Dansk Minox Case Study Essay Example for Free

Dansk Minox Case Study EssayProblem A/S Dansk Minox is a participation based in Copenhagen, which specializes in branded vacuum-packed meat and other food returns. Through consumer survey, the alliance found that there was a large untapped market for a Complete meal product which included sliced pork a tenacious with a vacuum-sealed bag of blushful cabbage salad. After long discussions among the marketing and finance departments, the complete meal pack was introduced at a set of $ 8.20 per pack of 1 kg. It sold only 30 tons as against the budgeted sales of 85 tons. The problem facing the company is that whether it has to stop go on production of the complete meal product or establish a newfangled consumer price of $ 6.85 per pack, in order to boost sales. Considerations and AnalysisIn order to decide the course of fulfil we may look at the following facts and considerations.Consumer Price 8.20 6.85Retailer Price 5.72 4.78Variable Cost 3.49 3.41 record Sales (in kgs) 3000 0 85000Advertising Costs 0.3 0.3Impact on Profit 41,400 90,950As we can see, impact on profit is higher when 85000 kgs of complete meal is sold at $6.85/kg, rather than selling 30000 kgs at $ 8.20/kg. Now, other point to note is if production expenses are to be revised to $ 1.20/kg, then on a panoptic represent basis, the complete meal would cost. get along unit cost (new) = Total unit cost (old) achievement expenses (old) + Production expenses (revised) Total unit cost (new) = 4.64 0.54 + 1.20 = $ 5.30And Profit per unit would be = Retailer price Total unit cost (new) = 4.78 5.30 = (-0.52) (i.e) there would be a loss of $ 0.52/kg, on a full cost basis, when the complete meal is sold at $ 6.85. Conclusion and RecommendationsThe point to be focused here is that though the new product might sell 85tons at a revised price of $ 6.85 per pack, it will incur losses on a full cost basis. Also it is not viable to lower the production costs anymore because, the resources of A/S Dan sk Minox which were specialized for meat processing were at once processing Vegetables. This is not their core competency and hence they would incur more costs in acting activities that they do not specialize in. Furthermore, the need for a single package containing sliced pork and red cabbage salad is itself questionable because the same packs are also individually available and these individual packs are of discover quality because slice pork is Dansk Minoxs speciality and red cabbage salad is its competitiors specialty.Hence, it is recommended that Dansk Minox stop further production of complete meal (because red salad is not its core competency) and concentrate on selling its measuring rod packs, which are in fact having a significant boost in their sales or the counseling can look to collaborate with the best red cabbage salad making company and together move on the customers the best quality of complete meal at the best price. The final decision would however be dependent upon managerial discretion and organizational guidelines/objectives.