Q1.

At the micro-market level, a) what problem does Ambrosia solve, b) what are the
current alternatives for customers to solve the problem, and c) are they entering at a
price you think is competitive and why?
a. Ambrosia aims to solve the pain of the amount of time taken to defrost the meat and curb
the bacterial growth that could come up from using the traditional way of thawing meat.
b. The available alternatives can be Direct and Indirect: (i) Using the microwave oven and
defrosting trays to thaw the meat that could deplete its nutrients and cause bacterial growth.
(ii) Keeping the meat in the refrigerator that requires a considerable amount of waiting time
and Cold Water Bath which may cause bacterial growth.
c. The price is not competitive at all. This is because the alternative of keeping the meat in the
fridge or elsewhere doesnt cost anything at all and microwave is an affordable commodity.
If we analyze the buyer behavior in the business plan 40% of Hispanic respondents shop
from Walmart. Based on other facts such as - Hispanics purchasing far more number of
SKAs and Walmart being the number 1 distributor of SKAs, one can say that price wont be
tempting for this market segment.

Q2. What industry is Ambrosia entering? At the macro-industry level, how

attractive/forgiving is the industry?
Ambrosia is targeting the small kitchen appliance manufacturing industry which is a saturated
industry. This industry could be seen as a potential opportunity (growing) based on PEST
analysis and not affected being the recession.

Q3. What types of problems do you foresee at the micro-industry level? How have they
proposed to mitigate them and what do they do to create and protect sustainable
advantage?
To market their product without a competitive price, they would require to bring down the
production and distribution costs which would need mass production or achieving economies of
scale. This will help in reducing the unit cost per product as a result of large-scale operations.
The company plans to release its flagship product during the first fiscal year and expects the
sales of this product to be contributing towards the revenue until the release of other products.
The gross margin percentage is approximately 31.82% per unit of the flagship product.
Therefore, in such a scenario, to create and protect sustainable advantage, the company should
be focusing on building deep supplier relationships with its manufacturers.
Q4. How is Ambrosia different from their competition in terms of their fixed and variable
costs and why is it structured that way? Do you feel this is an advantage or
disadvantage and why?
Ambrosia is a high leverage firm since its cost structure is composed of high variable expenses
and low fixed costs. Clearly this places ahead of the curve and therefore the company is a less
risky investment. Such a company will have powerful access to capital and would be an ideal
bet for acquisitions/buyout since it is producing less and thus accordingly will have a lower
operating cost because of their low fixed costs.

Q5. Who is their target market and how does their marketing plan reach this market?
Briefly describe a strength and weakness of their marketing plan.
The company is targeting Hispanic households and millennials above 18 years of age. To do
this, it plans to run commercials on Spanish TV Network, run print ads in magazines and
papers, build a website, reach out to people on social media and provide its products budding
Hispanic chefs in the LA region, thereby raising awareness through word of mouth.
In terms of strength of the marketing plan, the company is educating the market about the
potential problem of using a certain method that could save time as well as curb bacterial
growth. As per the market research, Hispanics go by the word of mouth in terms of the customer
reviews. As much as 38% of the Hispanics find TV advertisements interesting and 31%
remember products while watching TV.
In terms of weakness, there are some discrepancies in the projected growth rate of the small
kitchen appliance industry (NAICS Code : 335210). The company expects a cut out of an
industry growth of 19% and increase in revenue to $6.94 billion in sales. For a growth of this
scale educating the consumers and getting traction is immensely important. This team has not
proposed any strong go-to market strategies such as meetups or webinars. Also, it is not using
any SEO or internet marketing effectively.

Q6. How does Ambrosia propose to make money for its investors? Do you feel this is a
strong offer and a reasonable strategy? Explain your position.
Ambrosia is proposing investors a 15% equity, which is $221,785 based on the present net
present value of $1,478,564.99 calculated using a discounted cash flow method at discount rate
of 40% and $150,000 based on 4x net income earnings discounted back to previous years. We
think this is a fair offer since investors are getting equity in the company and are getting more
than they are paying compared to the net present value.
Q7. Do the financial statements support the body of the plan and do they seem realistic
based on the body of the plan?

It is given that the company plans to sell 4,160 units in Year 1 and will be making a profit of
$923,254. It needs to sell 3,183 units to break even. As per the given financial statement 3,261
product units were sold in Year 1.
Observing the Year 5 income statement, one can see gross profit of $2,022.520 and a net
income of $923,254. Clearly, the company was able to break even in Year 1 but did not achieve
their goal of selling 4,160 units.

Q8. What purpose does the Executive Summary serve, and how did this team do with it?
The purpose of an executive summary is to briefly describe the various aspects that the
business plan covers. It should effectively communicate the business idea and how and why
the business will make money, so potential investors can gain an idea on whether or not the
business would be a promising investment. The executive summary should be brief, yet have
enough appeal to entice the reader to read the rest of the business plan. The Ambrosia teams
executive summary was sufficient, as it identified the pain that the product would solve, the
product itself, how it would be manufactured, the target market, pricing, the team, financials, the
amount of money they are asking for from investors and how much equity they are willing to
give up, among other aspects. I feel that this teams executive summary effectively
communicated the important aspects of their business plan, but could have done so in a clearer,
more precise manner that investors would appreciate.

Q9. Overall, what are three strengths of the written plan (not the concept) and what are
three areas that could have been better?
Strengths 1. Data, statistics, charts, appendices usage was good and helpful. These parts of
the business plan show that the team researched, but also helps the reader make their own
conclusions and decide whether the business idea is feasible. These parts add credibility
behind the various claims that the team makes throughout the business plan.
2. The teams use of Porters 5 forces and PESTEL aided in their industry analysis. The
fact that the team elaborated on the 5 forces in the appendices helped better understand
the industry as a reader.
3. The market and industry analysis sections were well thought out and provided the reader
with significant information. It not only showed who the market is and how it would be
 reached, but also information on the teams pricing and promotion strategies, product
diversification, distribution, and the importance of first mover advantage.

Weaknesses - The layout of the business plan could be improved and delivered in a clearer
format. The team could have used more bullets, graphs, and charts in the business plan to
make their points in an easier, more appealing way for the reader, rather than long, wordy
paragraphs for each section.
1. A major piece that was missing throughout the business plan was the relevance of this
business concept as related to the founders. It is usually advantageous to explain what this
team of founders is providing in order to ensure success. The only part that mentions the
team is the Management Team section, which mostly explains what position each of the
team members will have and their responsibilities. Prior experience and other characteristics
of the team could help convince investors that this team have what it takes to actualize this
project.
2. Although the business plan did very well to pinpoint a large niche target market (millennial
Hispanics) and did even better in researching their behavioral pattern and habits, they
completely failed to realize that the potential market could be so much larger. This product is
one that can be used by any races throughout United States so, despite primarily targeting
Hispanics, they should also include plans to reach the overall market as well.

Q10. Describe three things you took away from reading this plan that will help you write
your own plan.
1. Despite focusing too strictly on Hispanics as a target market, credits are due to this team for
their extremely detailed research and analysis. The relevant market, industry & market
analysis, market segmentation, as well as the marketing, promotions and pricing strategies
all included substantial research and analysis towards Hispanics behavior and trends, which
is extremely important.
2. The amount of detail that was put into every sector of the business plan only serves as a
great benchmark for us moving forward. Each and every sector, including the concept,
company, industry, economics, marketing, operations and management included precise
numbers and data that explain exactly why they decided to do what they wanted to do,
barely ever making assumptions.
3. The business plan actually includes information about the warehouse and headquarter
facilities for the company, despite the company still being in planning phase which is
unusual. They have gone into great detail to explain where they will be based, how big the
place is, how much it will cost them, and exactly how each part of the facilities will be used.