External Analysis
One of the main opportunities for Monforte is that it can grow in artisan cheese industry. Monforte could move to $2 million in 2010. The company promotes healthy lifestyle and it leads in the homegrown healthy foods which will increase the image of the company in the industry and will grow its popularity in the food industry. Another opportunity for Monforte is introducing new products in the market. The new products include cheese aged through the process of affinage and smoked brined and cured meats through the process of charcuterie. Both of these products along with the selling of cheese can be beneficial for the company in increasing its profit and growth. These products can be used as complimentary food while serving wine in the wine industry.
More value can be created through increasing sales to the sommeliers and wineries. This provides opportunity to Monforte in increasing brand awareness, brand loyalty among customers and resulting in higher sales and revenues.There is the threat of rivalry present in the cheese industry, but Klahsen was not worried about the competition. The threat of competition in the industry was low as the product offered by the company was unique and innovative. Monforte’s strategy is to pursue differentiation in the product approach. Whereas, the threat of the buyer was low for Monforte. As the products offered by the company were quite unique and since Monforte was the only company having affinage services, so the consumers were interested in those types of products such as Monforte’s products, ended up purchasing Monforte’s products.
Monforte also has some threats which could affect its strategies.The economic recession in Canada is a threat to the company, and many areas are facing unemployment which causes problems for Monforte. This can affect through different aspects such as the raw material prices will increase, the customer purchasing power will be affected and the ability of the company will also be affected due to the recession in Canada. Moreover, the quota system for cow’s milk cheese by the Canadian government is also a threat to the company.The. quota system states that 5 types of cow’s milk cheese were allowed by the government and other types needed approval of the government. Monforte was involved in the production of cheese from the sheep and goat milk and Monforte was also planning of using the water buffalo milk in its cheese in near future.
Monforte wants to continue to be socially responsible in the industry. Monforte believes in improving the agriculture and to take measures for the betterment of the agricultural industry. The measures of working in the agriculture industry includes providing fair wages, being humane to animals, taking efforts for the protection of the environment and supporting the communities which relate to the farmers, donating funds to the non-profit organizations which are working for improvement of the medical industry in the areas where medical facilities are not available. Following these principles will help Monforte to achieve positive image, increase relations with the public and also the loyalty of the customers.Working for the improvement of environment helps the company in increasing loyalty of customers. Monforte has already been well known in the industry and these efforts may take it to the peak of success. The basic guidelines should be followed by Monforte, so that there is surety of growth and sustainability in the industry which may lead to the way of being a corporate citizen.
I&E Matrix Analysis
Monforte fell into the “V” category for performance. This means that the company is stable and performing well. This suggests that the company should hold and maintain its position rather than expanding currently. The company should pursue the strategies which are focused on market penetration and development of the product.
Recommendation
The recommendation for Monforte is that Klahsen should remain at status quo and it will be wise to build up capital before expanding.The work should be done for growing the existing business and also taking measures for decreasing the debt to equity ratio.The measures should also be taken in selling some assets of the company, leasing it back so that debt ratio could be decreased and there is capital in hand so that it can be invested in future for the future expansion. By selling the asset the company will get capital that capital can be invested on Affinage. This option will include leasing of shelving units as well as leasing the Climate Control System..................................
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