Sweet Leaf Bath Company Case Analysis

Sweet Leaf Bath Company

Case Analysis

Team Number 1:

Karanjot Chohan 100315539

Sijing Chen (Joy) 100323388

Yuewen(Aviva) Guan 100309304

Dalvir Toor 100297552

Colin McDonald 100273491

Prepared for: Vida Morkunas, ENTR 3100 S50

Submitted on: February 07, 2018

“We confirm that this work is entirely our own, has been prepared by us, and adheres to the Academic Integrity Statements digitally signed by each of us and on file with the Instructor.”

Definition of Success:

In order to allow Stacey Guymer return to Sweet Leaf Bath Co. on the full time basis and earn a salary of $36,400^[1] the company must increase its sales revenue to at least $150,000 by 2013. For this to take place, the company must address the following critical threats/opportunities before year end 2013:^[2]

• Capitalize and spread awareness on the growing fair trade market demand with their products and experience to build a loyal customer base.
• Formalize its distribution and promotion strategy to improve its retail and online presence.
• Address minimal sales growth through direct and indirect marketing.

Situation Analysis

SL operates in a highly competitive market with most firms selling identical products that are easily substitutable.Competitors of SL have stronger sales channels and customer base, and offered a diverse portfolio of products^[3].

The market for fairtrade products is growing and consumers have shown an increasing preference towards certified “green” products. The price for green products is higher than their counterparts, but still young and mature consumers with medium to high income prefer them.

SL experienced a drop in its sales growth rate, it dropped from 218% in 2010 to 12% in 2011. The gross margin on sales revenue improved from 37% in 2009 to 43% in 2010 and 51% in 2011. SL’s operating expense margin decreased from 65% in 2009 to 38% in 2011.^[4]

Due to unformalized distribution and promotional strategy, SL has a weak retail and online presence^[5]. SL’s existing marketing strategy is inefficient as well and relied solely on retailers to display their products. The consumer market is promising but needs further awareness regarding eco friendly and sustainable products. There is a lack of fair trade certified companies in the market and consequently, SL has a competitive advantage over its competitors. The major barriers to fairtrade consumers was its cost and availability of products.