a. What is your 5 year plan regarding the brand portfolio across the two markets. Give justification
Our Period 2 results have swept the industry and we have become number one team in our industry. We are the leaders in value market shares (23%) and unit market shares (29%) in Squazols market.
Our 5 year plan will focus on maintaining the brand equity in the Squazols market as we can see the 5-year anticipatory growth in manufacturing and construction sector and we have products strategically placed in Squazols market. Although we have invested in R&D of new product in Trigols market on anticipation of new segment in Utility, but as Trigols market is capital intensive and we don’t have market statistics to support new products in that market, we do not see requirement to diversify into Trigols market. Our plan will be to slowly diversify in the new market based on Ansoff’s grid platform, if we anticipate the need. Eg: based on profitability and market growth and share, we will position our products as Stars (with R&D expenditure) or if it does not perform well, we can withdraw the product, and diversify into Trigols market.
a. How much do you think will be your stock price index after 5 years
As per our actual SPI rise from Period 1 to Period 2, it has increased by
(1266-1061)/1061 = 19.3 %.
Now, as we have been number two player in the Buffalo industry in period 1, and have become market leader in period 2, we anticipate similar growth pattern in future with an average 20% growth year on year.
As such, our 5 year conservative estimate for SPI will be ((1.2)^4)*1266= 2625.17 assuming 20 % year on year growth due to our strategies and brand portfolio as described above.
Almas.shaikh@spjimr.org
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