Pei Alternative

Alternative __:

Focus Strategy: product attention to the Japanese Market

The demand for organic products is continuing to grow in the Japanese Market. Consumers in the food and beverage industry rely heavily on imported goods. Bruce MacNaughton should consider downsizing his current Canadian operations and focus on selling to the Japanese market, fulfilling orders to Kosaku Morita.

To implement this strategy, PEI Preserves would need to produce its products in smaller bottles. A cost of $65,000 would be incurred for new bottling equipment. Production of small sized bottles would ensure successful sales to Japanese consumers. As we can see from the financial analysis, the Cafe/Dairy Bar division does not produce a desirable profit margin. Operations in this division should be eliminated and closing profits from this department should be used towards the initial production costs.

MacNaughton currently employs on a seasonal basis however by shifting focus to the Japanese market, the company will be able to provide full-time employment to staff. PEI Preserves will constantly be producing preserves to Japan, decreasing existing factory down-time. The current production facility in New Glasgow would be running year-round at almost-full capacity. Staff would be paid on a salary base, allowing PEI Preserves to control its expenses. Employees hired for long periods of time will be more likely to be dedicated to the company’s vision and goals.

Since PEI Preserves does very well in its retail department, MacNaughton would have no problem selling products as gift items. Gift sets in the Japanese Market would sell for approximately $27 Canadian (2,000 Yen).

A focus based strategy seems like a viable strategy for PEI Preserves as it will provide sufficient revenue and produce high quality products, continuing to give MacNaughton a competitive advantage. A few uncertainties that may arise for PEI Preserves are: the supply of raw materials, predictability of the...