Question

Fitstar (www.fitstar) is a company that produces an app that turns an iP ad into a personal trainer. When Fitstar first started (with a single app tht offered personal training session via iPad), how would you have estimated Fitstar's initial sales? Estimate the firm's sales based ona comparable firm or use a multiplication method to arrive to a reasonable number. Explain how you would utilize each or both methods. (summarize in 500 words)

Answer 1

Since, it is the first year of operation Fitstar, it would be better to estimate the initial sales of fitstsr on the basis of fitstar it is because generally people are not that much brand conscious for such type of app and almost every app have the same customer exposure as the other app depending upon the appropriateness of design and user friendly features of the app.

Now if we are estimating sales on the basis of sales by other comparable firm then we should first look out when that comparable firm initiated it's operation, what growth rate it has achieved since it's initiation of operation and currently what consumer volume it is facing.

Further we should also see how many comparable firms are there in the competition so as to estimate the number of expected consumer we can get. We should also find out the price it is charging per user and accordingly adjust it's total sales on the basis of price charged by fitstar.

Last thing is we should see on what scale it is opersting and what all market it has explored or tapped.

Considering all these factors appropriate adjustments to it's sales shall be made in order to arrive at the initial sales figure of fitstar.