Introduction:
Apex is a medium sized chemical manufacturer with annual sales of $60 million. It is now trying to determine which of two new compounds it should bring to market. The two products were expected to have the same gross margin percentage. But, there is little agreement among Apex’s executive regarding which product should be launched. Given resource scarcity the company can only select one of the two products under consideration.
Business Model:
Though the two products increase Apex’s profits due to financial constraints the company emerged to select only one of the two products, Compound A-115 or B-227. Since both products are new to Apex and expected to earn same gross margin percentage below comparison provides a bit more understanding of each product’s market strength and importance.
Compound A-115 Compound B-227
Business Model New New, but this improvises the new market for the existing another business model Stigone.
Market Size $10 Million and stable $40 Million and growing
Competitors strength Only one and 95% customer satisfaction. 3 Strong competitors and 6 other selling off-brand or Commodity based betas.
Opportunity for market growth Very less Beta is cutting into Apex’s stigone sales with the company losing 10 percent of its sales per year. This product predictably increases that ratio of profits.
The decision:
According to the above table, I would recommend Apex to go for Compound B-227.
Reasons for decision making:
I applied 5C Framework in
S.P. is admitted to the orthopedic ward. She has fallen at home and she has sustained an intracapsular fracture of the hip at the femoral neck. The following history is obtained from her: She is a 75-year-old widow with three children living nearby. Her father died of cancer at age 62; mother died of heart failure at age 79. Her height is 5’3 and weighs 118 pounds. She has a 50 pack year smoking history and denies alcohol use. She has severe Rheumatoid Arthritis (RA) and had an upper GI bleed in 1993 and had Coronary Artery Disease with CABG 9 months ago. Since that time, she has engaged in “very mild exercise at home.” Vital signs are 128/60, 98, 14, 99 degree farenheight (32.7 degrees C) SAO2 94%
We evaluated our company’s position in the industry, and found ourselves in an excellent starting position to further develop our products and match them to the industry’s needs. Our market share is adequate and we can advance further with our strategy improve and reposition our products in the coming years. We have underutilized capacity, which we intend to improve, while increasing automation to reduce costs. We have plans to improve our promotion to improve product awareness and with the appropriate product lines we will increase price to improve margins and better align our high-end product image. Our current financial position is optimistic, showing our leverage (Assets/Equity) at 2.0, when our goal is to maintain 1.5-2.0 overall. By utilizing the analysis tools we are learning what elements are driving demand, how to effectively tailor our products through R&D, how best to adjust our marketing and pricing, while lowering input costs, in order to improve margins and to ensure our stakeholders are all satisfied.
If the company decided to sell the new product at price of D.Cr. 8.20, that means the full fixed expense of 1.20 is covered and the company will make high profit. However, the selling price of D.Cr. 8.20 is very high and under this price the company will sell the new product at a lower volume than what the company planned sale volume in the budget and that will affect the company in the market as a strong competitor in the food manufacturing. According to the case, the company sales volume drop to 30 tons when the product was sold at the price of D.Cr. 8.2. Thus, my recommendation are as follows:
Although the company did show an increased gross profit of $8,255,000 with $6,358,000 less Net Sales in 2013 versus 2012, that increase is due to the reduction in product Cost of Goods Sold by $14,613,000. Since increases in product price will negatively affect sales, one of management’s primary goals is to keep prices stable. This objective is achieved through implementation of cost cutting programs, investing in more efficient equipment, and automation of more steps in the production process.
The applicants are morally correct as long as their action promotes their long term interest. If their action produces or will produce for them a greater outcome of good, versus evil in the long hall than any other alternative, than that action is the right one to act on, and the individual should take that to be a moral act. An Assessment of Morality by Ethicsinbusiness.net
As a member of management Clive Jenkins is responsible for boosting employee morale to ensure that company goals are met
During this Period We decreased the price of our product from$ 5.45 to$ 5.29 to be more competitive in compare to our rivals and increased the sales force in chain drugstores and Grocery stores since they were receiving more sales than the other channels. As a result we increased our sales $29 million.
NME’s provide a higher return, but rarely make it to market compared to LCM products. The displacement of excess funds can either be invested into further research or be distributed to employees annually. If reinvested, additional capital could be used to further fund NME’s, or to market LCM’s. Evaluating individual projects and devoting special attention to their expected profitability or fit could produce alternatives as well. General Practitioner (GP), Niche, and Specialized products also offer additional lines of alternative products for evaluation and consideration.
After identifying the product(s) with the high sales, we will expand the capacity of that product(s). For the second round, we will analyze and adjust the automation levels to improve margins.
IgG – funtions in neutralizing, opsonation, compliment activation, antibody dependent cell-mediated cytocity, neonatal immunity, and feedback inhibition of B-cells and found in the blood.
Competitive advantage - Nundies is an innovative product which provides an alternative to visible panty lines; no other company produces the same type of product
* product’s contribution margin under conservative estimates is at 79% which represent a very lucrative product profitability
Nucleon, Inc. needs to determine the best course of action for the manufacturing and sale of its first product, CRP-1, in order to grow the budding company and gain sustained competitive advantage against large rivals. [vi]
Scenario: John is a 4 year-old boy who was admitted for chemotherapy following diagnosis of acute lymphoblastic leukemia (ALL). He had a white blood cell count of 250,000. Clinical presentation included loss of appetite, easily bruised, gum bleeding, and fatigue. Physical examination revealed marked splenomegaly, pale skin color, temperature of 102°F, and upper abdomen tenderness along with nonspecific arthralgia.
Since we are focusing our efforts on the low end segment of the market, our product can be determined as a cash cow. A cash cow is generally a leading product in mature markets, generating more cash than is used. This allows companies to use that cash to pay for administrative costs, as well as paying for dividends to shareholders and even fuling R&D. We were able to come to this conclusion based on where our product stood in the segment. Our low-end product has a lower market growth rate at 11.7% than most other companies. however, our product has a high market share comparative to other companies. When these two factors are taken into consideration using the BCG Growth-Share Matrix, we can conclude that our product is a Cash Cow.