Branningan Foods: Strategic Marketing Planning Case Solution

2. Introduction and Problem Statement

Brannigan Foods Services Inc is a United States based company, which mainly offers its services in an extensive range of industries such as event management and catering. It is a private limited company that was founded in 1998.

Four different strategic alternatives are proposed by the team members of Brannigan Foods. The general manager and vice president of Brannigan Foods, Bent Clark is faced with various options that need to implemented in order to gain recover from the steady decline in the overall industry. Moreover, the decision must be based upon the idea to increase the sales of the divisions, market share of the company and the profitability (David). The company’s profits have shown a declining trend over the last three years. Bent Clark needs to increase the company’s growth to 3-4 percent bracket by the end of the current fiscal year. It is important for Bent Clark to choose and implement among the options available to him to turn around the situation faced by the company. Any delay will further magnify the problems and losses faced by the Brannigan Foods (Weng and de Run).

3. Situational Analysis

i. Current Scenario

The company needs to come with a strong strategy to halt the current trend. To evaluate various options at hand various analytical models such as Porter’s five forces model and SWOT analysis to assess the feasibility of options available to the company.

ii. Porter’s Five Forces Model

Porter’s five forces model is used to critically analyze the effects of microenvironment on the operations of Brannigan Foods.

Rivalry among Competitors

Brannigan Foods is faced with a high level of competition by various other companies operating in the same industry. The competition is intense on the basis of price, taste, quality, product innovation and health factors involved. Secondly, various private labels have started to pose a threat for Brannigan Foods because retailers are providing cheaper products and brands (Lewis and Slack).

Threat of New Entrants

The threat of new entrants is not very strong because there are already well established strong companies operating in the industry. Also, new entrants would need strong investment for high levels of promotion and advertising brand awareness and are faced with high difficulty to create shelf space (Weng and de Run).

Threat from Substitute Products

It can be established that threat from substitute products is very high because of the fact that there are various other fast food restaurants that offer similar types of products. Moreover, the change in trends suggests that people prefer to go to dine at restaurants more frequently than availing the services of a caterer (Biemans).

Bargaining Power of Buyers

Customers enjoy high bargaining power because of their constant demand for new players and innovative products. At the same time, customers also demand these products at lower prices, which put more pressure on the companies competing for market share (Armstrong and Kotler).

Bargaining Power of Suppliers

It can be assumed that suppliers have a little power intact with them because the final product highly depends on the quality of raw materials provided by them. Secondly, suppliers can also intensify the competition by raising their price bars. Therefore, Brannigan Foods must build strong relationships with its suppliers to achieve a win-win situation (M. E. Porter).

iii. SWOT Analysis

SWOT analysis is conducted to closely understand and evaluate the weaknesses, strengths, threats and opportunities of Brannigan Foods to realize new possible strategies and implementation plans available to the company.

Strengths

The biggest strength to Brannigan Foods is the fact that it is the present market leader in the industry with the highest market share. In addition to that, Brannigan Foods has managed to establish a strong brand awareness of its products in the mind of consumers. Its brand awareness strategies have managed to produce favourable results in the past, as well. Lastly, its range of ready to eat and condensed soups highly reflect the American culture. Therefore, these product classes are highly accepted by consumers (Voulgaridou).

Weaknesses

The fact that its sales have decreased significantly over the last three years portray the biggest strategic weakness of Brannigan Foods.  Secondly, Brannigan Foods’ failure to target new market segments on the basis of society’s values and behaviours depicts the company’s weakness in the strategic department. It can be assumed that the company lacks a good communication channel between different departments because of the disintegration of different teams from each other (David).

Opportunities

On the other hand, Brannigan Foods does not have many opportunities at its disposal to gain advantage from. Firstly, the company can improvise its product line by introducing innovative new products. These products should be aligned with consumer needs and demands. Such innovative products can help the company in boosting its sales to the target levels (Pathania, Moretti and Currie). Secondly, Brannigan Foods can gain competitive advantage over other players in the industry by making strong and creative solutions with the retailers. This will not only reduce the bargaining power of suppliers for Brannigan Foods, but it will also create a win-win situation for the two parties.

Threats

The main threat faced by the company is posed by private labels that are steadily growing their position to seek shelf space. This reduces the share of shelf space available to Brannigan Foods (Reitsperger and Daniel). Secondly, a lack of coherent segmentation, positioning and targeting has resulted a gap between the consumer needs and products offered by Brannigan Foods.

4. Alternatives and Evaluation

This section of the report will enable to present the advantages and disadvantages of the four options available to Brannigan Foods.

i. Invest in the Growing Sectors

The director of the Simple Meal Unit, SrikantTipha, proposed that the company should emphasize and focus its efforts in the Dry Soup, Simple Meals Unit and Heart Healthy Soups divisions. The director also suggested that the company should increase its investment in advertising by 18 percent.

Advantages

The proposed strategy emphasized upon the brand and products that specifically target to the growing segments of the market. Also, the strategy has a strong potential to succeed as consumers are shifting to healthy lifestyles and quick to cook meals in their busy schedules.

Disadvantages

The core disadvantage of this strategy is that it only focuses upon star products of the company. However, it is necessary for Brannigan Foods to put emphasis on its cash cow products because such products generate profits that invested to promote the start products.

ii. Acquire Product Lines to Complement the Core Growing Sectors

The director of Planning and Finance, Claire Mackey, proposed the idea to buy out several small companies so that Brannigan Foods can expand its business into convenient and healthier segments of the market that will provide new flavours to the consumers. The company lacks these new flavours in its current product portfolio.

Advantages

The acquiring of different businesses seems to be a profitable strategy as the investment put in by Brannigan Foods in research and development is zero. In addition to that, not only this strategy will enable Brannigan Foods to avoid the cannibalization of its brands but it will also help the company to grow its market share.

Disadvantages

This strategy requires a major investment so that the company can acquire a new business. On the other hand, if not dealt out effectively, this strategy can backfire if the resultant synergies are not stable. Also, the company did not have any good experience in the past when it acquired Annabelle’s product line.

iii. Invest in Organic Growth from Internally Developed New Products

This strategy was proposed by Chief Innovation Officer, Anna Chong, in which she suggests that the company must begin to invest in research and development along with other divisions such as promoting and advertising its new product launches. She identifies that the company must invest in the profitable products to generate increasing revenue.

Advantages

The main advantage of this strategy is its originality of ideas. Also, the strategy is easy to implement with little cost attached to it. The innovations are feasible and accomplishable as they are mostly related to the addition of new products, packaging and usage as these features fully comply with the demands of consumers.

Disadvantages

The major problem with this strategy is that the risk of failure attached is quite high as one in ten innovative and new products are able to make their mark successfully. As a result, the cost of the remaining nine products can be quite large. Secondly, introducing new products will pose a new challenge of attaining shelf space for these products.

iv. Invest in Core

The strategy proposed by the director of Sales and Marketing, Bob Pugh, focuses around the idea of increasing the marketing spending by $ 210MM. He was of the opinion that this strategy will help the company to increase brand awareness. Also, he suggested that the price of Ready to Eat soups if reduced by 5 cents along with an investment of $22MM in capital will enhance the overall efficiency of production plants while cutting down the production costs.

Advantages

The advantages that this strategy will bring include the fact that implementing this strategy will reduce the risk associated with the new products as this strategy tends to focus only upon the core products in the portfolio such as Ready to Eat products.

Disadvantages

On the other hand, the resultant reduction in price will negatively impact the image of the premium brands of Brannigan Foods. Also, the investment required to implement this strategy is quite large. It is necessary to understand that large investments do not confirm the success of the strategy.

5. Recommended Solution, Implementation and Justification

This part of the report caters to suggest the optimum alternate available to Brannigan Foods to overcome the difficulties that it is facing in its Soup Division. After carefully evaluating each and every four alternatives, in the above section, which are available at the disposal of the vice president of CEO of Brannigan Foods it can be, established that no single strategy on its own is capable of producing the desired results. This means that to achieve steady growth and generate stable profits in the long, the company needs to develop a blend of strategies to overcome the frequent fluctuations occurring in the market.

However, to choose one option from the given four possible alternatives, it is recommended to Bent Clark must decide to improvise and implement strategy four, which suggests that the company should invest in its core. After deeply analyzing the options, this strategy has the potential to generate profits in the long run. Moreover, if the company flourishes in successfully implementing this option then it will also bring other benefits such improving brand health, brand perceptions and brand equity in the minds of consumers. These factors along with increasing profit will able the company to achieve its target growth level. Moreover, it will further strengthen Brannigan Foods position in the market as it will manage to make its mark in the ever changing and frequently fragmenting consumer market.

As managers from different departments have helped Bent Clark to get the holistic view of the overall scenario faced by the company, it is necessary to understand the importance of reinforcing the cash cow of the soup division, i.e. the Ready to Eat Soups. In addition to that, being a market leader in the industry Brannigan Foods must invest in the research and development division to cater to the changing needs and demands of the customers due to changing market trends.

It is of great significance to invest heavily in the marketing of Ready to Eat soups to make sure that the brand becomes stronger in the market. Furthermore, investing in the marketing of this brand will help the company to be able to continuously finance its products that are generating break even or slight profit margins. Such generation of finance from Ready to Eat Soup will also help in making these low level products to become cash generating star products in the future if the market experiences strong growth.