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Giuseppe's Sausage Case Analysis

1593 words - 6 pages

IntroductionTo Joe Cotrone, making sausage was a natural born art. In the early '90's he started making custom specialty sausage out of his kitchen and selling them to his friends, associates and patrons at the restaurant where he worked as a bartender in the Memphis Tennessee area. He made his product available by serving it at the restaurant and selling it out of a cooler from his car. From the conception of his business he differentiated from his competition by producing a high quality product with unique recipes that are hard to imitate. While expanding his customer base, demand soon exceeded Cotrone's production capabilities and a full-scale factory was needed.In order to facilitate a full-scale sausage company, Joe signed a six month commercial lease on November 1, 1991 and made plans for renovation to the space in order to satisfy USDA regulations to produce sausage commercially. Delays caused by construction and regulations postponed opening day of Giuseppe's Original Sausage Company, GOSC, until late 1992. Although Joe had continued to reach the individual markets, winning over some larger accounts, his financial resources were drained. Joe recruited outside investors, who he then depended upon to keep Giuseppe's afloat while sales were slow.Focusing sales to local upscale restaurants and grocery chains, he also developed a flyer of his specialty sausages to target an expanding individual market. New opportunities arose when the casino's opened in nearby Tunica Mississippi. Changing consumer tastes also contributed to the continued growth rate as people began to view sausage as a dinner meat instead of just a breakfast meat. Giuseppe's had reached $250,000 in sales for 1997 when he finally reached his break even point. Market changes and growth rate meant continued challenges for Joe to bring stability to GOSC.1. The current strategy of GOSC is high quality, differentiated product.Many weaknesses can be identified in the current strategy. Only because of Joe's fortitude, has he been able to develop a market niche for Giuseppe's unique and hard to replicate recipes.Some points to consider include, satisfying the goodness to fit test, although weak, which is achieved by fulfilling the demand with a quality product line. Having a local brand with a variety of eighty quality products, gives GOSC a competitive advantage. Financial objectives have not been attainted, inconsistency in sales volume, inability to develop long-term relations with major customers and time efficiency in developing and establishing new accounts are key indicators that performance is lacking. Although the strategy for utilizing just in time inventory also adds value to the freshness of the product, supplier reliability has occasionally hindered production. Maximum production capacity of the new sausage making machines has yet to be achieved. Developing a relationship with food brokers of major customers is essential to gaining an inside edge to this very viable...

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