Truearth Case Analysis

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In today’s business market, it is imperative for companies to invest in new product development in order to continuously grow. There are various factors, which come into play when it comes time for a company to make such a decision. In the case of TruEarth Healthy Foods, time has dwindled and they must make a decision whether to release their new refrigerated pizza line or not. Unfortunately, according to statistics launching a new product has an 80% fail rate. In addition, it can be a very expensive process needing special attention from management. Overall, TruEarth’s main concern here is whether or not it would be profitable venture to move forward with the launching of the new pizza product. The factors that need to be considered are the competitive market, consumer preferences based on the market research, manufacturing viability, and the financial viability.

The Competitive Market
The growing demand for wholegrain products, have cause companies to create products of this nature to appeal to a larger array of consumers. TruEarth’s Cucina Fresca fresh pasta product grew rapidly from $18 million in retail sales in 2006 to $35 million in 2007. In order to assess TruEarth’s dilemma with its new fresh pizza product we can compare it to the success of fresh pasta. First, lets take a closer look at the pizza market as a whole. Pizzas were a core component of the Italian-American food category, with annual sales in the United States estimated at $53 billion in 2007. Moreover, surveys suggest that 77% of consumers ate pizza at least once a month. When looking at total sales, 66% came from delivery, take-out, and restaurants while only 11% came from store-bought refrigerated pizza. When we compare the sales total of $5.8 billion in refrigerated pizza to that of the $4.4 billion in refrigerated pasta, it is clear there is a larger market for pizza than for pasta. Despite this seemingly open opportunity, Rigazzi, one of TruEarth’s main competitors...
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