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Case Study: First Class Trading Corporatio N: Team 4
Case Study: First Class Trading Corporatio N: Team 4
FIRST CLASS
TRADING
CORPORATIO
N
Team 4
Case facts
Case facts
Protagonist
Jeff Morahan - The founder of the company
David Sciacca Co founder of the company
Strategic Planning Levels
Corporate
Business
Functional
1.
2.
3.
Threats
Dependence on suppliers.
Competition on price,
convenience and quality
Depending on parent
committee approval.
Weakness
Product differentiation
Innovative
Unknown to the customers
Low cost
Interesting for teachers,
parents and schools
Portfolio Analysis
Industry Attractiveness
Business Strength
Market Size:
Growth Rate:
Competition:
Profitability:
Environmental Impact:
Market Size:
Market Growth:
Image:
Price competitiveness:
Product quality:
Sales force efficiency:
Profitability:
Establishing Company
Objectives
Acceptable?
Flexible?
Motivating?
Consistent?
Understandable
?
Achievable?
Situation Analysis
Sales volume:
Gross margin: 30 per cent at least until
2009
Profits:
ROI:
Marketing Strategy
Formulation
Organizational
Variables
Purchase situation
Variables
Individual Variables
Purchase importance-
Personal characteristics
Individuals in the DMUMostly women.
Parents -Price sensitive
Structure of buying
centre-
Evaluation of segments
Market profitability analysis
Competition analysis
Differentiator: Customized
solutions. Market potentialSales potentialSales forecastProfitability-
Competition analysis
Targeting
Segment: Private School
Target: Undifferentiated market selection
1.Private elementary school directors.
People involved in DMU
DMU largely consisted of women, aged 45 years
and over.
Majority of directors worked in collaboration with
PTA. (Both had equal say)
Directors were the final decision makers with
regards to new purchase decisions.
Targeting
2. Private elementary school teachers and
parent-teacher committees.
Influencers
Purchase criteria
Positioning
Organizational buying
process
Initiator
Influencer
Decider
Buyer
User
The children
are the
initiators of
this buying
process, as
they show
their urge to
have new
bag and
accessories
for the new
semester.
Parents
whose views
are working
as an
influence on
Board of
Directors
final
decision
whether to
give the
contract to
firm or nor
are
influenced.
The Board
of Director
of
elementary
schools are
decider as
they are one
to take
decision
about
uniform bag
and
accessories.
Parents are
buyers as
they handle
the
purchase
paperwork
for their
children or
pays.
Children are
the final
consumer of
the product.
Buyer
power
Competitive
rivalry
Threat of
substitutio
n
Threat of
new entry
The
possibility of
prices
driven up by
the
suppliers is
medium.
The
possibility
of prices
driven up
by the
buyer is
high.
The company
should mainly
focus on
existing
competitors in
markets like
Wall-mart and
Bureau Gros
who are
enjoying good
reputation in
the market.
The threats of
competitor is
As the
product idea
is innovative
and new in
the market,
there is a
low chance
of close
substitute
products
exist in a
market
Profitable
markets
attract new
entrants, so
there is a
medium
chance of
new
entrants in
the market
that can
erode
profitability.
PEST
Political Factor
Government
Subsidies
Economic Factor
Social Factors
There is a positive
impact of social
factor on the firm as
they are facilitating
customer with the
convenience of
availability.
Analysis Questions
1)What is the strategy proposed by
Morahan & Sciacca ? What is your
evaluation of this strategy?
2) As a result of your evaluation, what do
you think they should do? Why?
Implication
Price
Implication
Place
Implication
Promotion
Implication
Analysis
Analysis
Profit/Loss
-Wanted to capture 5% market share of
Quebec Private Elementary Schools by
2008
-Maintain marketing expenses at 5% of
sales
-Maintain gross margins at 30% until
2009 in order to cover all fixed/variable
costs.
Bags: $90 Retail
Cost: $63
Company Goals
Current/Future Contracts
Projected Contracts
*$11,000/school
*$90/student
To Reach Projected Goals
Break Even Analysis
*$11,000/school
*$126/student
If Sales Price was $126
Quebec $138
FCTC $90
External
Recommendations
1.
2.
3.