Bob runs a fifty year old new York city company (specialty pasta) that makes and sells through distrutors pasta to Italian restaurants in the mid-Atlantic region. Specialty pasta has gained a small competitive advantage though an integrated low cost/differentiation strategy by offering the freshest pasta and the lowest cost. While it makes a profit, it is a small one because of the additional cost of getting it pasta to the store soon after it is made. Specialty pasta competes against national firms and importers of Italian pasta. Bob believe he can expand specialty pasta’s profits by diversifying into sauces.
2.If bob decides to do so, what should specialty pasta consider in deciding whether to produce the sauces itself or outsource the production to another company?
3. is diversify into sauces a better approach to expand the business than attempting to expand to service a national market?