APEX CHEMICALS A LAUNCH ENIGMA

Company background Annual sales of 60 million and wishes to determine which of the two new compounds the company should market Parameter A115 B - 227 1. Nature of product New Electrolysis Plastic Oxidizer agent 2. Product Distinct advantage Inferior to stigones Characteristics over other products an existing product. in the market B227 is a substitute 3. Company Policy Avoid me too products 4. Cannibalization New Market Chances of of existing portfolio Cannibalization 5. Company Non Existent Good reputation 6. Brand Satisfied with Satisfaction going satisfaction Competition to the down as indicated extent of 95% of by 10% drop in a current users. growing market 7. Approach Diversification and Focus on organic risk spread growth 8. Market size $ 10 million $ 40 million 9. Competition 1 strong competitor 3 competitors and 6 small players 10. Contribution to Nil 25% i.e $ 15 million existing portfolio in revenues or 40% Market Share 11. Market Nil Good knowledge 12. Advantages of Reduce risk spread All eggs in one diversification basket 13. Market Stable Unstable characteristics 14. Projected Gross Same for both the products margins Please advise me on what to launch giving a rational policy justification of your investment in no more than 2 pages without rehashing/restating facts of the case. Restating of facts will invite negative marks.

Positives of A(revenue or cost) 1. product characteristics A has a distinct advantage over other products in the market. Therefore it will help to increase sales. 2. No Cannibalization entry in new market will help to increase revenue.

Positives of B(revenue or cost)

Product B may cannibalize existing portfolio leading to loss of sales