Background
For this case study we are asked to identify the current strategic position and assist in implementing changes to enhance the market position of Johnsonville Sausage Company. Begun in 1945 when Ralph Stayer’s parents purchased the property. Then it was a small family owned and operated storefront which the Stayers grew into a retail chain between 1946 and 1952. Still, Mr. Stayer handled all the purchasing and management of the business, while his wife administered the books. This defines the foundations of Ralph Stayer’s management style as the company grew with him. After Ralph earned his business degree, he and his father took a long look at the company and its future. They decided that they would concentrate on the wholesale segment of the market as it appeared more likely to support their growth plans. Obviously this was the right choice as by 1985 Ralph was able to build the wholesale business to $4 million in sales. By 1970, Ralph had assumed the majority of the day-to-day business and in 1978 was named president of the company.
Changing Strategy
Ralph built the business based on freshness and direct customer demand. Inventories were kept at a minimum, but demand was known to fluctuate due not only to seasonal variations, but because of the methods of advertising and promotion in place. To account for these oscillations, the employee base was flexible. This allowed them to work as demand required; more during high demand, and fewer hours when they weren’t needed. This strategy seemed to work well enough. The company was able to build a second plant in 1978, adjacent to the first building. The original plant was used strictly for the smoked and semi-dry products, while they moved production of fresh products to the new location.
Johnsonville was able to keep costs low by maintaining low inventories and by working in conjunction with stores to share the marketing and advertising costs. This helped to drive their expansion into...