Overview Of the Case

Oscar Mayer Product(Red Meat Products)

Louis Rich Category(White Meat Product)

Ready to Eat(New category)

Rob Goodman - Louis Rich Manager

Emphasized on backing Louis Rich Category and up the Advertising budget by $ 22 Million.

Boost the brand awareness of Louis Rich Products.

Introduce new products like LR Turkey Bacon.

Jane Morely- Finance and Planning

Suggested that the company should take a risk and reach out for new investments for Louis Rich Inc.

She narrowed it down to chicken Rite Inc. Turkey Time ltd, Crabbies Inc. each of these have sales of roughly $15MM.

Turkey time Ltd seemed to appeal more as it could help in LR expansion.

Jim Longstreet –Management Team

Jim Longstreet, is of opinion that the best option would be to invest in a new category and has two new ideas- Zappetites and launchables.

Out of the two, R&D is more hopeful about zappetites and thinks it could be ready to sell early next year.

Launchables on the other hand is still in the thinking stage, he thinks it will be a convenient and logical step ahead for the company.

Eric Stanger - VP of OM Brand

For the last 2 years there has been a decline in the sales and relative market share of Oscar Mayer products

He recommended- Price cut of 10% for top 3 OM products. Increase in Advertising budget. R&D for Low fat Oscar Mayer Products. Cover up Price Reductions : Analyze capacity.

Investment Issue

Which of the recommendations should he follow? Which brands should he back? How does competition look in the various categories? Relative Market Share of various categories Market growth potential for various categories? How much of risk to take? R&D Investment of how much and where?

If McGraw chooses a strategic direction that favors only one department, what negative effects could this have on the other departments? How can the damage be mitigated?

If he backs OM Brand: future uncertain, decrease in profits and it’s a mature category with

no built in growth, Competition is catching up LR Brand: potential for growth, requires investment in R&D and advertising, has

to keep up with competition Ready to eat category( Zappetites, lunchables): investment for R&D, Future

uncertain, have already faced loss in frozen food channel(Stuff n burger)

Acquiring Turkey Time: investment risk If McGraw Backs any one department only , he faces a huge risk as OM

contributes majorly to the profit share right now, but the market share is declining and the future of the other 3 are unknown he might end up in losses long term.

Effects of competition on OM Division? How does this impact investment decision?

Reduction in relative market share, hence reduction in profits. Customers moving to white meat category.

Investment Decision: If McGraw backs OM completely there is no guarantee that

OM will be able to get back to its former stage of high market share and improve its profits.

If McGraw does not back OM adequately , OMs market share and profit will decline at a faster rate , even before any of the other 3 can launch and make profits.

Which departmental directions are most viable? Which second best strategy? Which is least viable?

Most Viable: Louis Rich Department.

Second Best: R&D for Zappetites.

Least Viable: Acquiring Turkey time.

Our Strategy Recommendation

Invest for OM products R&D, advertising in order to maintain market share and profits.

Invest in Louis Rich Products advertising and introduce new products.

R&D for Ready to eat meals.

Which of Jim Longstreet’s new product ideas is less likely to

succeed? Why?

Lunchables Because of high fat content due to cheese, chocolate.

Lack of Bread in lunchables.

High salt content – crackers.