IMSciencesThe Craft Food, INC.

By: Waqas AhmadMBA 1.5

The Craft Food Inc

• The Craft Food Inc. is an international diversified (150 countries in

the World) company dealing in the foods and dressing products.

• The company currently consists of five operating segments

Snacks, Beverages, Cheese, Grocery and Convenient meals.

• Total Sales $42,201 Millions and net income is $1.95 Millions.

Harold Wallace• Founder, serves as Chairman and President of the

Wallace Group, owns 45% of the outstanding stock.

• Several years ago, Wallace and the Board embarked

on a strategy of diversification into plastics and

chemicals in order to decrease the company’s

dependence on defense-related business.

• Presently, the morale within The Wallace Group has

deteriorated.

• Wallace has hired Frances Rampar, a management

consultant, to conduct a management survey into

the problems facing The Wallace Group.

Internal and External Analysis

SWOT Analysis

Strength Weaknesses

Diversification Decreasing distinctive competence

Latest technology Scarce technical personnel

Well-integrated Leadership

Good reputation

Opportunities ThreatsPotential in market Competitors

 Internal Strategic Factors Weight Rating Weighted Score

Strengths      

Diversification .10 3 .30

Good reputation .10 3 .30

Latest technology .20 4 .80

Well-integrated .10 4 .40

Favorable market niche in electronics .05 3 .15

 Weaknesses 

Decreasing distinctive competence .05 1 .05

Scarce technical personnel .10 2 .20

Heavy dependence on government contracts .10 2 .20

Unprofitable chemical division .10 2 .20

Leadership .10 1 .10

TOTAL SCORES 1.00   2.70

IFE Matrix

Interpretation (IFE)

• The IFE total weighted score is 2.70 which is above the

average score of 2.5, indicate that the company has strong

internal position, which mean that the company has the ability

to minimize his weakness and properly utilize their strength.

External Factor Evaluation (EFE) Matrix

External Strategic Factors Weight RatingWeighted

ScoreOpportunities

 

     

Potential in market .70 3 2.1

 Threats  

Competitors .30 3 .90

       

TOTAL SCORES 1.00   3.00

Interpretation (EFE)

• The EFE total weighted score is 3.00 which is above

the average score of 2.5, indicate that the company is

responding in an outstanding way to existing

opportunities and threats in its industry. In other

words, the firm’s strategies effectively take advantage

of existing opportunities and minimize the potential

adverse effects of external threats.

Competitive Profile Matrix (CPM)

• CPM is not applicable in this case study due to the insufficient information.

Problems

Minor Problems

• The firm does not have a clear mission.

• Company heavily dependent on defense-related business

• Poor organizational design creates span of control

problems and results in poor operations.

• Unprofitable chemical division needs new management

or it needs to be analyzed for sale to someone else.

Major Problem• Lace of Leadership

Harold Wallace is found to be the major problems because:

– Some of the employee stockholders made an attempt to force Wallace’s

resignation.

– Tremendous dissatisfaction among management and employees resulted

from Wallace’s failure to delegate to subordinates and a lack of clear

strategies or long term plans, goals, or objectives.

Alternative Strategies

TOWS Analysis or SWOT Matrix

  Strengths – SS1. Diversification

S2. Good reputation

S3. Latest technology

S4. Well-integrated

Weaknesses – WW1. Decreasing distinctive

competence

W2. Scarce technical personnel

 

Opportunities – O 

O1. Potential in market 

S2O1

S3O1

W1O1

W2O1

Threats – TT1. Competitors 

S2T1

S3T1

S4T1

W1T1

W2T1

Interpretation (TOWS)

• S2O1: Through product development they can increase there market shares

(Product Development)

• W1O1: If Wallace Group able to maintain their distinctive competence they

can take advantage from market potential. (Market penetration)

• S4T1: The Wallace Group has Well-integrated they are able to supply many

of its own component parts and raw materials. (backward integration)

• W1T1: If they introduce new product in the market they may able to avoid

the threat of competitors. (Product development)

SPACE MatrixFinancial Strength (FS)

Cash flow : 5 Liquidity : 4 Leverage : 3

Competitive Advantage (CA) Market share : -2 Customer loyalty : -3 Control over suppliers & distributors : -3

 

Environmental Stability (ES) Technological changes : -3 Competitive pressure : -3 Barriers to entry : -4

 

Industry Strength (IS) Growth potential : 5 Profit potential : 3 Ease of entry into market : 2

 

Y axis: FS + ES 4 + (-3.33) = 0.67

X axis: IS + CA3.33 + (-2.66) = 0.67

FS+6

+1

+5+4+3+2

-6-5-4

-3-2-1-6 -5 -4 -3 -2 -1 +1 +2 +3 +4 +5 +6

ES

CA IS

Conservative Aggressive

Defensive Competitive

The company is in an excellent position to use its internal strengths to take advantage of external opportunities, overcome internal weaknesses, and avoid external threats.

SPACE Matrix

BCG Matrix

• The Boston Consulting Group (BCG) Matrix is not applicable

in this case because the information require for BCG matrix in

not available in the case study.

IE Matrix

I

II III

IV V VI

VII VIII IX

4.0

3.0

2.0

1.0

EFE

Wei

ghte

d Sc

ores

IFE Weighted Scores4.0 3.0 2.0 1.0

Hold and maintain stage, Market penetration and product development strategies are the appropriate strategies for this division.

Quadrant IV1. Concentric diversification2. Horizontal diversification3. Conglomerate diversification4. Joint ventures

Quadrant III1. Retrenchment2. Concentric diversification3. Horizontal diversification4. Conglomerate diversification5. Liquidation

Quadrant I1. Market development2. Market penetration3. Product development4. Forward integration5. Backward integration6. Horizontal integration7. Concentric diversification

Quadrant II1. Market development2. Market penetration3. Product development4. Horizontal integration5. Divestiture6. Liquidation

RAPID MARKET GROWTH

SLOW MARKET GROWTH

WEAK COMPETITIVE

POSITION

STRONGCOMPETITIVE

POSITION

Grand Strategy Matrix

Recommended Strategy and Plan of action

Quantitative Strategic Planning Matrix Strategic AlternativesKey External Factors Weight Product development Market penetration

Economy 0.30 2 0.6 3 0.9

Political/Legal/Governmental 0.10 1 0.1 3 0.3

Social/Cultural/Demographic/

Environmental0.10 4 0.4 2 0.2

Technological 0.20 2 0.4 2 0.4

Competitive 0.30 2 0.6 2 0.6

1.00    

Key Internal Factors

Management 0.20 2 0.4 3 0.6

Marketing 0.20 3 0.6 2 0.4

Finance/Accounting 0.10 2 0.2 4 0.4

Production/Operations 0.20 3 0.6 3 0.6

Research and Development 0.10 2 0.2 3 0.3

Computer Information Systems 0.20 2 0.4 3 0.6

Total: 1.00   4.5   5.3

Recommended Strategy and Plan of action

• Market Penetration– There have enough potential in the market

• The Wallace Group needs to increase the number of salespersons, increase advertising expenditures, offering extensive sales promotion items, or increase publicity efforts to capture more market shares.

Thanks