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Financial Modeling for Retail Expansion Initiative

Background

A leading consumer products company commissioned Intensity to determine the optimal strategy and finalize the operating launch plan for a retail expansion initiative. The company was historically successful with many products primarily through television based sales and promotion as well as through limited big box retail channels, yet desired to grow the business through expansion of product lines, brand investment, and additional retail channels and partners.


Our Analysis

Intensity developed a comprehensive financial model to project the financial impact of various scenarios. Throughout the process, Intensity validated key assumptions to continually update the projections leading to a cohesive strategy and plan to optimize performance and formulate reliable projections of revenue, costs, and cash flow requirements.

Intensity’s analysis included: forecasting revenue growth across multiple retail partners; understanding the effects of cannibalization, brand awareness and market growth; estimating pricing and gross margin for various product line, retailer and supply chain combinations; developing startup and ongoing cost estimates for outsourcing distribution to third party logistic providers; and rebranding and marketing launch expenses. The combination of estimates was built into Intensity’s robust scenario- based financial model to examine profit optimization alternatives.

Economic issues included financial modeling, revenue forecasting, profitability, marketing and promotion, substitution effects, and brand recognition.