Case 22

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Case 22 -The Procter & Gamble Company: Investment in Crest White Strips Advanced Seal

In May 2008, the Procter & Gamble (P&G) North America Oral Care group was considering the launch of a new Crest White Strips line, Advanced Seal. The product improves existing at-home tooth enamel whitening treatments, providing better adhesion to the teeth and thus better whitening results. The group is concerned about the willingness of customers to adopt the new line and the effect the new line will have on existing P&G whitening products.

Your task is to build a model to forecast the expected incremental cash flow from the initiative, with particular attention paid to the cannibalization of existing whitening business. The case in your textbook provides several alternative scenarios for launching the business. Your research report is expected to comment on the value implications of each scenario. This case provides a good blend of both finance and marketing tools.

Produce a substantial and detailed research report (essay) that addresses the following key questions:

1. What is the situation at P&G, and what is the company’s motivation for the Advanced Seal launch?

2. Does the project appear economically viable? Why or why not? Provide detailed examples.

3. Which strategic proposal do you find most appealing?

4. What are the key value drivers of Advanced Seal investment?

5. What recommendation would you make to Roman for P&G’s investment in Advanced Seal?

You should use details from the case as presented in the textbook, and the attached spreadsheet will also be valuable for conducting your research and analysis: 

Case_22_Procter_and_Gamble_F1670X.xlsx

Note: Do not simply repeat the questions and provide a short answer after the question. Your final product must be a properly formatted, professionally written research report in essay format, with a clear introduction, body, and conclusion. Use descriptive subtitles to organize your report and let the reader know which question you are addressing.

Upload your completed research report in MS Word format only.

You should perform a substantial amount of research for this assignment and be sure to properly document your sources with APA-style citations and a reference list. Paraphrase main points from your sources in your own words and apply the knowledge you have gained. Although there is not a specific page count or word count for this assignment, if your report is less than two pages (double-spaced, Times New Roman, 1-inch margins), you have not done a thorough job. Write as much as you need to address the key questions, but do not add "fluff" or simply repeat what is already stated in the textbook.

Assignment Grading Criteria:

Thoroughly answered all the questions: 60 points possible thoroughly answered

Spelling/Grammar at the college level: 20 points possible

References for course material: 20 points possible

Total: 100 points

Overall Feedback Case 2 Whole foods

Thoroughly Answered All Questions: 44/60

Leidylin, your paper provides a clear discussion of Whole Foods' differentiation strategy, competitive environment, and the challenges associated with maintaining premium pricing. You recognize that increasing competition from conventional supermarkets and specialty retailers could affect the company's profitability and future growth.

Your discussion also connects historical financial performance with the assumptions underlying Deutsche Bank's forecast. You correctly identify revenue growth, operating margins, and asset turnover as important financial drivers, and you recognize that historical success does not necessarily guarantee comparable future results.

However, the assignment required a more substantial quantitative examination of the financial exhibits. Your discussion of Exhibit 4 includes relevant sales and EBITDA figures but would benefit from additional analysis of historical ratios, including profitability trends and asset efficiency.

The most significant opportunity for improvement involves Exhibit 7 and the required sensitivity analysis. Although you explain why testing alternative assumptions would be valuable, you do not actually perform the calculations. For example, calculate how a reduction in EBITDA margin or a change in asset turnover would affect projected return on capital. Your recommendation to adopt more conservative assumptions is reasonable, but it needs specific revised estimates and supporting calculations to demonstrate their financial impact.

Spelling/Grammar at the College Level: 17/20

Your paper is organized appropriately, with an introduction, descriptive section headings, and a conclusion. The discussion follows a logical progression through the major assignment topics, making the report generally easy to follow.

However, some sentences contain awkward or imprecise wording that affects clarity. For example, phrases such as "an assessment of soundness shall be able to distinguish" and "it sells an attractive product" could be expressed more directly and professionally. There are also instances of inconsistent verb tense and word choice.

Continue proofreading carefully for sentence construction, clarity, and conciseness. Greater attention to these details will help make your financial arguments more precise and easier to understand.

References to Course Material: 18/20

Your paper incorporates several relevant academic and industry sources, including peer-reviewed research addressing consumer preferences, organic food pricing, and grocery retail competition. This provides a useful research foundation and demonstrates an effort to support your analysis beyond the assigned case.

Your use of scholarly sources is particularly helpful in explaining how consumer behavior and price competition can influence Whole Foods' business strategy.

However, review your APA citations and reference list for consistency. For example, some publication years differ between your in-text citations and reference entries. Ensure that publication dates are accurate and that the appropriate year appears consistently throughout the paper.

Also, connect the research more directly to your financial forecasting assumptions. Academic research supporting the effects of competition and pricing becomes more valuable when you explain how those findings justify specific changes to projected sales growth, operating margins, or asset efficiency.

Total Score: 79/100

Overall Feedback:

Leidylin, your paper demonstrates an understanding of the competitive and financial issues facing Whole Foods, and your use of scholarly research provides useful support for your discussion. The principal opportunity for improvement is quantitative application. Future financial research reports should move beyond identifying important assumptions to calculating how changes in those assumptions affect forecasted results. More detailed analysis of the case exhibits, supported by specific financial calculations, will make your recommendations considerably more persuasive.