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The Isis Company considers introducing a new lower-end olive oil brand with cheaper packaging in addition to its original brand "Isis". The objective was to increase the company's market share by penetrating the mass market (Isis's current market share in 2020 is 10%). Management wanted to position the two brands very differently. However, they anticipated that the new brand might cannibalize from Isis. The below table summarizes the prices, costs and expected volumes in both scenarios (Isis alone and Isis+ New Brand) next year (2021). 2021 Price (EGP/unit) Var. Cost (EGP/unit) Scenario 1 Isis 50 20 Scenario 2 Isis 50 20 Volume (units) Fixed Costs (EGP) 90,000 500,000 a) Conduct a cannibalization analysis to evaluate the introduction of the new brand. Next year (2021) 100,000 500,000 New Brand 35 15 50,000 1,000,000 b) What is the % increase (or decrease) in yolume and in net profits if the new brand is introduced? What is the new market share of the Isis Company (Isis+ New Brand) in this case (Isis's current market share is 10%)?

The Isis Company considers introducing a new lower-end olive oil brand with cheaper packaging in addition to its original brand "Isis". The objective was to increase the company's market share by penetrating the mass market (Isis's current market share in 2020 is 10%). Management wanted to position the two brands very differently. However, they anticipated that the new brand might cannibalize from Isis. The below table summarizes the prices, costs and expected volumes in both scenarios (Isis alone and Isis+ New Brand) next year (2021). 2021 Price (EGP/unit) Var. Cost (EGP/unit) Scenario 1 Isis 50 20 Scenario 2 Isis 50 20 Volume (units) Fixed Costs (EGP) 90,000 500,000 a) Conduct a cannibalization analysis to evaluate the introduction of the new brand. Next year (2021) 100,000 500,000 New Brand 35 15 50,000 1,000,000 b) What is the % increase (or decrease) in yolume and in net profits if the new brand is introduced? What is the new market share of the Isis Company (Isis+ New Brand) in this case (Isis's current market share is 10%)?

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
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The Isis Company considers introducing a new lower-end olive oil brand with cheaper packaging in addition to its original brand "Isis". The objective was to increase the company's market share by penetrating the mass market (Isis's current market share in 2020 is 10%). Management wanted to position the two brands very differently. However, they anticipated that the new brand might cannibalize from Isis. The below table summarizes the prices, costs and expected volumes in both scenarios (Isis alone and Isis + New Brand) next year (2021). 2021 Scenario 1 Isis 50 20 Volume (units) Fixed Costs (EGP) 100,000 500,000 90,000 500,000 a) Conduct a cannibalization analysis to evaluate the introduction of the new brand. Next year (2021) Price (EGP/unit) Var. Cost (EGP/unit) 2022 Price (EGP/unit) Var. Cost (EGP/unit) b) What is the % increase (or decrease) in volume and in net profits if the new brand is introduced? What is the new market share of the Isis Company (Isis+ New Brand) in this case (Isis's current market share is 10%)? Volume (units) Fixed Costs (EGP) Isis 50 20 c) The Company thought of extending the research beyond one year. The below table summarizes the projected prices, costs and volumes in both scenarios (Isis alone and Isis + New Brand) in 2022. Based on the above data, conduct a cannibalization analysis for the introduction of the new brand in 2002 Scenario 1 Isis 50 20 110,000 500,000 Scenario 2 Isis 50 20 90,000 500,000 New Brand 35 15 50,000 1,000,000 Scenario 2 New Brand 35 15 100,000 1,000,000 d) What is the % increase (or decrease) in yolume and in net profits if the new brand is introduced? What is the new market share of the Isis Company (Isis New Brand) in this case (Isis's current market share is 10%) ? e) Based on the results in (a-d), what would you conclude
Transcribed Image Text:The Isis Company considers introducing a new lower-end olive oil brand with cheaper packaging in addition to its original brand "Isis". The objective was to increase the company's market share by penetrating the mass market (Isis's current market share in 2020 is 10%). Management wanted to position the two brands very differently. However, they anticipated that the new brand might cannibalize from Isis. The below table summarizes the prices, costs and expected volumes in both scenarios (Isis alone and Isis + New Brand) next year (2021). 2021 Scenario 1 Isis 50 20 Volume (units) Fixed Costs (EGP) 100,000 500,000 90,000 500,000 a) Conduct a cannibalization analysis to evaluate the introduction of the new brand. Next year (2021) Price (EGP/unit) Var. Cost (EGP/unit) 2022 Price (EGP/unit) Var. Cost (EGP/unit) b) What is the % increase (or decrease) in volume and in net profits if the new brand is introduced? What is the new market share of the Isis Company (Isis+ New Brand) in this case (Isis's current market share is 10%)? Volume (units) Fixed Costs (EGP) Isis 50 20 c) The Company thought of extending the research beyond one year. The below table summarizes the projected prices, costs and volumes in both scenarios (Isis alone and Isis + New Brand) in 2022. Based on the above data, conduct a cannibalization analysis for the introduction of the new brand in 2002 Scenario 1 Isis 50 20 110,000 500,000 Scenario 2 Isis 50 20 90,000 500,000 New Brand 35 15 50,000 1,000,000 Scenario 2 New Brand 35 15 100,000 1,000,000 d) What is the % increase (or decrease) in yolume and in net profits if the new brand is introduced? What is the new market share of the Isis Company (Isis New Brand) in this case (Isis's current market share is 10%) ? e) Based on the results in (a-d), what would you conclude
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