Mystic Monk
Case 2.
The Solar Feeder.
Introduction
SDI is a company that was founded by Bo Haeberle and Ed Welsh, the idea born when Ed was watching a basketball match with Richard, Eds brother, and suddenly he glanced into the window because he saw a squirrel going into the bird feeder and destroying it.
Their product was very innovative and it won several prizes of “the best new product”, after years of developing they decided to sell their product, they opened a store where they could start the production of the product and also start to receive orders.
Eventually they realized that they have problems with the financial records, and the cash flow, so they started worrying and decided that the perfect product is not enough to make the company grow.
Squirrel Defense, Inc. have problems that they need to address, starting from the principal they might focus in, are;
They dont have a strategy; with this it means they dont have a business plan. This is why the company is having problems with the cash flow; they werent taking into count the expenses they have, the time and money it cost to make the product, and how much they need to sell to make their company grow.
They havent done a market research; so they dont know their target market. They didnt have establish the group of people that they need to attack with their advertisements and marketing, they were doing massive marketing, this didnt help them because they were wasting their time trying to convince young people to buy their feeders, when the people that bought their product were housewives with 35 years, It doesnt mean that there wasnt a possibility for the other people to buy their product but it wasnt sure.
The selling price of the solar feeder is over the average of the birds feeder products. The average price of the birds feeders are between $100-$150 and the actual price of the solar feeder is $300.
Their production cost is high and what they can produce is low. They cannot deal with all the demand due to the manufacturing. As a consequence they lose potential customers.
The first thing that is needed to do is define their strategy, with a well established strategy they will know what they want to sell, how they want to sell their product and what they need to do to obtain their goal. As well as creating their business plan with mission, vision, objectives, marketing, production and financial plans.
SDI is not close to achieve their breakeven volume of sales, because they have more fixed costs, than profits, to be in a breakeven volume of sales they need to sell more of their product so they can cover their total costs of production. SDI has a total of 59,963