Pei Preserve Essay Example

production.

P. E. I. Preserve has a wide product line with over 80 items and plans to expand further in the future. However, their Jam production has not reached economies of scale due to the abundance of efficient operations with the Gallery & Tea Room, New Glasgow Restaurant, the Country Garden land, manufacturing, and retail. This has created a bottleneck in MacNaughton's financial resources and time. As a result, McNaughton was unable to meet a demand of three million bottles because he couldn't afford to purchase $65,000 worth of bottling equipment. P. E. I.

Preserve Company experienced significant cash shortages as a result of its manufacturing operation's seasonal nature and failure to obtain appropriate financing. The company's deficit rose from $313,000 to $365,000 between the start of 2007 and March-end. Moreover, an unsuccessful acquisition endeavor for a different store in Charlottetown forced the company into receivership on May 10, 2007, after the bank eliminated its credit completely. The analysis of the problem and application of financial theory centered around the total current assets.

The company's excessive unsold inventory indicates a problem. Despite only having $7,108 (which is 2.7% of total current assets) in cash on hand, the quick ratio of 5.7:1 suggests good liquidity. However, this ratio is misleading due to the company's low current liabilities of $12,215. The production of more preserves than necessary for five months a year has led to a decrease in funding. As a result of limited cash funds and an abundance of unsold inventory, P.E.I. Preserve cannot invest in capital to reduce costs in the future.

PEST and SWOT Analysis (Refer to appendix A). Following a comprehensive assessment of

the SWOT, the primary focus should be on highlighting the opportunities and threats identified in the company's analysis using PEST. P.E.I. Preserve has numerous opportunities, such as establishing a manufacturing and warehouse facility to circumvent shipping regulations and ensure a year-round supply of strawberries. Additionally, there is potential for marketing and producing organic products for the increasingly health-conscious consumer base in Japan. Nonetheless, alongside these opportunities, there are also threats that the company must address.

One of the main challenges for P.E.I. Preserve is competition, as there are few barriers to entry in the Jam industry. Competitors can easily imitate the company's actions, putting P.E.I. Preserve at risk of going out of business. Additionally, the higher consumption tax in Canada and the current economic downturn may lead people to opt for cheaper alternatives for their food consumption, potentially causing the company to go bankrupt. According to Porter Analysis (Refer to appendix D), buyers have significant power as they can easily switch companies without any cost. On the other hand, suppliers have limited power due to the abundance of fruit suppliers both globally and locally.

The Jam Preserve industry is highly competitive due to the presence of multiple firms like Kraft and Smuckers. These companies possess ample resources, enabling them to offer their products at low prices and gain a significant market share. Additionally, the industry faces a high risk of new entrants as the capital requirements are low, and the learning curve is not steep. Moreover, there are numerous substitutes for Jam such as peanut butter and Nutella, which further increases the threat of substitutes. Given these factors, it is advisable to open a new

facility. The barriers to entry are minimal, and a new facility would allow for year-round production of raw inputs.

Strawberries); this will enhance their bargaining power with suppliers. Moving closer to a major market will also enhance their bargaining power with buyers and allow them to capitalize on the product's quality in a larger market, as well as benefit from economies of scale. P. E. I. Preserve adds value to their Jam production by making it on site, providing a visible process for tourists and local customers. Additionally, customers can sample products on site to experience the taste of each product.

Anne's P. E. I. Farm operates a Japanese website where they provide information on their products, including their content and health benefits. The website also showcases the production process, including pictures of the P. E. I. Value-Chain Analysis. This analysis considers the value-creating activities within the organization, recognizing the importance of adding value to extend profitability. Additionally, it examines the challenges of obtaining raw inputs year-round and revitalizing the preserving business to maximize profits.