By-the-Sea Biscuit Company: A Decision in New Venture Analysis Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

By-the-Sea Biscuit Company: A Decision in New Venture Analysis Case Solution

Because of the great manufacturing capacity, the business was able to manufacture approximately 15,050 cases/month, working about five days/week. The mentioned fact depict fifty to sixty percent of the manufacturing capacity. Despite this, the firm can incline its manufacturing quantity by up to 120,400 cases/month with effective and efficient marketing operations. The company’s annual income could go up by using the approach of Healthy Omega 3.

From the 1^st to the 4^th month, the venture would not be able to manufacture but from the 5^th month; it would be manufacturing 100% conventional biscuits, and after its seventh, to the twelfth month, it would be manufacturing 75% and 25% of conventional and healthy products, respectively.

From Appendix 5, it could be seen that the manufacturing would be starting from the fifth month and it would be covering around 10% market share of the frozen product’s market. During the initial months of operations; the venture would be manufacturing more than its supply because the products could be stored and preserved for a long life so it would be stored by the company to fulfil various demands of its customers in future.

It is analyzed that the price rate for the conventional biscuit at wholesale is about $ 13.5 /case, however its consumption rate is $ 2.99/ dozen. While for the Healthy Omega 3;the wholesale rate would be $ 20.25/ case and its consumption rate would be $ 4.49/dozen, as shown in Appendix 7.

From Appendix 8, the manufacturing cost and its breakeven could be analyzed. Based on the assumption; it could be said that the price for the Healthy Omega 3 would increase by 20% comparative to the price of conventional biscuits, depicting the price to be $ 9.34/case.

Advantages

The advantage of this alternative is that it would provide cheap delivery rates for the company, allowing it to havethe least competitive market with almost zero competition, an increase in cost and the demand of the biscuits and less differentiation pressure on the firm.

Disadvantages

Besides these advantages, the company must consider the potential disadvantages of this alternative in its analysis, which include the loss related to the opportunity cost by deciding to enter the conventional market of the U.S. with no previous calculations and analysis about the supply and demand of the frozen biscuit market.

Solution of Alternate 2

Frozen Dough is a worldwide global organization of refrigerated frozen biscuits, sweet and dinner rolls, cookies and brownies. Its food products are stored in the refrigerator at low temperatures. Its marketing products are the world’s quick and fastest food growing process. Its’ food products are very healthy, which include: good fats omega-3 fatty acid, which is very healthy. The Frozen Dough Industry will commence selling your specific product named “frozen biscuits” in two different locations or areas, i.e. New York and England. And the objective to sell your specific product is to export your product in different regions of the United States, and the company uses refrigerators while transferring its frozen products through road and trains. Suddenly, the company was unable to manufacture your frozen biscuit product because your facilities were unavailable, which means that it might have faced a specific problem leading towards affected facilities. Although, after a few months, the company produceda huge amount of traditional frozen biscuits.The ratio of the traditional frozen biscuits and omega fatty acids produced by the company was 7:3. The distribution of the frozen biscuit in the Canadian market will be 75 percent and for Omega Fatty acid it will be 25 percent. However, in the United States’ markets; it will be half of what it is in Canada.

Advantages

The prices of the sea frozen biscuit of the company are very low and inexpensive than other biscuit companies.
The local stores of New York and England help in decreasing the cost of exportation, enabling the company to have potential growth.
Canadian dollar is very high as compared to the United States dollar, so all the company’s expenditures will be inexpensive.
If the company disregards your shipping or exportation cost; the refrigerated export containers of the company affects the alternate, which helps in changing or transforming your services and specific product as compared to the competitors’ products, and this strategy also helps in enhancing your goodwill and competitive advantages in comparison to the competitors.

Disadvantages

Competition with the United States’ market competitors can increase your problems and difficulties of the company and due to these circumstances the company will back out from the market of the US and present competitors are shutting down of your company’s entire operational activities.
The Fluctuation of exchange rates between two countries, Canadian dollar and United States’ dollar in forthcoming years. This uncertain situation is heavily affected by decreasing and increasing the company’s cash flow.

Recommendations& Conclusion

After carrying out a detailed analysis, it has been concluded that the company should select alternate 2 as provides higher revenues and profits as compared to alternate 1. The revenue from alternate 1 is 1,822,130 dollars and profit is 628,963 while the revenue from alternate 2 is 1,864,838 dollars with the profit of 661,827 which is higher than alternate 1.

Because of the highly comparative market; the sea biscuit company will have to create some uniqueness in its product from competitors otherwise there would be higher chances for the company to face difficulties in the market. The positioning strategy by the sea biscuit will be the best quality with lower price products in the form of traditional biscuits and Healthy Omega 3.

As in Canada there is low competition, the company will be not as worried, leading it towards offering a wider range new products. The offering of new products seems to be good as it will createa big brand image in customers’minds, which will result in more power or monopoly in the frozen biscuit market.In the first year of operation, the company must be in contact with customers and suppliers in order to maintain a good relationship, which will be helpful for Sea Biscuit Company for different purposes in future............................

By-the-Sea Biscuit Company A Decision in New Venture Analysis Case Solution

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