C: exhibit 7).
United Farmers of Alberta (UFA) is planning to open a new petroleum outlet in Rocky Mountain House. This, however, could affect RMHC because they have been doing well with the petroleum division in the past couple years. Milt has expressed to Frank that he wants to develop a plan to minimize UFA's impact on their own sales and profits.
As noted in Appendix @ exhibit 1, the margins of the petroleum division are very low compared to RMHC's other divisions. This is due to the fact that there is high competition in the market of petroleum; therefore, it seems evident that the petroleum market is in market maturity.
UFA is known to have aggressive marketers and they are a co-op as well so, therefore, there is a chance that they may take some of RMHC's market share. A short run issue that RMHC needs to address is that UFA is coming into their trade area and this could threaten RMHC by taking over their market share. In the short run they most likely will experience a significant lose in sale
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