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Phantastic Candles

EEE 370
by

Monica Bermudez

on 24 October 2013

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Transcript of Phantastic Candles

Phantastic Candles

Brief Industry Analysis
> Candle business in the
Candle Manufacturing industry
>> Gift and home decor
1. Fully pursue loan & objectives
2. Full-time sales rep, trade shows, online
Amy Edelson's
Phantastic Candles
Supplies
Strategic Alternatives
Action Plan
Tracking and Control
Candle Industry
> Total revenue: $1.6 billion
> Profit: $43.9 million
> 413 companies / factories
>> Yankee Candles: 50.6%
Factors to Change
and Differentiation
> Retail price
> New smells and varieties
> Brand names
> Shapes
> 'Air freshener' affect
> Burn time
> Quality
> Holder
Porter's 5 Forces
Bargaining Power of Suppliers

>>
low
Bargaining Power of Buyers >>
low
Threat of New Entrants >>
high
Threat of Subtitute Products or Services >>
high
Rivalry Among Existing Competitors >>
high
Strengths
Opportunities
Basic
Financial
Overview
Short Term
> Use additional cash to purchase new wax melter and basic supplies
> Increase prices to ~$15
> Develop online presence with own website, Esty, Ebay, and Pinterest profiles
Long Term
> Save money for studio space
> Produce in bulk
> Push for holiday/religious sales
>> Sales increase & niche found
> Majority of revenue should be from online sales
Production
The Supply Chain
> What is the most efficient way to produce the candles?
> Wholesale supply-chain logistics
>> Easier method for business to order from her more consistently
> Which business want what and when?

Customer
Attraction
> Being online, how many more people are you attracting?
> What is your audience looking for?
> What is your niche market?
>> Gender, age, price, access?
EEE 370
// Mónica Bermúdez / Sara Easterling / Eason Lu / Brittany Rall //

Growth rate:
> .9% (2007-2012)
> 2.8% (2012-2017)
Competition: strengths and weaknessess
> Yankee Candle
> Slakin & Co.
> Root Candles
> Virginia Candle Co.
(WoodWick)
> Colonial Candle
> Gold Canyon Candles
> Chesapeake Bay Candles
> Swan Creek Candle
> Hanna's Candle
> Glade Candles
Trends
> Seasonal & religious
>> Scents & colors
> Eye-popping color
> Organic & sustainable
>> 7/10 American households purchase candles
>> 90% purchased by women
Where are new firms adding value?
> 3 cases of paraffin wax: $30 * 3 [$50-$90]
> Electric wax melter: $200 [$700]
> Molds: $70-100 each
> Misc. (wicks, labels, dyes, fragrance, containers): approx. $2 per candle
>> Works in basement
>> Sells in flower/ gift shops, boutiques
>> Long Island, Jersey Shore
SWOT
ANALYSIS
Weaknesses
> Niche market
> Established retailers
> Beginner's inventory
> Low risk
> "Entrepreneurial spirit"
> Lack of available labor
> Economy of scale issues
> Spring break "incident" bills
> Inconsistent orders
> Difficulty procuring a loan
Threats
> Customizable orders
(i.e. Greek, Otto, religious)
> Online commerce
> Boutiques
> Trade shows
> Seasonality of product
> Safety restrictions
> Low barriers to entry
(Etsy, Pinterest, DIY)
Central
Issue
Inability to produce in mass quantities
& lack of funding
1. Fully pursue loan and all seven objectives
2. Full-time sales rep with focus on trade shows and online development
3. Keep as hobby and focus on online sales
> Increase price to $15
> Develop online presence
> Build stock
Additional Costs:
$700 wax melter, $300 supplies, $750 molds, $730 licensing agreement
Total: $2,480
Additional costs:
$700 wax melter, $300 supplies
Total: $1,000
3. Online, part-time
Additional costs:
$300 for supplies
> Production and marketing
> Will a larger staff be effective?
>> Will they help expand the business to new customers in new locations?
> Are the candles being made with a consistent quality?
> Will a larger production allow you to remain creative?
Thank you!
Amy Edelson's
Lifestage
cycle:
Mature
Strengths
> "Trial year"
> Experimentatin & customization
> Solid skills & expertise
> Greater access to niche
> Reputable establishment
Weaknesses
> Inability to secure loan
>Poor cash flow
> High costs
> Multiple competitors

Strengths
> Moderate costs
> Expertise & ability
> Increase brand awareness
Weaknesses
> Poor cash flow
> Lower exposure
> Large competition
Strengths
> Continue hobby/ skills
> Increase stock for winter
> Minor income
> Save cash for future
Weaknesses
> Low cash flow
> Time commitment
> Little brand awareness
> No supporting material/ employees
Recommended!
Yankee Candles
Strengths
> Economies of scale and scope
> Brand recognition
> Market share
> Streams of distribution
Weaknesses
> Lack of personalization
> One shape
> Declining quality of products
Gold Canyon
Strengths
Weaknesses
> Burn time & quality
> "Home sales" method
> Fundraisers - personal streams of distribution
> Minor market share
> Mainly online sales
> Simple shapes
vs.
Full transcript