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Profitability Calculations for Different Entry Options (in $000)

Profitability Calculations for Different Entry Options (in $000)

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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analysis  which brand would be the most profitable with what entry mode ? 

Exhibit 1 Profitability Calculations for Different Entry Options (in $000) Entry Strategy Brand Forta Retail Market Size $ 3,200,000 Year One Penetration Year Two Penetration Year Three Penetration Total Market Penetration Retailer Margin Revenue Pass- Through to Brand Year One Forecasted Revenues Year Two Forecasted Revenues Year Three Forecasted Revenues Discount Rate Total Discounted Forecasted Revenues % Margin Total Margin Marketing Investments Branded Entry Other Investments Total Investments Estimated Three- Year Profits 30% 0% 10% 40% 20,000 6,000 26,000 Poland Abilit $3,200,000 30% 0% 10% 40% 17,000 3,000 20,000 Private-Label Entry Forta Abilit $3,200,000 $3,200,000 30% 25% 10% 40% 5,000 6,000 11,000 30% 25% 10% 40% 4,000 3,000 7,000 Branded Entry Forta $ 350,000 25% 0% 10% 40% 3,000 500 3,500 Bulgaria Abilit $ 350,000 25% 0% 10% 40% 5,000 1,000 6,000 Private-Label Entry Forta $ 350,000 25% 20% 10% 40% 500 500 1,000 Abilit $ 350,000 25% 20% 10% 40% 750 500 1,250 Purchased for use on the Global Issues in Marketing at Warwick Business School
Transcribed Image Text:Exhibit 1 Profitability Calculations for Different Entry Options (in $000) Entry Strategy Brand Forta Retail Market Size $ 3,200,000 Year One Penetration Year Two Penetration Year Three Penetration Total Market Penetration Retailer Margin Revenue Pass- Through to Brand Year One Forecasted Revenues Year Two Forecasted Revenues Year Three Forecasted Revenues Discount Rate Total Discounted Forecasted Revenues % Margin Total Margin Marketing Investments Branded Entry Other Investments Total Investments Estimated Three- Year Profits 30% 0% 10% 40% 20,000 6,000 26,000 Poland Abilit $3,200,000 30% 0% 10% 40% 17,000 3,000 20,000 Private-Label Entry Forta Abilit $3,200,000 $3,200,000 30% 25% 10% 40% 5,000 6,000 11,000 30% 25% 10% 40% 4,000 3,000 7,000 Branded Entry Forta $ 350,000 25% 0% 10% 40% 3,000 500 3,500 Bulgaria Abilit $ 350,000 25% 0% 10% 40% 5,000 1,000 6,000 Private-Label Entry Forta $ 350,000 25% 20% 10% 40% 500 500 1,000 Abilit $ 350,000 25% 20% 10% 40% 750 500 1,250 Purchased for use on the Global Issues in Marketing at Warwick Business School
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