Le Petit Chef Case Memo

New Product Development
[Name of company]
To: Brigitte Gagne
From: Ethan Pollak
CC: Robert McCullough
Date:
Re: Analysis and Recommendations for Le Petit Chef
INTRODUCTION
This provides recommendations and analysis for addressing how Le Petit Chef will stop its
steady decline in performance and become profitable again. This memo will look at: (1) how to
compete with the growing number of competitors ; (2) how to differentiate the Le Petit Chef
brand quickly and effectively ; and (3) what to do in order to cut costs and increase the
emphasis on products that Le Petit Chef should be more focused on.
RECOMMENDATIONS
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1. Compete on quality/ease-of-use by developing a high-end microwave oven with fuzzy
logic intelligence
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2. Differentiate quickly by funding the development of the “Liberte-express”
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3. Decrease costs and increase focus where it matters by narrowing down the product
line
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ANALYSIS
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The basis for the above recommendations were optimal support of the key decision criteria,
including: (1) fighting off competitive pressures in regards to quality/ease-of-use; (2)
differentiating themselves from high-end competitors; and (3) the need to increase
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performance in order to maintain profitability (See Exhibit IV for details).

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1. Compete on quality/ease-of-use by developing a high-end microwave oven

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with fuzzy logic intelligence
The company has three options for dealing with competitive pressures associated with
quality/ease-of-use, including: (1) adding a larger cavity model to the Liberte line; (2) creating
a new low-end Fraternite line; and (3) developing a new intelligent line of microwaves that uses
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fuzzy logic intelligence. In looking at how each option supported the key decision criteria (see
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Exhibit V), the third alternative provides the most support.
The first option of adding a larger cavity model to the Liberte line has some benefits however
the downfalls definitely outweigh these pros. The main benefits associated with adding this
larger cavity model is that it requires fewer resources than the majority of projects (30
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people/month) and can be completed in only 6 months. The downfalls however are that this
just adds yet another component into the already too large of a product mix and this
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component doesn’t overlap to any other products in their line which just adds unnecessary
costs and complexity.
The second option of creating a new low-end Fraternite line also has some pros that are
outweighed by the cons. Although creating this new Fraternite line would allow them to enter
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the larger and more prevalent low-end microwave market, it completely strays away from Le
Petit Chef’s brand image which has a large correlation to the high end, high quality side of the
market. The low-end market is also already heavily controlled by giant companies like
Samsung and wouldn’t suit Le Petit Chef well.
The last alternative of developing a new intelligent line of microwaves that use fuzzy logic
intelligence provides the best solution as it has by far the most benefits. The fuzzy logic
intelligence technology is just starting to become prevalent and is seen as highly innovative
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and appears to boast high quality to the consumer as well, which could be used heavily to Le
Petit Chef’s advantage. Developing microwaves with this technology follows the Le Petit Chef
brand image to a tee and will allow them to fight off competitors that are applying pressure to
them by marketing their products as high quality and easy-to-use just like they are. This also
helps to differentiate their brand from competitors which will be further discussed in the
following recommendation.
2. Differentiate quickly by funding the development of the “Liberte-express”
The company has three options for differentiating themselves from competitors
quickly/effectively, including: (1) adding a larger cavity model to the Liberte line; (2)
developing a new low-end Fraternite line; and (3) creating a “Liberte-express” quick-heating
model by upgrading the magnetron. In looking at how each option supported the key decision
criteria (see Exhibit V), the third alternative provides the most support.
The first option of adding a larger cavity model to the Liberte line has the same pros as
mentioned in the previous recommendation in that it is quick to complete and requires little
resources, however, its downfall here is that it doesn’t serve as a key differentiator because
other competitors already have and will continue to create larger cavity microwaves.
The second option of developing a new low-end Fraternite line has the same pros and cons as
mentioned in the previous recommendation in that it allows them to access the large low-end
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market however it strays away from Le Petit Chef’s overall brand image. Creating this
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Fraternite line also has the con of taking 18 months to complete, which is an extremely long
time when Le Petit Chef needs to add a differentiating product as soon as possible. This
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Fraternite line would also eat up a ton of resources that Le Petit Chef can’t afford to waste on a
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project like this.
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The last alternative of funding the development of the “Liberte-express” quick-heating model
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provides the best solution since it only will take 6 months to complete and serves as a strong
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differentiator against competing brands that have the same stature as Le Petit Chef.
Developing this model also requires significantly less resources than the new low-end
Fraternite line and a little bit less than adding the larger cavity model, all while still having a
higher NPV of 15,500,000 FF.
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3. Decrease costs and increase focus where it matters by narrowing down the
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product line
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The company has three options for increasing performance in order to maintain profitability,
including: (1) cost reduction of the Egalite to develop a low-cost, low-end Fraternite line ; (2)
creating a new low-end Fraternite line; and (3) completely cutting any development of a
Fraternite line. In looking at how each option supported the key decision criteria (see Exhibit
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V), the third alternative provides the most support.

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The first option of cost reduction of the Egalite to develop a low-cost, low-end Fraternite line is
beneficial in that it’s incremental innovation so it’ll only take 12 months to complete and has a
high NPV of 20,000,000 FF. It’s still not worth it to choose this option though because the
creation of this Fraternite line will further Le Petit Chef from its original brand image and will
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put them against extremely large competitors that already have high market share in the low-
end sector.
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The second option of creating a completely new low-end Fraternite line has the benefits
mentioned earlier of gaining access to the large low-end market however it only adds to Le
Petit Chef’s already too large product mix and should not be implemented given that and the
extremely high amount of resources required to make it happen.
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The last alternative of cutting any kind of creation of the Fraternite line provides the best
solution as it will help to narrow their product line and maintain the brand image of high quality
and luxury that is associated with Le Petit Chef. This will also allow for the R&D team to
increase focus where it matters (maintain core competencies) and in turn have less pressure
on them from the rest of the company.
CONCLUSION
To meet the goals for fighting off competitive pressures in regards to quality/ease-of-use,
differentiating themselves from high-end competitors, and increasing performance in order to
maintain profitability, the company should develop a high-end microwave that uses fuzzy logic
intelligence, create a “Liberte-express” quick-heating model, and completely cut any
development of the Fraternite line. These actions best match the key decision criteria of the
company (as defined in Exhibit IV, and project to provide an incremental performance
enhancement for the coming year and years to come(see Exhibit VI).
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EXHIBITS
I. Responses to guide questions
Le Petit Chef is facing an extremely competitive market however they have the
advantage of having a very strong brand to backup their products. That being said,
they have way too large of a product mix and need to focus on their core
competencies before anything. If Le Petit Chef is able to differentiate their brand
while not straying away from it then they will be able to stay competitive in this
market.
II. Pros and cons of alternatives
Issue Pros Cons

Compete on quality/ease-of-
use
1. Add larger cavity Requires little resources, Doesn’t serve as a key
model quick to complete differentiator, added
component
2. New Fraternite line Allows access to larger Strays away from brand
market image
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3. Fuzzy logic High quality – high brand Uses a lot of resources and
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intelligence correlation, key has low NPV
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differentiator, extremely
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beneficial in the long run
Differentiate
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quickly/effectively
1. Add larger cavity
model rs e Requires little resources,
quick to complete
Doesn’t serve as a key
differentiator, added
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component
market image
3. Liberte-express Strong differentiator, short Potential imitators
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completion time, high NPV

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comparatively
Decrease costs and maintain
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core competencies
1. Cost reduction of High NPV, relatively short Stray away from brand
Egalite completion time image, large competitors
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market image
3. Cut Fraternite line Narrows product line, No access to larger low-end
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development maintains core competencies market

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III. SWOT analysis
Strengths Weaknesses
 Extremely strong brand image – well Too large of a product mix

known in countries like France Many large competitors that are on a
 Large engineering team which is global scale
good for R&D  Disagreement amongst different
functional groups
Opportunities Threats
 Ability to differentiate amongst other  Large global competitors like

high-quality brands through the use Samsung imitating their new
of fuzzy logic intelligence products
 Ability to reduce product mix and  Large global competitors making a
increase emphasis on more bigger push into markets like France
important parts of the product line  Increased innovation by competitors
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IV. Identification of decision criteria
Criteria Weight (1 to Source

5)
Compete on quality/ease-of-use 5 Case, page 8, paragraph 3
Differentiate quickly/effectively 5 Case, page 9, paragraph 1
Decrease costs and maintain core 5 Case, page 7, paragraph 2
competencies
I. Comparative analysis of alternatives
4. The three tables below examine the various alternative for each recommendation
against the key decision criteria.
Options for Competing on quality/ease-of-use by developing a high-end microwave

oven with fuzzy logic intelligence
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Option #1: Option Option #3
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[Add larger #2 [Fuzzy logic
Criteria Weigh cavity Total [New Total intelligence] Total
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t model] Fraternit Rating
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Rating
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[Goal or criteria 5 4 20 3 15 5 25
#1]
#2]
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#3]
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TOTALS 43 46 54
Options for Differentiate quickly by funding the development of the “Liberte-

express”
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[Add #2 [Liberte-
Criteria Weigh larger Total [New Total express] Total
t cavity Fraternite Rating
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model] line]
Rating Rating
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#1]
#2]
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#3]
TOTALS 43 46 54
Options for Decrease costs and increase focus where it matters by narrowing down
the product line
[Cost #2 [Cut Fraternite
Criteria Weigh reduction Total [New Total line Total
t of Egalite] Fraternit development]
Rating e line] Rating
Rating
#1]
#2]
#3]
TOTALS 43 46 54
(Agreed with current sample totals)
II. Discussion or Pro-forma revenue consequences of alternatives
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New Product Development

Re: Analysis and Recommendations for Le Petit Chef

performance in order to maintain profitability (See Exhibit IV for details).

1. Compete on quality/ease-of-use by developing a high-end microwave oven

with fuzzy logic intelligence

Exhibit V), the third alternative provides the most support.

2. Differentiate quickly by funding the development of the “Liberte-express”

V), the third alternative provides the most support.

I. Responses to guide questions

II. Pros and cons of alternatives

Issue Pros Cons

completion time, high NPV

development maintains core competencies market

 Extremely strong brand image – well Too large of a product mix

 Ability to differentiate amongst other  Large global competitors like

Criteria Weight (1 to Source

I. Comparative analysis of alternatives

Options for Competing on quality/ease-of-use by developing a high-end microwave

Options for Differentiate quickly by funding the development of the “Liberte-

Option #1: Option Option #3

(Agreed with current sample totals)

II. Discussion or Pro-forma revenue consequences of alternatives

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