group 11 peter chen rob clark micheal joseph vincent zhang

Group 11Peter ChenRob Clark

Micheal JosephVincent Zhang

Overview Analysis Recommendation Implementation Risk Mitigation

AgendaPeter Chen

Menu

Overview

Analysis

Recommendation

Implementation

Risk Mitigation


AgendaPeter Chen

Ice Cream is MeltingProblem State

ment

Faced with growth from large branded ice cream, how can Geddy’s grow from a regional brand into a organized player?

How can we maximize the utilization of a seasonal supply chain?


AgendaPeter Chen

Geddy’s Vision

Leader in finest and tastiest ice-creams

Established strong brand name

Loyal customer base


AgendaPeter Chen

Industry Map

Industry

Organized Players

Frozen Deserts Ice Cream

Regional

Geddy’s


AgendaPeter Chen

Opportunities

•More urban disposable income correlation with ice-cream consumption

•Developing back end infrastructure from commercialization

•Indian Government allowing foreign direct investmentRapid economic

growth

•Indian consumption is about 15% of world average in ice cream

•Not a traditional desert due to availability of alternatives.

•Market Growth of 15-20%Very low per capita ice-cream

consumption


AgendaPeter Chen

Threats

•Large branded players seeing majority of growth in industry (20-25%)

•Large branded players have more resources for aggressive marketingLarge

competitor Growth

•Fluctuations in raw materials leads to supply shortages

•Complex raw materials for high quality ice-creamsSeasonal

availability of food supply


AgendaPeter Chen

Strengths and Weaknesses

•High Quality artisan ice-cream•Unique operations to cater to consumer

preference (Just Desserts)•Regional distribution advantage in transport

and supply

Strengths

•Lack of forecasting•Too many flavors•High Fixed Cost•Seasonal Swings

Weaknesses


AgendaPeter Chen

Making the Best Mix

Strategy

Operations

Supply Chain

Market Growth

Company Vision

0 10 20 30 40 50 60600.0

700.0

800.0

900.0

1000.0

1100.0

1200.0

0.50

0.60

0.70

0.80

0.90

1.00

1.10

1.20

1.30

1.40

Profit with Current Policy

Week

Wee

kly

Profi

t

Seas

onal

Dem

and


AgendaRob Clark

Current State

Seasonal Factor of Demand

Weekly Profit

0 10 20 30 40 50 60600.0

700.0

800.0

900.0

1000.0

1100.0

1200.0

0.50

0.60

0.70

0.80

0.90

1.00

1.10

1.20

1.30

1.40

Corrected Profit with Policy Optimazation

Week

Wee

kly

Profi

t

Seas

onal

Dem

and


AgendaRob Clark

Future State

Seasonal Factor of Demand

Weekly Profit

Increase 1.15% Annual Profit


AgendaRob Clark

New Restock Policy

TV BBS LL BT Total Difference of 350Sales Forecast 96 102 48 85 331 19

% of Total Weekly Sales 28.82% 30.92% 14.55% 25.71%

Distribution of Extra 6 6 3 5 TotalNew Re-stock levels 101 108 51 90 350

Consumer Demand Policy• Forecasted weekly based on previous

20 week average sales forecast


AgendaMicheal Joseph

Choosing Flavors

Merge with Just Bake

Multi-period Forecasting

Outsourcing

Brand + N/A +

Profit- ++ +

Operational efficiency + ++ ++

QualityN/A N/A --



Multi-period Forecasting

Build ‘Ice Cream Base Mix’ and

‘Flavor Mix’ pre- production

Recruit new temps in peak

season Assemble ‘Flavor Mix’ and ‘Ice Cream Base

Mix’ on spot

Is the next period of a high demand as

forecasted?

Restock supply and assist Just

Bake production

No

Yes


AgendaVincent Zhang

Short Term --- Market Expansion

Why ?Potential seen in

the growing market, bringing in more competition. "Geddy's" must

create a stronger brand image and gain brand equity before

the larger "organized players" enter market


AgendaVincent Zhang

Short Term


AgendaVincent Zhang

Long term - Sustain Expansion with Cost Efficiency

Why ?

Sustainable Market with population growth

Shift from high margin market to low margin market


AgendaVincent Zhang

Long-Term

Align with ISO standards

Merge with Just Bakery

Shift to Just Sundae

Structure Outsourcing


AgendaVincent ZhangSchedule

Planning

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023Multi-period Forecasting

Market Expansion Merge with Just Bake Shift to Just Sundaes Structure

Pull System

ISO

Outsource


AgendaRob ClarkFinancial

OutcomesYear 1 Year 2 Year 3 Year 10

Profit "Full" Kiosk $ - $212,500.00 $297,500.00 $892,500.00 Profit after Break

Even $106,250.00 $42,500.00 $4,250.00 $4,250.00 Consumer Demand $15,361.00 $21,505.40 $29,032.29 $72,940.60

Non-Kiosk Growth $(120,543.00)

$(86,795.55) $188,608.30

$5,706,675.77

Annual Profit $1,068.00

$189,709.85

$519,390.59

$6,676,366.36



Risk Mitigation

Supply Risk• Risk of quality

Competitor Risk• Unanticipated

aggressive push or expansion by large competitors

Risk

Use of ISO to guarantee quality

Operate with agility in knowledgeable markets and rely on consistent quality and cost effectiveness

Mitigation


AgendaQuestions!!

Question Me!!


AgendaAppendix Finance

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10

Profit to Invest $ 48,457.00 $ (14,293.00) $ 189,709.85 $ 519,390.59 $ 977,499.74 $ 1,577,240.06 $ 2,238,133.48 $ 3,103,498.18 $ 4,097,479.48 $ 5,281,887.06

Kiosk Cost $ (125,000.00) $ (50,000.00) $ (50,000.00) $ (50,000.00) $ (50,000.00) $ (50,000.00) $ (50,000.00) $ (50,000.00) $ (50,000.00) $ (50,000.00)

Production Line $ (44,000.00) $ - $ - $ (44,000.00) $ (44,000.00) $ (44,000.00) $ - $ (44,000.00) $ (44,000.00) $ (44,000.00)

EAI $ (120,543.00) $ (64,293.00) $ 139,709.85 $ 425,390.59 $ 883,499.74 $ 1,483,240.06 $ 2,188,133.48 $ 3,009,498.18 $ 4,003,479.48 $ 5,187,887.06

"Full" Kiosk Potential Profit $ - $ 42,500.00 $ 42,500.00 $ 42,500.00 $ 42,500.00 $ 42,500.00 $ 42,500.00 $ 42,500.00 $ 42,500.00 $ 42,500.00 # "Full" Kiosks 0 5 7 9 11 13 15 17 19 21

Profit "Full" Kiosk $ - $ 212,500.00 $ 297,500.00 $ 382,500.00 $ 467,500.00 $ 552,500.00 $ 637,500.00 $ 722,500.00 $ 807,500.00 $ 892,500.00

Kiosk Potential Profit $ 42,500.00 $ 42,500.00 $ 42,500.00 $ 42,500.00 $ 42,500.00 $ 42,500.00 $ 42,500.00 $ 42,500.00 $ 42,500.00 $ 42,500.00 # Added Kiosks 5 2 2 2 2 2 2 2 2 2Length after Break Even 0.5 0.5 0.05 0.05 0.05 0.05 0.05 0.05 0.05 0.05

Profit after Break Even $ 106,250.00 $ 42,500.00 $ 4,250.00 $ 4,250.00 $ 4,250.00 $ 4,250.00 $ 4,250.00 $ 4,250.00 $ 4,250.00 $ 4,250.00

EAI $ (120,543.00) $ (64,293.00) $ 139,709.85 $ 425,390.59 $ 883,499.74 $ 1,483,240.06 $ 2,188,133.48 $ 3,009,498.18 $ 4,003,479.48 $ 5,187,887.06 Growth Rate 0.00% 35.00% 35.00% 30.00% 20.00% 10.00% 10.00% 10.00% 10.00% 10.00%

Non-Kiosk Growth $ (120,543.00) $ (86,795.55) $ 188,608.30 $ 553,007.76 $ 1,060,199.69 $ 1,631,564.07 $ 2,406,946.82 $ 3,310,447.99 $ 4,403,827.43 $ 5,706,675.77

Year 1 Year 2 Year 3 Year 10

Profit "Full" Kiosk $ - $ 212,500.00 $ 297,500.00 $ 382,500.00 $ 467,500.00 $ 552,500.00 $ 637,500.00 $ 722,500.00 $ 807,500.00 $ 892,500.00

Profit after Break Even $ 106,250.00 $ 42,500.00 $ 4,250.00 $ 4,250.00 $ 4,250.00 $ 4,250.00 $ 4,250.00 $ 4,250.00 $ 4,250.00 $ 4,250.00

Consumer Demand $ 21,505.40 $ 29,032.29 $ 37,741.98 $ 45,290.37 $ 49,819.41 $ 54,801.35 $ 60,281.49 $ 66,309.63 72940.59765

Non-Kiosk Growth $ (120,543.00) $ (86,795.55) $ 188,608.30 $ 553,007.76 $ 1,060,199.69 $ 1,631,564.07 $ 2,406,946.82 $ 3,310,447.99 $ 4,403,827.43 $ 5,706,675.77

Annual Profit $ (14,293.00) $ 189,709.85 $ 519,390.59 $ 977,499.74 $ 1,577,240.06 $ 2,238,133.48 $ 3,103,498.18 $ 4,097,479.48 $ 5,281,887.06 $ 6,676,366.36


AgendaAlternative 1- Join Just

Bake

Go Geddy’s

Just Bake

Assisting in off- season

production Just Sundae’s

Assist ‘Just Bake’

production line

Turn kiosk for

‘Geddy’s’ into kiosk for ‘Just Bake’


AgendaAlternative 2- Multi period

forecasting

Build ahead before

production

Hire temps in peak season

Able to cope with high capacity


AgendaAlternative 3- Outsourcing

Produce and Store ‘Ice Cream Mix’

Develop Seasonal ‘Flavor Mix’ Production

Outsource ‘Ice Cream Mix’ and ‘Flavor Mix’ to local player during peak season


AgendaDecision Matrix

•Requires capital to start production of other product, decreasing margin of revenue

•Since period in off-season, production level manageable and hence efficiency in operation will be achieved

•Quality not effected since no change made in modifying menu

Join Just Bake•High cost if incorrect forecasting• Profits are higher since every period is being forecasted and

changed accordingly, hence changes are anticipated.Multiple forecast

•Spreading of brand since franshisee are setup in different locations•Franchisee pay to use brand name •Quality can be effected since production not controlled by

franchise

Outsourcing


AgendaShort Term

•The use of kiosk will allow "Geddy's" to spread brand awareness and acquire marketshare. Kiosk are cheap and have a quick break even timeframe.•At the same time, restructure all "standalone parlors" to a "Just sundaes" structure and move away from the traditional "Geddy's" model.


AgendaShort TermAnsoff's Product-Market Expansion Grid-Ian Ansoff has proposed a useful framework called the product/market expansion grid for detecting new intensive growth opportunities. There are four strategies, one for each of the quadrants:

Market Penetration Strategy-When the product is in the current market, it can still grow. The major approach to increasing current product's market share: - Convince non-users to use the product.

Market-Development Strategy-When the current product is launched in a new market, there are three approaches to develop the market:1.Expand distribution channels. 2. Sell in new locations. 3. Identify the potential users.


AgendaShort Term

Product-Development StrategyWhen a new product is launched in the current market, the intensive growth strategies could be to: 1. Develop new features2. Improve the technology.

DiversificationWhen a new product is launched in a new market, diversification makes good sense as better opportunities are found outside the present business. The diversification strategies are of three types: 1. Concentric Diversification Strategy: Develop new products with the earlier technology for new segments 2. Conglomerate Diversification Strategy: Develop new products for new markets.


AgendaRestructured

SalesCASE: Geddy's Icecream

Maximum Space 350

Restocking Level (begin. of wk) Product Sales Wk Profit Month Week Policy Deployed TV BBS LL BT Space Used TV BBS LL BT Total Sales (100Rupee)January 1 Target Service Level Policy 68 74 38 67 247 60 67 26 50 203 651.7

2 Target Service Level Policy 71 77 39 70 258 61 66 32 58 217 687.73 Target Service Level Policy 74 80 41 73 268 64 62 35 57 218 691.54 Target Service Level Policy 76 82 42 74 275 62 77 40 69 248 774.95 Target Service Level Policy 79 86 43 77 285 54 81 28 70 233 724.1

February 6 Target Service Level Policy 82 89 45 80 296 67 73 35 61 236 751.67 Target Service Level Policy 85 92 47 83 306 54 68 34 65 221 685.08 Target Service Level Policy 87 94 48 85 313 76 87 40 79 281 884.09 Target Service Level Policy 87 95 48 86 316 81 71 36 68 256 817.7

March 10 Target Service Level Policy 89 97 49 87 323 70 93 30 78 272 853.211 Target Service Level Policy 92 100 51 90 333 87 85 38 71 281 901.212 Target Service Level Policy 93 101 51 91 337 85 79 51 82 297 932.813 Target Service Level Policy 96 104 53 94 347 67 95 45 93 300 921.9

April 14 Scaled Stocking Level Policy 97 105 53 95 350 89 97 39 83 307 976.015 Scaled Stocking Level Policy 97 105 53 95 350 78 100 49 76 302 957.716 Scaled Stocking Level Policy 97 105 53 95 350 71 105 53 92 321 994.317 Scaled Stocking Level Policy 97 105 53 95 350 74 105 53 94 325 1006.8

May 18 Scaled Stocking Level Policy 97 105 53 95 350 97 105 47 91 339 1076.519 Scaled Stocking Level Policy 97 105 53 95 350 97 105 53 79 333 1070.520 Scaled Stocking Level Policy 97 105 53 95 350 96 105 53 78 332 1064.821 Common Service Level 98 107 50 95 350 97 103 50 95 345 1088.422 Common Service Level 98 107 50 95 350 98 107 50 95 349 1103.3

June 23 Common Service Level 98 107 50 96 350 97 107 49 95 349 1101.124 Common Service Level 98 107 49 96 350 97 107 49 91 344 1092.525 Common Service Level 98 107 49 96 350 91 107 42 96 335 1055.626 Common Service Level 98 107 49 96 350 98 98 49 96 340 1072.7

July 27 Common Service Level 98 108 49 96 350 98 107 48 95 349 1102.228 Common Service Level 98 108 49 96 350 93 108 49 96 345 1085.329 Target Level for Top 3 Margin 95 109 51 95 350 95 90 45 62 292 954.030 Target Level for Top 3 Margin 95 109 51 95 350 94 88 44 62 288 940.0

August 31 Target Level for Top 3 Margin 95 109 51 95 350 94 88 44 61 287 938.032 Target Level for Top 3 Margin 95 109 51 95 350 94 87 44 60 285 932.533 Target Level for Top 3 Margin 95 109 51 95 350 93 86 43 60 282 922.034 Target Level for Top 3 Margin 95 109 51 95 350 92 84 42 58 276 904.0

September 35 Target Level for Top 3 Margin 95 109 51 95 350 92 83 43 57 275 901.5

36 Target Level for Top 2 Margin 95 109 51 95 350 91 83 42 56 272 892.537 Target Level for Top 2 Margin 95 109 51 95 350 89 81 41 54 265 870.538 Target Level for Top 2 Margin 95 109 51 95 350 89 80 41 53 263 865.039 Target Level for Top 2 Margin 95 109 51 95 350 87 79 40 55 261 854.5

October 40 Target Level for Top 2 Margin 95 109 51 95 350 86 79 40 57 262 854.541 Target Level for Top 2 Margin 95 109 51 95 350 83 79 40 59 261 846.542 Target Level for Top 2 Margin 103 111 49 87 350 94 99 35 80 309 991.143 Target Level for Top 2 Margin 100 108 51 91 350 82 82 47 71 282 898.6

November 44 Target Service Level Policy 94 102 52 92 340 94 79 45 82 300 951.9

45 Target Service Level Policy 90 98 50 88 326 71 81 29 64 244 779.946 Target Service Level Policy 87 94 48 85 313 81 83 47 75 287 907.847 Target Service Level Policy 85 92 47 83 306 78 91 28 65 262 844.7

Decmber 48 Target Service Level Policy 82 89 45 80 296 72 71 40 55 240 771.149 Target Service Level Policy 81 88 45 79 292 78 78 37 72 265 838.850 Target Service Level Policy 78 85 43 76 282 63 66 33 60 223 703.851 Target Service Level Policy 75 81 41 74 272 75 72 37 59 242 779.152 Target Service Level Policy 74 80 41 73 268 66 61 35 48 210 676.7

January 53 Target Service Level Policy 68 74 38 67 247 56 68 28 63 215 671.154 Target Service Level Policy 71 77 39 70 258 71 51 39 54 216 690.755 Target Service Level Policy 74 80 41 73 268 61 77 34 47 219 709.8

Average 81 86 41 71 15361 49015.2% of 350 23.3 24.5 11.8 20.3


AgendaKey Weeks of Restructuring

Averages of WeeksRestructure Forecast Sales

28 Common Service Level 98 108 49 96 350 93 108 49 96 345 1085.3 TV BBS LL BTAverage/Weeks

29 Consume Demand Policy 95 109 51 95 350 95 90 45 62 292 954.0 95 90 45 62 20-4030 Consume Demand Policy 95 109 51 95 350 94 88 44 62 288 940.0 94 88 44 62 21-41

August 31 Consume Demand Policy 95 109 51 95 350 94 88 44 61 287 938.0 94 88 44 61 22-4232 Consume Demand Policy 95 109 51 95 350 94 87 44 60 285 932.5 94 87 44 60 23-4333 Consume Demand Policy 95 109 51 95 350 93 86 43 60 282 922.0 93 86 43 60 24-4434 Consume Demand Policy 95 109 51 95 350 92 84 42 58 276 904.0 92 84 42 58 25-45

September 35 Consume Demand Policy 95 109 51 95 350 92 83 43 57 275 901.5 92 83 43 57 26-4636 Consume Demand Policy 95 109 51 95 350 91 83 42 56 272 892.5 91 83 42 56 27-4737 Consume Demand Policy 95 109 51 95 350 89 81 41 54 265 870.5 89 81 41 54 28-4838 Consume Demand Policy 95 109 51 95 350 89 80 41 53 263 865.0 89 80 41 53 29-4939 Consume Demand Policy 95 109 51 95 350 87 79 40 55 261 854.5 87 79 40 55 30-50

October 40 Consume Demand Policy 95 109 51 95 350 86 79 40 57 262 854.5 86 79 40 57 31-5141 Consume Demand Policy 95 109 51 95 350 83 79 40 59 261 846.5 83 79 40 59 32-52

group 11 peter chen rob clark micheal joseph vincent zhang

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