Prince Edward Island †Essay Essay

Executive SummaryPrince Edward Island Preserve manufactures and produced high- quality, high priced specialty food products. P.E.I.P.C. experienced rapid growth in its short history. In the first few years of its existence, founder Bruce MacNaughton expanded his keep company from one manufacturing and retail dismission in 1989, following a second retail outlet in 1991. The company also diversified and opened two restaurants in 1989 and 1990 respectively. It is anticipated that P.E.I.P.C. will continue to grow, with projected sales for the year ending January 1992, to cause one million dollars. In August 1991, MacNaughton, contemplated on rising expansion. The two cities under consideration were in Toronto and Tokyo. Options under consideration include adding retail outlets in the aforementioned regions.Also under consideration is to augment wholesaling, and the use of distributors (hotel and airlines). Expanding the mail order handicraft is also an alternative. Although MacNaug hton has weighed some or all options to diversify P.E.I.P.Cs operations, it is unequivocally clear the company lacks clear vision, strategy goal and objective. MacNaughtons business had been built on gut and emotion rather than analysis. However, this approach may fix to be insufficient for the future. It is difficult to execute a strategy if goals are not specific, cant be described or understood. However, steer by the proper analysis of the external environment (SWOT), together with the firm-level analysis (VRINE Model), MacNaughtons can improve P.E.I.P.C.s long term war-ridden business position.Key ProblemsThis case highlights various strategic challenges MacNaughton face while contemplating expansion, and how to complete this objective successfully. The difficulty is to know when to close the gap between the firms aspiration and its current capabilities, resources and market position. The core issues identified in this case are1. Future Expansion2. Product imitation3. Produc t promotion falter to explore the use wholesale and distribution networks4. Financial Constrains unable to secure suitable financing, experienced period of cash flow shortages5. Managerial constrains6. Seasonal faculty inability to attract and retain quality staff due to the seasonal nature of the businessAnalysis and EvaluationP.E.I.P.C.s key resource is its geographical location. Prince Edward Island is most notable known for its pastoral beauty, slower pace of life, North Shore beaches and global image of Anne of Green Naples. Prince Edward Islands well known report card for the high quality of strawberries is the basis of P.E.I.P.C.s marketing strategy and product differentiation. As the company grew, P.E.I.P.C. developed and achieved a diverse product line. This resource helped the company to establish a competitive advantage. In addition, P.E.I.P.Cs higher prices did not compete with low end products charges by competitors. However, this marketing strategy to differentia te their brand, introduced P.E.I.P.C to a variety of competitors. Another key resource is financing. Although previously listed as a core issue, the company has the ability to raise $100,000 of addition capital to finance future expansion by issuing preferred stock. P.E.I.P.C.s manufacturing plant is another key resource.Currently, P.E.I.P.C.s production capacity is underutilized. The manufacturing plant operates five month a year, on a single, five days per week. Productivity levels can increase from fifty per cent to one hundred per cent by extending the hours of operation. Automating the bottling process could increase productivity substantially. The final key resource is its customers. Prince Edward Island and P.E.I.P.C. attracts thousands of tourists from over the globe. In supererogatory to local marketing efforts, the reliance on tourists could increase P.E.I.P.C.s global posture and raise consumer awareness of its products. A strategy must be formulated for the purpose of gaining and sustaining competitive advantage. MacNaughton should critically evaluate P.E.I.P.Cs performance measure for resources and capabilities by utilizing the VRINE model.The VRINE ModelValue A resource is valuable if it enables P.E.I.P.C to exploit opportunities to establish competitive advantage or negate threats. Japanese tourist comprises a gravid number of visitors to Prince Edward Island and Prince Edward Island Preserve, Co. outlets. The popularity of P.E.I and P.E.I.P.Cs products are well known to Japan. Essentially, the high level of spending by the Japanese, their fascination with P.E.I., traditions of gift giving and the amount of disposal income ready(prenominal) to them, indicates that opportunities in Japan energy be successful. Rarity P.E.I.P.C can enjoy temporary competitive advantage, so long as the content of ingredients used to even up its specialty preserves remain rare and scarce relative to it competitors. Inimitability/Non-substitutability Other fi rms in P.E.I. has begun to retail specialty preserves in hopes to profit from P.E.I.P.C.s success. Competitors might be able to imitate or substitute the value and resources quickly, at a low cost.Exploitability With a solid vision, financial base, coupled clear strategy formulation and implementation of its objectives, P.E.I.P.C. can exploit their brand and products domestically and manufacture their products globally with the resources available. P.E.I.P.C can protect and increase competitive advantage by expanding its interlocutor and distribution network in Toronto. Initially, MacNaughtons interest in Toronto was due to its size and local awareness of P.E.I. Successful expansion in Toronto can prove to be quite profitable for the company. Strategy planning for P.E.I.P.C. must also include a SWOT analysis in order to identify its interior and external factors that are favorable and/or unfavorable in achieving its objective. SWOT Analysis of Prince Edward Island Preserve Co.Str engthsWeaknessBrand LoyaltySeasonal Business StructureProduct DifferentiationAttract and Retain pure tone StaffLocal ReputationLimited AdvertisementBroad Product MixCash Flow ShortagesAbility to Raise CapitalOpportunitiesThreatsExpansion in Japan and TorontoProduct ImitationExtensive diffusion ChannelsVariety of Possible Substitutes Ability to meetCompetitive PricingSupplier Power to CompetitorsRecommendationsP.E.I.P.C can also explore expanding its marketing reach in efforts to bring brand awareness through e-commerce and web based advertising. Additionally, plans should include hiring a sales and marketing team to assist in strengthening the companys brand name and appeal. show on mail order sales by improving the quality of the catalogue and distribution reach. P.E.I.P.C. should consider automating the bottling process to increase production capacity and yearly volume. The company should also analyze the profitability of large scale orders with wholesalers, hotels and airline s, and perhaps consider opportunities to expand in the U.S.ImplementationMacNaughton should take into consideration the use of additional key strategy formulation concepts such as, the strategy diamond, the five forces model off environment threats and the PESTEL model to help his firm establish and sustain competitive advantage.