These toy kits and storage units are products that are going to be bought at a much faster rate than that of the tables and can greatly influence the sale of tables. These products are said to be bought on a much more frequent pace than the revenue drivers, the tables, being purchased at a rate of up to three to four times a year. The key cost drivers for Pkolino is production of its products of which it plans to outsource during the entirety of the life of the business, Pkolino plans to start out by outsourcing its manufacturing to Brazil then moving to a larger Asian manufacturer by year three.
I think in all the projected expenses for Pikolino are a little low with is understandable because you want your company to appear as efficient as possible. They seem to be running on a very low expense system in which they plan on outsourcing and cutting expenses to be as efficient as possible. As an investor I would challenge the projected sales of Pkolino. I would question this because we live in such a technology driven world that it would be hard to imagine a company as such growing to a million dollar company as projected in there proposal.
I would also challenge the expenses. Even with outsourcing I don’t think all cost were present and well represented. Companies that outsource also have to take in account the cost of getting things to and from the countries of which they outsource from as well as the negative connotation of outsourcing in itself. Week 6 Case Study B: DayOne DayOne has the potential to be a really great investment. It is a company that relies so heavily on great customer service and wealthy customers that there is a substantial amount of hesitation in investing in it as a chain though.
DayOne has established itself as a strong hold in San Francisco despite having a worthy adversary in the local hospitals. I think that with the right business plan, that is specifies for being a retail chain, that DayOne would be a great investment. As long as they are put in wealthy communities that show a steady birthrate, you will always have new customers. The problem comes with maintaining customers after they’re children grow. DayOne can look into expanding being just infants and maybe open a new branch that is for older children as well. The gross margin on service sales is 39. 2 percent.
Day One can improve service sales by providing more cost efficient service. They can do this by either reevaluating the services that they provide or by charging more for these services. DayOne is trying to raise enough money to pay off its debts from opening its first center and to open a second center in Palo Alto. The total amount they needed was upwards of 1. 6 million dollars. I think that only trying to raise enough money to do this will result in them being in a similar predicament that they were in with the center in San Fansisco.
DayOne should look to improve their business plan so that they can secure funds to open several new centers as well as have funds to run these center for at least two quarters. I think that DayOne should seek to raise as much as 7 million dollars to effectively start a successful chain of centers. Andrew needs to focus on developing a more chain oriented business plan that differentiates from the one he used for his San Francisco location. Andrew needs to make sure that this new plan is more investor friendly. There is a reason why he is struggling attracting investors. Also read Sunbeam corporation case study
He needs to figure out what the problem is and make changes in his proposal. He has a proven business but to have a successful chain it can entail an entire different business strategy. I would invest in DayOne if they agree to improve their business model to be more efficient and would agree to maintain the extraordinary level of customer service that they seem to have. DayOne has a proven track record of making its customers happy and providing top notch service. They have proven that their business model is effective and can be a great addition to any cities market.