Ganong Bros. Limited (GBL) was founded in 1873 by two brothers in St. Stephen, New Brunswick and has gone through 4 generations of remaining a private family firm. The firm is an international company with exports to middle east and Japan. As well as a factory in Thailand. Over the past couple years GBL has shown a financial loss. GBL is a The board of directors consisting of 6 external members and 2 family members, have decided to give David Ganong, president of GBL, 6 weeks to come back with recommendations that would be able to restore the company to profitability and increase productivity. Objective:
As David Ganong, president of GBL, I need to come up with a recommendation to pass on to the board of directors to be analysed and hopefully passed upon further review. These recommendation will bring the firm back to profitability, as well as develope a new $10 million block of business increasing revenue by 50%. So as president I would like to look at options that involve maintaining the goal of the company and doing my best to keep Ganong Bros Limited privately owned and in the town of St. Stephens. Analysis:
Political: The Ganong company was doing fairly well before the free trade was involved in the industry. Before the free trade companies that wanted to come to Canada they had to pay a tariff as high as 15%. Where if a Canadian company wanted to move into the American market, they were able to do so on only having to pay a tariff of 5%-7%. With the free trade the Canadian industry lost that tariff differential.
Economical: Ganong Bros. Limited has a big focus on the economy in and around St. Stephens. They are always trying to make sure their community is driving the company.
Social: In the Canadian industry it has been effected by two social reasons. Those reasons are; a lower proportion of children in Canada, and that there is also a growing number of health conscious Canadians.
Technological: In the industry a company must reduce cost to earn a profit. In the late 1980s resulted in more efficient operations for most large and mid-sized firms. With the modernization of competing plants gave Ganong a key reason to build a new plant in St. Stephens. By creating this new plant it gave the firm more automation, more buying leverage for supplies and more volume to cover fixed cost. The industry also has a lot of seasonal operations because not every product was made year round. For the products that were only made seasonal it still maintained an overhead cost for the floor space that the equipment was located on. PORTERS 5
Threat of new entrants:
* High, with free trade it can allow any company to gain part of the market, and with 87 confectionery plants already in Canada it does not seem to be very hard to get into. Bargaining Power of suppliers:
* High for the suppliers of the cocoa because there is lots of manufacturers to choose from to sell their goods. Bargaining Power of buyers:
* High, for customers because there is many different types of chocolate to choose from. Threat of substitute:
* Being involved in the junk food industry there is a high threat of substitutes for chocolate. Consumers can choose to go for candy, chips, or be healthy and stay away from chocolates. Rivalry among existing competitors:
* Rivalry is high due to many competitors focusing on the same market and production. Complementors: With being in the confectionery industry there is a few thing that compliment the industry. This industry goes along with holidays and birthdays as well as special events can compliment Ganong. Competitive Advantages: GBL focuses on a community driven company. They are also one of the first companies to sell the heart shaped box for valentine's day with having a 30% m market share for that day. GBL is also Canada`s oldest confectionary company and they are a strong player in the boxed chocolates. They are known as...