Snuggle Dri Case Study Solution

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Executive Summary

The Sun Products Corporation has designed a product that offers buyers an easy and affordable way to effectively soften their laundry. Proper fabric softening is the most effective process available to reduce static cling and stiffness in clothing. Improper laundry techniques result in wrinkles, faded materials, and the breakdown of fabrics. Studies have shown that proper washing procedures can slow down the deterioration of fabrics and lengthen the life of clothes while making the whites whiter and colors brighter over a longer period of time. The greatest solution to this problem stems from the lack of use of fabric softeners. Existing products offer no effective or affordable solutions for ensuring laundry comes out soft and snuggly. Treatment of clothes costs Americans over $4 Billion in direct costs each year.
The Sun Products Corporation is the first line of laundry products to answer this problem and provide proven results that using fabric softener lengthens the overall life and quality of clothing. After washing, the unique additive in our fabric softener remains on the clothes. This will allow protection from dangerous UV rays, immense dryer and iron heat, daily usage, as well as future laundry cycles. Though our brand Snuggle, we shall provide this in a new product line under the registered brand name Snuggle Dri, which not only provides the advantages stated above but also creates a water repellant coating. No other product on the market offer similar results along with trusted quality and assurance of Snuggle.
The Company
The Sun Products Corporation was founded in 1975 as Huish Detergents Inc. by way of Wilton, Connecticut. The Sun Products Corpo...

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...ed on detailed financial projections, Snuggle Dri will require $300,000 in start-up capital, but will bring in positive cash flow practically instantaneously which will handle any unexpected expenses and generate profit by the end of Year 1. By the end of Year 3 the brand will be generating $30,000,000 in sales with a sizeable net profit.

Sales - Sales growth is projected at a constant rate of 90% annually, which based on growth from existing channels of distribution and positioning
Operating Expenses - After the first 24 months we project an increase in operating expenses caused by higher advertising, marketing, and promotion costs
Inventory Turnover - We will launch with a test run with purchase of 30,000 gallons of Snuggle Dri. We will keep this as a minimal inventory stock at our distribution hub. On average, we will have three months worth of inventory on hand.

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