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The firms objectives include the following: 1) Provide great tasting foods made with the highest quality

ingredients, 2) Build and maintain strong brand values while delivering great customer service, 3) Turnaround the company into a successful business. These are the objectives we must keep in mind when determining a future strategy for the company. Recommendation: In order to achieve its objectives, PEI Preserves should focus its efforts on the following a specific product-market strategy. The company should sell jams, condiments, teas, and other food items produced for the gift and gourmet specialty food markets. These products are to be sold in its local retail stores, restaurants, shipped globally through mail/online orders (discussed further below), and by wholesaling the product both within Canada and exporting to Japan. The target market is conscious of quality and willing to pay a premium price for a better product. The firms business system focus is on manufacturing the products and bringing them to market through various distribution channels such as those currently in place. The firms strategy to attain a competitive advantage is one of product differentiation. They have a high variety in their product line, especially for a smaller company competing among the food production behemoths. PEI Preserves carries over 80 items, 60 of which are made by in-house. They maintain this advantage through product quality (much higher fruit content than the typical grocery store product, special ingredients such as champagne, liqueurs, etc.), brand power, and customer service. The company should pursue the stated strategy and expand into markets that have a demand for gifts and high end specialty food items, while phasing out the less profitable channels of the business - specifically, the Gallery and Tea Room, and Garden area. With combined projected revenues at around $15,000, these channels generate only .8% of overall projected sales from all streams of business. Eliminating them could allow the company to re-focus its resources (managerial, labour costs, capital, etc.) to more valuable channels. Specifically, the firm should increase capacity utilization to meet the forecasted increase in tourist demand (as a result of an increase in cruise ship passengers), the demand from wholesalers across Canada, and major demand in the Japanese market. Growth would involve making more efficient use of current capacity and hiring more managerial staff to run the operations and labour staff to increase output. To make mail orders more profitable, it can be phased into an online-ordering system which would eliminate about $30,000 in expenses (mostly catalogue printing costs), or roughly half its cost. Moving online would also increase the number of potential buyers and would open up free advertising potential via websites such as Facebook. An online ordering system should also serve to predict more accurate shipping charges, which would allow the company to achieve its break-even point on shipping costs, rather than overspending as it has been doing. Rationale: PEI Preserves lack of a solid product-market strategy resulted in confusion and needless diversification leading to insolvency in 2007. The way to fix this is by removing the lowest performing practices and introducing the company with higher ones. Competition exists in other firms that provide gift, gourmet products and specialty food items, both locally and globally. It is necessary for the firm to achieve a competitive strategy through product differentiation since, due to the high quality of its products, the company cannot compete on price. Considering the new shipping port opening near the firm, the presence of untapped potential in the wholesale market, and a viable opportunity for expansion into the Japanese market, the company should focus on expansion and growth. Expansion into the Japanese market would represent large increases in the companys net income. Based on an expected order of 2 shipments of 90,000 bottles (plus one order of 90,000 bottles already placed), the Japanese exports would represent a near 30% increase of PEI Preserve Companys net income ($1 margin per bottle, 3 shipments of 90,000 bottles each, 270,000 bottles x $1 margin = $270,000 net income from Japanese Exports; Japanese Exports / Current Net Income = 270,000 / 936,018 = 28.85%). However, the firm should not currently invest in a new factory to increase production since it is already heavily in debt. The company only runs 1 shift a day, 5 days per week, and only 50 % of capacity is used. Beginning immediately, the factory should run more shifts per day and run the factory 7 days a week. The firm must invest in human capital in order to take advantage of opportunities available to the firm. The firms CEO has admitted to managerial constraints and complained that, [he] hasnt had a vacation in years, and that, [he] is unable to pursue all of the ideas he had for developing the business. The CEO spends 40 % of his time dealing with operational issues regarding the restaurants. Furthermore, wholesale opportunities are not fully taken advantage of since the firm lacks sales managers to visits purchasers and trade shows and effectively market the product on-site across the nation. By foregoing Bruces licensing idea, it affords him more time to work on the core business rather than further diversification which may be seen as needless and confusing to the consumer. Should he go through with licensing out the brand name, much of his time will be spent overseeing an operation that would take away from his core business, perhaps reducing the quality of his main products in the process.