AJAX Corporation - Michael Porter's Case Study

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While he cites examples of companies which have been able to create brand differentiation in an undifferentiated market, such as Foster Farms for chickens, his spending in this area does not make sense. Since he already controls a significant portion of deep-water lobster, which is regarded as high-quality by a price-insensitive market, he should do whatever he can to improve supply to this end of the market.

The specific steps that Graziano should consider include:

Additional acquisitions of wholesale capacity

Increasing financing of working capital, which could constrain his sales expansion

Consider expanding his marketing to other high-margin markets which support his high-quality product.

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This should especially include Europe and Japan, which seem to pay twice as much for If shipping is an issue, he has the resources to discover how to ship and store to these markets.

In addition, Graziano should drop certain activities. It makes no sense for the company to continue vertical integration to restaurants; other than the operation in Kingston, Rhode Island, the company has no expertise. Running radio advertisements also makes no sense.

In conclusion, Graziano's operation is a low-cost, high-volume producer and marketer in a variable business. It should profit in either high- or low-supply situations as the low-cost….....

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