MAKING MANAGEMENT DECISIONS

Making management decisions



Making Management Decisions- Envchem Ltd

Introduction

In order to analyze the feasibility of new product, in the situation where there are other lines of product manager has to assess a part of fixed costs which is involved in the production process, the market, competition, product segmentation, production process, marketing strategy and marketing, product design, and all costs associated with production, marketing, logistics and storage, etc are analyze to see the capacity, demand, selling price of the product in relation to other products in the same segment of the competition. A feasibility plan is a document that allows entrepreneur to assess the profitability of the project. To do this, we will analyze both the investments and expenses that the business will result as revenues that are expected to obtain.

Discussion

Envchem Ltd wanted to launch a new laundry detergent Emerald that does not produce any harmful waste chemicals after use. Overall demand for cleaning products is closely linked to population growth. More people means there will be more bodies to bathe and more homes to clean. However, as the age of UK population and the rate of new household formation decrease correspondingly (Seitz N., & Elllison M., 2004, pp. 68).

To finance Envchem Ltd, being an analyst I will be looking for entire factors that influence the demand an 'environmentally-friendly' product of this kind. The following are the factors that have been considered to influence the demand of this product.

Technology & Systems: Companies in the Industry such as Ecocover products range from high volume types such as laundry detergents and liquid soaps that are used regularly, to lower volume specialty products for less frequent cleaning needs. Growing environmental concerns have caused change in both the production process and packaging of detergents and household cleaners products in recent years. Today, such products are designed with the objective of creating minimal waste and environmental impact.

More changes in the future: Over the next five years, the rate of technological change in the industry is not expected to be particularly high. However, given the intense nature of competition among the major players, the continuous introduction of innovative new products is becoming more important. A number of consumer product companies are now turning to outside suppliers including specialty chemical manufacturers in their efforts to develop new innovative products.

More green lies ahead: Environmental concerns among consumers and governmental regulators are expected to continue. Increasing emphasis will be placed on factors such as biodegradability, aquatic toxicity (manufactured chemicals' effects on aquatic organisms), renewable feedstock and environmental footprint regarding carbon dioxide emissions throughout the supply chain.

Price competition has pressured profit margins, and companies are exploring other product lines

Players such as Ecocover are still profitable, but their products have become less distinguishable from competitors

Companies are using acquisitions to grow revenue rather than depending on demand for products

Consumers have unqualified acceptance of detergent products, indicating the industry's low level of radical innovation

The following is the estimation provided by the Envchem Ltd for their new ...