Case 1-1 Clearfield Cheese Company Case: A Sequel

I. Major Facts

 The Clearfield Cheese Company was established by two brothers, Terry and Ted
Edwards, in 1931, in Clearfield, Pennsylvania.

 This section of Central Pennsylvania's economy was based largely upon coal and
agriculture at this point in time.

 The U.S. economy was in the throes in what was usually referred to as the Great
Depression.

 Coal production and agriculture were both experiencing the effects of a slumping
economy.

 The farms in the area were mostly small-to-medium size dairy operations.

 The farmers were under financial duress because they couldn’t sell their milk in the local
area for a price to cover their costs of production.

 There were better market opportunities in Pittsburgh and Harrisburg, Pennsylvania.

 Unfortunately, their transportation costs put their "landed cost" at a disadvantage with
dairy farmers in Erie, Pennsylvania and Eastern Ohio. 

II. Major Problem

 The board of directors were concerned about future growth because of changing diets of
many consumers who had become more concerned about consuming milk-based
products. However, after they added low-fat versions of the major products the board
addressed an added concern that this would not be sufficient to sustain their growth and
profits.

III. Possible Solutions

 Setting up a new company to produce non-dairy based products such as almond milk and
other alternatives to cow milk.

 All the new products would have a healthy "spin" such as the White Wave Company.

 Market Expansion of their existing product lines into Mexico and Central America.

 Expanding their current product offerings by adding ice cream, high-end cheeses made
from goat and sheep milk.

 A combination of one or more of these alternatives.

IV. Choice and Rationale

 I actually would go all in and utilize or implement all the above-mentioned ides listed in
section III. Although, it's an aggressive approach and may be very costly at start-up. We
will definitely get ahead of the market, and have great and successful product lines,
which will lead to more growth and more profits.

V. Implementation

 Although, it's an aggressive approach and may be very costly at start-up. We will
definitely get ahead of the market, and have great and successful product lines, which
will lead to more growth and more profits.

VI. Case Questions

1. Evaluate all three alternatives.

1. Setting up of a new company to produce non-Dairy based products such as milk extracted
from almonds, soy, rice and other nuts would be an extremely beneficial alternative, as
currently the products are being introduced into the market making it an attractive stage
in the product life cycle to enter into the market and capture adequate market share. The
demand for the product exists and has been proved by similar products which have been
introduced in some markets. Experimentation, there are many alternatives from which
milk can be extracted. Further alternatives exist in the various flavors and forms the
 products can be presented in. Research and development to produce milk by products
such as cheese, ice cream, milk powder and whey with this milk can also be explored.
The company can also enhance its brand and image by presenting a caring and
compassionate attitude towards its consumer, by providing an option of a healthier
alternative for its health-conscious consumer and for the lactose intolerant. The major
drawback what is alternator would be large investment in machinery for cold water
mechanical process utilize for extraction of milk. People also require adoption of all latest
technology along with ensuring that Employees with adequate experience available for
handling the gold melting process which requires significant monitoring and control.
However, given the vast experience and exceptional management, planning and
strategizing exhibited by the Clearfield Cheese company in the past, successful planning
and implementation of the new production process in marketing of the products shall
meet with success. The management is efficient with adequate knowledge in utilization
of lean production and inventory methods, along with adequate monitoring and control of
the supply chain for optimal efficiency in every process.

2. Market expansion of existing product lines in to Mexico and Central America maybe an
attractive alternative but not effective in providing long-term growth and sustenance.
Milk products is a saturated market in every country and any foray into existing Markets
can only provide limited opportunity. For capturing an adequate market share through
acquisition or set up of new outlets or create a new distribution network, would require
extensive investment of capital and strategizing due to existence of multiple competitors.
This would be risky investment of entering into new markets where no adequate gap
exists for the product and attempting to Russell Market share from competitors by large
investment in marketing. This option can be considered, after due analysis of the market
and the demand, thereafter if projected sales and market share justified the input cost and
adequate profits can be generated, it can be considered as an option preferably through
acquisition of existing suppliers unable to compete to minimize capital investment and
risk.

3. Expansion of existing product offerings introduction of ice cream, high end cheeses made
from goat and sheep milk and high-end milk-based candy wood again have similar
 disadvantage as representing introduction of an existing product with saturated markets
due to presence of numerous producers and wide variety of choice available presenting a
formidable competition to be overcome in order to capture market share. Another
downside to these products is that the current scenario is of extreme health consciousness
among the consumers, resulting in them moving away from consumption of high fat
products such as these and opting for healthy alternatives. The various options existing in
the market seem to have explained all available forms the products can be produced in
through modification of the product in every possible way leading to almost no scope for
further experimentation and attracting of the consumers attention through innovative
presentation in different forms. Therefore, this would not be an attractive alternative
venturing into with consideration of long-term growth and sustenance.

2. What I would recommend? Why?

 I would recommend setting up of a new company to produce non-Dairy based products as

the product life cycle provides the perfect option for entry ensuring long-term growth and
sustenance. The option presents the least risk as the investment is towards latest
technology and production equipment which can also be obtained through lease as a less
capital-intensive option. This can be explored in combination with market expansion of
existing product lines in to Mexico and Central America through options which present
minimal investment through formulation of strategic alliances. Also, to enhance how
maintain existing cash flow and profitability to provide adequate support for venturing
into the new product line. This option should also be explored for future development
into creation of market share for the new product line(s) being introduced and preparing a
strong foundational base for it.