Case 1 - Organigram case study - How can we improve? PDF

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Summary

Based on in-class discussion: Analyze the situation using the SWOT framework, PESTEL & Porter 5 Forces. (10%) Pestel OrganigramPolitical Companies must follow export/import laws  Canada is a stable political governance  Not all levels of governments agreed  Restriction on selling recreat...

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Case Study #1 OrganiGram: Navigating the Cannabis Industry with Grey Knowledge MGMT-1020 Prof. Tavia McLachlan Due Date: January 28, 2022 (5PM) Value = 10% Eloi Gignac Student #101249667

Based on in-class discussion: 1. Analyze the situation using the SWOT framework, PESTEL & Porter 5 Forces. (10%)

Pestel

Political

Organigram     

Companies must follow export/import laws Canada is a stable political governance Not all levels of governments agreed Restriction on selling recreational cannabis and medical markets Currently illegal in Canada

Unfavourable

Economic

       

Companies must follow minimum wage requirements Stable economic growth in Canada Low inflation Low interest rates Government support in Maritimes Government subsidies Affordable pricing for product Income inequality among Canadians

Favourable economically

Social

     

Changing attitudes towards cannabis Most medical professionals have a negative stance on cannabis Perception of an illegal drug becoming legal Health concerns Influence from Colorado legalization Increased use in popular cultures

Neutral

Technology

    

Availability of sale apps, websites, etc. Research – new strains, extraction of THC/CBD Production, better greenhouse, and growing process Cultivation innovation Better inhouse research

Favourable

Environmental

    

Weather forecast, changing seasons Climate change, pollution Quality of land/soil Usage of a lot of energy in production Opportunity to make organic product

Neutral

Legal

     

Organic must follow regulations Federal restrictions on selling cannabis Consumer protection law Licensing Regulation on possession Laws around who can purchase

Unfavourable

Porter 5 Forces

New entrants

Competitive

Organigram      

Hard to get license Hard to acquire supply High capital Product development is costly Little differentiation (consumer may switch) High barrier

  

Limited amount of competitors Large and well-established illegal market Low brand loyalty

Power of Suppliers



Are different strains but overall undifferentiated product

 

Many suppliers of raw material Less suppliers of actual product but companies can backwards integrate and produce own buds New companies would have less product until established enough to backwards integrate



Power of Buyers

Substitution

SWOT Analysis

Strengths

Weaknesses

   

Buyer don’t have a lot of choice Not a huge market as it is dictated by medical High price standardization so nor a buyer’s market Limited by regulation on amount purchases

    

Alcohol Illegal market Other drugs Cigarettes, cigars, etc. Abstinence

Organigram       

Organic product and certification Competitively priced East coast operation allows for subsidies from the government First-mover advantage in east coast market East coast loyalty Able to sell oils as well as cannabis Able to cultivate

     

Located on East coast, could have issues with distribution Harder to distribute cross the country Potentially smaller market Potential financial issues related to expansion Low market share compared to big competitors Higher price

2. Based on the External and Internal analysis; what are some possible new products Organigrams may consider? Please include both before and after legalization. (10%) Since Organigram launch in 2013, their only existing product available for medical users were there 100% organic bud, this was audited and confirmed. They were using regulated soil, organic fertilizers, and were free of certain pesticides. New products before legalization:

   

New Strains, organigram already had 3 popular strain called lighthouse, highlands, rising tied, they could create more. Packaged pre-rolled joints Rolling paper made from the hemp leaf Organigram branded ash trays, rolling trays and grinders

New products after legalization:       

Cannabis oils Extracts Edibles Beverages Vaporizers Bongs Pipes

3. List 1-3 possible scenarios the cannabis market will need to consider in the next 5 years. (20%) Companies with a competitive advantage over production will own a larger percentage of the market share. In terms of a business standpoint, organigram should consider increasing its landscape volume, there could be a shortage of land to produce the product in high quantities, this won’t meet demand and could protentional offset the company into bankruptcy. Regarding the marketplace, organigram along with other companies, will struggle with rolling out different marketing approaches, the reason being is marijuana will plausibly fall inbetween tobacco and alcohol. Tobacco is heavily regulated; it has strict restrictions towards advertisement/promotion, causing marijuana companies to struggle with their marketing efforts.

4. Base on these scenarios (and an uncertain future) list 2-3 strategies for Organigram to consider in the next 5 years. (30%) Organigram could open more indoor facilities to grow the plant to prevent damaging weather, or seasons, this could alter the company’s growth in the future. Organigram should be on the lookout for potential business alliances, they can settle trading or manufacturing agreements to prevent the decrease of production/inventory if they ever come to a halt. Organigram could advertise their brand on social platforms that accept the promotion of marijuana products, this includes independent websites, social media accounts, blogging post, any platform works if they follow the guidelines in relation to promoting and advertising.

5. Complete a Porter 5 force analysis for after cannabis legalization. (20%)

Porter 5 Forces

Organigram     

Saturated market Operation cost Customer loyalty Startup challenges Product development is costly

   

Fierce competition Illegal market still thriving Companies face marketing challenges Competitive advantage

Power of suppliers

  

Large quantity of production supplies Well-established suppliers High inventory demand

Power of buyers

  

High demand Black market Limited amount of purchases

    

Illegal markets Alcohol Tobacco products Abstinence Other drugs

New entrants

Competitive

Substitution...