Maketing, harrington case solutionDocument Transcript
Harrington Collection Case SolutionCompany should enter in the Active wear segment in Vigor divisionunder “Better” product classification for the following reasons. Profit margin in Active wear segment is estimated to 18.307% in 2009 while the profits in 2005, 2006, and 2007 were 11.07%, 9.98%, and 8.77% respectively. So this active wear segment will provide double profit to the company. Break-even point will arise at 269,202 units. Company will sell this much of units in the 3rd quarter of the first year. Because company is estimated to sell 420000 units in the first year under “Better” category. Since Company deals with high end customers and quality is one of their core strength. So I would suggest the company to launch active wears only in “Better” segment, not in “Moderate” or “Budget” segment. Since company’s revenues and profits are decreasing for the last 3 years, so company does not have enough amount for new investment in new division. Company is better to launch the active wears in “Vigor” Division only, not in any new division. Even surveys done by the company itself also supporting substantially the launch of active wear segment in the market.