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Case Study - The Oscar Meyer Company


Also according to forecast given by Rob Goodman, pound volume of white meat will be raised to 305pounds and the revenue be decreasing by $2million. Also if the company sustain the demand rate of white meat by around 10% the total production of 305mpounds seems like a sticky wicket. By concentrating on one division the president might succeed in alienating the other divisions and increasing the hostilities among them. Also for increase in marketing and promotion the amount proposed was 22 million, which is on the higher side according to us. This is because there is no guarantee of return on it in the long run as there is uncertainty on the success rate of new products, ( turkey based bacon etc), to be launched.
             Alternative 2.
             The second solution was given by Jane Morely. She was the director of Finance and Planning. She suggested going for acquiring strategy, to acquire small firms that make healthier products. She even shortlisted three firms for Marcus. Her idea was to regain the large proportion of market share again.
             Analysis.
             The group was not totally convinced by this solution as the acquiring strategy has its own drawbacks. There is always an uncertainty of not knowing how the acquired division would perform. Also as calculated by Jane the annual debt to be paid would be around 3 million, which can spell trouble for the company already experiencing decline in sales. The three shortlisted companies did not have much common with Oscar Mayer in terms of technology used. Turkey Time Ltd was the closest to them in terms of technology used. Acquiring other firms also causes cultural clash which would take time to get addressed. Obviously acquiring new firms also has its benefits like expansion and innovating new products but the risks at the moment outweigh the advantages in our humble opinion. This again boils down to the fact of expanding the LP which again emphasizes on white meat and not on red meat as well, this suggestion is focussed on increasing the market and thereby increasing the operating income.


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