Douglas Fine Foods Harvard Case Solution & Analysis

Problem statement

Currently, the company is facing a number of problems due to which the CEO is deciding to revamp its business strategies. These strategies include severe decision regarding the mergers and acquisitions. The transformation of the business from a family owned world class dairy product to a highly professional organization that is present in almost all aspects of their value chain. Now the company wants to develop a vision that supports all the complexities of its business decision and provide a framework for potential acquisition and financing activities. It is highly important for a company to create a vision that aligns company’s operations and cultural transitions.

Introduction

A hundred-year-old company has gone through several buyouts and merger decisions. The business has emerged from a small food and beverage company with a world class catering business whose services are considered to be compulsory from school cafeteria to the large banquets. Douglas fine food is number one privately owned food services Company of Canada. Its financial strengths are also contributing positively to the portfolio of the company. The company provides food services for banquets, home picnics, and high-quality cooking equipment on customer demand. The company has passed through common lunch servers to warehouses and government offices to corporate formal meal and ceremonial dinner.

 

 

The New CEO of Douglas fine foods Matthew Douglas is currently considering making a decision for the purchase Matthew Douglas of his father’s from his two elder brothers. The decision is so intense that he has to take care of all aspects that will affect this buyout. The newly held CEO had not decided to take these serious decisions up till the time when he clearly announced to be a complete owner of the organization. From the beginning of Douglas fine food, the company has contracted on the expansion of business by having concrete relations with the consistent food consuming organizations. The company has also established its franchises in the streets of Canada. These authorized franchises are also generating large finances of the company through their flexible food deals and brand loyalty.

PORTOR ANALYSIS

Threat of New Entrant

The threat of a new entrant is medium.The food and beverage industry is considered to be one of the most saturated industries of the world. In this industry, the entry barriers are decided by the competitor’s capital investment and market share. The food and beverage business is divided into two categories: the first market segment relates to a commercial food business which owns 79 percent of market share. Douglas fine food comes under a commercial food segment and owns a large amount of market share in Catering, franchises, and restaurant services. The business possesses a strong base in the market through its long holding presence in the market due to which the new entrant cannot impose a high potential threat to the company.

Bargaining power of Supplier (MEDIUM)

In the food and beverage industry the supplier posses plenty of options to change their strategic alliances and form the new one according to their suitable price. Similarly, the company does not compromise on the quality of raw material and hence, transforms their alliances as per the quality of material. If the supplier is enjoying its strategic alliance as well as the manufacturing firm is comfortable with their supplier performance, then the price of the raw material would be slightly competitive and high.

Threat of substitute products (HIGH)

The non-commercial business is providing the substitution to the commercial and high scale food service provider. The low priced services provided by the non-commercial fragmented sector could be a potential threat to Douglas because these small scale businesses are catering niche market.

Threat of competitors local (HIGH)

Competitive rivalry is high because the barriers to entry are medium, and a large number of small businesses are serving a niche market consistently. The small and medium competitors are catering a tiny portion of market share, however, the competition could become intense because they are also competing on low prices in the market and families prefer places that are economically stable. However, in a food industry the completion lies in the goodwill and standard services provided by the company.

If the company delivers high-quality food services to larger organizations then, their business cannot be taken away from them........................

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Douglas Murray is the new Chief Executive Officer (CEO) Douglas Fine Foods (DFF), a family business in his 80th year. Headquartered in Calgary, Alberta, DFF has grown to become Canada's largest private food services company, making $ 30 million a year business. DFF provides business dining, lodging and services camp Food, catering, vending services and equipment for the food and design. The company serves clients in various industries, including schools, sports arenas and concessions, warehouses, government agencies and corporations. Douglas has to make some key decisions about DFF, including how to pay for the purchase of shares of his brother, the extension of the contract with unwanted customers, whether to pursue an active acquisition strategy, and how to turn the business to become a world-class, professionally managed organization. Students should appreciate the complexity and compromise in decision-making sequence, outline a clear strategy and vision, priority policy options, identify the elements of acquisition strategy, identify financing options for cash-constrained firm, and the management of internal transformation of culture. "Hide
by James E. Hatch, Mary M. Crossan, Gerard Seijts, Jeff Goodwin Source: Richard Ivey School of Business Foundation 20 pages. Publication Date: February 10, 2010. Prod. #: 909N14-PDF-ENG

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