Ganong Bros. Limited Sample Essay

Ganong Bros. Limited ( GBL ) was founded in 1873 by two brothers in St. Stephen. New Brunswick and has gone through 4 coevalss of staying a private household house. The house is an international company with exports to middle E and Japan. Equally good as a mill in Thailand. Over the past twosome old ages GBL has shown a fiscal loss. GBL is a The board of managers dwelling of 6 external members and 2 household members. have decided to give David Ganong. president of GBL. 6 hebdomads to come back with recommendations that would be able to reconstruct the company to profitableness and increase productiveness. Aim:

As David Ganong. president of GBL. I need to come up with a recommendation to go through on to the board of managers to be analysed and hopefully passed upon farther reappraisal. These recommendation will convey the house back to profitableness. every bit good as develope a new $ 10 million block of concern increasing gross by 50 % . So as president I would wish to look at options that involve keeping the end of the company and making my best to maintain Ganong Bros Limited in private owned and in the town of St. Stephens. Analysis:

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Political: The Ganong company was making reasonably good before the free trade was involved in the industry. Before the free trade companies that wanted to come to Canada they had to pay a duty every bit high as 15 % . Where if a Canadian company wanted to travel into the American market. they were able to make so on merely holding to pay a duty of 5 % -7 % . With the free trade the Canadian industry lost that duty derived function.

Economic: Ganong Bros. Limited has a large focal point on the economic system in and around St. Stephens. They are ever seeking to do certain their community is driving the company.
Sociable: In the Canadian industry it has been effected by two societal grounds. Those grounds are ; a lower proportion of kids in Canada. and that there is besides a turning figure of wellness witting Canadians.

Technological: In the industry a company must cut down cost to gain a net income. In the late eightiess resulted in more efficient operations for most big and mid-sized houses. With the modernisation of viing workss gave Ganong a cardinal ground to construct a new works in St. Stephens. By making this new works it gave the house more mechanization. more buying purchase for supplies and more volume to cover fixed cost. The industry besides has a batch of seasonal operations because non every merchandise was made twelvemonth unit of ammunition. For the merchandises that were merely made seasonal it still maintained an overhead cost for the floor infinite that the equipment was located on. Porters 5

Menace of new entrants:
* High. with free trade it can let any company to derive portion of the market. and with 87 confectionery workss already in Canada it does non look to be really difficult to acquire into. Dickering Power of providers:

* High for the providers of the chocolate because there is tonss of makers to take from to sell their goods. Dickering Power of purchasers:
* High. for clients because there is many different types of cocoa to take from. Menace of replacement:
* Bing involved in the debris nutrient industry there is a high menace of replacements for cocoa. Consumers can take to travel for confect. french friess. or be healthy and remain off from cocoas. Rivalry among bing rivals:

* Rivalry is high due to many rivals concentrating on the same market and production. Complementors: With being in the confectionery industry there is a few thing that compliment the industry. This industry goes along with vacations and birthdays every bit good as particular events can congratulate Ganong. Competitive Advantages: GBL focuses on a community driven company. They are besides one of the first companies to sell the bosom shaped box for valentine’s twenty-four hours with holding a 30 % m market portion for that twenty-four hours. GBL is besides Canada`s oldest confectionary company and they are a strong participant in the boxed cocoas. They are known as Canadian competitory. S-curves: The company has a few seasonal merchandises that use particular machinery this company would follow a seasonal s-curve. Long-tail: Having a broad assortment of merchandises with comparatively low sums sold of each is GBL`s long-tail. Resources

Looking at the company’s financials it seems to be the company has excessively much in long-run loans. Ganong’s entire debt to net worth ratio is 4. 9 where the industry median is 0. 6. The concern demand to convey the figure closer to the industry median to vie. Equally good they presently have to most hard currency on manus in the last three old ages but the least sum of current assets. This being said their opportunities of acquiring money now is harder than earlier. They have ever had problem having money from clients with holding a day’s receivable at 61 yearss and the industry median for this statistic is 21 yearss. For the company to hold more success and hard currency available to pay debt or put in undertakings the company need to beef up up at that place receivables section. Right non the company is non viing in the industry plenty. Ganong is behind the rivals benchmark in every class shown in the instance. Ganong seems to be a prima rival for its Valentine’s twenty-four hours chocolates in a cordate box with 30 % market. but are the periphery participants in other merchandise lines.

The Ganong Bros Limited as two company values and want to be built around these values. The organisation is first and for bases behind their community. They like being in St. Stephens and want to stay at that place. They strive on engaging staff from the community and around it. Another company value is that they have ever been in private owned and a household house. Over the last 4 coevalss the company has survived and remained both those things. With lodging to these values it may be difficult for the company to run into directions desires. The desires being. doing the company a profitable organisation. Organization

The organisation has many blocks to their proposed scheme. The direction capacity has 4 coevalss of experience. With a household civilization organisation the company may hold trouble with their proposed schemes. and may necessitate to believe of different schemes or view the company otherwise. This is direct to a direction issue where the company with put the committedness to its employees and community over doing a net income. Options

Alternate # 1: Alternate Financing
Recently GBL had been approached by an international cocoa house who wants to go a spouse with a minority place. Professionals
* Feasible for the company
* Can maintain the concern in St. Stephens. and construct the house.
* Will give the company resources it lacks Cons
* Will no long be a household owned concern
* If spouse becomes unsatisfied will they stay in St. Stephens or look to sell to a larger company Alternative # 2: Contract Battalions
Contract battalions were with houses who required a dependable beginning of supply that would run into certain specifications for a peculiar merchandise. Contract battalions are fabricating a good for another company Pros

* Increase in productiveness
* Long-term contracts
* Supply the house with fiscal demands to buy different specialized machinery and natural stuff
* Net income without the cost of gross revenues
* Keeps works in St. Stephens
* Will remain in private owned and household cultured

* May lose focal point on single end products
* Could be stuck in long-run contract with a neglecting industry Alternative # 3: Private Label
The house is already involved in the private label but are looking at the possibility at going more proactive in the private label sector. The house feels that the private label tendency will turn in Canada. Professionals

* Reduce in gross revenues cost
* Wide merchandise lines
* Possibility of deriving planetary acknowledgment. and market portion Cons
* Product is non known as Ganong ( known as private label marketer name )
* Lower monetary values. Lower gross border compared to other operations
* No control on merchandises for the private label

Alternate # 4: Traveling the Factory
Another option GBL can see is traveling the operations. With most of the Canadian population and a larger part of the company’s market located in Ontario. the company could pick up and construct a mill in Ontario. Professionals

* Central administering country
* Greater ball of the company’s market in country
* Lower distribution cost
* Build more consciousness for the organisations merchandise

* Take off from the community of St. Stephens
* Costly
* Newly mill in St. Stephens no demand to upgrade or travel * May non increase houses presence or gross revenues. which would so diminish net income more Alternate # 5: Consolidation of Manufacturing and Shared Ownership GBL and two other organisations had hired an outside adviser to finish an extended survey on the chance of consolidating the operations of the three houses. This option will convey the 3 houses together and sell a peculiar merchandise from each house but under a new company name where all 3 will hold a shared ownership. Professionals

* Still acquire to keep their ain independent merchandises
* Each houses brings a different facet to the industry ( Ganong merely chocolate manufacturer of the three )
* Lowest produced merchandise that house can do a good gross border Cons
* Lose one merchandise to new house
* Not household owned
* If shared company fails may lose portion of assets in original company ( high hazard )
* Possibility that Ganong can lose household secrets

As David Ganong. I recommend that GBL Goes with alternate 2: Contract battalions. By traveling with contract battalions it is possible to happen many companies that want to outsource a merchandise to another house. By catching those companies available it will do for the opportunity to increase our productiveness on lines we already produce. besides may assist with seasonal extremums for companies that sell that merchandise in opposite seasons as us will go on the production of that merchandise so equipment is acquiring used twelvemonth unit of ammunition. Equally good as delivery in other merchandises that we will be able to do one time we have purchased the specific machinery. This fiscal demands would be allocated by a company that is looking for us to fabricate their goods. By acquiring them to subscribe a long-run contract would give the company money to acquire started on their goods and be able to do a net income merely by bring forthing. This option allows the company to keep their organisational tantrum. and could even perchance convey on more chances in the hereafter. Ganong is still able to bring forth their ain merchandise that could be produced at a lower COGS do to the usage of the same machinery which would apportion for less rest clip and increase efficiency. The house would besides stay in private owned and maintain the concern in the household. The ROI for this option would be all profitable in the beginning because the house would merely be concentrating on fabrication merchandises we have the machines for. Execution

Traveling about this recommendation I would get down by seeking for companies that are looking to outsource. Since the concern has been around for a really long clip and have developed a great name for themselves this should non be hard to publicize with the hard currency they have on manus but every bit good as through the connexions they have gained over the old ages. Once they have obtained contracts with clients we would so get down to bring forth the goods that we have the machinery to make so. For the 1s that need forte equipment we will non urge buying that machinery until we have more than one contract unless that contract has the machine invariably bring forthing. We would keep this options until contracts end and so hopefully derive new contracts.


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