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Class- or Mass
Written Analysis and Communication II

Submitted by:
X

Submitted to:
Y

Memo

Neptune Gourmet Seafood
USA
To:Mr. Stanley Renser,
Chairman and CEO,
Neptune Gourmet Seafood
From:Rita Sanchez,
Sales Director,
Neptune Gourmet Seafood
Date: November 5, 2012
Subject: Decision Report on Management of Excess Inventory

Please find attached a detailed decision report on how Neptune Gourmet Seafood can manage the current situation of increased supply. The report contains an analysis of the situation followed by the problem statement and evaluation criteria for various courses of the viable options possible. The options have been evaluated on various parameters including profitability & brand equity of the company. I hope you find the report appropriate for your consideration & further course of action.

Executive Summary

Neptune is the most upmarket player in the $20 billion industry, and the company is doing everything it can to preserve its premium image among customers. But Neptune's recent investment in state-of-the-art freezer trawlers, along with new fishing regulations, is resulting in catches that are bigger than ever. Though demand is at an all-time high, the company is saddled with excess inventory. The feasible solution to this problem, while keeping in mind the premium brand image of Neptune, is to organise food-fests and turn the issue of selling off the inventory into an opportunity - a marketing tool to venture into new territory.

Word Count: 103
Table of Contents

S.NoContentsPage No.

1. Situation Analysis1
2. Problem Statement2
3. Options2
4. Criteria for Evaluation2
5. Evaluation of Options3
6. Recommendation4
7. Action Plan4

Situation Analysis

Neptune Gourmet Seafood, North America’s third largest seafood producer, is the most upmarket player in the $20 billion industry. Over the last 40 years, Neptune has earned an enviable premium image among its customers by producing the best seafood in the region. In order to stay ahead of competition and keep up with its tagline- ‘The best seafood on the Water Planet’, Neptune had invested heavily in this high-end business. Market-Share

The total net-worth of Neptune is $820 million. Neptune accomplishes about 30% of its sales by selling frozen and processed fish products to U.S. grocery chains. About 33% of sales are achieved by supplying to the best restaurants and the biggest cruise lines near its headquarters. Another 33% comes from wholesalers who distribute its products to all the restaurants in the United States. The remaining 4% of sales comes from a fish market outside Fort Lauderdale. Technology

Ever since its inception 40 years ago, Neptune has constantly innovated and adopted new technologies and has thus been able to attract a premium of 25-30% over its competitors. Neptune has recently invested $9 million in six state of the art Freezer Trawlers. These Trawlers, with their advanced fish catching, storing and freezing technologies, have given Neptune an edge over others. With the inclusion of these Trawlers, the company’s stocks have risen. Inventory

Because of its ability to capture and process fish efficiently, the stocks in the inventory are on a rise. In the past three months, Neptune’s finished goods inventory has shot up to 60 days’ supply- twice the normal level and three times what it had been a year ago. Even with an increase in demand in the past four weeks, the inventory has continued to grow. Market Competition

Neptune has had to face stiff completion from seafood providers of China, Peru, Chile, and Japan. But, by investing heavily into the business and by purchasing modern trawlers and freezers, Neptune has been able to keep the sharks at bay. The competition in the market is, in general, fierce and price cuts of Neptune’s product may result in price wars. Problem Statement

Find a way to deal with excess...
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