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Micoderm: A
Profitability Analysis
January 2016
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Outline
Company Overview
Product Overview
The SSRS
The Dilemma
Apparent Problem
Decision Options
SWOT Analysis
Proposed Solutions
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COMPANY OVERVIEW
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PRODUCT OVERVIEW
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PRODUCT OVERVIEW
THE SSRS
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THE DILEMMA
What should be done to secure the future (or
profitability) of Micoderm?
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APPARENT PROBLEM
The product was losing money in 2010 because its selling
price could not be increased; hence it had become
barely profitable to the company.
The Ministry of Health had frozen its selling price since
2000, and had refused to grant a request for price
increase due to a deep economic crisis in the country.
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DECISION OPTIONS
Should we
continue selling
at the current
low price or
accept our
losses?
Should we
leave the SSRS
so as to be able
to increase its
selling price?
Micoder
m
Should we
request a price
increase yet
again from the
SSRS?
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SWOT ANALYSIS ON MICODERM
STRENGTHS
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SWOT ANALYSIS ON MICODERM
STRENGTHS (CONTINUED)
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SWOT ANALYSIS ON MICODERM
WEAKNESSES
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SWOT ANALYSIS ON MICODERM
OPPORTUNITIES
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SWOT ANALYSIS ON MICODERM
THREATS
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SWOT ANALYSIS ON MICODERM
THREATS (CONTINUED)
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ANALYZING THE NUMBERS
Ignoring the outliers and comparing the sales revenue from the
current price (2.37 * 2,196 = 5,204) to the projected sales revenue
from the average price (6.00 * [40% of 2,196] = 5,270), the
difference in revenue is negligible (66).
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PROPOSED SOLUTION
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PROPOSED SOLUTIONS
Launch new OTCs and skin care cosmetics for profit making.
However, the company should develop a strong good rapport with the
Ministry of Health so as to present their case informally and be advised
on the timing of the request. With the alleviation of the economic crisis,
they could still grant the request.
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PROPOSED SOLUTIONS
Launch new OTCs and skin care cosmetics for profit making.
However, the company should develop a strong good rapport with the
Ministry of Health so as to present their case informally and be advised
on the timing of the request. With the alleviation of the economic crisis,
they could still grant the request.
THANK YOU!