CHIPMAN-UNION, Inc.
Odor-Eaters Socks
EXECUTIVE SUMMARY
In March 1980, Hosiery market in United States was quite competitive in terms of price and players. Chipman-Union Inc. was one of the major players in this market which produced a whole gamut of hosiery products ranging from men’s dress hosiery to socks for all types of customers like men, boys, girls, misses and athletes.
Chipman-Union was established in 1972 by a merger of the Union Manufacturing Company with Charles Chipman’s Sons Company. In 1979, CU had to narrow down its product lines to increase profit margins by removing production inefficiencies. By 1980 it primarily manufactured men’s and boy’s casual and athletic socks, which were sold to the retail/ distribution
…show more content…
They also proposed a few consumer promotions to be supplemented along with the advertisement such as the $1 cash refund offer or 25 cent coupon offer to gain consumer attention.
GENERAL CHARACTERISTICS * Low Interest Category * Limited Product Differentiation * Price Sensitive Customers * Seasonal Variation in Sales * Customers’ Preferences in Packaging
PROBLEM STATEMENT
* The company is considering whether or not to introduce a branded line of men's athletic and casual socks. Based on the research conducted by the GFM and their estimates and recommendations, the Chipman-Union Management has to decide whether they should adopt the GFM marketing program and should go ahead with the launch of this new product and thereby aiming to place about 15000 display units in retails outlets within two years.
COST ANALYSIS OF ODOR-EATERS SOCKS
Calculation of Net Margin per pack
According to the pricing and Cost-Structure analysis in the case, the Gross Margin and the Net Margins are calculated below: Cost Analysis Per Pair of Odor-Eater Socks | Cost Description | In $ |
Net Margin is the ratio of net profits to revenues of a company. It is used as an indicator of a company’s ability to control its costs and how much profit it makes for every dollar of revenue it generates. Net Margin is calculated using the formula: Net Margin = (Net Profit / Revenues ) * 100 Net margins vary from company to company with individual industries having typically expected ranges given similar constraints within the industry. For example, a retail company might be expected to have low net margins while a technology company could generate margins of 15-20% or more. Companies that increase their net margins over time generally see their share price rise over time as well as the company is increasing the rate at which it turns dollars earned into profits.
A typical Gross profit margin depending on the industry may be 25 to 30%. Nucor’s Gross profit margin ratio indicates that industry is intense and cost of goods is one of the main of factor in profitability. After examining the five year
The most suitable costing method Yeltin should adopt is the practical capacity in order to remove the factor of uncertain budgeted sales figure. For this approach and the practical capacity of 65000-22000 units, then the revised overhead costs come out to be $30. With the inclusion of material and labor costs, the cost of the cartridge stand at $52 and the additional royalty expense of $10 raises the overall per unit cost to $62. The selling price of the cartridge is fixed at $150. With this selling price, the gross margin is equal to $88. The gross margin percentage is equal to 59%. In comparison to the budgeted volume, the gross margin has increased by 14%. See below
The Athletic shoe industry had its start in 1892 when U.S Rubber company invented Keds and by
Consider a product line with 50% gross margins (after subtracting volume-related expenses from prices). The cost for handling an individual customer order is SEK 750, and the extra cost to handle a production order for a non-stocked item is SEK 2,250.
--Next say the prices of the shirt first, then say the hoodie, the price of the hat
Nyke Shoe Company has been in business for over 50 years. Over the last five years, the company has been undergoing some financial hardship due to an erratic market and an inability to understand what the consumer actually needs. In a last ditch effort to avoid bankruptcy, they have adopted a new business model which entails the development of only one shoe size. In order to achieve this goal, statistical data must be utilized and applied to make the best choice. The data used will be explained to the fullest and a conclusion will be then obtained.
In our analysis we determined the equations for total cost and marginal cost using the average cost obtained from the regression model provided, and the fixed costs estimates in the collected data calculated by a previous resource endorsed by the company. Once we have determined the marginal cost equation, we calculated the output for perfect competition profit maximizing criteria P
Customers make purchasing decisions based on the information they have among products and the values of goods a company offers. For that reason, companies have to promote their products to increase products awareness. In order to achieve organizational goals, companies must understand the market’s needs to ensure the success of their businesses. Such information can be gained through research. The industry that will form the basis of this paper is Western Canadian Shoe Association. The three brands under study are Reebok, Adidas, and Nike.
The Gross Margin ratio represents the percent of total sales revenue that TCI retains after incurring the direct costs associated with producing the goods and services sold by them. It helps us distinguish, as much as possible, between fixed and variable costs. With a 20%, 15%, or 10% projected increase in sales, for 1996, we calculated TCI’s GM ratio to be 41.85% , and in 1997 to be 41.84%. This means that around 42% of TCI’s sales dollar is available to pay for fixed costs, like its potential long-term debt to MidBank, and to add to profits.
By the use of Porter’s Five Forces model to analysis the athletic footwear market around the world; our strategy is to cut the price of footwear in the Year 11 and 12, and to increase budget of advertisement and to bid celebrity endorsements in order to boost the sales volume in a competitive industry .
This manager’s report provides a financial performance review of the business operations for athletic footwear industry’s Elite Feet for production Years 11 through 18. Included in the report are trends in company’s annual total revenues, earnings per share (EPS), return on equity (ROE), credit rating, stock price and image rating. Additionally reported are the strategic vision for the company, performance targets for the aforementioned production years plus the next two years, the company’s competitive strategy as well as production strategy, finance strategy and dividend policy. Also discussed is a look at the company’s closest competitors and the actions that could be
Market analysis C & J Clarks LtdCONTENTSEXECUTIVE SUMMARY1.INTRODUCTION2.COMPANY HISTORY AND PROFILE2.1C&J Clark2.2History2.3Manufacturing2.4Range of Shoes2.5 K Shoes3.MARKET ANALYSISA. MICRO ENVIRONMENT3.1 Market Data3.2Competition3.3Consumer demandB. MACRO ENVIRONMENT3.4Political3.5Social3.6Technological3.7Economic4.SWOT ANALYSIS5.IDENTIFICATIONS OF STRATEGIC ALTERNATIVES6.RECOMMENDATIONS6.1Short Term6.2Medium Term6.3Long TermEXECUTIVE SUMMARYI have been asked by C & J Clark Limited (Clarks) to prepare a report which would include a market analysis of the UK footwear industry and to propose a number of strategic recommendations which would ensure that Clarks secures its short, medium and long term future as the market leader in the shoe
Consider a product line with 50% gross margins (after subtracting volume-related expenses from prices). The cost for handling an individual customer order is SEK 750, and the extra cost to handle a production order for a non-stocked item is SEK 2,250.
impact of the decision on the cost structures and the resultant margins for each of the