Gannon

Overview

Ganong Bros, Limited (GBL) a small private family confectionary firm in St. Stephen, New Brunswick, with a wide variety of sugar confectionary and chocolate product lines. Founded in 1873 GBL was Canada’s oldest confectionery company. On March 30, 1995, the board of directors had just reviewed the year-end financial statements, which essentially showed two consecutive years of financial losses. David Ganong, president of GBL has been tasked by the board of directors to develop a growth plan that would increase company revenues by 50 per cent. This growth was required to take place above and beyond changes that were made to the main business lines, and was driven by business models, products or serves outside of the core business. The board had pressed Ganong hard for a solution and had given him six weeks to return with a recommendation that would restore the company to profitability.

Porter’s Five Forces Model – Ganong Industry Competition

|Industry Force |High |Why? |

| |Med | |

| |Low | |

|Threat of new |Med |High capital requirements a barrier to entry |

|entrants | |Economies of scale are required |

| | |Increased number of US firms operating in Canada due to |

| | |NAFTA. |

|Power of buyers |High |The buyer faces few switching costs...