W 1 C 3San Diego State University

Today’s Objectives• About our Company

• Operating Results

• Original Objectives and Strategies

• Deviations

• Forward looking statements

Company Description

Brainstorm Nutrition Develops, manufactures, and distributes a full line of healthy on-the-go protein bars, energy drinks and fruit juices for the health conscious consumer

Where Can You Find Us?

– Henrys– Trader Joe’s– Whole Foods

Company DescriptionVision

• To revolutionize the health food industry.

Mission

• To provide great tasting and innovative nutritional supplement bars and drinks that enable consumers to achieve optimal health and wellness goals.

Products

Business Strategy

Marketing Objectives

• Goals:-21.3% market share by end of year 7. – Market leader in Advertisement– 20% annual sales growth through end of

year 7– Introduce new product model each year

Marketing Strategies

• Strategies• Pulsing Advertising Strategy– The “Zone Pricing” Model– Market Segmentation Target Market-Men and Women Students ages 18-25-Men and Women Working Professionals ages 25-35

Results: Market Share

Results: Gross Sales

Results: Advertising Expense

Operations• Objectives

– Top two in R&D

– Two new Savings Levels each year

– Shift production to Pandau

– Low ending inventory

• Strategies– 15% R&D budget increase per quarter

• Two metrics

– 8% training budget increase per quarter

– One Pandau line every other quarter

– Low safety stock / accurate forecasts

Operations

Results: R&D Expenditures

Results: Return on Training

Results: Unit Production Cost

Results: Production Lines

Y3 Y4 Y5 Q1 Q2 Q3 Q4

Home 6 6 6 6 7 7 7

Pandau 0 3 3 3 5 5 5

2nd Shift 1 0 3 3 4 4 4

Deviations

• R & D

• Second Shifts

• Inventory

Human Resource Strategy

• Goals– Employee Retention– Training– Sales force equilibrium

• Strategies– Sales Force studies– Annual and quarterly raises

Finance• Objectives

– 22% Profit Margin– Achieve top credit rating– 13% ROI– Minimum cash balance > COGS

• Strategies– Internally Funded– Repurchase stock and bonds

Results: Net Income$000’s

Results: Stock Price

Results: Investor ROI

Deviations from Strategy

Looking Forward

• Run Models longer• Smooth price increases• Increased safety stock• Maintain market share• New Model introduction

Key factors of Success

• Information is key• Moderate pricing strategy• High marketing and RnD budget• Minimizing production cost

– Pandau plant– Savings level through training

Looking forward…

• Long-term capacity established• Highest advertising moving into Y7• Continuance of original strategy

– Competitor’s Actions– Fight for every inch

• New goals – Ambitious/Attainable

Deviations from Strategy

• Large sales increases that defied market trends.

• Danger of stockout• Advertising and RnD “wars”

– Brick Street Journal– Large increases across industry