By the Sea Biscuit Company Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Advantages:

As compared to other products and competitors offerings, the sea biscuit company’s products prices are low.
The US regions local stores are nearby Canada which helps to reduce distribution cost and potential growth.
Due to the appreciation in the US dollar as compared to Canadian dollar, expenses of company will be lower.
By ignoring higher shipping cost, the company’s refrigerated shipping containers are cost effective alternative, which help to differentiate its product and services from competitors,ultimately helping it to create a competitive advantage over competitors.

Disadvantages:

Competition from existing companies in the US market can create difficulties for the company which will ultimately throw out “by the sea biscuit company” form existing competition, resulting in shutting down of its operations.
Exchange rates between two currencies, the US dollar and Canadian dollar can fluctuate in upcoming years. This unpredictability might lead to a heavy decrease and increase in cash flows of the company.

Recommendation& Conclusion:

After making detailed analysis, it is recommended that alternate 2 should be selected because it gives higher revenues and profits as compared to alternate 1. Revenue and profit from alternate 2 are 1,864,838 dollars and 661,827 dollars respectively while revenue and profit from alternate 1 are 1,822,130 and 628,963 respectively. (lower than alternate 2).

Due to highly saturated US market, By the sea biscuit company will have essentials to differentiate its products’ positioning form competitors, otherwise it will result in its exit form market. The positioning strategy for By the sea biscuit company will be the lower priced high quality products in the form of traditional biscuits and Healthy Omega 3.

Due to free competition in Canadian market, the company will not need to worry about it, which might lead to a wide range of new product offerings. New offerings time to time seems to be a good and healthy option, which will create the distinctive brand image in the minds of customers which ultimately leads it to capture new segment and population in its existing target market, resulting more power or even monopoly in frozen biscuit market.

During first year of operation, the company must be in contact with customer and suppliers due to maintaining a healthy relationship with them, which will be beneficial for “by the sea biscuit company” for several purposes in upcoming years.

Exhibit 1: Market Size of Canada

			Traditional			Healthy Omega 3
Month	Market Share %	Number of Cases	% of production	Number of Cases	Market Size	% of production	Number of Cases	Market Size
1	0%	-	0%	-	-	0%	-	-
2	0%	-	0%	-	-	0%	-	-
3	0%	-	0%	-	-	0%	-	-
4	0%	-	0%	-	-	0%	-	-
5	10%	4,318	100%	4,318	232,382	0%	-	-
6	20%	8,636	100%	8,636	464,765	0%	-	-
7	30%	12,953	75%	9,715	522,861	25%	3,238	261,430
8	40%	17,271	75%	12,953	697,147	25%	4,318	348,574
9	50%	21,589	75%	16,192	871,434	25%	5,397	435,717
10	50%	21,589	75%	16,192	871,434	25%	5,397	435,717
11	50%	21,589	75%	16,192	871,434	25%	5,397	435,717
12	50%	21,589	75%	16,192	871,434	25%	5,397	435,717
Total		129,534		100,389	5,402,891		29,145	2,352,872

Exhibit 2: Production Plan for Alternate 1

	Traditional			Healthy Omega 3
Month	Number of Cases	Revenue from Traditional	Income from Traditional	Number of Cases	Revenue from Omega 3	Income from Omega 3
1	-	-	-	-	-	-
2	-	-	-	-	-	-
3	-	-	-	-	-	-
4	-	-	-	-	-	-
5	15,050	203,175	59,699	-	-	-
6	15,050	203,175	59,699	-	-	-
7	11,812	159,462	46,854	3,238	65,570	29,662
8	10,732	144,885	42,571	4,318	87,435	39,554
9	9,653	130,313	38,289	5,397	109,294	49,442
10	9,653	130,313	38,289	5,397	109,294	49,442
11	9,653	130,313	38,289	5,397	109,294	49,442
12	9,653	130,313	38,289	5,397	109,294	49,442
Total	91,256	1,231,949	361,979	29,144	590,181	266,984
Total Revenue	1,822,130
Total Profit	628,963

Exhibit 3: Pricing for Healthy Omega 3

Price of 1 bag	$ 4.49
Number of biscuits in a bag	12
Number of bags in a case	18
Number of biscuits in a case	216
Price of 1 case	80.82

Exhibit 4: Production Cost & Breakeven Analysis

Production Cost	Traditional	Healthy Omega 3
Variable cost / case	$ 7.78	$ 9.34
Fixed Cost	$ 211,100
Unit cost	$ 9.53	$ 11.09
Price per case	$ 13.50	$ 20.25
Income Per case	$ 3.97	$ 9.16
Breakeven point	$ 40,076
Break even per product	30,057	10,019

Exhibit 5: Market Size of New York & New England

			Traditional			Healthy Omega 3
Month	Market Share %	Number of Cases	% of production	Number of Cases	Market Size	% of production	Number of Cases	Market Size
1	0%	-	0%	-	-	0%	-	-
2	0%	-	0%	-	-	0%	-	-
3	0%	-	0%	-	-	0%	-	-
4	0%	-	0%	-	-	0%	-	-
5	10%	469	100%	469	25,219	0%	-	-
6	20%	937	100%	937	50,438	0%	-	-
7	30%	1,406	50%	703	37,829	50%	703	56,743
8	40%	1,874	50%	937	50,438	50%	937	75,658
9	50%	2,343	50%	1,172	63,048	50%	1,172	94,572
10	50%	2,343	50%	1,172	63,048	50%	1,172	94,572
11	50%	2,343	50%	1,172	63,048	50%	1,172	94,572
12	50%	2,343	50%	1,172	63,048	50%	1,172	94,572
Total		14,058		7,732	416,116		6,326	510,689

Exhibit 6: Production Plan for Alternate 2

	Traditional			Healthy Omega 3
Month	Number of Cases	Revenue from Traditional	Income from Traditional	Number of Cases	Revenue from Omega 3	Income from Omega 3
1	-	-	-	-	-	-
2	-	-	-	-	-	-
3	-	-	-	-	-	-
4	-	-	-	-	-	-
5	15,050	203,175	59,699	-	-	-
6	15,050	203,175	59,699	-	-	-
7	11,109	149,972	44,066	3,941	79,805	36,102
8	9,795	132,233	38,854	5,255	106,414	48,139
9	8,481	114,494	33,641	6,569	133,022	60,176
10	8,481	114,494	33,641	6,569	133,022	60,176
11	8,481	114,494	33,641	6,569	133,022	60,176
12	8,481	114,494	33,641	6,569	133,022	60,176
Total	84,928	1,146,531	336,882	35,472	718,307	324,945
Total Revenue	1,864,838
Total Profit	661,827