Imagine you are advising a major Philippine fast-food chain. They are considering launching a new line of plant-based chicken alternatives nationwide. How would you assess the market attractiveness and potential profitability of this move? Please walk me through your approach.

Situation

During my internship at a local consulting firm, we were approached by a leading Philippine beverage company that wanted to enter the rapidly growing ready-to-drink cold brew coffee market.

Task

My task was to help build the financial model to project market size and potential profitability, and to identify the key assumptions that would drive the investment decision.

Action

I first conducted a bottom-up market sizing by estimating the number of target consumers in Metro Manila using demographic data from PSA, then multiplying by expected frequency of purchase and average price point to get the annual market value. I segmented by income brackets and geographic clusters to identify early adopters. For profitability, I built a P&L model that included costs of raw materials sourced from local coffee producers, co-packer fees, distribution margins, and marketing spend. I ran sensitivity analysis on market share and price premium, and benchmarked against a recent market entrant from Thailand.

Result

Our analysis showed a viable opportunity with an expected payback period of 2.5 years under a conservative scenario. The client used our model to secure board approval for a PHP 200 million launch budget, and the product achieved breakeven in 22 months, aligning closely with our projections.