Moreover, the absence of marking, sales, and production departments adds a burden on Ecton when it comes to negotiate its acquisition.All of these concerns and more will be discussed in the next few pages.I have carefully analyzed the various matters that affect the decision of which toy to introduce first, the Even though by using advertising we only get 80% of the Big Tiger’s stores to distribute our product, after the first year when they see that it is profitable and worth being in their stores they will most likely want to carry it in 100% of their stores for their own benefit.
Thus, Cannon and his partners will work in more freedom environment if they keep their company away from acquisition.
Action Plan If Ecton machine passes the tests, Cannon should actively approach the big manufacturers, HP, Acuston or ATL.
Case Analysis Innovative Toy is entering the infant toy market by distributing through supermarkets.
It is important to analyze if our potential supermarket channel, Big Tiger, and Innovative Toys can find a place where there is a win-win situation and where both companies are pursuing the same objectives.
Ecton is going to position the company to be acquired but the board of directors and clinical advisors has some concerns about the ramifications of that plan.
Also, Cannon is not sure on how to approach specific market segments, such as ICUs in hospitals.
By selling with a contribution margin of 25%, where their total profit is highest for the product, they would make ,880 (assuming that all the mothers with infants that said that would buy infant products at a certain price buys our product at that price).
This is a 100% increase in profits for the infant toy category.
It is important to analyze the pros and cons of spending the marketing budget on trade promotion or advertising.
It is important to note that the success of Innovative toys and a future launch of a second product next year rely on the success of the product we will launch first in Big Tiger supermarkets.