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Repackaging a Global Brand:

A Case Study Analyzing the Capital Expenditure Decision

INTRODUCTION

It is early 2014. A leading global skincare manufacturer, Health & Beauty Co. (HBC), has been losing market share in the hand and body lotion market. While the firm still leads its competitors in market share in this segment of personal care, it seeks to stem further share erosion and, to that end, has recently developed a strategy to recover market share through rebranding, advertising, and repackaging. The situation is especially critical since a large competitor is believed to be launching a new skincare product in the near future. Your task as senior financial analyst is to draft the capital expenditure proposal related to the new packaging proposal. Information to support you in this task follows. You should complete the firm’s capital expenditure template included in Appendix 1.

BACKGROUND:

The U.S. skincare market has been growing at an average rate of 4% over the past three years and is estimated to reach $11 billion in 2019. This market includes facial, body, and hair care, as well as other makeup segments. HBC holds a leadership position in the hand and body lotion market but needs to evolve to meet consumers’ growing needs and compete with an ever-increasing number of competitors. Recent market research by HBC revealed that consumers perceive the current packaging as outdated: old, generic, dull, and cheap looking. It also lacks a contemporary and premium look compared with some of the main competitor’s products. HBC is in the process of rebranding these product lines, and newly developed packaging will play a pivotal role in the plan to rebrand and reposition the product. The new packaging aims to convey the brand image of modern, up-to date, high-quality, everyday use, and good value. Preliminary investigation comparing the existing and proposed packaging revealed the following:

1. The proposed packaging will keep the brand fresh and relevant while maintaining the brand heritage and appeal to existing and future consumers. 2. The project: a. Provides the opportunity to simplify an overcomplicated and confusing pack line-up by reducing the current portfolio of sizes. b. May lead to improved margins since there is the potential to raise prices on the newly packaged items. The current gross margin of the product is 69%. 3. Overall, the new pack design is a cost-effective pack with package unit prices lower than that of the current brand pack. 4. The brand team believes that incremental sales growth is achievable through the combination of new brand positioning, advertising, and packaging. Feedback from several large retailers consulted on the new packaging was consistently positive.

PROJECT INFORMATION:

The new packaging would require the purchase of molds and assembly equipment (useful life of six years on all) as follows:

Cap/Pump molds $1,590,000

Change part 260,000

Pump assembly 570,000

 In addition, the firm will incur start-up expenses related to partial case returns and other items. It is assumed that major customers will be able to manage down their inventory levels with the assistance of the transitions team. Minimal returns will come from large retailers including WalMart and Kmart due to their quick inventory turnover. It is anticipated that most returns will come from drug retailers as they shift products to the new packaging and remove unsold product from the shelves.

Partial case returns net of salvage value $1,800,000

Label conversion costs 700,000

Freight charge/launch year expenses 400,000

Other miscellaneous 300,000

The redesign calls for cutting SKU’s from 79 to 49. No volume loss is anticipated from this since the transition team will actively manage shelf space on a customer-by-customer basis to minimize loss of shelf presence. The SKU reduction is estimated at $119,000 per year since the new package design is less expensive per unit.

The brand’s current long-term strategic role is to maintain share and grow at category levels. Sales in the most recent year were $139.5 million. Without the redesign, sales are forecast to remain flat at historic levels. With the redesign, management believes that sales can grow at the rate of the skincare category—forecast at 4% per year for the next five years—and there will also be incremental growth related to recovery of market share of 2% in Year 1, 1% in Year 2, 0.5% in Year 3, and 0% thereafter.

The gross margin will remain at 69% of net sales. The incremental marketing and development cost is a one-time $700,000 for market research and development. Management thought the project should be evaluated using a discount rate of 7% based on the firm’s weighted average cost of capital (WACC) and the perceived riskiness of the project.

ASSIGNMENT QUESTION: 1. As the accounting financial analyst supporting the brand, the CFO assigns you the project of completing a capital expenditure proposal for the repackaging. You must complete the template in Appendix 1.

Capital Expenditure Proposal

Section 1 Background: Describe here the project background, description, timeline and strategic rationale. (10 Points)

Section 2 Financial analysis: Identify and calculate the key metrics that will be used to analyze the decision. This includes proforma financials, NPV, IRR, Payback and break-even measures. (25 Points)

Section 3 Risks: Outline the financial and nonfinancial risks associated with the project. (15 Points)

Section 4 Ethical considerations: Identify ethics issues of repackaging/rebranding a product without improving it. Also, consider if it is ethical to increase the price without improving the product. (16 Points)

 

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write my assignment 23039

I need help creating a thesis and an outline on Accounting for non-profit company. Prepare this assignment according to the guidelines found in the APA Style Guide. An abstract is required. Rotary International is a not-for-profit organization that was founded on February 23, 1905 by the Chicago attorney, Paul P. Harris. The Rotary Club of Chicago provided a platform where diverse professionals would exchange ideas, forming meaningful and lifelong relationships. The name, “Rotary” came from the fact that earlier members used to rotate in each others’ offices for meetings. With its growth, Rotary International aimed at bringing together professional and business leaders so as to render humanitarian services, promote utmost ethical standards in various vocations and foster global goodwill and peace, this being in line with its motto of “Service above self.” In its structure are Rotary clubs, Rotary International and Rotary Foundation. This paper focuses on the Rotary International, RI which is the umbrella body supporting Rotary clubs across the globe and coordinates global campaigns, programs and initiatives. The mission of RI is to “provide service to others, promote integrity, and advance world understanding, goodwill, and peace through its fellowship of business, professional, and community leaders” (Rotary International, 2014). It is therefore a model of a charitable organization seeking to promote social interests in various communities around the world.

RI has its world headquarters based in Evanston, IL in the US. It has international offices in Zurich, New Delhi, Tokyo, Yongdungpo-gu, Parramatta, São Paulo and Buenos Aires serving Europe/Africa, South Asia, Japan, Korea, South Pacific and Philippines, Brazil and Southern South America regions respectively. They also have offices in Great Britain and Ireland. Through this network, Rotary International, RI (2014) documents a current membership of 1.2 million people. These regions contribute towards the total donation income of RI.

The presidency is the topmost position in RI.

 

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Hi, need to submit a 500 words essay on the topic Unit 5 Science Individual Project.

It is a well known and reported fact that the current population of the world is more than six billion and a half billion and it is only increasing on a daily basis (CIA, 2007). This increase is certainly putting a strain on our food resources, availability of fresh water, distribution of energy resources, health services, education services and many other problems that are being faced by developing nations (BBC, 1999). Sadly, the situation is also worst in developing nations while many developed nations may have to face the problem of falling population rates, a growing number of elderly and not enough people in the workforce (King & Elliott, 1996).

Of course there must be something that can be done about it and the United Nations itself has made many different recommendations to developing countries to help them achieve some level of control over their growing populations. However, it does appear that we are fighting a losing battle since the population of the world is still increasing and it is showing little signs of stabilization. In fact, at our present rate of expansion the population of the world has been estimated to rise to eleven billion humans by the end of this century (BBC, 1999).

This is clearly unacceptable since we do not have the present technology nor the availability of resources to feed even the present population and a rise of almost hundred percent could only reduce our ability to handle the situation. If we do not control population increases and also do not drastically work towards providing an acceptable standard of life for the rest of the world we are simply heading towards disaster and conflict between the haves and the have-nots.

The highest recommendation which can be made is to create awareness and educate people about the population situation. The UN is already working towards establishing programs for

 

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write my assignment 6601

Marianne Moore’s “Poetry” is written in defense of poetry. In the excerpts, which lines or phrases reflect Moore’s opinion of what good poetry should be?

. . . to discriminate against “business documents and

school-books”; all these phenomena are important. One must

make a distinction

however: when dragged into prominence by half poets, the

result is not poetry,

nor till the poets among us can be

“literalists of

the imagination” —above

insolence and triviality and can present

for inspection, “imaginary gardens with real toads in them,” shall

we have

it. In the meantime, if you demand on the one hand,

the raw material of poetry in

all its rawness and

that which is on the other hand

genuine, you are interested in poetry.

 

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