Prince Edward Island Preserve Co. Background Prince Edward Island Preserve Co. is a manufacturing and retail company primarily located in New Glasgow, Prince Edward Island, Canada. The private company (owned mainly by its founder, Bruce MacNaughton) is in the gift/gourmet and specialty foods market, producing and marketing specialty food products such as jam preserves, honeys, teas and coffees. The six-year-old company currently has majority of its manufacturing and retailing in Canada. Its key focus concepts at present are strategic leadership, implementation of strategies, forming international alliances, pursuing international expansion and promoting resource-based growth. Case Problem Should Prince Edward Island Preserve Co. pursue consumers in the Toronto and/or Tokyo market? If so, how? The choices available for achieving further growth include mail order, distributors, and company controlled stores. Case Analysis Industry Structure - The gift/gourmet and specialty foods industry is a market with several firms, a few of which are large players. This oligopolistic structure of the industry has lead to firms competing in the quality, taste and design domains rather than in the price domain. This is clearly evident by the fact that firms emphasise more on their brand image and quality stance as their key success factors rather than the shelf price of their products. Since the goods in this industry are luxury goods, they are income- sensitive. However, they are relatively price inelastic in demand. The industry is one that has been dramatically influenced by globalisation, and now has both local and international players competing in the marketplace. Globalisation has also led to an increase of ‘middlemen’ such as importers and wholesalers, which has led to double (and triple) marginalisation, and has thus substantially increased the retail prices of products (or reduced profits of upstream manufacturers). It should also be noted that consumer preferences do vary from country to country, and hence it is crucial to have a clear understanding of every geographical market that a firm in the industry plans to enter and play in. PESTEL Analysis – Considering the increased local and international competition in the gift/gourmet and specialty foods industry, it is crucial for PEI Preserve Co. to ensure that its intended strategies are coherent with the changes in its internal and external environment. Exhibit 1 lists the key external factors for PEI Preserve Co. to consider when formulating its strategy. These factors are categorised as Political, Economical, Sociocultural, Technological, Environmental and Legal. SWOT Analysis – Exhibit 2 lists the general internal factors that PEI Preserve Co. has to keep into consideration for its future success. It lists the firm’s Strengths, Weaknesses, Opportunities and Threats. VRINE Model and Test – In the gifts/gourmet and specialty foods industry, PEI Preserve Co. has a unique position due to its location in PEI and its ability to source only the highest quality of fruits (strawberries) and other raw materials. It also has a key emphasis on
- Fall '18
- jane smith
- Prince Edward Island, PEI Preserve Co.