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“Today Shapes Tomorrow

 Published Every Monday    Volume  134 Special Edition August 3, 2009














































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Chapter 8 – Competition heats up but your new strategy seems to be working in week-6

Last week we discussed details of the fifth week.  Your new strategy worked.  Your sales soared to 80 lemonades a week.  This week competition from “Jack & Jill Lemonade” intensified.  As predicted, your competition dropped the price to $0.75 a cup, which dropped your weekly sales to 45 cups, however, you made some smart moves on the cost and positioned well for the future.  Perhaps you have found a way to be different than your competition and continue to be profitable in the lemonade business. 


Your new business strategy seems to be working.  Let us see how you did this week – 

1)  SALES – You sold 45 lemonades this week even though your competition “Jack & Jill Lemonade” down the street dropped the price to $0.75 a cup.

2)  CUSTOMERS – You listened to the feedback from your key customers.  You made some changes to the lemonade.  You re-branded to ORGANIC LEMONADE with low sugar. It turned out to be a success.

3)  PRODUCT AND SERVICES – You are keeping the quality of lemonade good.  You service is courteous and taste is just perfect.

4)  PRICE – So far your price of $1 per glass has worked.  You know that “Jack & Jill Lemonade” are now selling lemonade for $0.75 per glass.  So you start to think should you follow and drop your price next week? What will happen to your sales and profit numbers?

5)  COST Analysis –

  • Per the customer feedback, you cut the sugar in half from your recipe, which also helped to cut your sugar cost in half.  

  • You also realized that the biggest cost or two thirds of your cost is from lemons. So you get creative and worked out a deal from the local organic farm. If you pick your own lemons the farm will cut lemon price by one third. Not bad!

                     

                   Old Cost = $0.33 per cup                             New Cost = $0.24 per cup (a 27% cost reduction!)

 

Your success is recognized by many.  Keep up the good work!  This is how your 6th week numbers look –   



Learn more about…

What is Credit History?  Why is it important to have a good credit history? Volume 12.    

What is Economy, Business, Workers, Goods,  Services,  Stock, DOW, S&P500, and NASDAQ in Volume 16. 

Does it pay to study hard? Volume 17.    

What is Currency and Foreign Currency Exchange rate? Volume 14What is stronger or weaker currency? Volume 20. What does the dollar slide mean? Volume 32.


How does money grow in a bank? Volume 21. 

What is Fed Funds rate and Discount rate? Volume 22

What does the interest rate cut mean for you? What is APR? Volume 23. 

How to read stock information? Volume 25. 

What is “Black Monday”…Crash of 87”? Volume 31.

Who are CEO, CFO, Shareholders, and the Board of Directors? What is SOX? Volume 33


What does “$4.95 + Tax” means?  Volume 47.


What is a Recession?  What is a Depression? Volume 48.


What is Mergers & Acquisition (M&A)?  What is a Merger?  Volume 49.


What is ADR?  Volume 62.


What does buying back of shares means?  Volume 63.

Why is consumer confidence so important?  Volume 64.


 

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