Foster Pharmaceuticals Forecast Customer Exhibit 61
Exhibit 61exhibit 61 Foster Pharmaceuticals Forecast Customer Sales
Exhibit 61exhibit 61 Foster Pharmaceuticals Forecast Customer Sales
Exhibit 6.1 Exhibit 6.1 Foster Pharmaceuticals: Forecast Customer Sales Mix Customer Sale Mix Large retail chain 1 40% Large retail chain 2 35% Regional drug store 15% Small grocery chain 10% Exhibit 6.2 EXHIBIT 6.2 Foster Pharmaceuticals: Partial Sales Forecasts for Year 1 Month Sales January $100,000 February $250,000 March $400,000 April $600,000 May $450,000 June $300,000 Exhibit 6.3 EXHIBIT 6.3 Foster Pharmaceuticals: Partial Sales Forecasts for Year 2 Month Sales January $200,000 February $350,000 March $500,000 April $700,000 May $550,000 June $350,000 Exhibit 6.4 EXHIBIT 6.4 Foster Pharmaceuticals: Forecast Receivables Collection Pattern Customer 0-30 days 31-60 days 61-90 days Large retail chain 1 35% 50% 15% Large retail chain 2 25% 40% 35% Regional drug store 20% 35% 45% Small grocery chain 30% 55% 15% SWOT Analysis Chelsea McCray Marisol Scheer MGT 3340 November 2, 2019 SWOT ANALYSIS 5 SWOT Analysis Chick-Fil-A was founded in 1946 with its headquarters in College Park, Georgia, United States. It is a fast-food chain famous for its chicken sandwiches. The chain main ingredient is chicken for breakfast, lunch, and dinner. It operates under various concepts like a drive-thru only, mall or in-line, and Dwarf House and Truett’s Frill (Chick-fil-A, n.d.). It operates licensed, satellite lunch counters and non-traditional outlets. The chain offers a wide range of burgers, desserts, drinks, sandwiches, wraps, side dishes, and wraps. It also provides catering services to private and public events and it owns merchandises like sweatshirts, accessories, and T-shirts. In just the United States, the company is one of the top-players in the segment of fast-food outlets providing chicken with KFC as their major competitor. It announced $4.4 million in their annual sales in the United States only (Bhasin, 2019). Compared to other major players in the segment like KFC, Chick-fil-A has 2100 outlets which are relatively small. However, its revenue has made it comparable to top player making it a market leader. The outlet does not operate on Sundays and holidays SWOT Analysis of Chick-fil-A This analysis examines the strengths, weaknesses, opportunities, and threats of Chick-fil-A. SWOT analysis is a management tool that helps brands like Chick-fil-A benchmark their performance compared to their competitors in the industry (Sarsby, 2016). The Strengths at Chick-fil-A The strengths of a business are the business practices that make it unique from its competitors. The strengths of Chick-fil-A include the chain has impeccable customer service (Bhasin, 2019). This is unusual in fast food because most use the self-service model. Their customer service makes them different from their competitors. The chicken sandwiches at the outlet differentiate it from the competitors in the industry. In the United States, most burgers are beef burger, but this chain sells chicken sandwiches which are burgers filled with chicken and patties (Chick-fil-A, n.d.). The conversations on the dangers of eating red meat have helped the outlet. Majority of fast-food outlets are not inviting for customers to spend a lot of time. Therefore, they have simple and formal décor. This is not the case with Chick-fil-A. The outlet has made an inviting ambiance with the use of employee’s pictures and writings on the walls, and warm colors. The employees at Chick-fil-A are paid higher than the average industrial rate. Also, they provide their employees with opportunities for career development and advancement (Bhasin, 2019). This has helped ensure employee satisfaction and reduced employee turnover. This creates an impression of being wanted in the restaurant to the customers. The chain has seen continuous growth in its revenue over its years of operation. It also uses a strong advertisement; “Eat Mor Chikin†a slogan that uses cows (Chick-fil-A, n.d.). The purpose of the cow is to discourage the consumption of beef burgers provided by competitors. The chain has been sponsoring sport events and taking part in charity events. Also, their online presence enables customers to make online orders and delivery. The Weaknesses at Chick-fil-A Weaknesses refer to the areas where a business needs improvement. Some weakness of Chick-fil-A includes the prices are higher compared to their competition. Even though the quality of service and food is worth the price, the low and middle income earners in the U.S. are not familiar with the brand (Bhasin, 2019). Unlike their competitor KFC that has outlets in other countries, Chick-fil-A operates only in the United States. This has limited their popularity leaving it out of the big league in this industry. Innovation and technology have become part of fast food companies. These companies are reinventing their marketing, supply chain and menu. Innovation is an easy task for big brands whose profitability depends on sales volumes. However, this has not been the case with Chick-fil-A which is not a global brand. The growth rate of the industry is faster than it can handle with the entry of new fast-food outlets. This leaves customers with a lot of choices. This affects customer loyalty and expensive brands like Chick-fil-A face the challenge of keeping their customers (Bhasin, 2019). The outlet suffers from reputational loss because of its same-sex marriage controversy comment by its chief operating officer in 2012. This led activists to call for a boycott and protests. It limits their customers’ options by offering only chicken fast food. The outlet suffers from reputational loss because of its same-sex marriage controversy comment by its chief operating officer in 2012. This led activists to call for a boycott and protests. It limits their customers’ options by offering only chicken fast food. The Opportunities Chick-fil-A face Opportunities are the external environment surrounding a business in which it can capitalize and increase their revenue. The opportunities at Chick-fil-A include fast-food joints offer poor customer services which have shifted the preference of customers to fast-food outlets like Chick-fil-A that value quality customer service (Bhasin, 2019). Thus, it should capitalize on this opportunity. With the ongoing advocacy against consumption of red meat, companies need to reinvent and focus on healthy options. Chick-fil-A can increase its customer base because they provide white meat food and also diversifying their healthy food option. Another opportunity is expansion to other countries. Their competition KFC is doing well in other countries. They should also focus on penetrating the untapped areas in the United States. Chick-fil-A should capitalize on this area. Their menu limits the customers’ options. Reinventing and expanding their menu will help the outlet increase their customer base. The Threats Chick-fil-A face Threats are environmental factors that make it hard for the growth of a business. Some threats that Chick-fil-A faces include stiff competition from competitors like KFC and Popeye’s. KFC has ventured into other countries making it a global brand. Therefore, the company is making more sales compared to Chick-fil-A (Bhasin, 2019). It is also well-known by consumers. The competitors’ menus also provide a variety of options for customers. This makes them a better option because it does not limit customers to certain food. There are a lot of scandals around chicken-based food outlets like KFC. The scandals relate to chicken quality and quantity used. This creates apprehension in customers and many of them avoid these outlets (Bhasin, 2019). Also, there has been an issue of chicken shortage in the United States which threatens the performance of the outlet as the price of raw chicken rising with the scarcity. Conclusion To sum up, Chick-fil-A has maintained its reputation and operation in the United States for decades. Its chicken sandwiches have kept them in competition in the fast growing industry. The outlet has strengths that make help stay competitive in the industry, but it faces threats and weaknesses that hinder their growth. However, there are some opportunities that the outlet can venture in for further growth. References Bhasin, H. (2019, Apr 2). “SWOT analysis of Chick-fil-A.†Marketing91. Retrieved from: Chick-fil-A. (n.d).Chick-fil-A: Home of the Original Chicken Sandwich. Retrieved from: Sarsby, A. (2016). SWOT analysis . Lulu. com. Unit 6 Case 3 Sooner Pharmaceuticals Kathleen Grogan received her PhD in pharmacology ten years ago from Boston University. While there, she became interested in the business side of drug distribution and hence stayed on for an extra 18 month to earn an MBA. After graduation, she went to work for Capo Corporation a major drug manufacturer, where she managed the development of a new nonprescription antiallergy drug. Although the drug passed all US Food and Drug Administration (FDA) trials and was certified for general use, Capo simultaneously developed a similar drug that was cheaper to produce and equally effective in treating most, but not all, allergy symptoms. Thus, Capo decided not to proceed with production of the drug that Kathleen helped develop. However, Capo was willing to license production and distribution rights to another company. Kathleen thought that this might be a golden opportunity, so she quit her job with Capo to found her own company, Sooner Pharmaceuticals. The sole purpose of Sooner Pharmaceuticals is to obtain the license for, produce, and distribute the new drug, which Kathleen dubbed "SneezeRelief" Kathleen is currently working on the business plan for Sooner Pharmaceuticals that she will present at a venture capital conference in New York. The main purpose of the conference is to match entrepreneurs with venture capitalists who are interested in providing capital to fledgling firms. She has spent a lot of time thinking about how Sooner Pharmaceuticals receivables should be managed. She is concerned about this issue because she knows of several small drug manufacturers that have gotten into serious financial difficulty because of poor receivables management. Initially, Sooner Pharmaceuticals would sell directly and exclusively to four retail customers in the northeast (exhibit 27.1 provides the sales mix). If demand proved solid, the company would expand into other areas and wholesale channels. Sales are expected to be highly seasonal: Allergy drug sales are slow during the winter months, but they pick up dramatically in the spring when plant pollen levels reach a peak. Business falls off again in the summer, but it picks up in the fall when the ragweed season begins. Kathleen's sales forecasts for the first six months of operations are given in exhibit 27.2. Assuming Sooner Pharmaceuticals receives financing and begins operations, the sales forecasts for the first six months of the second year are provided in exhibit 27.3. Kathleen does not plan to give discounts for early payment; discounts are not widely used in the industry. On the basis of preliminary discussions with retail outlets (Sooner Pharmaceuticals customers), she forecasts the payment schedule shown in exhibit 27.4. She does not foresee any problems with bad-debt losses. First, the retailers with whom she plans to do business have been in operation for a long time. Second, she plans to carefully screen all customers. She believes these two factors will eliminate bad-debt losses. On average, she believes that 20 percent of receivables will contribute to profits, so 80 percent of receivables represent cash costs. Furthermore, the First National Bank of Oklahoma has indicated that its receivables financing would cost 8 percent annually. In spite of her optimism regarding bad-debt losses, Kathleen is concerned about Sooner Pharmaceuticals potential level of receivables, and she wants to put in place a monitoring system that will allow her to quickly spot any adverse trends that develop. The total sales forecast for the first full year of operations is 800,000 packages. Each package, which will contain 12 tablets, will be priced at $5. Kathleen has hired you as an outside consultant to advise her about receivables management. So far, you have developed a model that produces accounts receivable balances, average collection period (ACP), aging schedules, uncollected balances schedules, and quarterly carrying costs for the end of March and the end of June. The uncollected balances schedule permits managers to remove the effects of seasonal and or cyclical sales variation and to construct an accurate measure of receivables payment patterns. Thus, it provides financial managers with better aggregate information than do such crude measures as the ACP or aging schedule. Kathleen anticipates that the venture capitalists at the conference will ask some questions concerning the interpretation of the receivables data, the sensitivity of the results to the basic assumptions, and the strategies to reduce carrying cost of receivables.