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Prince Edward Island Preserve Company: Turnaround Case Solution

Solution Id Length Case Author Case Publisher
1372 1064 Words (4 Pages) Paul W. Beamish, Nathaniel Lupton Ivey Publishing : 908M49
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The company PEI Preserves was progressing quickly because of its efforts in the promotion of the company and the developed company positioning in the market. However, the company, in order to grow was faced with decisions to diversify even further than its diversification in its product line. The company had diversified into hotels and coffee shops that were related to the essence of the brand related to food. However, the company had faced with some failed attempts at diversifying into other segments. This had caused a distraction among the top management of the business, and they could not keep up with the repayments that had to be received from the creditors. As a result, the company was operating in a deficit. The company then agreed to go into a phase of receivership that included collecting receivables from creditors.

Following questions are answered in this case study solution

  1. Why did PIEP go into receivership in 2007?

  2. Assess the financial viability of PIEP’s operations (i.e. retail, mail order, wholesale, Japanese export, cafe and gardens).

  3. What is your assessment of the pros and cons of each growth alternative? What product market would you choose to pursue and why? What, if any role, should the organic product line play in the company’s overall strategy?

  4. What expansion opportunities should PEIP pursue? Please develop an implementation plan for your chosen alternative. If more than one option is viable, which option should PEIP pursue first?

Case Analysis for Prince Edward Island Preserve Company: Turnaround Case Solution

Furthermore, the analysis of the situation is that it also had a turnover in its book-keeping department with four account keepers changed in the year. With the company’s aim of growth and the unstable conditions in the collectable department, the company had failed to receive money from the creditors. This shows that growth requires that there be infrastructural development in the company. This includes developing a trained and well-managed staff in the company that would be able to sustain the changes in the company due to growth.

2. Assess the financial viability of PIEP’s operations (i.e. retail, mail order, wholesale, Japanese export, cafe and gardens).

The first option available for PEIP for its operations was the retail function. The retail function was a threat to the brand name of the company, and there were no specific promotional activities done at the retail stores since retailing was outsourced. Even then, the retail function has a good financial viability because of the fact that it increases the reach of the products. Apart from that the mail order service has a financial viability attached to developing knowledge among the customers. However, through this operation, knowledge can only be spread amongst the people who visit Prince Edwards.

Furthermore, the third operation is wholesale exports to the Japanese market. The profit margins for the company in this operation are low. This makes it less viable for the company even though the opportunity for sales in that market is high. If the company began to increase its plantation in Japan as well as its own retail outlets, the costs would decrease because the margins given to the retailers would decrease. The fourth opportunity that the company has for its operations is the café and gardens that the company purchased. The financial viability of this segment is low because of the people not willing to pay for recreational activities such as the activities launched by the company.

3. What is your assessment of the pros and cons of each growth alternative? What product market would you choose to pursue and why? What, if any role, should the organic product line play in the company’s overall strategy?

The company had four options of existing operations of the company out of which it could choose one to expand in. The Japanese market had a high demand for high quality fruit preserves that was the main offering of the company. The pros of this alternative would be a higher level of sales in the Japanese market because of the pull factor demand. The con, however, is the low level of margins gained from this market. The second alternative is expanding retail and allocating time to it to implement the testing system at retail outlets to ensure that the company promotes itself according to set quality standards. The pro of this alternative is a high level of coverage and word-of-mouth marketing for the company that was the main source of marketing for the company apart from brochures given to the vacationers. The con of this alternative is again the high level of retail margins and finances spent on the facilities of testing implemented across various retail outlets.

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