Canco Ltd Case
Canco Ltd. case
Summary
The Canadian fradistat industry consists of four companies: Acme Ltd., Beaver Ltd., Canco Ltd., and Deeco Ltd. Though the industry is growing, it needs highly skilled workers where the products cannot be replicated with the current technology but the company focuses on local markets. Canco Ltd. was established in 1976 in Atlantic Canada and is the second largest company with a market share of 29% but the profits in 2007 were only third highest with the products of average quality. The company’s flagship plant in New Brunswick, for the past three years, has been operating below its capacity, as total industry sales in the eastern region have grown slowly and the company lost some of its share of the market to Beaver’s lower-priced products. Though Canco’s products have sold well in Western markets, the plant in Alberta was insufficient to meet the orders but the plant’s issue of bond was well-received by the market.
Problem Statement and Objectives How does Canco Ltd. improve the strategic positioning and profitability that could enhance its potential to compete in the industry? The company can use overtime to increase output in any plant to 20% above the plant's capacity. In western region the distribution costs are high while the manufacturing cost of eastern region is increasing in addition the tight labour market for skilled workers results in an increase of 15% in wages. The industry focuses on domestic market and the company has to face competition from the Beaver’s low priced products.
Situational Analysis: Canadian Fradistats industry is relatively an attractive industry as there are only 4 companies manufacturing fradistats, the key components of many industrial products. In addition there are no close substitutes for the products that the companies have great bargaining power over the buyer. Canco’s strengths outweigh weaknesses as it has second highest shares in the market but its low marketing reduces its sales.
Summary
The Canadian fradistat industry consists of four companies: Acme Ltd., Beaver Ltd., Canco Ltd., and Deeco Ltd. Though the industry is growing, it needs highly skilled workers where the products cannot be replicated with the current technology but the company focuses on local markets. Canco Ltd. was established in 1976 in Atlantic Canada and is the second largest company with a market share of 29% but the profits in 2007 were only third highest with the products of average quality. The company’s flagship plant in New Brunswick, for the past three years, has been operating below its capacity, as total industry sales in the eastern region have grown slowly and the company lost some of its share of the market to Beaver’s lower-priced products. Though Canco’s products have sold well in Western markets, the plant in Alberta was insufficient to meet the orders but the plant’s issue of bond was well-received by the market.
Problem Statement and Objectives How does Canco Ltd. improve the strategic positioning and profitability that could enhance its potential to compete in the industry? The company can use overtime to increase output in any plant to 20% above the plant's capacity. In western region the distribution costs are high while the manufacturing cost of eastern region is increasing in addition the tight labour market for skilled workers results in an increase of 15% in wages. The industry focuses on domestic market and the company has to face competition from the Beaver’s low priced products.
Situational Analysis: Canadian Fradistats industry is relatively an attractive industry as there are only 4 companies manufacturing fradistats, the key components of many industrial products. In addition there are no close substitutes for the products that the companies have great bargaining power over the buyer. Canco’s strengths outweigh weaknesses as it has second highest shares in the market but its low marketing reduces its sales.