Justin's Flashcards
1
Q
When was Justin’s founded?
A
2004
2
Q
When did Hormel acquire Justin’s
A
2016
3
Q
Justin’s market penetration
A
6.3m HH
4
Q
5 dimensions of CATME
A
- contributing to the team’s work
- interacting with teammates
- keeping team on track
- expecting quality
- having relevant KSAs
5
Q
Contributing to the team’s work
A
doing at least your fair share of the work and assisting teammates whenever possible
6
Q
Interacting with teammates
A
seeking out and listening to ideas, contributions, and feedback from team members
7
Q
Keeping the team on track
A
monitoring and ensuring progress of team and members
8
Q
Expecting quality
A
motivating and believing in the team to do good-to-excellent work
9
Q
Having relevant KSAs
A
contributing valuable knowledge, skills, and abilities that improve the team
10
Q
Market Attractiveness
A
How well does the category create a competitive advantage and capture a substantial stake in the market?
11
Q
Fit with Brand Image
A
How well does the category fit with Justin’s brand?
12
Q
Financial Attractiveness
A
How financially attractive is the category?
13
Q
Operational Feasibility
A
How well does the category align with Justin’s sourcing, manufacturing, distribution, and logistics competencies?
14
Q
Product Lifestyle Stages
A
- Launch: introduction into the market, focus on product innovation
- Growth: increasing demand, flexible processes, increasing product standardization
- Maturity: demand and product stabilization, increasing importance of cost, process innovation to increase efficiency
- Decline: changing technology or customer needs, declining demand, potential phase in of a replacement product.
14
Q
Key reasons for product extensions
A
- energizing a brand
- expanding core promise for new users
- managing true innovation
- blocking or inhibiting competition
- managing a dynamic environment
15
Q
Risks to product extensions
A
- cost
- cannibalization
- channel conflict
- brand confusion
avoid: ego/fear driven decisions
15
Q
Methodology of Risk vs Reward
A
- find the right data
- analyze the data
- make the best decision
- present the decision
- implement the decision
15
Q
Revenue
A
earned by selling the product
calculate: from market size, growth rate, and market share
15
Q
Cost of Goods Sold (COGS)
A
how much it costs to produce the product (variable costs)
calculate: units sold (revenue/selling price) * variable cost of product per unit
16
Q
Operating Expenses
A
other expenses independent of the number of units sold
17
Q
Depreciation
A
expensing of the cost of an asset over time. is NOT a cash expense
calculate: year 0 cap ex/years
18
Q
Operating Income (EBIT):
A
revenue - (COGS + OpEx- Dep)
19
Q
Income tax expense
A
operating income * tax rate
20
Q
net income
A
operating income - income tax expense
21
net income margin
net income/revenue
22
annual operating cash flows (year 0 only)
net income - cap ex
NOTE: cap exp are an investment, not part of operating income
23
annual operating cash flows
net income + depreciation
NOTE: we add back depreciation because it is a non-cash expense
24
cumulative cash flows
operating cash flow for year X + cumulative cash flow for year X-1
25
WACC
discount rate to calculate the NPV of an investment's cash flows
26
Cash flows
initial investment amount and the operating cash flows from the project over time
revenue - operating costs
27
Present value
the future value of an investment expressed in today's value.
28
Discounting
procedure used to calculate the present value of an individual/series of payment(s) that will be received in the future based on an assumed interest rate or return on investment
29
Net Present Value
capital budgeting technique found by subtracting a project's initial investment from the PV of cash inflows discounted at a rate equal to cost of capital
NPV = PV of cash inflows - initial investment
30
Internal rate of Return (IRR)
a metric used in capital budgeting to estimate the profitability of potential investments. makes NPV of all cash flows equal to zero.
31
Payback period
time required to recoup the funds expended in an investment or to reach the break-even point
32
Profit Margin
amount by which sales revenue exceeds costs
33
Market Attractiveness attributes
business exist to create value to customer in the form of products and services, winning brand has competitive advantage
34
Fragmented vs concentrated
fragmented = many small competitors
concentrated: small number of dominant competitors
34
Rivalry among competitors
intense competition and rivalry reduce the profit potential in a market, higher costs to win customers
34
Rivalry is determined by
- industry structure
- market growth rate
- strategic commitments
-exit barriers
35
4 Ps
product, price, place, promotion
36
Selecting a pricing method
costs = price floor
competitors' prices = orienting point
customers' assessment of unique features = price ceiling
37
skimming pricing
high initial price for new or innovative product
38
penetration pricing
low price on new product
39
prestige/premium pricing
high price that attracts quality or status conscious consumers
40
value pricing
price based on what the consumer is willing to pay due to unique features
41
economy pricing
low or bulk pricing for customers who want to save as much money as possible
42
bundle pricing
grouping different products together and charging less in total than each item would be individually
43
dynamic pricing
change price quickly based on changes in demand
44
supply chain
consist of the flow of products and services from: raw material suppliers, product manufacturers, wholesales, distributors, retailers, service providers
45
three stages of production decisions
1. production planning: where, when, how?
2. production control: quality and costs
3. improving production and operations: develop more efficient methods
46
BLOT
bottom line on top
1. orient reader
2. BLOT
3. additional details
47
Presentation Introduction
hook, intro, statement of credibility, statement of relevance (BLOT), preview
48
10 Cs of Business Writing
complete, concise, clarity, consideration, concrete, courtesy, correctness, credible, conversational, coherent
49
Line extension vs. brand extension
line extension: variation of existing product
brand extension: expanding company into a new product category
50
push vs pull
push: personal selling and trade promotions (discounts) are use heavily
pull: advertising directed at consumers
51
sales promotion
price discount directed to the consumer either through a price reduction or coupon
52
trade vs consumer sales promotion
trade: aimed at resellers to help push the product through distribution channel
consumer: for consumers, paid for by manufacturer
53
Packaging Decision Framework
sustainability, operations, profits
54
margin
profits relationship to revenue
(revenue - variable costs)/revenue
55
markup
profits relationship to variable costs
(revenue - variable costs)/variable costs
56
Gross margin %
Gross margin/revenue
57
Revenue
COGS/(1-Required GM%)
58
Direct to consumer "DTC"
manufacturer straight to consumer
59
traditional retailer
manufacturer, distributor, grocery chain, consumer
60
vertical integration
firms producing their own inputs. firm using specialized suppliers so they can focus on their core business
61
Reasons for buying or outsourcing
- cost advantage
- insufficient capacity
- lack of expertise
- quality
62
benefits of outsourcing
allows a firm to
- concentrate on core capabilities
- reduce staffing levels
- accelerate reengineering efforts
- reduce management problems
- improve manufacturing flexibility
63
Co-packer
a business capable of producing and packaging food products for outside clients, small kitchens to large manufactures
- sometime calls a co-manufacture/co-man
64
private label vs co-pack
private label: manufacturer usually owns recipe, manufactures the product and then puts client's label on packaging (Trader Joe's)
co-packing: client owns recipe and the co-packer does the manufacturing per requirements of client
65
why co-packer?
- spend $ on marketing rather than capital for manufacturing equipment
- flexibility for small production
- scaling the business
66
challenges of co-packers
- quality control
- often high MOQ
- logistics
- priority
- does not match product plans
67
risks of outsourcing
- loss of control
- increased reliance on suppliers
- increased need for supplier management
68
reasons for making
- protect proprietary technology
- no competent supplier
- better quality control
- use existing idle capacity
- control of lead-time
- lower cost
69
How does IRR compare to WACC?
If IRR > WACC accept project
If IRR < WACC decline project
70
What are shortcomings with payback period?
1. doesn't take into account the time value of money
2. the appropriate number of years for a "good" payback period is subjective
3. doesn't recognize cash flows beyond payback period
71
How is payback period different from IRR?
Payback period is the amount of time it takes the firm to recoup its initial investment
IRR is the internal rate of return on the investment
