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Apex Case Study Essay

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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

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