Omega Paw Inc.

Problem Statement

In order for Omega Paw to grow successfully, its president, Michael Ebert would require to select an appropriate channel of distribution in the market that is generally growing but is dominated by the low cost basic litter box.

Objectives

After reaching the sales milestone of $1 million in just over a year, Mr. Ebert hoped to reach sales of $1.7 million (70% increase) by 2012, $3 million (76% increase) by 2013 and $5.7 million (90% increase) by fiscal year end December 2014.

Background

The desire to invent the self-cleaning litter box arose when Ebert was left to care for his brother’s cats for the holidays. It was then that he wanted to find a better way to clean after the cats, which was cleaning the cats’ litter box without having to hold his nose. His current sales in just over a year’s operations, was $1 million. He wanted to grow his business rapidly but only has a marketing budget of $100,000 and the capacity to produce 3,500 units a week.

SWOT Analysis

Strengths:

1. Excellent sales during the first year of operations

2. Competitively priced

3. Low production costs

4. Omega Paw is easier to use compared to direct competitors

Weaknesses:

1. Dampened reputation due to production issues on 2,500 pre-sold units

2. Lack of large distribution network

3. Production is limited to 3,500 units a week

Opportunities:

1. The cat population is estimated to grow at 3.6% annually for the next few years

2. Untapped American market

3. Omega Paw is the only self-cleaning litter box in the US

Threats:

1. Several competing products available in the market

2. Increased brokerage costs associated with expansion

3. 15% of cat owners barely purchase specific cat products

Market and Competitive Analysis

The market for cat supplies including litter boxes in Canada alone is approximately $378.97 million (10 % on supply x $792 annual spend x 14.5 million x 33% cat owners). With the cat population in the United States being 7.3 times more in the United States, the market there can be estimated to be worth $2.75 Billion, making cat supplies approximately a combined $3.13 Billion market in North America. Within that