Class Or Mass : Case Analysis

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Class or Mass – Case Analysis By John Scott A. Executive Summary Neptune Gourmet Seafood is facing two major issues – an excess inventory problem and shrinking contribution margins. Due to increased efficiency and investments in technologically advanced ships the company’s finished goods inventory has shot up to a 60 days supply – twice the normal level. In addition, the company’s margins have shrunk by 10% in the past year due to rising costs and growing competition. The company is looking to increase profitability and find a long-term solution to the inventory problem. My recommendation is for the company to stay focused on its main competitive advantage of supplying a high-end premium quality product. Neptune Gourmet should target new…show more content…
The main differences are summarized below:  Excess inventory – cut prices 50%, 10%, or not all  How to expand – new mass market brand or private label product  New Markets – Domestic or International (South and Central America) In addition, there are concerns about how competitors and the U.S. Association of Seafood Processors and Distributors will respond to their decisions. Neptune cannot afford to start a price war with its competitors and the risk of losing the Gold Seal of Approval could damage the reputation of the company. The analysis will focus on three questions – 1) the strategic direction for Neptune Gourmet 2) how to best utilize the excess inventory 3) maintaining and utilizing Neptune’s competitive advantage in the long term. A complete SWOT Analysis is provided in appendix C. D. Opportunities and Threats The case presents multiple possible opportunities for growth and expansion. The key questions to answer are where to expand and how to expand (see full market expansion grid in appendix D). One option is to target price-conscious consumers in the U.S through either private label products or a new mass- market line. The risk associated with this option is the possibility of cannibalizing sales of the higher priced product and starting a price war with competitors that would damage margins. In addition, a low priced
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