Mass Or Class Analysis

1. Identification of the Issues

• What is the major opportunity/problem faced in this case?

• What are the major decisions that need to be made? What are the minor opportunities/problems that contribute to the major opportunities/problems?

The main issue in the case is the company will face an increase of the production and they need to be able to handle it without dramatically change the prices. A second problem is how to benefit from this situation (seafood harvest increase) and expand the company business and therefore the revenue. The alternatives would be drop the price, or try to start a second brand, less expensive.

2. External Analysis

• What are the major factors outside the organization that contribute to the major opportunities/problems?

• What are the major factors outside the organization that will influence your decisions?

One important outside factor is the tight competition and strict rules within this market segment. Neptune is seen as premium brand, having the prices sensibly higher than other players. If they drop the prices, the other competitors may gain advantage, because it will be easier for them to position their products closer to Neptune and get more market share. Dropping the price may also produce a counter-measure from the competition, and the results may be damaging for the entire market. The reality is that seafood customers are expected to pay a high price (comparing to a steak for example), and this fact should be also used in taking a decision.

3. Internal Analysis

• What are major factors inside the organization that caused the opportunities/problems faced by the organization?

• What are major factors inside the organization that will influence your decision?

The management was neglecting increase of the production for several months. They didn’t have any real plans on how to handle it. The immediate problem (to much supplies in stock) needs to be solved first.

A second factor we need to consider is the distribution area for Neptune’s products. I understood that they mainly focuses on the east coast and on line-cruisers. Still there is the Central US and West Coast left uncovered, and they can make use of their Premium brand name to expand in that areas without affecting the base price.

4. Alternatives

• List all of the possible alternatives to take advantage of the opportunities or solve the problems identified.

• List the strengths and weaknesses of each alternative.

Dropping the price is the first alternative. I do not support this idea because it will end up having loss in the sales (they didn’t actually doubled the production in order to support a 45% price cut).

They could start a second brand, targeting a low end consumer. I think this will destroy the Premium Brand Image because high end customers will be lost probably. For example (might be a bit exaggerated) if Rolls Royce would