badm 580 (aps) - conquistador beer case
DESCRIPTION
PowerPoint deck for Conquistador Beer case from Georgetown McDonough School of BusinessTRANSCRIPT
7/16/2019 BADM 580 (APS) - Conquistador Beer Case
http://slidepdf.com/reader/full/badm-580-aps-conquistador-beer-case 1/4
Conquistador
Gray Team III
7/16/2019 BADM 580 (APS) - Conquistador Beer Case
http://slidepdf.com/reader/full/badm-580-aps-conquistador-beer-case 2/4
Market Research Data
Report Selection Criteria Cost
A National/Oregon per
capita beer
consumption
Allows for estimation of average per year per
capita growth rate to apply to revenues
$ 600
C Market Share Estimates Allowed for estimation of market share that could
be captured
$ 1,200
E Beer Taxes Paid Provides data to extrapolate gallons sold and
establish market size
$ 2,400
F Financial Statement
Summaries
Cost of sales required for projections
Insight into levels of leverage for other
wholesalers
$ 100
G Consumer Study Provided insight into product and feasibility of
projected numbers; pricing guidance
$ 6,600
I Retail Wholesale Determine price per six pack $ 3,600
$14,500
We purchased data that allowed us to estimate projected revenues and costs
(based on market share and pricing) for ConquistadOregon. We calculated the
NPV for Larry’s salary as well as the company net worth at year 10.
7/16/2019 BADM 580 (APS) - Conquistador Beer Case
http://slidepdf.com/reader/full/badm-580-aps-conquistador-beer-case 3/4
Investment Decision
Our models indicate that the company will have losses through year 6, and become increasingly
profitable thereafter, with a net income of $459,348 in year 10. If Larry is comfortable with thelong payback period and the high likelihood of start-up failure, he should make a bid.
Model Assumptions
• Larry’s trust fund is a perpetuity that is not subject to
fluctuation
• Conquistador will attain its projected 30% market share
• Conquistador’s premium pricing is sustainable in target
market
• Growth rate of consumption is consistent
• Statewide consumption patterns hold in target counties
•Continued access to financing
• No additional CapEx required in 10 years
• Federal income taxes negligible given projected initial
losses
The projected revenues were based on:• Initial six-pack sales for target market: 567,372
• Growth rate of consumption: 1.62%
• Initial market share of Conquistador: 15.4%
Costs include:
• Semi-fixed costs
• Costs of staffing (including Larry’s salary)
• Initial capital expenditures
GRAPH HERE
7/16/2019 BADM 580 (APS) - Conquistador Beer Case
http://slidepdf.com/reader/full/badm-580-aps-conquistador-beer-case 4/4
In a perfect world…
With more time and money, the
team would undertake additional
research into the market, the
product, and Larry’s risk tolerance.
Additional “Larry” Research
• What alternative investments can
Larry make?
• What has he rejected in the past?
Additional Market Research• Look at longer time horizon for data
• Purchase beer & liquor license data
to determine keg sales
Additional Product Research
• Taste product
• Buy retailer study