How to incorporate all of this information into a report

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Assume that you have just been hired as a financial consultant to a startup company that plans to introduce a new beverage to the soft drink market. Your company’s product is advertised as a healthier alternative to soda and other artificially flavored drinks. The all-natural sparkling beverage has only 25 calories, 5 grams of sugar, no chemicals or preservatives, and comes in four fruit flavors: orange, pineapple, apple and grape.

Two years ago the product was introduced in Florida. A phenomenal growth in sales since its introduction demonstrates that the product and its marketing possess tremendous potential. Accordingly, the company wants to explore possibly expanding sales of the product to the rest of the U.S. market.

Although the company has been highly profitable, the management group has little to no financial experience. Most decisions to date have been made on the basis of ‘does it feel right’ as opposed to rigorous, data based financial analysis. The company has no system of financial oversight and the managers of the company have a limited understanding of sound management accounting practices.

You have been asked to provide the company with a general analysis of this proposed project. Your specific task is to produce a report discussing the following key aspects of this expansion project:

  • A microeconomic analysis of the current state of the soft drink market in the U.S. and how any recent developing trends may affect the demand for this product.
  • A macroeconomic analysis of the state of the U.S. economy and the impact this may have on the demand for this new product.
  • A list of key management accounting practices that the company must put in place to support their planned expansion. Each item you list must be fully explained to the management group so they understand how and why the practice is necessary to manage the growth that will come with expansion of the product to different states. Be sure to consider the fact that the company will need outside financing and may even consider the possibility of going public in order to sell its stock on an exchange.

Based on the quality of your report, the management group will decide whether or not to hire you to then help them develop a full capital budgeting plan for this project. Because this is something you would like to do, mainly because capital budgeting consulting pays extremely well, you want to make sure your report is well written, organized, professional and convincing.

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Explanation & Answer

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Soft Drink Industry Analysis in United States
Learner’s name
Affiliated Institute
Date

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Introduction
An unpopular saying by ‘unidentified’ scholar stated that men do not live to eat, but eat
to live. Food is a basic human need, and every human being needs food to live. There are many
categories of food, with a general definition of food referring it as any substance consumed by a
human being for the purpose meeting the one’s basic needs. Soft drink industry is one of the
major sources of food, in the form of fresh juice or flavored drinks. In the United States, the soft
drink industry is among the major industries driving the economy. According to a study done in
2016, the soft drink industry generated $219bn in revenues in the United States (Statista, 2017).
The trends in the industry show that the industry is expected to grow, and thus it is an interesting
industry for the potential investors. This paper presents an analysis of the soft drink industry in
the United States, to determine the ease of new entry of new companies into the industry, the
levels of profitability and factors that any new entrant should consider prior to making a decision
on whether to join or forgo the idea. The case is based on a startup company, and thus factors
such as the required resources, technology, among other key factors will be given special
attention.
Soft Drink Industry Micro Analysis
a. Starting capital
Capital is essential to the establishment of any business. The availability of resources
determines the size of the business at entry level or even its ability to enter the market. Lee &
Jones (2008) explained that among the first steps that any entrepreneur should think about is the
capital required to b...


Anonymous
Really useful study material!

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