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Maple Leaf Consumer FoodsÆ 4900ass_t1 Case 12

Maple Leaf Consumer FoodsÆ 4900ass_t1 Case 12...

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Recommendation Given Maple Leaf Consumer Foods’(MLF) current performance, strategy and scope in addition to their internal capabilities and external environment, this report will prove that MLF should divest ML Beef, Overlander and Burns hot dog brands and focus on growth of other brands (such as better tasting, low fat hot dogs), rather than trying to support all current brands. Investing in brands in the adult segment that have good potential to grow will only improve profits, employee morale, customer satisfaction regarding taste and price. MLF should build brand equity nationally instead of by region. This report will also analyze alternative options for MLF and why they are not fitting as a solution. Issue To begin, the issue at hand must be defined in order to determine the correct course of action. The issue that MLF is facing is that they have nine hot dog brands, of which five are losing significant market share and another one is declining. The main competition, Sneider Foods (JMS), has gained an increase in market share, while keeping their prices, quality, taste and product lines intact. MLF needs to determine how much they would like to increase their market share. Clearly, MLF needs to improve their economies of scale and revisit their strategy. This issue is urgent and requires this strategic strategy implemented in less than 3 months. Current Strategy MLF’s objectives are to improve market share and brand equity across Canada and create and sustain a leadership position with a market-based view 1 while improving employee morale in the Consumer Foods unit. MLF’s scope covers two markets, the adult and family markets. Within the family market, MLF offers one premium, four mainstream, four value and one economy hot dog and three mainstream hot dogs in the adult market. In contrast, JMS only has one mainstream hot dog in the adult market and two mainstream hot dogs in the family market with a 10 to 20 percent price advantage over MLF’s value products. Additionally, MLF emphasizes different brands for different geographic regions, such as Ontario, Western Canada, Quebec and the Maritimes, providing no national presence. Immediately, this presents a red flag, that MLF has too broad of a scope resulting in 1 McGee, John, Howard Thomas, and David Wilson. Strategy Analysis & Practice . Berkshire: McGraw Hill Companies, 2005. 9-157.
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a lack of focus. By divesting the Maple Leaf Beef dogs, Overlander and Burns’ brands, and building national brand equity by providing all their products in every region, MLF will be able to narrow their scope to fewer products and focus their investments on building their presence in the growing, adult market. MLF’s current strategy seems rather confused. While JMS maintained their prices in 2001, MLF increased their prices, proving to not be following a cost leadership strategy, and even though the previous marketing director believed Consumer Foods was the lowest-cost producer in the value segment, he was far off. Assuming MLF is following a differentiation strategy, they have not chosen a
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