Giuseppe's Original Sausage

Introduction

Giuseppe's Original Sausage Company is a company that formed in late 1991 by Joe Cotrone in Memphis Tennessee. This was a gourmet sausage company that specialized in dinner sausages that consisted of more than 80 different sausage products. Mr. Cotrone as a leader was very worry about the future of the company. He identified deficiencies that he needed to work on, For example, lack of inconsistency in sales volume, financial stability, time involved in developing and establishing new accounts, new competitors in town, and inability to develop and retain long-term relations with major customers.

For Joseph the company was his passion and the art of making sausage came naturally to him. He became very popular for his great products and service. In 1991, Giuseppe's Original Sausage Company began to shape and he leased a space in a commercial building. By 1992, his products were sold in the grocery store Seessels and local restaurants. In 1997 because of Joseph's success his company reached sales up to $250,000 due to larger-order quantities from an expanding customer base.

Giuseppe Sausage Company's strategy

The CEO Mr. Cotrone started the company was to build and work up smarter than harder to a larger customer size. My case shows he initially concentrating in high quality unique specialty sausage customized by customers in local regions. One of the main benefits of being a small company is they are able to offer a wider variety of specialty sausages because they are only concentrating on a smaller client base whereas larger companies tend to focus on producing a few varieties to cover a larger customer base. Giuseppe strategy was to develop a reputation of being the best in the industry. To do this they focused on and provided what their customers wanted (customized specialty sausages, priced their products competitively) just a few cents above competitive prices, and prided themselves on being above average USDA and Health Department standards and regulations when it comes to cleanliness of the sausage making areas. Another successful key for Giuseppe was increasing the market share, increase the brand recognition, and expanding the geographic coverage.

Porter's five forces model

1. Competition in the industry: Competition among the competitors focused on price, but also on other features such as special promotions, advertising, and the variety of product offerings. Rivals establish themselves through value, brand recognition and nutrition.

2. Potential of new entrants into industry: As the market for dinner sausage continued to grow, new entrants were expected. As evidenced by Giuseppe's it was possible for a new company to enter the industry in a relatively short time. Government regulations (USDA regulations) erected some barriers to entry, but the major barrier came from the ability of the large companies to wage significant marketing campaigns. Other barriers would be customer loyalty and brand preferences, and the specialized know-how of a company (recipes). The ease of entry is a threat to existing companies due to the low capital requirements and due to the small importance of the learning curve.

3. Power of suppliers: The fact that there are no good substitutes for the meat needed to manufacture the sausage, especially if supplier are seeking for quality, places the buyer in a situation where he is limited to a single type of supplier in the industry. Although there are many ingredients needed, meat is the primary ingredient and therefore it dominates the industry. It is strategically important to have a working relationship with your supplier