Cima Mountaineering, Inc

The break -even units to cover this initial cash outflow is 42,194 units (See appendix 5). Since the serious mountaineers and hikers market is quickly reaching maturity, we do not think that sales growth in that segment can be maintained for long. Currently producing only at 85%, Cima has excess manufacturing capacity and therefore it can earn additional contribution by making the distributor's brand. If this were to happen, Cima can still reap the profits of private branding. The projected profits from 1997 to 2002 for this option are $2,511,400, with a present value of $1,428,499 (see appendix 3 & 4). Most competitors like Timberland and Nike offer only low to medium priced products in this segment, and therefore there is a market niche open for premium weekender shoes. This financial analysis shows that Project 2 has the higher profitability and quicker returns compared to Project 1 in the projected 5 years. eign competition, the company is finding it difficult to keep sales growing. Recommendation: Cima Mountaineering, Inc. After deciding on the segment to target, Cima must address the issue of broadening the scope of distribution strategies, to increase sales. Project 1 presents the opportunity of targeting the recreational hiker by offering two new boots. Positioning the new boots to attract this segment should make projected sales achievable. As opposed to Project 2, this market segment is marked with high growth as consumer preferences are changing to a more casual and stylish boot for a variety of uses. Projected five-year sales for this option are also shown in appendix 3.