Strategic Components of Grandma’s Best

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Table of Contents

Components
Quantitative (Financial) Analysis (Hilton 349)
Comparison with Industry Players
Organizational Health

Components

Grandma’s Best implements several successful strategic confectionary sales components. The company’s arena is the confectionary industry. The company sells chocolates and other snack foods. The company sells its products within the United States. The company is venturing on selling the products outside the United States.

The company applied economic logic to each marketing activity (Carbaugh 41). By offering discounts, the demand for the company’s food products increases. By offering commissions, more stores are eager to sell the company’s products.

Basic economic theory dictates that the demand for the products will increase when the price is reduced. Similarly, the customers tend to buy products of lower prices. Economically, the company is on its second economic stage (Pine 41). The stage is described as a profitable arena. There is an increasing demand for the company’s products. Consequently, all components fittingly intertwine, increasing the public’s synergy-based interest.

The company implements differentiation strategies. Grandma’s Best sells diverse chocolate products. Some chocolate products have mint as well as almond tastes. The company is very popular during Valentines occasions. To increase revenues, the company pays commissions. Likewise, the company offers discounts, increasing the demand for the company’s food products. The company’s products are also popular during Easter Sunday celebrations.

Quantitative (Financial) Analysis (Hilton 349)

ROA – Return on Assets

Table 1.

Description	Return on Assets (ROA) Ratio
Grandma’s Best	2.31 percent
Industry	43 Percent
Variance	40.69 Percent

Grandma’s Best generated an advantageous but low 2.31 percent return on assets ratio. The company’s net income is 2.31 percent of the total assets. Increasing the net profit will increase the return on assets ratio.
The ratio is lower than the industry average ratio of 43 percent.
The variance is 40.69 percent.

Return on Investment (ROI)

Table 2.

Description	Return on Investment (ROI) Ratio
Grandma’s Best	2030 percent
Industry	2061 percent
Variance	31 percent

Grandma’s Best produced an advantageous 2030 percent return on investment.
The company’s net income is 2,030 percent of the total investments. To improve the ratio, the net profit should be increased.
The industry ratio is pegged at 2061 percent. At 31 percent, the variance between the two ratios is not material.

Return on Equity (ROE)

Table 3.

Description	Return on Equity (ROE) Ratio
Grandma’s Best	2.31 percent
Industry	85 percent
Variance	82.69 percent

Grandma’s Best produced a slightly favorable 2.31 percent (net income) return on equity percentage.
The company’s net income is 2.31 percent of the company’s stockholders’ equity figure.
The industry ratio is higher at 85 percent.
The variance between the two figures stands at 82.69 percent.

Current Ratio

Table 4.

Description	Current Ratio
Grandma’s Best	146 percent
Industry	384 percent
Variance	238 percent

Compared to the current liabilities, the ratio shows that Grandma’s Best has an advantageous 46 percent more current assets. To create a better current ratio picture, the company should reduce the current liability portions.
The industry average stands at 384 percent. The variance between the two ratios is near 240 percent.

Quick Ratio

Table 5.

Description	Quick Ratio
Grandma’s Best	61.7 percent
Industry	214 percent
Variance	153.2percent

Grandma’s Best produced a favorable 61.7 percent quick ratio.
The quick ratio is composed of cash as well as collectibles.
The company’s quick assets is composed of cash and receivables.
To improve the ratio, the company must increase the quick ratio components.
Compared to the current liabilities, there are 61.7 percent more quick assets.
The industry ratio is pegged at 214 percent. The variance between the two ratios is 153.2 percent.

Debt Ratio

Table 6.

Description	Debt Ratio
Grandma’s Best	22.7 percent
Industry	684 percent
Variance	661.3 percent

Grandma’s Best produced an unfavorable 22.7 percent debt to equity ratio. Debt is 22.7 percent of the total stockholders’ equity amount.
The stockholders’ equity includes the common stock and preferred stock investments.
The best ratio is 100 percent.
The industry generated an unfavorable 684 percent debt to equity ratio.
Grandma’s Best performed better than the industry players, combined.

Market Share

Table 7.

Company	Revenues ( In Thousands)	Percentage
Grandma’s Best	16,000	4.35 Percent
M & M	30,000,000	82 percent
Hershey	6,644,000	18 percent
Total	36,660,000	100 percent

Table 7 shows that Grandma’s Best generated a lackluster revenue performance.
The industry total revenue is $36,660,000.
Grandma’s Best only produce a dismal $16,000.
M & M is the most popular chocolate brand.
At $ 6,644,000 revenue, Hershey Company’s chocolate sales performance is better than Grandma’s Best’s chocolate sales outcome.

Comparison with Industry Players

When analyzing the industry, Grandma’s Best is able to survive. Surviving includes generating higher revenues. Surviving also includes generating more net profits. Observing the revenues of M & M Mars Company’s chocolates, Grandma’s Best must triple it current marketing activities.
Grandma’s Best’s 2012 revenues are miniscule. The company must learn from the industry leaders. The company can duplicate the marketing strategy of one of the top players in the industry, M & M Mars Company.
Grandma’s Best must search for new stores. The stores should be located in highly populated communities. Selling the company’s products in highly urbanized centers will increase the product demand. Selling in additional new locations will precipitate to higher global sales.
By allocating more advertising budgets, the people will learn about the many benefits of buying the Grandma’s Best food products. The advertisements will display the different products. Consequently, the advertising viewers will have different product choices.

Organizational Health


	Grandma’s Best Organizational Health: Okay

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