Case Analysis: Hansson private label
Introduction
Hansson private labels is a manufacturer of Herbal & beauty care products, the company is producing high quality beauty and skin care products from a long period of time. The company started its business in 1992 by purchasing Simon health and beauty care products, Simon left the market having a tough time to meet the competition
The other reason for his exit was financial implications, which he was facing. In addition,the company was going in too much debt and also its profitability and sales were quite low to meet the challenges, which is why Simon exited the market by selling hiscompany to Hansson private labels.
Hansson Private Labels was one of the leading private labels brand while having a major market share in the US and also exporting its goods towards forward channels to Europe and having a significant market share in that region.
Problem statement
The Hansson Private Label was facing a problem that its marketing and production department analyzed that the growing population, consumers’ needs and the competition between branded companies like P&G, Unilever and private labels hadbeen increasing drastically. Hansson Private Label’s current facility is using almost 90% of the capacity and still they are unable to meet the demand of its customers, since HANSSON PRIVATE LABELS’s prime and regular customers were giant retailers like Wal-Mart etc.Moreover,the company’s marketing team forecasted that the demand for its products will increase in the future and Hansson Private Labels will be unable to meet that demand and thatthe company will lose its market share because of the shortage. The reason behind the increasing demand was that the retailers were expanding their businesses into other global regions.
The solution of this problem was to expand Hansson Private Label’s facility in order to fulfill the demand by investing an amount of $50 million as suggested by the firm’s CFO. The document will analyze the project and give final recommendations about the feasibility of the investment that either the company should invest in this project or not.
Analysis to the project
There may be several methods of analyzing the projects however;we are applying the following methods as per the requirement of the project and the data given
• Capital budgeting
• Financial modeling
• Sensitivity analysis.......................................
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