The Super Project

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MBA − Cases in Corporate Finance The Super Project (HBS) Instructor: Pål E. Korsvold BI Norwegian School of Management



McGraw−Hill Primis ISBN: 0−390−68861−4 Text: Harvard Business School Negotiation Cases

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Copyright ©2006 by The McGraw−Hill Companies, Inc. All rights reserved. Printed in the United States of America. Except as permitted under the United States Copyright Act of 1976, no part of this publication may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system, without prior written permission of the publisher. This McGraw−Hill Primis text may include
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Harvard Business School Negotiation Cases

The Super Project


© The McGraw−Hill Companies, 2005


The Super Project

The Market
A Nielsen survey indicated that powdered desserts constituted a significant and growing segment of the total dessert market, as shown in Table A. On the basis of test market experience, General Foods expected Super to capture a 10% share of the total dessert market. Eighty percent of this expected Super volume would come from growth in total market share or growth in the powders segment, and 20% would come from erosion of Jell-O sales.

Production Facilities
Test market volume was packaged on an existing line, inadequate to handle long-run requirements. Filling and packaging equipment to be purchased had a capacity of 1.9 million units on a two-shift, five-day workweek basis. This represented considerable excess capacity, since 1968 requirements were expected to reach 1.1 million units, and the national potential was regarded as 1.6 million units. However, the extra capacity resulted from purchasing standard equipment, and a more economical alternative did not exist.

Capital Budgeting Procedure
The General Foods Accounting and Financial Manual identified four categories of capital investment project proposals: (1) safety and convenience; (2) quality; (3) increase profit; and (4) other.

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