PLEASE READ THE FOLLOWING AND ANSWER THE QUESTIONS IN DETAIL

QUESTION 1. PLEASE EXPLAIN THE OPPORTUNITY AND THREATS FOR ENVIRO-PLUMBER IN DETAIL USING A SWOT ANALYSIS

QUESTION 2. EXPLAIN IN DETAIL what are the analysis, alternative(analysis options and decision) and ways to implement.

PLEASE REPLY ASAP AND MAKE SURE IT IS IN DETAIL

Enviro-Plumber It was December 20, 2012, and Joe Smit, a naturalized Canadian entrepreneur born in Germany, had just asked the Brock MBA Small Business Consulting Group for their advice. Joe told the consultants that he owned the North American distribution rights to what he referred to as the "best product in the world." He'd purchased the rights in June 2011 for \$20 000 at the ACHEMA trade show in Frankfurt. (ACHEMA, organized by Messe Frankfurt GmbH, is the pre-eminent European trade show for "chemical engineering, environmental protection, and biotechnology.") European rights were owned by the multinational chemical company that actually manufactured the product. The company would make its money by selling the product to Joe, who in turn could sell it in North America. THE PRODUCT The product was a drain cleaner that cleared even the worst clogged sinks, toilets, showers, and floor drains. It was in the form of a can, about the same size as a can of Drano (the leading drain-cleaning brand). Joe had been amazed at the demonstrations put on by the chemical company representatives at Frankfurt. Trade-show attendees Copyright 2012 Carman Cullen, Goodman School of Business, Brock University. This case was written by Carman Cullen as a basis for classroom discussion and is not intended to illustrate either effective or ineffective handling of a management situation. The names of the product and participants in the case have been disguised, as have all of the numbers with the exception of the competitive analysis. Reprinted with permission. were asked to clog demonstration sinks and pipes with rags and cork and assorted waste products. Then the can was inverted in the drain, and with a slight push on the bottom of the can, a wave of pressure was created in the sink or toilet, completely cleaning the drain. There was never a need for a second shot, and each 200-gram can provided 10 shots. The active ingredients were certified environmentally friendly in Europe, and the product bore the Blue Angel certification in Germany to substantiate this claim. These active ingredients created a forceful reaction that pushed clogs through the pipes, leaving only a few ice crystals behind that could be washed away with hot water after the clog was gone. Because the product used HFCs (hydrofluorocarbons) and not CFCs (chlorofluorocarbons), German environmentalists endorsed it. In short, Joe was impressed. Here was an effective, environmentally friendly product with affordable distribution rights that he felt strongly would be popular and successful in Canada and the United States. The product could be named whatever Joe wanted to call it for the North American market, and the chemical company would provide the name and all U.S./Canadian government labelling requirements as part of the landed cost, which was $2.50 per can, F.O.B. Canadian or U.S. destination. After conversations with his wife, Joe decided that the best brand name would be Enviro-Plumber. The distribution rights were for three and a half years, beginning at the signing of the contract-which Joe did on July 1 (Canada Day), 2011, in Frankfurt. In order to keep the rights for a further five years (until 2019), Joe had to meet a minimum sales hurdle of 500000 units by December 31 , 2014. Joe was convinced this could be easily accomplished. THE ISSUE Over a cup of coffee at the consultants' office, Joe disclosed that since signing the agreement he'd sold a total of 25000 units, most of them in the northeastern United States through a contract with a small chain of hardware stores. Joe showed the consultants a video of Enviro-Plumber cleaning drains-and it impressed them, too. "There's nothing like this product for effectiveness," Joe said, "and it's environmentally friendly to boot." But with only 25000 units sold so far, Joe's dreams of wealth from the world's greatest product were going down the drain. He told the MBA students that he had no idea what to try next. He had expected to get rich from Enviro-Plumber, but was fresh out of ideas as to how to make that happen. THE CONSULTANTS' QUESTIONS The consultants had several questions for Joe. First, they asked for more details on the numbers. He told them that the $2.50 landed cost per can was in Canadian dollars, and that the price was firm for the three-year term of the agreement; if the 500000 -unit target was achieved by 2014 , the price would be revisited. The minimum order was 30000 units (each container held 30000 cans), with payment due one week after receipt of the container from the chemical company. Joe had two warehouses - in Buffalo, New York, and Niagara Falls, Ontario - to accommodate his numerous businesses, each of which specialized in environmentally friendly consumer products. He could accommodate 90000 units in the Niagara Falls facility and about 300000 in the Buffalo warehouse. Joe was prepared to invest a further $250000 in the venture. He had already purchased, and received, 90000 units (cost to Joe: $225000 ), with one-third in Niagara Falls and the remainder (less 20000 already sold) in the Buffalo warehouse. He'd sold only about 5000 units in Canada. The MBA student consultants then asked about Joe's fixed costs, and he told them that he had two salespeople dedicated to his businesses, one in Canada and one in the United States. Each rep cost Joe around $65000, including all expenses. He'd spent $10000 printing flyers and hiring companies to distribute the flyers in major cities across North America. However, to date, the flyers had been distributed only in Toronto, Ottawa, London, Cleveland, and Pittsburgh. Additional expenses he'd allocated to Enviro-Plumber totalled another $40000. This was starting to get expensive. But then Joe hit them with a real problem. He'd been in negotiations with a major hardware chain, whose buyer seemed very impressed with the product's quality. The buyer said he'd order 50000 units on a trial basis, but with two constraints. First, he demanded a keystone markup on the product. That is, whatever he paid Joe per can would be marked up 100% on cost; in essence, he'd simply double Joe's price. Second, the retailer demanded "significant promotional support" for the product. Joe asked what "significant" meant, and the buyer said, "Whatever it takes to sell 50000 of these as quickly as possible-it's your company. You tell me." The consultants asked Joe, an experienced entrepreneur with years of experience selling environmentally relevant products, for his explanation of the poor sales to date. "I think it has to do with consumer behaviour," Joe began. "North Americans are more squeamish than people in other parts of the world-they don't like messes. Enviro-Plumber causes some splashing, and even my wife hated that aspect of the product. But I've got that fixed." Joe had found a company in Pittsburgh that designed and manufactured a handle and splash protector that could be used for clogged toilets. The cost to Joe was $4.95 per unit, based on a minimum order of 1000 units. Joe thought this was expensive, but had concluded that the consumer only ever needed to buy one handle and protector. The students' final question was about the competition. They knew about Drano and Liquid-Plumr, but not much else. Joe, who'd been ready for that question, handed them a competitive analysis sheet (see Exhibit 1). He explained that Drano was the industry leader, and sold at various prices depending on its version and size and the retailer's pricing strategy. Liquid-Plumr generally sold at fairly similar prices. Most products in competition with Enviro-Plumber contained caustic, corrosive chemicals, and most weren't useful for a clogged toilet. For that, people had to use a plunger-a "plumber's helper"-essentially a wooden stick with a rubber attachment on the end. Other than that, people had to call an actual plumber. Joe expressed his concern and his frustration. He knew his product was excellent, but he was in serious danger of losing the distribution rights in two years