Final Sax Pres

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A team case competition for the Alpha Kappa Psi Principled Business Leaders Institute in Reno 2010

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Final Sax Pres

  1. 1. Saxonville® Sausage: The Italian Opportunity! AXIS Consulting LTD.!
  2. 2. Current Situation! 0% growth in overall sausage! 15% growth in Italian sausage! 16% Vivio® market penetration! 20% annual organics growth!
  3. 3. Strengths & Weaknesses! Strengths:!     ! •      Ability to distribute fresh products nationally! •      44% adult population prefer fresh! •  Matched category growth level! •      Favorable brand image! Weaknesses: !      ! •      Not a first mover in Italian sausage market! •      In-store promotional marketing only! •  Small national presence ! •  No “true Italian” heritage!
  4. 4. Opportunities & Threats! Opportunities: ! •      Growing Italian sausage market! •      Desire for tasty, easy family meals! •  Growing organic and “natural" markets! •      No national players in fresh Italian sausage !      ! Threats: ! •      Local producers! •  Higher spending by potential rivals! •      Increased frozen sausage consumption!
  5. 5. GE / McKinsey Chart Analysis! Business Unit Strength! High! Medium! Low! Market Attractiveness! High! 36%! Brats   Medium! 4%! Vivio®     Low!
  6. 6. Plan Objectives! •  Take Vivio® national! •  Focus on cohesive branding! •  Increase sustainability! •  Introduce Vivio® Organic line !
  7. 7. Branding! Vivio® ! •  Market presence! •  Positive testing! •  Less costly ! Positioning statement: ! “Bringing families together with fresh healthful Italian sausage”! Unique Selling Propositions:! •  A national line of fresh Italian sausage! •  Makes for easy and delicious family meals ! •  The versatile ingredient no family should go without!
  8. 8. Promotional Strategies! Strategies for Vivio® Natural! •  Labels with recipes! •  Recipe sharing with strategic partners! •  Coupons and discounts with strategic partner! Strategies for Organic line! •  Co-branding with local organic producers ! •  Encourage local producers to promote Vivio® ! Vivio® Natural Vivio® Organic
  9. 9. Product! Vivio® Natural! •  Drop hot sausage ground! •  Drop Italian pepper sausage! Vivio® Organic! •  Recipe licensing ! •  Produced organic farms!
  10. 10. Packaging! Re-sealable sustainable packaging created by Ecoproducts®! Smaller labels to showcase product! Recipes on back of label! Vivio® ! “The versatile ingredient no family should go without”
  11. 11. Distribution! Existing distribution chain for Vivio® Natural! •  Fresh suppliers! •  Sold to wholesalers! •  Promoted in chain stores.! Organic line licensed in the Pacific and Northeast!
  12. 12. Industrial Standard! • Revenues of $1.5 Billion! • COGS of $1.223 Million (81.54%)! • Gross Margin $276.9 million! • Promotional Expense of $11.850 (.79%)! • Net Profit of $39.6 Million!
  13. 13. Spending to Compete! 2004 – 2005 breakfast sausage hemorrhaged more than $33,000,000 in revenue
 Recommendation: $12 million introductory promotional campaign! Organizational goal cannot be realized without a financially supported promotional campaign!
  14. 14. Financial  Forecast! 2006! $24,400,571! 2007! $46,046,137! 2008! $54,203,610! 2009! $62,768,957! 2010! $71,762,571! $175,149,937 NPV !
  15. 15. Vivio ® ! “Bringing families together with fresh healthful Italian sausage”! Questions?  
  16. 16. Financial Outlook! 2006 2007 2008 2009 2010 Pessimistic (net) -$15,135,824 -$10,184,204 -$4,994,249 $455,204 $6,177,130 Inflows $520,296,286 $546,361,100 $573,676,655 $602,357,988 $632,473,387 Outflows $535,432,110 $556,545,305 $578,670,904 $601,902,784 $626,296,257 Expected (net) $31,139,287 $53,455,464 $62,009,998 $70,992,259 $80,423,633 Inflows $783,073,747 $900,527,309 $945,551,174 $992,826,233 $1,042,465,045 Outflows $751,934,460 $847,071,845 $883,541,176 $921,833,974 $962,041,411 Optimistic (net) $36,982,104 $72,639,173 $82,175,917 $92,189,499 $102,703,760 $1,054,111,23 $1,106,814,29 Inflows $816,202,719 $1,003,917,845 7 9 $1,162,152,513 $1,014,624,80 Outflows $779,270,615 $931,278,672 $971,935,320 0 $1,059,448,754 Weighted Average $24,400,571 $46,046,137 $54,203,610 $62,768,957 $71,762,571 NPV $175,149,937

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