MGT 599 Week 5
Over the last few years Willie’s Candy Company has been experiencing flat sales and earnings without growth. They have been able to maintain these sales with aggressive pricing and trade incentives of their two most popular products, Willie’s Yummy Chews and Willie’s Sour Straws. Although they have attempted to introduce new products in the past, those products were just unsuccessful. As the strategy consultant to the executive committee of the company, I will evaluate the committee’s ideas and offer my strategic expertise and recommend a plan to increase sales and growth in the future.
The CEO, Chester Wonka III, suggest that we merge with a much larger Swiss company. He has suggested related diversification. Related diversification is when a business adds or expands its existing ...view middle of the document...
Although this will broaden our product portfolio, it will also put us in a lot of debt, due to all the debt issuances from Silverman Fuchs to purchase these smaller companies. But how will we grow if we are putting ourselves deeper in debt? And why would we want to lower our investment rating? With all this new debt our investment rating would lower tremendously.
Our Executive VP of Marketing, Megan Lee has suggested revamping our marketing efforts. We should not merge nor put ourselves deeper in debt by purchasing other smaller companies, but instead invest in our own marketing department, by increasing our advertising and adding more resources to our new product development department. This will allow us to become more profitable in the marketplace and add a new and improved face to Willie’s Candy Company.
The COO, Robert Johnson, is all about cutting our cost. He wants to outsource some of our operational functions, reduce our headcount and streamline our operations. This will allow us to save money and possible see profit growth in the future. But on the other hand his plan is limited. It only allows us to cut our expenditures, but what about a strategy to increase our profits? Although cutting cost is always good, we must do something more to increase the profits of our current product as well as successfully launch new products.
After carefully evaluating all of the executives’ ideas, I have come to the conclusion that the best option is the ideas of our Executive VP of Marketing, Megan Lee. We should definitely invest in ourselves by revamping our marketing efforts, advertise more and provide new and more resources to create new products. We should also advertise our two hottest products with new and improved packaging as well as new and improve taste. This would prove that we are competitive in the marketplace and increase profits year after year.