Submitted by: Submitted by kkkkkkkkkkkk
Views: 76
Words: 831
Pages: 4
Category: Business and Industry
Date Submitted: 06/09/2014 04:04 AM
I recommend Michael Shaps to launch his custom crush idea. Reasons are shown below.
(1). His production capacity doubled because of the newly acquired winery. If he insists on expanding OtC business, his new winery and a small makeshift tasting room may not experience the estimated traffic because it is located on a wooded Virginia mountain. However, if this new winery is used for his custom crush idea, bad location will not be a problem.
(2). The estimated U.S. table wine consumption growth rate was expected to be stable at 1% in the near future. It means that Michael Shaps has less opportunity to generate more profit from his normal wine business. Besides, he is already in the top-five producer in Virginia after acquiring a new winery. It is fairly hard to obtain additional market shares from top-five competitors. In contrast, his custom crush idea provides a higher profit margin by reducing costs. This is a good way to generate more profits when total revenue will not change much. Additionally, he does not need to focus on distribution. His custom crush customers have their own distribution channel. As distribution channel is always a big problem for people doing wine business. It is great to get rid of the distribution problem by offering custom crush service.
(3). According to the case, there are people requiring him to provide such services. His great reputation will attract customers with no doubt. Besides, nobody ever provides this service in Virginia. There are no competitors right now. It is a good chance to gain market share as much as possible.
(4). In order to dominate this industry, he has to come up with a new idea to increase his overall capital. Now, he has got a good idea. Although there are risks, it is worthwhile to take risks. High risk always comes with high return. This custom crush service is what makes his business different.
(5). His idea about packaging that reduces the packaging cost is also an opportunity to generate more profit.
(6)....