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Case and Article Related Solved 2018

This document contains information on the positioning strategy, units sold, revenue, costs and profits for two companies - Niche and Mainstream - over two years. For the base business, total units sold were 783,360, revenue was Rs. 1,442.94 crore, total variable costs were Rs. 808.05 crore and total margin was Rs. 634.89 crore. However, some of each company's sales cannibalized their own existing sales, reducing overall profits. After factoring in this cannibalization effect, Niche's profit post-cannibalization in Year 1 was Rs. -26.16 crore and in Year 2 was Rs.

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Sakshi Shah
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108 views

Case and Article Related Solved 2018

This document contains information on the positioning strategy, units sold, revenue, costs and profits for two companies - Niche and Mainstream - over two years. For the base business, total units sold were 783,360, revenue was Rs. 1,442.94 crore, total variable costs were Rs. 808.05 crore and total margin was Rs. 634.89 crore. However, some of each company's sales cannibalized their own existing sales, reducing overall profits. After factoring in this cannibalization effect, Niche's profit post-cannibalization in Year 1 was Rs. -26.16 crore and in Year 2 was Rs.

Uploaded by

Sakshi Shah
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as XLS, PDF, TXT or read online on Scribd
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PROBLEM 1

POSITIONING STRATEGY NICHE MAINSTREAM


Year 1 Year 2 Year 1 Year 2
Units
Units 80,000 150,000 270,000 440,000
Total units 80,000 150,000 270,000 440,000

Revenue (Rs. 000)


Price per unit 2350 2350 2150 2150
Retail 188,000 352,500 580,500 946,000
Total revenue Rs. 000 188,000 352,500 580,500 946,000

VC per unit Rs 1330 1330 1250 1250


Product cost (Rs. 000) 106,400 199,500 337,500 550,000

Variable margin 81,600 153,000 243,000 396,000


Variable margin per unit 1,020 1,020 900 900

Fixed costs (Rs. 000)


Advertising 45,000 62,000 95,000 112,000
Consumer promotions 24,000 27,500 62,000 70,500
Trade promotions 19,500 21,000 35,500 38,000
Depreciation 5,000 7,200 15,000 20,200
Total fixed costs 93,500 117,700 207,500 240,700

Profit pre-cannibalization ($11,900) $35,300 $35,500 $155,300


both kahuna blade
units 783360 603187.2 180172.8 units 783360
rev 1442940 1240928 202011.6 rev 1442940
1.841988 1.841988 2.057286 1.12121 total VC 808050
total margin 634890
188000 avg unit margin 0.81047
352500

580500 114.1142
550000 8.56
88.5 -34.52
110.5 41.186
192.5
220.5
199.9 11.9
317.2 -35.3
545 -35.5
790.7 -155.3

33
140.8
PROBLEM 2

POSITIONING STRATEGY NICHE MAINSTREAM


Year 1 Year 2 Year 1 Year 2

Profit pre-cannibalization (Rs. 000) (11,900) 35,300 35,500 155,300


Units pre-cannibalization 80,000 150,000 270,000 440,000

Sales from base (Rs 000) 1,442,940


VC of base (Rs 000) 808,050
Total margin (Rs 000) 634,890
Total units 783,360
Contribution per unit in base Rs 810.47 810.47 810.47 810.47

Cannibalization rate 22% 22% 32% 32%


Units stolen from base 17,600 33,000 86,400 140,800
Unit contribution of stolen units 810.47 810.47 810.47 810.47

Cost of cannibalization (Rs. 000) 14,264 26,746 70,025 114,114

Profit impact of precision


Profit post-cannibalization (Rs. 000) (26,164) 8,554 (34,525) 41,186

units 783360
rev 1442940
total VC 808050 1.0315180759804
total margin 634890 0.8104702818627
avg unit margin (Rs 000) 0.8104702818627

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