Oscar Mayer Product(Red Meat Products) Louis Rich Category(White Meat Product) Ready to Eat(New category) Investment Issue Which of the recommendations should he follow? Which brands should he back? How does competition look in the various categories? Relative Market Share of various categories Market growth potential for various categories? How much of risk to take? R&D Investment of how much and where? Our Strategy Recommendation Invest for OM products R&D, advertising in order to maintain market share and profits. Invest in Louis Rich Products advertising and introduce new products. R&D for Ready to eat meals.

4.  Overview Of the Case
 Oscar Mayer Product(Red Meat Products)
 Louis Rich Category(White Meat Product)
 Ready to Eat(New category)

5.  Rob Goodman - Louis Rich Manager
 Emphasized on backing Louis Rich Category and up
the Advertising budget by $ 22 Million.
 Boost the brand awareness of Louis Rich Products.
 Introduce new products like LR Turkey Bacon.

6.  Jane Morely- Finance and Planning
 Suggested that the company should take a risk and reach out for
new investments for Louis Rich Inc.
 She narrowed it down to chicken Rite Inc. Turkey Time ltd,
Crabbies Inc. each of these have sales of roughly $15MM.
 Turkey time Ltd seemed to appeal more as it could help in LR
expansion.

7.  Jim Longstreet –Management Team
 Jim Longstreet, is of opinion that the best option would be to
invest in a new category and has two new ideas- Zappetites
and launchables.
 Out of the two, R&D is more hopeful about zappetites and
thinks it could be ready to sell early next year.
 Launchables on the other hand is still in the thinking stage,
he thinks it will be a convenient and logical step ahead for
the company.

8.  Eric Stanger - VP of OM Brand
 For the last 2 years there has been a decline in the sales
and relative market share of Oscar Mayer products
He recommended-
 Price cut of 10% for top 3 OM products.
 Increase in Advertising budget.
 R&D for Low fat Oscar Mayer Products.
 Cover up Price Reductions : Analyze capacity.

9.  Investment Issue
 Which of the recommendations should he follow?
 Which brands should he back?
 How does competition look in the various categories?
 Relative Market Share of various categories
 Market growth potential for various categories?
 How much of risk to take?
 R&D Investment of how much and where?

10.  If McGraw chooses a strategic direction that favors only
one department, what negative effects could this have on
the other departments? How can the damage be mitigated?
 If he backs
 OM Brand: future uncertain, decrease in profits and it’s a mature category
with no built in growth, Competition is catching up
 LR Brand: potential for growth, requires investment in R&D and advertising,
has to keep up with competition
 Ready to eat category( Zappetites, lunchables): investment for R&D, Future
uncertain, have already faced loss in frozen food channel(Stuff n burger)
 Acquiring Turkey Time: investment risk
If McGraw Backs any one department only , he faces a huge risk as OM
contributes majorly to the profit share right now, but the market share is
declining and the future of the other 3 are unknown he might end up in losses
long term.

11.  Effects of competition on OM Division? How does this impact investment
decision?
 Reduction in relative market share, hence reduction in profits.
 Customers moving to white meat category.
Investment Decision:
 If McGraw backs OM completely there is no guarantee that
OM will be able to get back to its former stage of high market
share and improve its profits.
 If McGraw does not back OM adequately , OMs market share
and profit will decline at a faster rate , even before any of the
other 3 can launch and make profits.

12.  Which departmental directions are most viable? Which second best strategy?
Which is least viable?
 Most Viable: Louis Rich Department.
 Second Best: R&D for Zappetites.
 Least Viable: Acquiring Turkey time.

13.  Our Strategy Recommendation
 Invest for OM products R&D, advertising in order to
maintain market share and profits.
 Invest in Louis Rich Products advertising and introduce
new products.
 R&D for Ready to eat meals.

14.  Which of Jim Longstreet’s
new product ideas is less likely to
succeed? Why?
Lunchables
 Because of high fat content due to cheese, chocolate.
 Lack of Bread in lunchables.
 High salt content – crackers.