De La Salle University

Ramon V. del Rosario

College of Business

Golden Valley Foods Case Analysis

In Partial Fulfillment of the

Course Requirements for

Marketing Fundamentals
2nd Term, AY 2022-2023

Submitted by:
Catindig, Irah Klariz D.
Cheng, Sean Rae Vincent
Fajardo, Russell Christopher U.
Gao, Katrina L.
Gonzales, Micaella Ashley Kate T.
Mallari, Markus Lance B.
Sy, Kailey Dyanne T.
Tamsac, Jhermae Lou A.
Valler, Hernan Jansel B.

Submitted to:
Paz, John Joshua M.

Submitted on:
January 30, 2023
 I. VIEWPOINT

In this case, the main decision maker is the newly elected President of Golden Valley

Foods, Neal Middleton. From his viewpoint, he must base his decisions on every evidence or

historical financial facts that the company has retained in order to determine the long problem

regarding the company’s profitability. This is the most important part because the company’s

success depends on the context and extent of the economic decision the newly elected president

will make. He must be able to address effectively and efficiently the different issues being faced

by the company with the use of optimum level of resources , making sure that through his laid

plans the company can maximize its operations and can alleviate the market share of the

company in the industry where they operate.

II. TIME CONTEXT

In the year 2012, Golden Valley Foods, Inc. suffered a huge decrease in profits. The chain

of problems arose when the previous management made mistakes that have caused a major recoil

towards the company’ market share and image. From this, the company faced several issues

including the major problem with their investors as this group of people revolted against the

company’s management.

III. STATEMENT OF THE PROBLEM

This study aims to identify potential strategies that the newly elected company president

could employ to boost the business's profitability.

IV. OBJECTIVES

● To improve the average return on shareholder investments to around 5-6% in one year.
 ● To increase the profit margin by 15% in one year and 20% in the following year.

● To raise the company's product sales by 8% in 6 months.

V. ENVIRONMENTAL SCAN / AREAS OF CONSIDERATION

Strengths

● High production output with more than 30 processing plants.

● Wide variety of marketing mixes and product offerings from horizontal integration.

● Major supermarket chain store influence.

● Large pool of capital to work with given the size of the company.

● Established brand in their industry.

● Has a wide range of things that many different types of businesses can acquire and sell.

Weaknesses

● Not as “market-oriented” as its competitors.

● Shareholder investment is low compared to competitors.

● Sales department is deemed inefficient as morale and quality has dropped.

● Ignorance of smaller store sales potential due to line-forcing policy.

● Lack of development in vertical integration thus missing potential to lower production

costs and raise product quality.

Opportunities

● Smaller stores can be looked upon for their potential in more sales.

● Potential on exploring product offerings that competitors have not touched on given wide

product offerings.
Threats

● Major businesses in competition with may shut down the business profits and stature, if

cannot keep up.

● Store price points potentially cut more profit than intended.

● Rival companies that manufacture the same products have a more effective marketing

approach than them, and as a result, consumers will flock to other companies.

S/O Based Strategies (Strengths and Opportunities)

● Use of a large pool of assets and resources to venture into newer branches of products of

good quality and of need to consumers.

● Use of influence and capital of the business in the market to shift attention to the new

products (e.g advertisement) that satisfy needs of consumers made from a better focus on

higher impact products on consumers than a wider variety like their competitors.

● Providing a different angle to a somewhat wide marketing mix, with an emphasis on the

requirements and desires of consumers.

W/O Based Strategies (Weaknesses and Opportunities)

● Readjustment of product policies to cater to smaller stores to possibly increase sales with

more stores.

● Reform of sales department and strategies with vertical integration focused changes, to

explore the said potential on newer product offerings or selective quality offerings. This

could overtake competitor profits and set new milestones in made profits to revive
 shareholder investment and ‘market-orientedness’.

● Integration of smaller stores, such as offering an alternate choice for enterprises at a

greater price for each supply chain management.

S/T Based Strategies (Strengths and Threats)

● Given the chance to still compete in the industry with the resources and assets of the

company, the company can afford to take risks to compete with their variety of product

offerings to work with.

● Adjust production costs to be profitable despite modification of prices from stores.

● Establishing a subordinate and not engaging on customer retention initiatives can allow a

corporation to outperform the incumbent company's offerings.

● Increasing the number of certified items that the company offers that other companies

supply in order to compete with rivals as well as dominate the market.

W/T Based Strategies (Weaknesses and Threats)

● Incorporate lesser known fields under the primary corporation that manufactures products

using plants accessible in major corporations.

● Strengthen weakened sales department to bolster chances of competing better in the

industry.

● Cater sales to smaller stores as well to compensate for price points that may reduce profit

and catch up in sales with other competitors.

VI. ALTERNATIVE COURSES OF ACTION

1. Line-forcing policy must be abolished.

Golden Valley Foods, Inc. has a line-forcing policy, which requires any store that wishes

to carry its brand name to carry the majority of the 65 Golden Valley Foods items. This policy

limits the diversity of places on which the products are offered. If this policy is removed, small

businesses will be able to sell the company's products as well.

Advantages Disadvantages

● This would enable the business to ● It may disrupt the company’s workflow

reach new customers and possibly process.

increase sales. ● This would decrease the volume sales as

● This widens the scope and furthers the big companies might lessen the

the accessibility of the business’ products they will be availing.

offered products. ● It will be more challenging to sell the

company’s entire line of products.

2. Minimize Expenses and Operating Costs (Reduction of Mass Production and

Implementation of Vertical Integration)

Golden Valley Foods, Inc. is a production-oriented food processor that produces as much

as possible then getting rid of the excess afterwards. This would mean that they have natural

losses from overproduction of commodities. This would incur unnecessary additional costs of
not only disposal of the excess, but also of making products that won’t bring profit back. Also,

instead of retaining the horizontal integration strategy, it could streamline its supply chain

through vertical integration and downsizing resources. If the vertical integration of the company

can be worked on like their competitors, then their business could potentially have better overall

performance.

Advantages Disadvantages

● Ownership of more stages in ● Product offerings may decrease, given

production allows much better the lesser use of more external suppliers

control of product production quality. and emphasis on lesser quantity for

● Costs can be cut with lesser reliance higher quality.

on external suppliers to source ● Long term process of adjustment from

products. horizontal integration which cannot be

● Focused effort on a fewer number of done overnight. Requires integration of

chosen products can potentially trained staff for the new manufacturing

create quality products that would processes.

entice customers to constantly come ● Miscalculation of demand could lead to

back to. shortage.

 3. Carry out a mass marketing strategy

In such a competitive market, brand awareness is everything. In this type of business,

consumers are frequently drawn to a well-known brand because they perceive it as a low-risk

purchase since many purchases are made on a low-involvement basis. Therefore, differentiating

and boosting the business through the use of different mass marketing strategies like “Shotgun

Approach” and “Guerilla Marketing” would help increase market exposure of the brand.

Advantages Disadvantages

● The company's brand awareness can ● Customers have different preferences,

be raised through this. Customers may so a single marketing campaign might

find it easier to recognize the brand not be able to satisfy everyone's needs.

and its products after seeing the While it might be effective in one

company's campaign anytime and area, it might not be well received in

anywhere. another.

● There would be more potential ● Advertising products through

customers that would greatly increase well-known channels could be costly.

the sales.

● The ability to control the market and

drive away potential competitors

would give the business a competitive

edge.
VII. DECISION MATRIX

In creating the decision matrix, the criterias, according from least to most important, are

ease of implementation, attaining more customers, cost-efficient, sustainability, and profitability.

Scores were then given to each alternative. The criterias were rated 1-5 with 5 being the highest,

meaning it is good, and 1 being the lowest, meaning it isn’t the best. The recommendation of

ACA 1 or “line-forcing policy must be abolished” had a total of 54; ACA 2 or “minimize

expenses and operating cost” got 42; and ACA 3 or “carry out mass marketing strategy”

alternative got the highest total of 58.

VIII. RECOMMENDATION

Since the main objective is to increase the company’s profitability, Golden Valley Foods,

Inc. is heavily encouraged to carry out a mass marketing strategy in promoting their products.

This type of business line requires much effort in creating brand image since it has a very

competitive market. Therefore, different mass marketing strategies like Shotgun approach and

Guerilla marketing can be considered. Shotgun approach is advertising specific products to a

huge group of individuals in the perspective of the mass. This includes television campaigns,

radio commercials, billboards, etc. This would increase the company’s brand awareness since

these promotions are able to be seen by customers whenever and wherever they are. Brand

awareness is essential as it can improve brand perception and build trust. On the other hand,
guerilla marketing tends to involve the application of innovative and premium marketing

techniques to maximize brand visibility. Because of the captivating elements in an advertisement,

the approach frequently reaches a massive audience. Potential customers may have reactions

causing them to remember the brand in a different way than they are accustomed to. The goal of

these strategies is for the company to create a one-of-a-kind commercial that would be imprinted

in the minds of the customers. More customers equals to an increase in sales and an increase in

sales means an upswing in profits.

This alternative is the best option among the three since abolishing the line-forcing policy

makes little to no difference if the brand is not well known to consumers; in addition, it risks the

company’s volume sales to decrease. Also, even if the Reduction of Mass Production and

Vertical Integration were implemented, it would not make a significant impact if there were no

sales. This course of action will also not address the objectives as the amount of time needed is

years for it to be of significance.

IX. PLAN OF ACTION

After weighing the pros and cons of the alternatives, the option to implement a mass

marketing strategy seems like the most ideal action plan, especially in the long run. To set this

plan in motion, the timeline shown in the following table is proposed.

Activities Measure Person-in-charge Duration Obstacles

1. Analysis of Research and evaluation Marketing and 1-2 Months Factors that may
market and of the company's Research & have been missed
competition. competitors' products, Development during analysis
sales strategies, and Departments (oversights/inaccura
 strengths and cies).
weaknesses in
comparison to the
company's own.

2. Financial The company's financial Accounting and 2-3 weeks Sudden missing
Analysis & statements and the Finance Department funds for various
Budget amount of money reasons
Preparation available for the strategy. (e.g embezzlement,
accounting error,
etc.).

3. Creation of Developing the best Marketing and 2 Months Unavoidable flaws

Market possible strategy for Research & in the strategy based
Strategy gaining more customers. Development on current
Departments circumstances of the
market/world or
company that give
difficulty into
execution.

4. Execution of Analysis & evaluation of Marketing, 3 Months Situations that are

Marketing performance, Operations, and difficult to
Strategy profitability, and data to Research and predictably avoid in
adjust positively Development the plan such as
accordingly to Departments calamities, negative
consumers and profits. media events,
company scandals,
etc.
X. REFERENCES

Hayes, A. (2022, August 26). Vertical Integration Explained: How it works, with types and

examples. Investopedia. https://www.investopedia.com/terms/v/verticalintegration.asp

Indeed Editorial Team. (2021, November 23). A Definitive Guide to Mass Marketing (With Pros

and Cons) indeed. https://www.indeed.com/career-advice/career-development/mass-marketing