Strategic Planning For Information Systems
770.627.71
Allan Fisher
Case 2
Giuseppe’s Original Sausage Company
1. Giuseppe Sausage Company’s strategy was to produce a variety of high-quality
sausages in different forms and flavors. That meant using the best ingredients and
standardizing the procedures for production.
2. The sausage industry was a competitive market. The major competitors were able
to compete on a national scale. As a small specialty sausage maker, Giuseppe was
able to sell its sausages to upscale restaurants at premium prices. Institutions
however, were more concerned about average tasting sausages at lower prices.
Even though specialty sausages had the potential to yield high margins, copying
and competitive pricing limited this potential. Larger organizations also made it
more difficult for Giuseppe because of centralized buying and production buyers,
large marketing campaigns and the threat of large meat packers entering the
market. The Memphis area market is attractive for Giuseppe’s profit prospects.
The total market grew at a rate of 15.4 percent since 1996. The customer base was
growing in the mid-south because people were adjusting to eating sausages as an
alternative dinner meat.
3. The fact that Giuseppe is a specialty sausage maker, one of their strengths is being
able to maintain their primary volume of sales in their local region. Another
strength is being able to offer a wider variety of sausages in smaller volumes. This
will attract restaurants and new casino’s to provide their customers with a variety
of high-quality sausages. Some of its weaknesses lie in the fact that it competed
against larger companies that sold their sausages nationally. Giuseppe had to
compete against pricing, special promotions, advertising and shelf space within
the retail market.
4. Many problems are hindering Giuseppe to realize a profit. The inability to handle
credit card payments may lose potential sales. There is no automated system to
determine the cost for making each flavor of sausage. It was uncertain whether a
profit or loss was made from different sausages. Inconsistent pricing was based
entirely on the competitors pricing and ‘gut’ feeling. Due to weekly orders of the
meat used to make the sausages, delays in the delivery of the meat meant delayed
sausage production. Mr. Cotrone should feel relieved that the company finally
broken even. It suggests that things were heading in the right direction.
Competition and inconsistent policies played a factor in stalling the company’s
success. Mr. Cotrone did not take advantage of the broker/distributor channel,
which provided marketing information and ideas that would have influenced his
sales immensely.
Strategic Planning For Information Systems
770.627.71
Allan Fisher
5. After analyzing the 1994 – 1997 Income Statement, the company’s total operating
expenses are much less, than the gross profit in 1997 than in previous years. Most
of the operating expenses have been decreasing year-to-year, a trend that will
likely continue in the near future.
6.
7. Mr. Cotrone should take advantage of the broker/distributor channel to level the
playing field in obtaining market information and ideas. He should also automate
his (Point of Sale or POS) procedures by implementing a system that will
structure his current procedures and policies. The system will allow him to keep
an accurate count of his sales and other important data.