¶ … Harvard Brief Cases called TruEarth Healthy Foods - Market research a New Product Introduction...case # 4065 Two parts assignment (A & B) Part A. One paragraph background/situation Part B: Please address case questions attached find a copy excel spreadsheet guideline "hint" determining demand levels.
TruEarth Healthy Foods -- Market research for a new product introduction
TruEarth was established in 1993 in St. Louis, Missouri as the provider of gourmet pastas and sauces, made from higher quality ingredients. The products were launched under the Cucina Fresca brand name and they have attracted significant customer satisfaction. Throughout the past recent year, the company had been engaging its efforts in the creation of a new product line, namely the whole fresh pizza. The launch of the new product is now being assessed, in a context of massive investments and sales decreases in pasta and sauces product lines.
The initial success of the Cucina Fresca pasta had resulted from the creation of products from higher quality ingredients, which were not only tastier, but also healthier for the buyers. This success then was attained in the overall context of changing customer demands and the company's triumph was due to its ability to adapt to the changing market features.
The pastas were as such launched in a time when there was opportunity for growth in the healthy foods sector. Today, this opportunity still exists, yet it is more decreased, since the number of industry players has increased and the competition has intensified. Last, at the level of product...
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7778 Total Contribution = unit contribution x sales= $5 x $25,000= $125,000 Operating income= Total Contribution -- Fixed Costs= $125,000= $80,000 = $45,000 DOL at 25,000 bags = $125,000/$45,000=2.7778 Why does the degree of operating leverage change as the quantity sold increases? The Degree of operating leverage is a unit of measure on the return on fixed assets. The degree represents the ratio between a change in profits and a change in revenue. A higher
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