Many customers are currently insisting on betas and the sales are cutting into Apex’s stigones sales at a rate of 10% per year. B-227 would be Apex’s first product in the beta segment which is very competitive. There are currently three strong competitors in the market and six others selling commodity based or off-brand betas. The oxidizer market accounts for 25%
One suggestion is that the company reposition its water as a premium product, justifying a higher price. If successful, the company believes that it could charge 20% more for its water than it does now. 1. What is the maximum sales loss (in % and units) that Healthy Spring could tolerate before a 20% price increase would fail to make a positive contribution to its profitability? The maximum sales loss would be 25% before they can tolerate before a 20% price increase, which amount to 1,500 bottles per day instead of 2,000.
The test market numbers given in Table 1 shows a loss of $1,204,150, which is mostly attributable to the high market expenses. But if we look at the projected numbers in Table 1, we see that by introducing to a larger market the initial sales are enough to combat the expenses by the residual effect of repeat customers. Total sales increase 20 times while expenses only increase 4 times. This gives Zoecon a profit of $1,088,422. Market Share Potential – Table 2 shows the breakdown of the market in terms of the 19 city distribution next year.
The companyfollowed a strategy which allowed it to increase its corporate profits, since most of its business units it retrenched were unprofitable. By 2006, five business units hadnegative net profit margins and negative operating margins. Four of those unitshad negative margins of more than 10%, with different units seeing steady or sharpdeclines in revenues in profits since 2004. The only two profitable units were the direct selling unit and the Europeansnack lines. These two lines were seeing declining revenues and operating margins,except in 2006, when both lines increased their margins.
Japan’s GNP1, making Japan the most dependent country on trade in the world. (Shimokawa, 1995). This reform would increase the Japanese purchasing parity and would be favorable in the long run. In the short run however, firms relying strongly on exports would suffer losses, this including the automobile sector and thus the Big 4 Japanese car makers- Toyota, Nissan, Honda and Mazda. By 1985, Japanese imports justified for 20% of passenger car sales in the U.S. and 10% of sales in Europe.
HAVELLS INDIA : The SYLVANIA ACQUISITION DECISION Growth rate of Sylvania – 2.5% in 2005, 3.5% in 2006 Growth rate of Sylvania – CAGR 40% but still its loss making firm. Assumption that SYL will continue to grow profits by the same rate, we find that Total profit in 5 years will be approx.. INR 813 Cr Using a opportunity cost of capital 10% - Present value = INR 573 Cr Valuation of SYL is 200 Mn USD, which is around INR 894 Cr. So NPV is – INR 373 Cr or around USD 70 Mn. So the correct valuation would have been USD 130 Mn. Hence if they go ahead, they will be paying around USD 70 Mn extra.
We got a cost of equity of 20%. Free cash flows are calculated using the formula EBIT x (1-TAX) + Depreciation – Capex – Change in NWC. The results are presented below: The NPV of the first generation phone project, ignoring both the possibility of investing in the second-generation project and the possibility of selling the equipment after two years is ($3,154). Since the NPV is negative, this would not be a good investment. 2.
Table of Contents Introduction…………………...…………………………………………………...………….…...3 Samsung’s Turnaround Strategy…………………………………………………..………………3 Implications for Marketing………………………………………………..………………5 Strength of the Samsung Brand...........……..…………………………………………………......5 Comparison to Sony: Becoming a Top Ten Global Brand…...…………………………...5 CMO’s Role & Responsibilities…………………………………..…...………………………….6 Building Influence...……………………………………..…...…………………………...7 Conclusion/ Decision ……………......…………...…………………………………………….....7 References…………………………………………………………………………………………8 Samsung Electronics Company: Global Marketing Operations- Introduction In the 1990’s Samsung started out as a “third-tier commodity brand with very little product differentiation” (Quelch & Harrington, 2008). Due to the Asian financial crisis in 1997, the company experienced tremendous loss, and made the difficult decision to revamp their brand image. Based on this strategic change, Samsung was able to experience increasing brand success, and in August 2003, became number 25 in the world’s most valuable brands, with an estimated valuation of $10.8 billion. Initially, the company’s turnaround strategy was what spearheaded the corporation into such tremendous success. During that time, Samsung’s marketing function was overhauled, so that it could support the new brand proposition.
It also reduced its employee scale by 50% while 105 new recruits were hired by other branches. By successful de-marketing strategies, the branch reduced 43% of traffic accidents handled (54 to 31) and thereby the insurance claims, but the same entry was the fastest-growing and largest portion of total indirect cost at the headquarters the same year. In other words, Taejon’s revenue growth cannot indicate a proportional increase in cost generating or resources consumption from the headquarters. Under the current revenue-based process, its cost reduction effort was not rewarded with lower overhead allocation, but increasing financial responsibility as the company’s indirect costs expanded from 2007 to 2008.
Heath Spring Water Company – Assignment General Information Price/ bottle $20 Volume/ day 2000 Variable Cost $16000 Variable cost per unit $8 Fixed Cost $20000 Question 1 Answer The maximum sales loss that Health Spring Water Company (HSWC) can bare without losing profits is: -25% which is -500 units. If sales fall beneath this point it will no longer be worthwhile. As we can see in the graph below, they will gain extra contribution due to a higher price but loose contribution due to volume decrease. The variable cost will also decrease since we produce fewer units. Calculations To calculate the Iso-Contribution change in price and levels I will use the following formula and calculations.