You Decide

MGT 599 Week 5

You Decide

Over the last few years Willie’s Candy Company has been experiencing flat sales and earnings without growth. They have been able to maintain these sales with aggressive pricing and trade incentives of their two most popular products, Willie’s Yummy Chews and Willie’s Sour Straws. Although they have attempted to introduce new products in the past, those products were just unsuccessful. As the strategy consultant to the executive committee of the company, I will evaluate the committee’s ideas and offer my strategic expertise and recommend a plan to increase sales and growth in the future.

The CEO, Chester Wonka III, suggest that we merge with a much larger Swiss company. He has suggested related diversification. Related diversification is when a business adds or expands its existing product lines or markets, even by merging with other companies within the same or related industry. This will allow us to be a part of a much larger conglomerate as well as expand into international markets. By merging with this larger company, it will diversify our company and allow us to grow. On the other hand, we will no longer be in control. We will no longer own Willie’s Candy Company; the Swiss company will own us.

The CFO, Swifty Miller, has suggested we not merge, but instead work with an investment bank called Silverman Fuchs to purchase other smaller candy companies. Although this will broaden our product portfolio, it will also put us in a lot of debt, due to all the debt issuances from Silverman Fuchs to purchase these smaller companies. But how will we grow if we are putting ourselves deeper in debt? And why would we want to lower our investment rating? With all this new debt our investment rating would lower tremendously.

Our Executive VP of Marketing, Megan Lee has suggested revamping our marketing efforts. We should not merge nor put ourselves deeper in debt by purchasing other smaller companies, but instead invest in our...