1.41 1.50 1.62 1.71 After-tax earnings before interest and taxes on interest 1.98 2.12 2.25 2.42 2.57 Add: non-cash items including depreciation expense 1.4 1.50 1.59 1.71 1.82 Funds Provided 0.58 0.62 0.66 0.71 0.75 Subtract: Capital Expenditures 0.4 0.43 0.46 0.49 0.52 Total cash flows exclusive of interest (net of tax) $0.18 $0.19 $0.20 $0.21 $0.23 $2.73 Present value factor at discount rate of 12% 0.893 0.797 0.712 0.636 0.567 0.567 Present value $0.16 $0.15 $0.14 $0.14 $0.13 $1.55 Total present value of cash flows $0.72 Present value of residual $1.55 Fair market capital value for the firm
Market Customization: Market Segmentation, Targeting, and Positioning “Coca-Cola has never disclosed how much it lost in the new Coke fiasco, though bottlers told Mr. Meyers of Beverage Digest that they took a hit of $30 million on unwanted concentrate for new Coke. The company also spent $4 million on market testing and taste comparisons with 200,000 consumers.” http://www.nytimes.com/1995/04/11/business/company-news-ten-years-later-coca-cola-laughs-at-new-coke.html Question: Can the failure of “New” Coke be attributed to shortcomings of Robert Goizueta’s Market Customization strategy. Answer: The Background: From 60% in 1950, Coca-cola’s market share had dropped to 24% in 1983. The market share was mainly lost to Pepsi-Cola. Coca-cola thus, in 1985, decided to introduce a new formula (unpopularly called New Coke) in-order to drive up sales.
The experiment will microwave three different brands (independent variable) of popcorn for 4 minutes and then count the remaining kernels (dependent variable). A1. Literature Review The first literature review is the “Which Brand of popcorn pops the most”. This experiment tried to find the most cost effective brand of popcorn. It found from Orville Redenbacher, Act II and Kroger that the Act IIs popcorn brand is most cost effective (Which brand, n.d.).