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Tea Time Business Analysis and Recommendations

Tea Time launched its own branded tea in 2002 but faced several issues that led to financial troubles. It did not have a strong cost leadership strategy to compete with other major tea brands. It also lacked sufficient advertising spending to promote its brand. Additionally, Tea Time did not establish a clear debt-equity financing plan from outside investors to balance its assets and liabilities. These strategic issues resulted in the company having net losses instead of profits.

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Faysal Ahmed Talukder
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705 views14 pages

Tea Time Business Analysis and Recommendations

Tea Time launched its own branded tea in 2002 but faced several issues that led to financial troubles. It did not have a strong cost leadership strategy to compete with other major tea brands. It also lacked sufficient advertising spending to promote its brand. Additionally, Tea Time did not establish a clear debt-equity financing plan from outside investors to balance its assets and liabilities. These strategic issues resulted in the company having net losses instead of profits.

Uploaded by

Faysal Ahmed Talukder
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
  • Case Study on Tea Time
  • Tea Time Background
  • Pricing Strategy Analysis
  • Advertising Campaign Challenges
  • Debt-Equity Financing Analysis
  • Profit Loss Evaluation

Case Study on Tea

Time
Submitted By :
Md. Sarafuddin Chowdhury
ID: 1505079
Md. Rubayat Uddin
ID: 1505069
Faysal Ahmed
ID: 1505007
MD. Shahidur Raihan
ID: 1505051
Salauddin Quader chowdhury
ID: 1304059

Tea Time

Tea Time started out as a trading company


in 1969

In July 2002, Tea Time launched its own


branded tea, under the label Tea Time

Price Setting
Problem: pricing setting

Analysis:
Not appropriate packaging price setting with
quality of Tea Time for the local market.

Formulation : Tea Time focused on


differential Strategy with low price but
market leaders focused only cost
leadership.

alternative solutions :
If the company were able to take cost
leadership approach, it would have gained
more profit and sustained in the tea market.

Recommendation: I think, the company


should have considered as a cost leadership
market because their competitors pricing
strategy was cost leadership.

: Lack of advertising campaign


properly
Problem:Lack of advertising campaign
properly.
Analysis: Tea Time did not have sufficient
amount of money for advertising campaign
compared to market leaders in the tea
market.

Formulation The Company should have


focused on more functional strategy but it
did not do that one.
Alternative solution: If the company were
able to launch proper advertising, definitely
sales of the company would not have fallen.

Recommendation: From my point of view,


company should have invested more money
the purpose of advertisement through
advertising media like Television,
Newspaper etc. to keep market by
supporting of marketing counselor.

No clear scenario of debt-equity


financing from outside investors.

problem:: No clear scenario of debt-equity


financing from outside investors.

Analysis:: Tea Time did not account the


balance of payment for the assets and
liabilities of the company.

Formulation:The Company should have


clearly showed debt-equity ratio for
understanding purpose

Alternative: If the company were able to


finance to Tea Time company from other
sources, so it could not have financed
through earnings from sister companies.
For this reason, Tea Time and its sister
companies faced financial trouble.

Recommendation:
According to my view point, company
should have financed for new business from
outside sources like financial institutes
because a company should keep balance
between debt and equity of the company.

Tea Time had a net profit


(loss).

Problem: Tea Time had a net profit


(loss).

Analysis: It had more expense than


income

Formulation:The Company should have


used profitable measures at fixed interval in
the period like profit margin, return on
assets etc.

Alternative evaluation:Using profitable


measures If Tea Time were able to take
proper steps to reduce the loss of the
company.

Recommendation: From my perspective,


company should have been more conscious
about its expenditure

Case Study on Tea Time Submitted By : Md. Sarafuddin Chowdhury ID: 1505079 Md. Rubayat Uddin ID: 1505069 Faysal Ahmed ID: 1
Tea Time started out as a trading company in 1969 In July 2002, Tea Time launched its own branded tea, under the label “T
Problem: pricing setting Analysis: Not appropriate packaging price setting with quality of Tea Time for the local market.
Formulation : Tea Time focused on differential Strategy with low price but market leaders focused only cost leadership. 
Recommendation: I think, the company should have considered as a cost leadership market because their competitors’ pricing
Problem:Lack of advertising campaign properly. Analysis: Tea Time did not have sufficient amount of money for advertising c
Formulation The Company should have focused on more functional strategy but it did not do that one. Alternative solution:
Recommendation: From my point of view, company should have invested more money the purpose of advertisement through adver
problem:: No clear scenario of debt-equity financing from outside investors. Analysis:: Tea Time did not account the bala
Formulation:The Company should have clearly showed debt-equity ratio for understanding purpose Alternative: If the compan

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