MGMB01H3 Lecture 3: Lecture 3 Part 3

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What is the link between profit and revenue? (look at numbers from exhibit 1) Incremental contribution = ( *. 59) = . This analysis suggests that the mil investment will breakeven if each store converts. Is this reasonable: each na company-owned store generates ,000 revenue per year (ex. 1: average ticket price is . 85 (ex. 3: this means the average store has 191,948 transactions per year (= ,000/. 85) If the average customer visits starbucks 5 times a month (60 times a year 12 * 5, case pg. 11), each store sees approximately 3,199 unique customers per year (=191,948/60: convert 112 out of 3,199. There are two segments one is the established customers that are past/old customers not in a rush have income and are 25 and above. The second are the new customers and they are new to starbucks and are in a rush and don"t have a lot of income. Call and pick-up option/small pop-up stores in busy areas.

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