Exotic Caribbean Mountain Pride LTD Expansion strategy Case Solution

Moreover, the existing production facility seems to be small however the company is competing with large manufacturers of cocoa products which include Cadbury drinking chocolate, Roma Cocoa and Grace Instant Chocolate Swiss Miss Milk Chocolate, Carlos’s chocolate, and Chief Cocoa. All these companies have time tested production facilities and made huge investments to achieve lean operations. 

In this regard, the Exotic Caribbean may invest in the production facility to expand its operations to achieve economies of scale. The large facility would require procurement of cocoa in bulk from the farmers thereby allowing the company to gain bulk discounts. Moreover, the investment in efficient operation facility would allow the company to eventually reduce its fixed cost and thereby cutting the per unit cost to the minimum. Resultantly, the company would be more efficient in this highly competitive market. It is also pertinent to mention that the old facility is causing trouble on account of ineffective or faulty production areas, for example, the cold storage is not efficient and frequently cost repair and maintenance expense. A new production facility would also allow Saunders to take care of these issues.