Hansson Private Label, Inc Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Hansson Private Label, Inc Case Solution

Introduction

Hansson Private Label Inc. was a company of PCP (personal care products)manufacturing that was established in 1992 by Tucker Hansson. The company had well-established marketing strategies that enable the company to build strong retailers that aid the company to generate a solidified financial status and market presence. The company had efficient leadership that allow the company to become the principaland leading company in the manufacturing industry hence within a short span, Tucker Hansson acquiredassets of Simon Health and Beauty Products. From 2003 to 2007 under the leadership of Tucker Hasson and his team the company enjoyed and retain a great financial performance. The company had a skillful management team that have a significant role in the sustainability of the business growth rate and reduced the barriers that resist the company to achieve its business core objectives.

The main aim of the company was to establish a strong and expanded loyalty based-customer market that allow the company to increase its brand legacy and financial statement as compared to its rivals. So, that is why the company set efficient selling strategies through its strong retailers including Costco, Wall-Mart, Kroger, and Dollar which have versatile specifications and strategies that attract a huge volume of customers (Erik Stafford, 2009).

Problem Statement

Hansson Private Label, Inc. is a company of personal care products that is going to expand to around $50 million to expand its manufacturing capacity. The decision regarding the expansion of manufacturing capacity involves around $50 million investment which is not free from market risk so that is why the BOD and management are worried about this expansion. However, the company needs to perform the financial analysis of the project that involved the calculation of future cash flow and NPV, and the decision of expanding required a strong financial analysis, systematic capital planning process, and evaluation of risks associated with the expansion in the future (Erik Stafford, 2009).

Analysis

Project Analysis

The company experienced various downfalls and successes during its business span but in most cases, the company successfully sustain the business growth rate and retain the brand presence in the market either in a highly competitive market or in a market that has low market competition.

However, the analysis of the company shows that the company achieved one of the most successful quinquennials from 2003 to 2007 under the leadership of Tucker Hansson and his skillful management during which the company achieve a strong financial status and core objectives of its business. However, the company is now going to invest around $50 million in its manufacturing capacity expansion which might be better for the company that enables the company to achieve its core objectives and profitable customer market.

Hansson had expanded predictably, not ever adding importantvolume until Hasson had clear sufficientprominence of the sales channel to make sure that any novelcapabilitymight beinstigatedprocesses with at least sixty percent capacity operation. Hasson has almost four main plants which are operated at a capacity of around 90%. However, Hasson successfully maintained a modest level of debt to contain the risk of economicsufferingin case the company made a big customerloss. However, the main mission of the company had remain the same to be the top leading provider of high-quality personal care products of private label to the leading retailers of the United States (Liu, 2020).

According to the US market analysis, it is shown that the company saw an increase in the customers of personal care products including mouthwash, skin care products, and other personal care products. The personal care product manufacturing industry achieved a historic revenue of around $21.6 billion in 2007 and the market is likely to grow annually by 3.93% which shows the high capability of success in the market.

The investment in the expansion of the manufacturing operation capacity allows the company to achieve a huge profitable volume of customer market which help the company to sustain its business growth rate and strengthen its market presence. However, the expansion has various benefits and certain risks that should be handled by the company to achieve its business core objectives. The project of manufacturing capacity expansion has both benefits and side effects (Duvaleix, 2020).

Pros of the project

The expansion of the manufacturing capacity for the company is a vital decision for the company to achieve a huge volume of loyalty-based profitable customers that has the efficiency to increase the legacy and economic health of the company. However, the pros of HPL’s expansion of manufacturing capacity are as under:

The investment of $50 million in the project allows the company to cover a wide range of customer markets by increasing high-quality production.
The growth rate of personal care products increased by 3.93% which shows a positive graph of the economic health of HPL in the future.
It allowsHPL to sustain its business growth rate and strengthen its brand legacy in the global market, especially in the US market..........................

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Hansson Private Label, Inc Harvard Case Solution & Analysis