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Case 12 Individual Assignment Finalized

Case 12 Individual Assignment Finalized - Aloysius Govias...

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Aloysius Govias 206696090 Recommendation Maple leaf consumer foods (MLF) current strategy and scope must be refocused in order to 1) increase their competitive advantage, 2) strengthen their core competencies and 3) adapting to a rapidly changing external environment. This will be achieved through 1) Divesting Overlander, Burns and Maple Leaf Beef, 2) consolidating the ML brand achieving greater economies of scope and scale, and 3) perform the necessary research in order to see where potential market growth exists. Trying to sustain 12 brands is not a viable option for MLF, and must be adjusted to be competitive. Issue I dentification 1. Oversaturated Product Line 2. Profit Margins 3. Need for direct consumer research 4. Changing Market Demographic Oversaturated Product Line The main issue that MLF currently faces is brand equity. There are 9 brands of wieners combined with 3 brands of franks, and sausages five of which are loosing market share while one has started to decline. MLF primary competition Schneider Foods (JMS) has increased its market share while keeping prices, taste, quality and product lines consistent continually improving margins and market share. This over saturation has reduced MLF profit margins. Profit Margins Profit margin have decreased by 40% (Exhibit 1) for MLF portfolio of hot dogs, with the lowest margins coming from ML Beef Dogs, Overlander, and Burns a decrease of 63%, 170% and 160% respectively. These brands provided for an average loss of 8 cents per unit, further diminishing profits. Direct research is required to see where MLF can improve sales and margins. Need for direct consumer research MLF has no current market information as their data is many years old and irrelevant. With a changing market demographic MLF requires new information in order to expand their relevant brands to the right consumers. This information cannot be found from a secondary source, and must be procured directly for MLF analysis. Page 1 of 8
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Aloysius Govias 206696090 Changing Market Demographic The Weiner market demographic is undergoing a change, as the adult and family sector increase by 11% and 2%, providing new markets for growth. These four issues are the primary concern for MLF currently and require immediate strategic revision and implementation within the next quarter. Analysis P.E.S.T (Exhibit 2) analysis shows the external macro-environment factors that affects all firms. Political forces include the Department of Agriculture which requires all hot dog meat to be ground from muscle meat not animal byproducts. Stricter regulations come from the CFIA on the proposed content of the meat and nutritional standards. Economically MLF is in a potentially high growth market where consumers seek the lowest price for their product. This provides consumers with lower costs for the foods decreasing their capital expenditure. Socio-culturally hot dogs are enjoyed all year around, especially during the summer months. It is the North American culture to eat hot dogs after a club or
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Case 12 Individual Assignment Finalized - Aloysius Govias...

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