Pei Preserves Case

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Executive Summary
TO: Bruce MacNaughton, CEO, Prince Edward Island Preserve Co. Ltd. FROM: Courtney Datema, Consultant
DATE: March 28th, 2011
RE: Whether to Expand Retail, Wholesale, or Mail Order

After a profitable year following the repossession of Prince Edward Island Preserve Co. Ltd. (P.E.I. Preserves), I have assessed a number of issues that need to be addressed in order to continue being profitable and come up with a feasible product-market strategy. The corporation as a whole lacks a clear strategy and includes a number of operations unrelated to their main focus of manufacturing and retailing preserves. Because of the wide range of operations, you are being overworked and not all segments can be properly attended to. Also, the seasonal nature of manufacturing preserves and retailing in tourist season causes for difficulties in finances and employment.

The alternatives for review are the following: expand retail, expand wholesale, expand mail order, hire a sales representative, increase vertical integration of all operations, extend product lines and rent out the factory. I recommend you hire a sales representative to take on wholesale operations, that you drop mail order operations, and that you invest the majority of your time and efforts towards retail, while increasing the vertical integration of the remaining segments. You should also try to rent the factory out during off-season and maximize manufacturing capacity in-season. I am confident that implementing these changes will cause the P.E.I Preserves to see continued profits and growth. TO: Bruce MacNaughton, CEO, Prince Edward Island Preserve Co. Ltd. FROM: Courtney Datema, Consultant

DATE: March 28th, 2011
RE: Whether to Expand Retail, Wholesale, or Mail Order

Prince Edward Island Preserve Co. Ltd. (P.E.I. Preserves) has recently experienced some difficult times after going into receivership in 2007. Since your repossession of the business, however, fiscal year 2008 has experienced a small profit due to a focussed turnaround. The company is currently divided into a number of different segments; restaurants, retail, wholesale, mail order, and a garden. The greatest sales and income can be attributed to your successful retail portion of operations. I will be assessing whether you should expand the retail, wholesale, or mail order segments of the company and recommending a viable product-market strategy.
Problem Identification
Before deciding which segment of the business to expand, I have outlined a number of problems to be addressed when making this decision. I noticed that the corporation lacks a clear strategy and is committed to a wide range of operations, some unrelated to the main activity of producing and marketing preserves. As an extension of this issue, I also believe you, Bruce MacNaughton have overextended yourself trying to singlehandedly manage all of the operations. Lastly, the company is not currently structured to successfully deal with the seasonality of the business.

Problem Analysis
Lack of Clear Strategy
P.E.I. Preserves has a broad range of operations within its corporation. While I applaud your willingness to take risks with different outlets for expanding the company, there is a lack of vertical integration throughout all aspects of the corporation. With the main operations revolving around manufacturing and retail of specialty food products, it is difficult to see where restaurants and gardens fit into the organization. With a number of failures of specific retail outlets and restaurants as well as an unsuccessful acquisition of an unrelated company, I see there is a lack of clear strategy. While you are doing a great job promoting P.E.I. as “Canada’s Garden Province” and the “little jewel that was in everyone’s heart” through these individual operations, there is not enough coordination among them all.

Overextension of Work Efforts
Your commitment to P.E.I. Preserves and...
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