The capaicty issue faced by Clif Bar Inc is that the company is not able to fully satisfy demand of its customers pertaining to its products, which is caused by its relatively small scale of operations. The capacity strategy of the company pertains to increasing the production capcity for the Clif Bar and Luna Bar products. As mentioned earlier the company has already been utilizing the option of outsourcing part of its production to the third party.
However according to the increasing demand of its main two products, the company is planning on increasing the production capacity of the company. This is an attempt by the company to compete with the Kraft food company and Netsle who manufacture products of about 45 million each,and therefore are taking away the market share of Clif Bar. In order to satisfy the demand of the customers, the company is planning to invest in a production facility which will increase the production capacity of the company to 1 million units.