Transcript The PharmaSim Case Period Review

The PharmaSim Case
Period Review
Prepared by:
Nik Rentas
Turgut Tezir
August 10, 2006
OUTLINE
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General Period Review
Period Performance
Period 4
Period 5
Period 6
Period 7
Conclusions I & II
General Period Review
PERIOD
0
1
Introduce
New Products
Dryup
Coldcure
Advertising
Spending
3.3Mil.
+17.7Mil.
Promotional
Spending
+1Mil
+17Mil
2
3
4
5
6
7
8
Besthelp
+
Allround+
Curall
Children
Ethick
End+
AllStar
Allright
+7.3Mil
+17.2Mil
+14.4Mil
+12.3Mil
+21.3Mil
+2.7Mil
+7.3Mil
+3.5Mil
+7.8Mil
+3.7Mil
+10.1Mil
+3Mil
+4.1Mil
+1.5Mil
+13.7%
+13.6%
+57.4Mil
2.4%
+106.2Mil
4.4%
+223.8Mi
l
7.3%
+164.1Mi
l
5%
+316Mi
l
9.2%
SALE
Mass
Merchandiser
+9%
Retail
82.1Mi
l
4.3%
Convenience
Grocery
380.7Mil
19.1%
+19%
+168.4Mi
l
6.6%
+36.4%
+345.6Mil
12.8%
-21.8%
9.9%
+29.1
%
+7.5%
General Period Review
Period
0
1
2
3
4
5
6
7
8
Net Income (millions$)
67
91
69
69
52
112
206
98
141
Compare Groups in Class*
0
10
14
8
10
2
2
5
3
Stock Price ($)
38.35
50.71
39.14
37.5
35.42
52.98
57.7
61.75
80.68
Compare Groups in Class*
0
9
14
7
8
5
4
4
4
Return on Expenditures (%)
203.6
257.3
182.7
200.8
90.1
217.6
139.4
132.8
192.7
Compare Groups in Class*
0
13
11
5
12
2
5
8
3
Return on Sales (%)
18.9
21.3
16.9
16.9
11.7
24.6
18.4
16.0
19.9
Compare Groups in Class*
0
12
13
10
13
4
3
6
3
Share of Manufacturer Sales (%)
23.8
23.4
21.9
20.8
21.4
22.0
22.8
22.4
24.6
Compare Groups in Class*
0
8
7
7
7
7
5
5
5
Cumulative Net Income (millions$)
67
158
227
296
349
460
567
665
806
Compare Groups in Class*
0
10
13
11
11
8
7
5
5
General Period Review
Stock Price ($)
Net Income (Million $)
90
250
80
206
200
80.68
70
61.75
60
150
141
112
100
91
67
50
69
98
40
38.35
30
69
52
20
10
0
periods
57.7
50.71
39.14
50
0
periods
52.98
37.5
35.42
Period Performance
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Period 1 was below average compared to groups in the
class.
Period 8 was above average
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We were in the top 3 best company based on
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We were in the top 4 best company based on
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net income,
return on expenditures and
return on sale.
stock price.
We were in the top 5 best company based on
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share of manufacturer sales,
cumulative net income
Period 4
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Allround + 12hr Multi Capsule
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Capsule & Stronger
Net Income and Stock Price climb
Advertising & promotional spending high
Grocery and retail store sale grew
Curall has also requested permission to
sell children cough medicine
Period 5
Advertising & promotional spending high
 Product awareness high but declining
 New competitor products introduced with better
marketing strategies, more focused
segmentation.
 Ethik introduced End+
 Net Income increased almost double size
 Stock prices increased
 Retail sales grew by 12.8%
Period 6
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Allright children medicine introduced
Total advertising and promotional spending
increased
Sales force increases caused major
improvements
Net Income and Stock prices grew
Retail sales grew by 7.3%
Convenience store sales decreased 21.8 %
Period 7
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Advertising and promotional spending
increased
We continue to increase sales force
Grocery stores showed the strongest
growth in this period with an increase of
7.5%.
Retail sales grew by $164.1 million.
Conclusions I
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An average advertisement and promotional
allowance help us to increase product awareness
although didn’t help retention.
The best advertising company had a marginal
effect. We switched over cheaper advertisement
company to reduce advertising cost.
Through cost cutting in advertising we increased
our sales force to attempt to match that of B&B.
Doing so made retail sales skyrocket and
brought us within 10 million dollars of B&B.
Conclusions II
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Through cost cutting in advertising we increased our sales force from
period 6 on to attempt to match that of B&B.
Doing so made retail sales skyrocket in period 8 bringing Allstar
within 103 million dollars of B&B in retail sales
Period 7
Period 8
Allstar
Retail Sales
.
B&B
805.9
943.9
615
729
Promotional Allowance
116.5
111.9
Cost of Goods Sold
219.8
192.7
278.6
424.4
16.5
21.7
43
Sales Force
Administration
Allstar
B&B
Retail Sales
925.3
1028.3
Manufacturer Sales
706.1
794.5
Promotional Allowance
134
122
Cost of Goods Sold
240
219.1
332.1
453.4
Cons. & Trade Promo.
15
23.8
50.6
Advertising
44
55.7
14.6
21.1
Sales Force
14
22.9
16.9
19.5
Administration
18.8
21.2
187.7
311.5
240.3
329.8
89.3
109.5
99.7
113.5
98.4
202
140.6
216.3
Stock Price
61.75
129.95
Stock Price
80.68
144.47
Capacity Utilization
108.9
96.7
Capacity Utilization
100.2
104.6
Manufacturer Sales
Gross Margin
Cons. & Trade Promo.
Advertising
Contrib. after Mkting
Fixed Costs
Net Income
Gross Margin
Contrib. after Mkting
Fixed Costs
Net Income