From: OldRaccoon
To: Michael Dore
Date: February 18th, 2013

1. Overall, sales and profit for the company increased every year during this 5-year period. However, the return on sales decreased every year during this 5-year period. This means although the company had an increase in both sales and profit, it actually didn’t do business very well. Especially product A and E (relatively higher profit margin compare to product B and C) have a significant decrease in later years; I think this is the primary reason of decline of the company’s return on sales. 2. Since 2011(the year of issuing product D), product A and E has a decrease in sales of 16 million and 64 million respectively. And in 2012, product A and E has a decrease in sales of 40 million and 32 million respectively. In addition, the issue of product D significantly lowered the annual profits percentage of product A and E. Oppositely, the sales of B changed only little and sales of C even increased 8.46%. The percentage of profit of B and E respectively went up by 3.87% and 4.93%. This suggests that A, D, and E target a different market than B and C’s market. Because there were barely competitors in the market when product D came out, it soon became a popular product. As the declining tendency of A and E, the similar product D will eventually replace their position, as soon as can spend enough money for promotion to attract more customers. Supporting stats is the stunning 114.3% increase in sales for product D, even though product E sales increased a lot in the year before product D released. 3. I think the company may consider starting to drop product A and E since they are becoming less and less profitable and can be substitute by the latest product - product D. The company should completely drop product A and E when the sales they are generating can only break even. And after that,