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Submission instructions:
The Catfish Creek Canoes [CCC] case concludes our discussion of marketing
issues. Your analysis of CCC is due as follows:
- Word and Excel files emailed no later than 7:45 am on October 13th.
Email subject line is catfish; file name protocol is
yourlastnamecatfish.xls or yourlastnamecatfish.doc]
- Hardcopy is due at the start of class for your section
- Bring a copy of your work for reference during our discussion
Other instructions:
- Please DO NOT use Excel to answer the "essay" questions.
- Use bullet points to answer the essay questions wherever possible. Be
brief, but be specific.
- This case is somewhat similar to the Sombrero Fruit Juice Outlet case.
OK, sure, the product and environment are very different, but the basic plot
is much the same: potential entrepreneur has an idea and wants to know if it
will work.
- One way to think about questions 1 and 2, below is to use what I call
the "frog pond" method. [e.g., How big is the frog pond [= the market]? How
big are the frogs [manufacturers] already in the pond? Are they big
bullfrogs or tadpoles? How serious is the "threat" from the big ones [are
they just noisy or do they really stir up the water?] Is there enough space
for yet another frog in this pond? Are there enough lily pads to hide under
here, or are we going to get beat up before our tadpole-sized venture
reaches maturity? Thinking this through in the context of the case should
not be too difficult.
- Note that the answer to question 2 is somewhat dependent on the answers
to questions 3, 4, and 5.
- HINT: There is nothing NEW in this case that really
requires the material from chapter 5. In some respects, I could just as well
have used Catfish Creek Canoes in place of the Sombrero case. DO NOT make
this more difficult than it is.
Your assignment questions are as follow:
- Is this an attractive industry to enter? Why or why not?
- Who are CCC's competitors? What kinds of product do they offer?
- What are consumers looking for when canoe shopping? How much
are customers willing to pay for wooden canoes?
- How do the competitors' products compare with what potential canoe
customers are looking for? Consider both price and attributes of the
product.
- Given your evaluation of 1a - 1c, above, can CCC provide a canoe having
the attributes that customers want for a price customers are likely to pay?
What selling price should CCC set in order to cover costs and meet profit
goals?
- Determine the dollar value of the investment that would be required to
get CCC started.
- Determine CCC's total fixed costs. Include internet charges. Note that
advertising rates are given for two magazines catering to canoers. Assume
that CCC would go for a 3 inch ad in each of the two publications mentioned,
and the prices are linear.
- The U.S. exchange rate on July 29,
1999 was 1.4695.
- Production cost of the ad is $1,000Cdn.
- Fixed assets have a useful life of 5 years; depreciation is straight
line, zero salvage.
-
Determine the sales revenue necessary for Davidson to achieve an annual
net profit of $10,000.
-
Based on your analysis so far, what price will Davidson have to charge in
order to achieve the desired profit?
Evaluation of
your work:
"A" papers will
thoroughly address each of the issues enumerated above. Written work will be
comprehensive and contain insights into the obvious issues as well as the
subtleties involved in this decision. Numerical analysis will be accurate,
complete and well organized. "A" papers will demonstrate a thorough
understanding of the conceptual issues which are relevant to the analysis. "A"
papers will have professional appearance and will be entirely free of errors in
spelling, grammar and syntax. One primary differentiator between "A" and "B"
papers will be the extent to which you are able to integrate the qualitative and
quantitative assessments of this situation. "C" papers will tend to lack any
such integration, and/or contain significant conceptual/mechanical errors. More
serious [or more numerous] errors will result in grades of C- or lower.
Historically, students' ability to address questions like So what? What
difference does it make? Who cares? has been a major factor in the
difference between higher and lower grades in all of my classes.
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