CASE ANALYSIS OF PACK-iTS CASE STUDY

SUBMITTED BY-ANJALI MEHTAPGDM2-1504

1

2CASE SYNOPSISThis case is all about analyzing the marketing, operating and financial aspects of the business venture to determine the financing requirementsbefore making a decision as to whether to proceed with the new venture or not.

BACKGROUND• 6 University management students want to start a business

in partnership, named Pack-iTS.• It is a healthy lunch preparation and delivery service,

serving elementary schools within Thames Valley District School Board, London, Ontario.

• They can invest $25,000 and would limit their involvement to 10 hours a week per member.

KEY ISSUEThe key issue involved in this case is regarding the decision that the 6 partners have to take whether to proceed with the entrepreneurial venture or not by the end of the month and to know if additional financing would be required other than $25,000 to run the business with limited involvement of 10 hours per week by each member.

MAR

KETI

NG

M

IX

COMPETITION ANALYSIS Major competitors-1. Lunchables (Kraft)2. Lunchmates (Schneiders)3. Smart Lunch (Schneiders)

Healthy lunch service

for school going kidsVariety of choices

Easy delivery

Elementary

schoolsLondon, Ontario

$ 5 per lunch

Flexibility of

choice of lunches

per week

WebsiteFundraising

fairBackpack

mailPromotional package

PRICE RANGE$2.59-$3.99 per package

TARGET GROUPHealth conscious working families (both the parents are working) whom children study in elementary school

3STRENGTHSFlexibility for parents &

childrenConvenient meal solution for

busy familiesVariety of choices

Easy deliveryHealthy food choices

WEAKNESSESTime restraints-partners were full time university students

Budget RestraintsLimited knowledge about the

business

OPPORTUNITIESHealth conscious families

Increasing family incomes(by 13.6% between 2001 to 2005)None of elementary schools in

area operated cafeterias

THREATSPicky eaters

Bi-monthly hot lunch programmes

Strong competition from established brands

Low price of packaged lunches-$2.59-$3.99

SWOT

RECOMMENDATIONS• They can continue the venture as it is profitable

planned but should hire an administrative assistant to overcome the time restraint.

• Target parent councils and local parenting magazines to advertise.

BREAK EVEN ANALYSISVariable costManufacturing cost-$2.9Unit S.P-$5.0FIXED COST-$87,500

FINANCINGInitial investment-$25,000Compensation-$6000

EXPENSES

COST

Salary 36,000Rent 18000Marketing 3,500Operating 30,000

BREAK EVEN(UNITS)=87,500/(5-2.9)=41,666 units(approx.)

TOTAL MARKETNo of elementary School-154Avg. Students-400Total No of students-61,600

Lunches per week

%student

Total

0 50% -1 30% 18,4802 10% 12,3203 6% 1,10,8804 2% 49,2805 2%

Total61,6002,52,560

ESTIMATED SALES