Analysis of Ganong Bros Limited Case Study

Analysis of Ganong Bros Limited Case Study

Executive Summary

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This study aims to explicate recommendations for Ganong Brothers Limited as to how to travel frontward from their state of affairs as described in the instance survey.

To make this the study critically analyses both Ganong Brothers Limited and the industry it operates in by mode of a PEST analysis and utilizing Porter’s Five Forces theoretical account. Using this information Ganong Brothers Limited’s strategic capablenesss will be identified. Taking this further the organisation’s current schemes are examined and from there future schemes are recommended for Ganong Brothers Limited.

Industry Overview

Ganong Brothers Limited is a confectionary company based in Canada. The industry is divided into sugar confectionery, cocoas and other cocoa-based merchandises and masticating gum. See below for inside informations of the make-up of the Canadian confectionary industry.

The industry is mature and in fact worsening as demand has decreased due to take down proportions of kids in Canada and an increased involvement in healthy life. In add-on the cocoa industry is characterised by a high degree of competition which means that net incomes are low. Net incomes tend to be higher in the sugar confectionery industry than the cocoa industry.

Organisation Overview

Ganong Bros. Limited is a 5th coevals household cocoa company that is presently confronting fiscal troubles.

The company was founded in 1873 by two brothers in Canada. It is a little company and has built a name for itself in boxed cocoas. It competes good in seasonal merchandises. Around Valentines Day Ganong Brothers Limited does peculiarly good, with a 30 % market portion for its bosom shaped box of cocoas.

Presently Ganong Brothers Limited is non making good financially. There have been two back-to-back old ages of fiscal losingss. It can be said that Ganong Brothers Limited is Canadian competitory but non North American competitory.

The chief issues facing the company are that customers’ demands have changed and Ganong Brothers Limited has non. As the instance analyze provinces their chief issues are ‘lack of critical mass, research and development capablenesss, fiscal capacity and managerial capablenesss GBL was non large plenty to vie is a universe of planetary giants.’

Ganong Brothers Limited can be said to be excessively thinly spread, they have 400 lines over seven merchandise classs. Some of these merchandises are non big net income shapers. One of Ganong Brothers Limited’s biggest failings is that its current direction information system is flawed and the people on the board find it hard to measure the profitableness of each merchandise line.

However, they do hold many strengths as good. They have a big potency for invention as proved by old inventions. They have a good repute for high quality ingredients and a committedness to employees and the community

Bryson ( 2004 ) states that a stakeholder is person who has an involvement in the administration and the result of the determination it makes. Ganong Brothers Limited’s stakeholders include their employees, clients, providers, industry trade groups such as the Confectioners Association, rivals and local communities, peculiarly in St Stephen.

Ganong Brothers Limited’s organizational civilization is still really much a household atmosphere and they take their societal duty really earnestly. It can be said that Ganong Brothers Limited is really good at doing cocoas and looking after its stakeholders but non needfully good at doing direction determinations and it is this that has led to its current quandary.

Porters 5 Forces Analysis of the Canadian Confectionary Industry

Michael Porter provided a model that theoretical accounts an industry as being influenced by five forces. The company seeking to develop a competitory advantage over rival houses can utilize this theoretical account to better understand the industry context in which the house operates.

A matrix demoing how the Canadian confectionary industry can be analysed utilizing Porter’s Five Forces is shown on the following page.

Existing competitory competition between providers – really high

  • Highly concentrated industry
  • Low merchandise differences
  • Four major transnational cocoa saloon companies in Canada mean that industry is intensively competitory

Menace of new market entrants – depression

  • Need for economic systems of graduated table as there are big capital demands for research and development and fabrication equipment
  • Removal of duty wall and debut of free trade mean increased competition from abroad

Dickering power of purchasers – high

  • High trade name designation and trueness
  • High monetary value sensitiveness for mundane Sweets, less so for gift confectionery
  • High handiness of gift replacements such as flowers and vino

Power of providers – depression

  • Supplier of chocolate and sugar cane are legion
  • Normally cheaper exterior of Canada

Menace of replacement merchandises – high

  • Low purchaser disposition to replace one time trade name trueness has been established

The Canadian confectionary industry is a comparatively mature market, and is the lone state in which the four major cocoa makers exist. Competition amongst bing retail merchants is intense with 15 % of houses lending 85 % of green goods.

Customers for confectionary merchandises are, in general, quite monetary value medium. Although they have some extent of trade name trueness, by and large clients for general confectionery should be considered as holding rather high snap of demand because the merchandises are similar. Therefore, dickering power is comparatively high.

Power of providers is comparatively weak as there are legion providers of all ingredients.

For the new entrants, the chief barrier has been high initial investing cost in research and development and fabrication equipment. Economies of graduated table favour the large administration, due to continual development in survey of client and competition and relationships built in its value concatenation of purchasers and providers.

PlagueAnalysis of Ganong Brothers Limited

PEST is an acronym for political, economic, societal and technological factors. A PEST analysis examines these facts in order to measure the market and chances for a concern. A successful administration is one which understands and can expect and take advantage of alterations within their environment.

A PEST analysis matrix for Ganong Bros Limited can be seen on the following page.



  • Removal of duty wall and debut of free trade agencies increased competition from abroad
  • Canadian economic system is strong, which means that they is plentifulness of demand for luxury merchandises such as confectionary
  • High barriers to entry in the USA as big capacity is needed to run efficaciously there



  • Turning figure of wellness witting Canadians reduces demand for confectionary
  • Lower proportion of kids in Canada reduces demand for confectionary
  • Turning consumer involvement in societal duty
  • Specialised equipment needed merely for seasonal green goods additions costs

Strategic Capability of Ganong Brothers Limited

Strategic capableness is besides known as a critical success factor. It is of import to understand and place these strategic capablenesss so that they can be exploited in order to turnaround Ganong Brothers Limited’s current downward tendency.

New chances can be created by widening and working Ganong Brothers Limited’s capableness either in ways which rivals find hard to fit or in truly new waies or both.

Ganong Brothers Limited has two chief strategic capablenesss that can be exploited. That is its involvement in community mindedness and its household atmosphere. There has been an addition in public involvement in societal duty in recent times. Social duty can be defined as a company’s duties to prosecute long-run ends, which may be paid for the society beyond the demands by the jurisprudence ( Robbins, et. al. , 2003:138 ) .

Current Schemes at Ganong Brothers Limited

Ganong Brothers Limited are presently prosecuting a scheme of increased criterions which means higher borders. However as rivals have non value followed it has resulted in a loss of market portion for them.

The ‘Strategy Clock ‘ is based upon the work of Cliff Bowman ( Bowman and. Faulkner, 1996 ) . It is a suited manner to analyze a company ‘s competitory place in comparing to the offerings of rivals. There are eight nucleus options and Ganong Brothers Limited are presently following option four. Please see following page for an illustration.

Ansoff ‘s product/market matrix is a good known selling tool used by sellers. Ansoff ‘s matrix offers strategic picks to accomplish aims. There are four chief categories that can be used to categorize Ganong Brothers Limited’s current schemes.

Existing Markets

New Merchandises

Existing Markets

Market Penetration

Merchandise Development

New Merchandises

Market Development


Ganong Brothers Limited’s current scheme is concentrating on bing markets, new merchandises and merchandise development. Product development is when the house is doing significant alterations, add-ons or alterations to its present merchandise scope. It operates from the security of its established client base.

This scheme is presently non successful. It is non suited to the Canadian confectionary industry. New merchandise development can be hazardous and expensive. The deductions of this option for the administration is that it can take to a big, boisterous and unrelated scope of merchandises which are both hard to both manage and leads to trade name dilution. Customers find it hard to associate to the trade name as there is no clear trade name individuality. It is non executable to go on with this present scheme as it is destroying the company financially.

Possible Options for Strategic Options

Traveling back to the Ansoff matrix there are several different strategic options available to Ganong Brothers Limited. The first of these is concentrating on bing markets and bing merchandises and seeking to develop market incursion. This is, in consequence the continuance of an bing scheme. This is non appropriate as it is non suited for Ganong Brothers Limited as their current schemes are non successful.

A different option is diversification across one of three classs ; horizontal, perpendicular or pudding stone. Horizontal variegation refers to the development of merchandises which are complementary to or competitory with the administration ‘s bing activities. In Ganong Brothers Limited’s instance this could be extra types of confectionery or other gifts such as cards.

Vertical integrating is the development of activities which involve the preceding or wining phases in the administration ‘s production procedure. This could intend more engagement in the processing or retailing side of confectionery. This is surely a possibility for Ganong Brothers Limited as one of its chief strengths is its dedication to societal duty and its household focal point. By retailing its merchandises itself it can pass on this message more suitably to clients.

Conglomerate variegation refers to a state of affairs where the new activity of the administration seems to bear small or no relation to its bing merchandises or markets. Ganong Brothers Limited does non hold the size or capableness presently to prosecute this option.

Another option is market development which involves bing merchandises and either come ining new geographical countries or advancing new utilizations for an bing merchandise and/or come ining new market sections. It is an appropriate scheme to prosecute when the administrations distinct competency remainders with the merchandise instead than the market. This is executable in Ganong Brothers Limited’s instance because they do hold a alone competency that is societal duty and an accent on a household tally concern.

It can be seen that the standards that been used to measure and rank the options are feasibleness, acceptableness and suitableness.


Short term program ( 0 to 12 months )

  • Seek out alternate lines of concern for strategic growing
    • Promoting new utilizations for an bing merchandise such as associating confectionary with other events such as hockey tourneies and Canada Day
  • Directly retail to clients
    • Create web site which non merely offers merchandises for sale but besides inside informations the company’s societal and household values

Long term program ( 1 twelvemonth onwards )

  • Cut costs
    • Improve direction information system to make more timely concern determinations and better the measuring of merchandise and client profitableness.
    • Reduce merchandise line to most profitable. By making so, direction become far easier and resources are non wasted on non-profitable merchandises.
  • Offer production installations to other candymakers
  • Directly retail to clients
    • Open shops to offer merchandises direct to the client, underscoring household values.


  1. Balogunet Al. ( 2003 ) ,Researching Strategic Change. London: FT Prentice Hall.
  1. Bichta, C. ( 2003 ) ,Corporate Socially Responsible ( CSR ) Practices in the context of Grecian Industry, Corporate Social Responsibility and Environmental Management, Vol. 10, pp. 12-24.
  1. Bowman, T. and Faulkner, J. ( 1996 ) ‘Competitive and Corporate Strategy – USA: Irwin.
  1. Bryson, J. ( 2004 ) .What to make When Stakeholders Matter, Minneapolis: Taylor & A ; Francis Ltd. , Vol. 6 Issue 1 2004 pp 21-53.
  1. Johnson, Scholes, and Whittington ( 2005 )Researching Corporate Scheme. Text and Cases, 7th edition, Prentice Hall.
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