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Economic Considerations: Consumer Products Inc.


Consumer Products Inc. (CPI) is a U.S. regional consumer products company located in Phoenix, Arizona. The company manufactures and distributes a small line of consumer products to retailers in major western cities including Los Angeles, San Francisco, Seattle, Portland, and Phoenix. The company has an excellent reputation as a good corporate citizen and producer of some of the highest quality products in the business.

CPI's three major brands are Shades of Youth, a hair care line that recently has been doing extremely well as the aging baby boomers look for products to help retain some of their youth; Super Clean, a line of detergent and bleach products; and Super White, a line of tooth paste that quickly and safely whitens teeth. Super Clean is the anchor division, and it was the sole line of products the company had when Javier Lopez founded it in 1951. The company launched Shades of Youth in 1975 and Super White in 1980.

You have headed up the Super Clean division for the last 8 years and were recently promoted to Chairperson of the Board and Chief Executive Officer (CEO). The firm went public ten years ago under the leadership of your predecessor as CEO, Regina Baker. CPI is well established on Wall Street and has a reputation of being a good company that is conservative and a safe investment.

With only a U.S. regional presence and $200 million in revenue, you are clearly aware that the company's ability to compete with the industry giants (Procter & Gamble, Unilever, Colgate, and Gillette) is limited. You believe that the firm must expand to other regions in the U.S. and begin international expansion if it is going to grow and prosper over the next decade.

The Board has reservations about making such bold moves, arguing that the company has been a successful regional company for over 50 years and can remain a niche player in the consumer products business. You see things differently. You see that the market is changing and competitors are becoming more aggressive by making acquisitions or developing new products that are extremely competitive with CPI's brands. More importantly, you believe that the company will either be crushed by competition or forced into a merger to survive.

You know the task ahead of you is daunting. As you approach the challenge of persuading the Board to expand, you believe it is critical that you outline the global macroeconomic issues that are driving the industry and articulate the microeconomic dynamics that are central to the firm's success. Ultimately, you see this as a decision-making problem. The Board must make the right decision now because the survival of the firm is at stake.

While at lunch, you and the company's chief financial officer (CFO) begin to discuss opportunities to expand in the U.S. Discuss the opportunities to expand in the U.S., what it would take, and the potential hurdles the firm would have to overcome. Be sure to identify specific retail companies that could potentially sell CPI's products, the markets that would be attractive, and some of the financial and economic considerations.

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This paper will help the reader to understand the hurdles that CPI may face in order to expand its business in the U.S. along with the measures adopted to overcome it. It also emphasizes on the attractive markets and retail companies that possibly sell their products in the market. We will also explain the financial and economic considerations. In this part of the paper, we will discuss the opportunities available with the CPI for its expansion.

Consumer Product Inc. has various opportunities to expand its business in the U.S. The company can acquire small players in the industry, so as to gain a large market share in the industry. It should focus on emerging segments by providing products that can fulfill the needs of the customers so as to attain a high level of customer satisfaction. The company should sell its products online also with the increasing technological advancement. This allows the company to mark its presence within U.S. There is a need to have space and good infrastructure facility for storage of products. It should build and maintain healthy relations with its suppliers, distributors and customers. This leads to an effective supply chain management. It also helps in creating brand awareness in the market. Effective supply chain management also provides competitive ...

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