Omega Paw Inc.
Problem Statement
In order for Omega Paw to grow successfully, its president, Michael Ebert would require to select an appropriate channel of distribution in the market that is generally growing but is dominated by the low cost basic litter box.
Objectives
After reaching the sales milestone of $1 million in just over a year, Mr. Ebert hoped to reach sales of $1.7 million (70% increase) by 2012, $3 million (76% increase) by 2013 and $5.7 million (90% increase) by fiscal year end December 2014.
Background
The desire to invent the self-cleaning litter box arose when Ebert was left to care for his brother’s cats for the holidays. It was then that he wanted to find a better way to clean after the cats, which was cleaning the cats’ litter box without having to hold his nose. His current sales in just over a year’s operations, was $1 million. He wanted to grow his business rapidly but only has a marketing budget of $100,000 and the capacity to produce 3,500 units a week.
SWOT Analysis
Strengths:
Excellent sales during the first year of operations
Competitively priced
Low production costs
Omega Paw is easier to use compared to direct competitors
Weaknesses:
Dampened reputation due to production issues on 2,500 pre-sold units
Lack of large distribution network
Production is limited to 3,500 units a week
Opportunities:
The cat population is estimated to grow at 3.6% annually for the next few years
Untapped American market
Omega Paw is the only self-cleaning litter box in the US
Threats:
Several competing products available in the market
Increased brokerage costs associated with expansion
15% of cat owners barely purchase specific cat products
Market and Competitive Analysis
The market for cat supplies including litter boxes in Canada alone is approximately $378.97 million (10 % on supply x $792 annual spend x 14.5 million x 33% cat owners). With the cat population in the United States being 7.3 times more in the United States, the market there can be estimated to be worth $2.75 Billion, making cat supplies approximately a combined $3.13 Billion market in North America. Within that