Initiatives You Would Take To Accelerate the Growth and Revenue of Funskool and Achieve the Leverage Its Own Brand

 

If the company wants more revenue and growth then the initiative to enter is the video game market. As the table mentioned below shows the market share analysis of toys industry that was increasing year by year in the video games section. While the traditional toys and games sections show that the market share was decreasing continuously. So, as the analysis company would move on the video game section, it can increase the company profit as well as increase the financial position.

If the company chooses the Video game segment then company will continuously gain profit starting from the year 2017. The estimation table is presented which below:

 

2013 2014 2015 2016 2017(p) 2018(p) 2019(p) 2020(p)
Net revenue 1001 1209 1483 1923          2,711          3,651          4,730          5,971
Cost of goods sold 481 600 759 993          1,400          1,885          2,443          3,083
Gross profit 520 609 724 930          1,311          1,766          2,288          2,888
Selling and distribution expenses 366 442 510 648             914          1,230          1,594          2,012
Net profit (loss) 102 114 133 168             398             535             694             876
Annual growth rate 27% 21% 23% 29% 41.00% 34.64% 29.57% 26.23%

 

In this calculation we take some assumptions are as follows:

  • Projecting 500 Million Rupees sale for the year 2017.
  • The traditional toys category of Funskool will grow by 15%.

As the analysis of the above table, if Funskool enters into the video game market then would get Rs.398 Million Net Profit in 2017 with an increase of Revenue by Rs.2711 Million. In 2018 the firm will get Net Profit by Rs.535 Million with Rs.3651 Million Revenue. The Net profit of Funskool in 2019 will increase by Rs.694 Million which will gain with Rs.4730 million Revenue. Also, in 2020 it will gain Rs.876 Million Net profit with more Revenue of Rs.3083 Million.

This analysis shows that the company would continuously get benefit in term of profit, also this profit will help to improve the financial position of the company.

If the Funskool adopts the video game market then to maintain the brand name by producing the video games in own company. Their workers must develop the video game software or products for consumers. In doing so, the company should get the perspective of consumers that may help in the development of the video games. Also, promote their video games by using the social media or advertising.

Reduce Their Cost of Operation

Yes, they can reduce their cost of operation by the following methods. Which are mention below:

  • The Selling and Distribution expenses of Funskool has been increasing year by year, the Cost of Goods Sold has increased as well. The % of COGS has increased by 52% in 2016 as compared to 2015 which was 51% with an increase in selling expenses. As to reduce the operational cost, Funskool would decrease the expenses which will charge by Selling and distribution their products.
2013 2014 2015 2016
Net revenue 1001 1209 1483 1923
Cost of goods sold 481 600 759 993
Gross profit 520 609 724 930
Selling and distribution expenses 366 442 510 648

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