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In the recent times, competition between companies operating in the same field has drastically surged. This is attributable to raised knowhow among customers, improved distributional efficiencies, reduced barriers of entry and improved customer service delivery among other aspects. As a result, companies have been forced to diversify beyond the domestic markets, in order to have raised sales turnovers, which in most cases translate to higher profitability. Further, through international expansions, companies have been able to attract as well as retain investors, thus ensuring short and long-term sustainability. One of the firms, which have intensively considered expansion, in order to ensure sustainability, is Prince Edward Island Preserve Co Ltd (Carpenter & Sanders, 2009).

Prince Edward Island Preserve Co Ltd, founded in 1985 is an international company, specializing in production of high quality foods by using the highest quality farm ingredients and produce. Despite its enormous success in the domestic markets, the company has faced numerous challenges in the international market, a factor which made the firm to undergo receivership in 2007. As a stakeholder who has been appointed by the founder Bruce MacNaughton, I will develop a 5 years strategic plan, which will make the company competitive both in the local and international market. P.E.I.P.C. needs a new corporate strategy to guarantee the company a stronger financial future. With regards to the current situation where the organization is faced by under pa returns due to the seasonal business it operates, the company can make use of better strategy that makes use of the current benefits while at the same time creating others. With the consideration to shift from restaurant and the production of jam, P.E.I.P.C. risks facing unfavorable financial challenges and threats. However, expanding the organization’s market reach is identified in this corporate strategy plan to be much beneficial. In this case, the expansion allows the company to run businesses in a much diverse market to increase the output of the company. There are two notable diversifications of the markets, which can be undertaken by the company to enhance sustainability, thus include Tokyo and Toronto markets.

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For P.E.I.P.C, expansion of Jam Production to Tokyo market has several competitive advantages as compared to that of Toronto. First, the company has a high level of popularity within the Japanese market, especially in Tokyo. This is a result of the requirement of reading Anne of Green Gables in Japanese schools, thus it will be easy for the potential customers to associate with the brand. Further, in Japan, annual consumption of jam, one of the products manufactured by P.E.I.P.C is estimated to be 80,000 tons, and imports are 6-9% of the total consumption. By diversifying in this market, the company will have the challenge of stiff competition as various types of jams are locally manufacture by companies like Endoseian Co Ltd, hence sold at a lower price. Some opportunities include high number of visitors in this market as well as raised disposable incomes, especially by the middle-class.


As indicated above, it is clear that, the company prefer to expand its market to Tokyo market as compared to that of Toronto. With consideration to entry into a new market, various challenges have been identified that P.E.I.P.C. will be dealing with as it includes Tokyo as a new destination to capture new market. In addition, the problem of attracting and keeping potential and highly skilled employees would be partially offset. Primarily, the seasonal nature of jam production has created the employee problem, hence, creating another level of problem, decreasing profits. In this case, considering various variables that range from sociocultural aspects like income distribution to operation costs, P.E.I.C.P. will consider expanding its business reach by targeting Tokyo markets. The reason for choosing Tokyo over Toronto is due to the Single Child Policy enacted by the Chinese government; one of the reasons that more Chinese are leaving China in search of harmonized grounds to breed expand their families on. Japan, as a close Asian neighbor to China, provides a comfortable atmosphere for the expansion of families (Carpenter & Sanders, 2009).

While the Chinese and their passion for more kids are taken care of, they provide cheap labor to Japan and foreign companies operating in Japan. With consideration to Toronto, an expansion in Canada is likely to suffer from cost ineffective variables like low turnover levels and slow market saturation. In addition, the option of expansion in Toronto cannot be implemented because the target market is vulnerable to collapsing with regards to Mexican immigrants forced into Canada by strict USA immigration laws – relevance drawn to market firm specificity of pursing Tokyo expansion plan. In this case, the expansion of P.E.I.P.C. by venturing into the Japanese markets is strategic plan that would see the company accumulating higher profits and retaining skilled employees – pursing synergy. With regards to Asian and Japanese culture, shopping is a customer trend that does not diminish with economic issues faced by the rest of the world. In this case, the main vehicle that would see this venture successful is targeting densely populated cities, specifically Tokyo. The reason behind this reasoning is that target customers will be reached in large numbers while at the same time targeting their shopping culture.

Cost Savings Strategies

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It is notable that, even under the most promising economic situations, there is the need for Prince Edward Island Preserve Co Ltd, to take all the possible cost saving strategies. In most instances, cost saving strategies may be simple to implement, thus having enormous impact to aspects such as cash flow, profitability, and share prices among others. For this company, there are certain cost savings strategies, which will be employed, in order to free up the resources needed to pursue the opportunity of JAM production expansion in Tokyo (Carpenter & Sanders, 2009). One of the reducing the operational overheads once operations starts in Tokyo. Despite the enormous growth in Tokyo, it is clear that, the G.D.P per capital has reduced in the recent years, especially after 2008 owing to global financial crises.

Consequently, disposable income among potential customer has reduced, owing to high food and gas prices and reduced exports among other factors. Owing to this, sale of consumer products have reduced in different parts of the world, including Tokyo. To reduce overheads, Prince Edward Island Preserve Co Ltd will merge with other companies selling food products in Tokyo. This way, the company will reduce costs associated such as those regarding staffing, setting up of new manufacturing plants among others. For instance, through merger, the company will save costs such as those dealing with acquiring land for construction of the manufacturing plants purposes. For instance, in Tokyo the cost of rental space is $75-$160/sq. meter, which is the most expensive globally. The other cost saving approach that will be used is supplier consolidation. In most cases, companies use different suppliers to offer same services is goods, thus increasing risk level across multiple suppliers. By reducing suppliers, the company will benefit from economies of scales, thus reducing costs.


It is clear that, in order to determine the best entry vehicle, there is the need for managers to verify the type of strategic concerns, which are of enormous importance as well as the costs that are hard to cover. However, by sharing resources, there is the raised risk of opportunists and high transaction costs. There is one main strategy, which will be used by the company to implement the new expansion to Tokyo. This is through contractual agreements, which is an agreement between partners who have international coverage such as franchising, licensing and joint R&D. P.E.I.P.C will enter into contractual agreement with Endoseian Co Ltd. The following implementation plan will be followed.

Timeline in months


Key Deliverables


Phase 1: Preliminary Assessment

  • Conducting preliminary assessment
  • Preparing research and development plan
  • Describing internal and external environment


Phase 2: Research and development

  • Providing comprehensive analysis pertaining external and internal environment
  • Assessing issues and the alternatives



Phase 3: Strategic Direction


  • Finalizing all key issues and rationale
  • Evaluating alternatives
  • Developing recommendations


Phase 4: Final Report and Presentations


  • Offering highlights of the strategic assessment
  • Explaining and offering rationale for all key issues, recommendations and implementation


Phase 5: Commencement

—  Amending final report and presentation

—  Commencement of business in Tokyo

One of the likely cause of PEIPC’s potential failure, is that low knowledge generations as well as low medium risk opportunities which will be experienced as a result of this contractual agreement. In this expansion plan, financing will be carried out by financing will be through selling its shares to the public in Tokyo. This way, loyalty will be created, thus higher levels of sustainability.

Financial Ratios

Return on Investment

This will measures the returns of proprietors’ investment from Prince Edward Island Preserve Co.

Gross profit Ratio

Gross profit is profit obtained after deducting all the variable costs from the revenue obtained. Since gross profit alone does not give us a lot of information on the competitive nature of the firm, hence there is a need to be expressed in term of a percentage.

This ratio indicates the sales margin compared to the factory cost.

Return on Equity

This measures the rate of return of shareholders equity of common stock owner. It shows the ability of a firm to generate profit from each unit of shareholders equity.

The length of the joint venture contract with Endoseian Co Ltd will not exceed 50% of the strategy’s life span. This means that the contract has to expire before end of 5 years if a 10-year plan is assumed. The reason for this is to make sure that the organization can operate by making independent decisions, reducing risks, expanding the scope of its production goals, and managing input and output returns (Carpenter & Sanders, 2009).

Following this concern, the business approach of P.E.I.P.C. will remain unchanged but expansion is considered on a different business venture, introduction of a Tokyo branch to target the middle class. A SWOT analysis shows that the taking of this venture involves more positives, in terms of opportunities and strengths; than negatives, in terms of threats and weaknesses. A background check on competition within Tokyo shows that the available fashion investments target the upper class. This allows free entry of investors without the risk being run down by bigger and much stable players. However, as a strategic approach into the business venture, P.E.I.P.C. aims at trading its products at slightly lower prices than the market prices while compensating the operation cost by the number of units sold. Alternatively, regularly changing market trends would be dealt with by venturing into the Tokyo market on a joint venture with an already existing player. This is to offset the likelihood of trading unprofitably or running the risk of unsustainable business operations (Carpenter & Sanders, 2009).

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