Invest in the growing sectors:
The proposal of the investment in the growing sectors like simple meals, low sodium heart healthy soups and dry soups was given by Srikanth Tipha, who is the Category Manager of the simple meals unit, so he made the strategy on his own unit ,he proposed the company should emphasize efforts in simple meals, low sodium heart healthy soups ,dry soups. This will happen by the advertising and promotion, so that the consumers can consume this type of soups. For this company should spend $18M in advertising.
With this proposal company brand image and the awareness of the product to the consumer will increases, then the consumer starts to consume the products because it is healthier and easy to prepare
Note: STAR PRODUCT= DRY SOUPS CASH COW =RTE SOUPS The company Acquire the Annabelle foods 5 years back which is in slow growing line but did not reach the expectations by the company’s forecast. In addition, This proposal clearly mentioned that promote Star product Leave the Cash cow, For the Star product, Promotion and advertising is most important. Cash cow is the investor for the promotion and advertising if they leave Cash cow behind the company will be loose the profits.
With this proposal the Brannigan’s foods net earnings will not increase instead of increasing it will decrease by 4%
Acquire product lines to complement the core in growing sectors:
Clark Mackey, Directory of finance & Planning proposed this proposal of acquiring the small companies, which having the growth in the market produces healthier and new flavor soups. He also mentioned 3 companies names which company can get profit by acquiring them, his guess is that by acquisition of any one company can get 1.5% to 3.5% to Brannigan foods sales within 5 years
No need to invest for R&D
If the brands are kept, there will be reduction in cannibalization.
Already bad experience in the Annabelle, Even though it is in slow gaining track, If they want to change in to their brand from acquire brands huge investment required for the promotion and advertising
With this proposal the Brannigan’s foods net earnings will not increase instead of increasing it will decrease by 7%
Invest in organic growth from internally developed new products:
Anna Chong, Chief innovation Officer proposed this proposal. She is very sure about her proposal can move growth back to 3-4% also reverse the market share and profit decline.
Her view is to Milk the cash cows and subsidize the investment of the star product with new flavors’ and innovative packages
New products with new ideas
No need to invest for acquiring a company
Avoid the risk in the production line
Not only the Baby boomers, they can target new segments
Launching 10 products in the market out of 10 one will be success in the market it will be heavy to the company
With this proposal the Brannigan’s foods net earnings will not increase instead of increasing it will decrease by 2%
Invest in the core:
Bob Pugh, Director of Sales and Marketing, He focuses on the core products one of the core product of the Brannigan food is RTE soups bobs proposed to bring back the Brannigan boys and girls love soup campaign to target younger generation which is the pressing need for the company. He proposed to spend $20mm in marketing to increase the brand awareness and also decrease price of core product to five cents.
Reduce risk of new product failure
By reducing the price of core product may harm the brand image.
With this proposal it seems to be profitable, and also we can see the net earnings will be increasing during the next 3 years
Which of the four-manager proposal should Clark favour?
By these four proposals made by his team, we think Clark should favour Bob Pugh’s proposal because that proposal is only concentrating on the core product which already kept the company in profit from declining and it reduces the production cost, There will be no cannibalization
Second best strategy:
The Bob Pugh’s proposal may not be the next cash cow, So Anna Chong proposal is the second-best strategy with different direction and also an interesting approach it is not only developing of the new products but also includes a heavy investment which will not affect to the new trends
The least strategy which Clark can approach is the proposal made by the Claire Mackey Acquiring the small companies why it is last pick because it involves heavy investment for acquiring and after that also for A;P it requires extra investment and also, they have an experience with the Annabelle Foods