Performance Management Page 3 Question 3 (9 marks) Kevin Raymond CEO of PRV Inc. (PRV), met with the board of directors two weeks before PRV's annual general meeting for the year ended December 31, 2020. The board was NOT happy. Revenues were down 18%, and net income was down 22%. PRV owns and operates a chain of over 120 grocery stores in Western Canada. The day after Kevin met with the board, Kevin met with PRV's senior leadership team to go over the situation. The team reviewed all of PRV's business lines to identify products that were driving the decline in sales and net income. In recent years, PRV has gone through a major expansion phase. With competition increasing and mergers taking place, grocery stores have become more "one-stop shopping mega-stores, and PRV felt it needed to do the same to compete. As a result, in 2017 PRV added clothing merchandise and household and kitchen products to its stores, in addition to the groceries and household supplies it has always sold. In 2018, PRV added larger home appliances, including fridges and stoves, and in 2019, PRV started offering sporting goods. The senior leadership team quickly identified that the areas with the most significant decline in sales and profits were these recently added product offerings, especially the larger home appliances. They immediately determined that PRV would stop selling the larger home appliances, and limit the selection to microwaves, toasters, and coffee makers. The team felt that these are closer to PRV's main grocery product lines. Frank Baker, vice-president of sales, commented that PRV should NOT only consider reducing products, but should look for opportunities to expand into new areas. For instance, Frank noted that PRV could increase customer traffic in its stores by attracting a new demographic through offering cooking classes, which is a growing trend in Canada. Frank also suggested expanding PRV's organic grocery product lines, with a possibility of even growing its own products or licensing its own branded organic lines. Required: a) Identify the different strategic vehicles that PRV executed in its expansion from 2017 to 2019, and explain how each related to its main grocery business. (3.5 marks) b) Identify the relevant strategic vehicles that PRV is currently considering, and identify the rationale as to why each is being considered. (5.5 marks)