A. Executive Summary
Neptune Gourmet Seafood, North America’s third-largest seafood producer’s inventory had shot up to 60 days’ supply – twice the normal level and three times what it had been a year ago. The problem with excess inventory can cause numerous deficiencies such as tight up of cash and loss of margins. During an executive meeting of Neptune’s top management, each executive has a different opinion in presenting a strategic solution. My recommendation is to offer two additional product lines besides the current line that’s targeting at quality seekers. The three - brand strategy strives to acquire the highest market share focusing at three distinct segments eliminating the major issue of excessive inventory while allowing Neptune to operate at its full capacity serving all segments. B. Situation Analysis Summary
Jim Hargrove has become overly concerned about the excess inventory because of the advanced technology the company has adopted. Neptune was able to capture more seafood than other company. The root cause analysis suggests that the underlying cause of the problem is Neptune’s limited number of targeted segment. (Appendix D) Because of this, Neptune is overlooking other potential segments that might bring a significant profit to the firm. A summary of top executives’ opinions about the problem presented can be found in Appendix A - Stakeholder analysis. C. Importance of Decision
The decision of whether to reduce price or launch new product line is important, and its implication will result in major consequences to Neptune. If the wrong decision is made such as reducing price, a significant loss in profit will harm Neptune in the short term while the negative effect will permanently destroy the brand image of Neptune in the long term. This will take Neptune years to recover.