· increasing concern about healthy lifestyle
Larson’s Father has connections in the retailed food industry
Loblaws are willing to cooperate with HLG
· Plenty of indirect competitor
· Economy recession
· Need 2 years for CFIA inspection
· Long shelf life
· Patented product, and has exclusive right to resell in Canada
· High nutrition value 99.7%
· Strong relationship with Loblaws
· History of success in selling this product
· Tasteless as an ingredient, so it can increase the nutrition value without affecting the taste
The company should emphasize that nutrifusion contains natural ingredients that can increase the nutritional value…show more content… fierce competitive environment. leader of nutrition industry: Anway, USANA, Nuskin. marketing strategy: health life, natural product. leader of nutrition: large corporation, long history, lots of loyal customers, provide different products with different functions. strong advertising strategy. worldwide.
Competitor analysis: Direct competitors: Amway, USANA, Nuskin. competitor assessment (Exhibit). Nutrifusion competitive advantage-low (in canada).
Product: easy to be replaced by other substitute product.supplements, such as vitamin, fruits and vegetables. no switching cost
Breakeven point: HLG should have a sales volume at 5252g to achieve its breakeven point. Otherwise, it cannot survive in the first year operation.
If sales volume is the same as HLG and Loblaws estimated, HLG could have a net profit of $51,743, which achieves its target profit $50,000. Also, HLG will have enough cash to distribute dividends.
If the sale decreases 20%, although HLG will still generate a net profit of $26,695, it is not able to achieve its target sales level. The sufficient cash is not enough to distribute dividends.
Compared the ROI, if the sale volume was the same as they predicted,the ROI is 1.03, which means that HLG could have a positive net present