Case Study: The Solar Feeder

SWOT analysis:

Strength:

1. The product that is highly demanded.                
2. Recognition in the form of many awards that is won by the solar feeder.
3. Good relationship with the distributor.

Weaknesses:

1. They did a little marketing research.
2. No expertise in the business namely in marketing and management (e.g.: preparing marketing plan and advertising).
3. Price relatively expensive, production is slow which make them unable to cope with the high demand of the product.

Opportunities:

1. The high demand of the product.
2. Potential of investment.

Threats:

1. Some animal lovers condemned the idea of solar feeder which is utilizing the electrical shock to get off the squirrel from the feeder.
2. The threats of competitors which are offering cheaper products.

Observation in the financial performances:

1. They experience a negative income, this primarily due to excessive expenses.
2. Unable to meet the break even point ( Please refer to the appendix 1)

Industry Environment

1. Competition in this field is not strong. Although there are competitors who offer cheaper than SDI, still it unappealing and does not offer the solar feeder’s technology.
2. Growth opportunity is fairly high considering the extremely high demand.
3. There is strong evidence of the need of changing the production line and promotion strategies to suit the customer preferences.
4. The wholesaler and retailer demanded 100 percent markup on their cost which also indicate the strong wholesaler bargaining power.
5. Dominant strategic game plans evolve around cost leadership and bundling with complementary products. There is also a clear emphasizes on services quality (Hence the need for investment in service system).
6. Customers are not very mobile in moving to other retailers, perhaps due to the lack of any other reliable competitors of SDI.

Recommendations

1. In the effort to improve the promotion of the product, the soar feeder should try different ways of promoting their product since thus far the advertising proves to be ineffective for the animal lovers. Some alternatives are trade shows, gifts, tracts.
2. In the area of financial, it is recommended for the solar feeder to improve their financial statement. Prepare a well-defined budget and tighten the expenses.
3. It is also recommended for the solar feeder to increase their production rate and cutting the cost of production. To cater this objective the outsourcing to other manufacturing is the best solution.
4. Build up strategic vision for the solar feeder. This will be proved to be a guidance of the long term path of the organization.
5. Conduct a more extensive marketing research, this will prove to be handy in deciding the target market, identify their needs and best ways to promoting the product to the targeted market. Marketing research also useful in preparing the marketing plan of the company.

Appendix 1:

BREAK – EVEN POINT

1. Average per unit = Total Revenue

                                                                                   

                                      Total Unit Sold per year

                                  =   56,071 / 446 = 125.7

2. Average COGS per unit = Total COGS + Expected annual sales

                                                        Total Unit Sold per year

                                                   = (22,715 + 19,285) / 446

                                                   = 94.2

3. Contribution per unit = 125.7 – 94.2

                           

                                        = 31.5

4. Break even units = Fixed Cost

                                     Contribution per unit                          

                           

                                        = 26,993 / 31.5 = 857 units