M1A3 LIVORIA SANDWICHES, INC.

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M1A3 LIVORIA SANDWICHES, INC.

By | October 2013
Page 1 of 4
Date:October 11, 2013
To:Brothers Sam and Paul Livoria
From:Dev Das
Subject:Strategic Review and Recommendations
INTRODUCTION
This report examines strategic alternatives that would help owners of Livoria Sandwiches Inc. gain competitive advantage in a growing market, achieve its profitability target and maintain its strong reputation of having a high quality and unique product in the industry. This report provides an analysis of the company’s current situation, identify strategic issues and analyze strategic alternatives. These also provide recommendations as to courses of actions the brothers should adopt to reach their goal, and proposed implementation plan. CURRENT SITUATION

Stakeholders Preferences:
  * Go franchising (Paul)
  * Enhance vegetarian menu (Sam)
  * Preserve quality and control (Sam)
  * Realize $1.1M net income by 2015 (both Paul and Sam)
  *Avoid using line of credit (both Paul and Sam)
Constraints:
  * Cash
  * One supplier of all store requirements/ingredients
  * Bank requires $20,000 minimum cash balance at any given time   * Number of hours work
  * Working space
Environmental Scan : SWOT Analysis Exhibit 1
Current Financial Assessment
  - Lowest profit of .29% compared to industry wide due to $500,000 contingent liability booked in 2012. Removing this extraordinary item would result to 24% operating income which is higher than Dawkins industry benchmark   - 52.93% highest Contribution margin than industry average   - High growth % versus set by the industry

  - Available line of credit
  -Impressive performance among competitors whether franchising or non-franchising   -Debt free
Key Success Factors:
* High-quality traditional custom-made sandwiches developed through generations *Loyal client base and recognition
* Effective obsolescence plan
* Zero Debt
Key Risks:
Losing market share and competitive advantage
Limited experience how to compete and to grow the business
Just one supplier...

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