THE MISWAK COMPANY
CASE STUDY
SOLUTION
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SYNOPSIS
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In January 2014, while searching online for a biodegradable alternative to gum, undergraduate business
student Jonathan Drewnowsky came across a product called “miswak.” Made from the branches of the
Salvadora persica tree, miswak was a natural and fully biodegradable toothbrush alternative. Drewnowsky
wanted to research the possibility of starting a business to sell a miswak product in Canada, so he presented
n
the concept to classmate Christine Peet, who chose to explore the feasibility of starting The Miswak
tio
Company (TMC) based out of London, Ontario, Canada, for a class project. If the venture was deemed
feasible, Drewnowsky and Peet planned to adjust their undergraduate course load and start the business in
September 2014.
lu
TMC’s goals are to maintain a socially and environmentally responsible business profile and to provide a
minimum of CA$10,0001 in compensation to each of the two partners in each of the first three years of
So
operations. For the initial investment, Drewnowsky and Peet have already managed to secure a total of
$50,000 in financing from family sources; however, they wonder whether the investment is sufficient to
sustain TMC’s cash flows for the first three years, and if not, how much additional financing will be
required. They have a meeting scheduled with a bank at the end of the week, during which they will be
expected to present projected statements, including cash budgets, and a financing request. The partners need
to know how much to request and what form of financing would be appropriate to ask the bank to consider.
OBJECTIVES
1. Perform industry, competitive, and consumer analyses in order to identify the risks and opportunities
associated with the venture;
2. Prepare detailed cash budgets, incorporating sensitivity analysis to determine financing requirements;
The Case Solution Starts From page 6
,3. Prepare projected income statements and balance sheets;
4. Perform a breakeven analysis to assess the riskiness of the venture; and
5. Make a recommendation about whether to proceed with the venture, including any alterations to the
original plans.
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m
Sa
n
tio
lu
So
ASSIGNMENT QUESTIONS
1. Perform an analysis of the industry, competition, and consumer. What implications can you draw for
the marketing strategy presented?
2. How much financing is required in Year 1 to sustain cash flows? What about Years 2 and 3? If the
financing requirement exceeds the initial investment available, what is the likelihood that the partners
will receive external financing? How much financing should the partners request from the bank?
3. Can the partners meet their financial goals under the original estimates? What about if sales are 25 per
cent less than expected?
4. Should The Miswak Company implement the “Brush for Everyone Project” right away? or not at all?
or should it wait?
5. How risky is the venture?
6. If you were Drewnowsky and Peet, would you start The Miswak Company? Why or why not?
The Case Solution Starts From page 6
,OR
Q: As Jonathan Drewnowsky, evaluate the overall feasibility of The Miswak Company. Make whatever
decisions and recommendations you deem appropriate.
e
pl
m
Sa
n
tio
ANALYSIS
lu
1. Perform an analysis of the industry, competition, and consumer. What implications can you
draw for the marketing strategy described?
So
See Exhibits-1 and 2 for an assessment of the opportunities and threats facing TMC from an
industry and competitive perspective. See Exhibit -3 for an analysis of consumer behaviours and
preferences that could affect the venture.
Implications for Marketing Strategy
Because the concept of using miswak for oral hygiene is so new in North America, yet consumer interest
in eco-friendly products is generally high, TMC’s marketing strategy must focus on educating target
consumers on the combination of the oral hygiene and environmental benefits of using miswak. This task
could be accomplished through an informative website, effective search engine optimization, highly visible
recommendations and reviews by respected bloggers and in other publications, a presence at industry and
consumer trade shows, and placements in specialty health, travel, and ethnic stores. Astute students may
question why the initial distribution strategy does not involve direct online selling. This point would provide
an opportunity for the instructor to lead a discussion about the trade-offs between margin and volume.
The Case Solution Starts From page 6
, EXHIBIT -1: INDUSTRY ANALYSIS
Opportunities Threats
The quantity of toothbrush waste added to Over 90 per cent of people regularly use
landfills might grab the attention of green toothbrushes and toothpaste as their main form
consumers. of oral hygiene, so it would be challenging for
them to convert to using a chewing stick.
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m
Sa
n
tio
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So
The Case Solution Starts From page 6
, EXHIBIT -7: PROJECTED INCOME STATEMENTS ($)
Year 1 Year 2 Year 3
SALES 50,600 100,725 109,800
EXPENSES
Product Cost 24,188 50,854 55,682
Tradeshow Costs 5,550 5,550 5,550
Selling Kits 1,000 1,000 1,000
Internet Advertising 10,000 10,000 10,000
Blog Promotion 2,000 2,000 2,000
Cell Phones 1,440 1,440 1,440
e
pl
m
Sa
n
tio
lu
So
The Case Solution Starts From page 6
CASE STUDY
SOLUTION
e
pl
SYNOPSIS
m
Sa
In January 2014, while searching online for a biodegradable alternative to gum, undergraduate business
student Jonathan Drewnowsky came across a product called “miswak.” Made from the branches of the
Salvadora persica tree, miswak was a natural and fully biodegradable toothbrush alternative. Drewnowsky
wanted to research the possibility of starting a business to sell a miswak product in Canada, so he presented
n
the concept to classmate Christine Peet, who chose to explore the feasibility of starting The Miswak
tio
Company (TMC) based out of London, Ontario, Canada, for a class project. If the venture was deemed
feasible, Drewnowsky and Peet planned to adjust their undergraduate course load and start the business in
September 2014.
lu
TMC’s goals are to maintain a socially and environmentally responsible business profile and to provide a
minimum of CA$10,0001 in compensation to each of the two partners in each of the first three years of
So
operations. For the initial investment, Drewnowsky and Peet have already managed to secure a total of
$50,000 in financing from family sources; however, they wonder whether the investment is sufficient to
sustain TMC’s cash flows for the first three years, and if not, how much additional financing will be
required. They have a meeting scheduled with a bank at the end of the week, during which they will be
expected to present projected statements, including cash budgets, and a financing request. The partners need
to know how much to request and what form of financing would be appropriate to ask the bank to consider.
OBJECTIVES
1. Perform industry, competitive, and consumer analyses in order to identify the risks and opportunities
associated with the venture;
2. Prepare detailed cash budgets, incorporating sensitivity analysis to determine financing requirements;
The Case Solution Starts From page 6
,3. Prepare projected income statements and balance sheets;
4. Perform a breakeven analysis to assess the riskiness of the venture; and
5. Make a recommendation about whether to proceed with the venture, including any alterations to the
original plans.
e
pl
m
Sa
n
tio
lu
So
ASSIGNMENT QUESTIONS
1. Perform an analysis of the industry, competition, and consumer. What implications can you draw for
the marketing strategy presented?
2. How much financing is required in Year 1 to sustain cash flows? What about Years 2 and 3? If the
financing requirement exceeds the initial investment available, what is the likelihood that the partners
will receive external financing? How much financing should the partners request from the bank?
3. Can the partners meet their financial goals under the original estimates? What about if sales are 25 per
cent less than expected?
4. Should The Miswak Company implement the “Brush for Everyone Project” right away? or not at all?
or should it wait?
5. How risky is the venture?
6. If you were Drewnowsky and Peet, would you start The Miswak Company? Why or why not?
The Case Solution Starts From page 6
,OR
Q: As Jonathan Drewnowsky, evaluate the overall feasibility of The Miswak Company. Make whatever
decisions and recommendations you deem appropriate.
e
pl
m
Sa
n
tio
ANALYSIS
lu
1. Perform an analysis of the industry, competition, and consumer. What implications can you
draw for the marketing strategy described?
So
See Exhibits-1 and 2 for an assessment of the opportunities and threats facing TMC from an
industry and competitive perspective. See Exhibit -3 for an analysis of consumer behaviours and
preferences that could affect the venture.
Implications for Marketing Strategy
Because the concept of using miswak for oral hygiene is so new in North America, yet consumer interest
in eco-friendly products is generally high, TMC’s marketing strategy must focus on educating target
consumers on the combination of the oral hygiene and environmental benefits of using miswak. This task
could be accomplished through an informative website, effective search engine optimization, highly visible
recommendations and reviews by respected bloggers and in other publications, a presence at industry and
consumer trade shows, and placements in specialty health, travel, and ethnic stores. Astute students may
question why the initial distribution strategy does not involve direct online selling. This point would provide
an opportunity for the instructor to lead a discussion about the trade-offs between margin and volume.
The Case Solution Starts From page 6
, EXHIBIT -1: INDUSTRY ANALYSIS
Opportunities Threats
The quantity of toothbrush waste added to Over 90 per cent of people regularly use
landfills might grab the attention of green toothbrushes and toothpaste as their main form
consumers. of oral hygiene, so it would be challenging for
them to convert to using a chewing stick.
e
pl
m
Sa
n
tio
lu
So
The Case Solution Starts From page 6
, EXHIBIT -7: PROJECTED INCOME STATEMENTS ($)
Year 1 Year 2 Year 3
SALES 50,600 100,725 109,800
EXPENSES
Product Cost 24,188 50,854 55,682
Tradeshow Costs 5,550 5,550 5,550
Selling Kits 1,000 1,000 1,000
Internet Advertising 10,000 10,000 10,000
Blog Promotion 2,000 2,000 2,000
Cell Phones 1,440 1,440 1,440
e
pl
m
Sa
n
tio
lu
So
The Case Solution Starts From page 6
