Memorandum TO: Barry Landers, CEO FROM: Marlena McWilliams & Randolph Scrapper DATE: February 21, 2000 SUBJECT: Natureview Farm Key Issues or Problems Natureview is a natural organic Brand Name for yogurt. Since its inception it has relied on its uniqueness of taste, texture, long shelf life, and low cost marketing to grow to a 13 million dollar company. Currently it sells yogurt products only in the natural/organic food channels like Whole foods and Wild Oats, which in 1999 controlled only 3% of the yogurt sales in the US, but has a rapid growth rate of 20% per year.
Going into the new age Natureview has had to undergo some financial changes; they must switch their investor profile and style to continue operations. However, in order to attract the right investor Natureview has to increase total revenues by 7 million dollars to 20 million dollars in a 12 month period. This increase in revenues will flow down to the profitability of the company as long as they pick the best option to help increase revenues and profits at the same time.
Christine Walker the Chief Marketing Officer must consider all three options qualitatively and quantitatively to ensure that the new strategy of either entering the supermarket industry or expanding into the children’s multipack will provide profitably for the company. Even more importantly this strategy must be transferable to their current business model without jeopardizing the relationships with the current customers, suppliers and distribution partners.
Christine does not have an easy decision on her hands but she has analyzed the different options from her executive staff to determine the best result for the company moving forward. Natureview lost an investor and needs to raise sales to entice a new investor. They are faced with three options to meet their need of total revenues equaling $20M. Evaluation of Strategic Alternatives |1 |Expand 6 SKUs of the 8-oz. size into eastern and western supermarket regions | |2 |Expand 4 SKUs of the 32-oz. ize nationally into supermarket channel | |3 |Introduce 2 children’s multipacks into natural foods channel | Recommendations and Implementation In assessing the three scenarios, our analysis shows that scenario three would be the best choice for Natureview. Natureview should focus on expanding its already successful organic yogurt product line to include 2 childrens’ multipacks into the natural foods channel priced at $3. 5 This strategy will allow for Natureview to truly step away from its competitors and become the leader in the market and to reach their set revenue the quickest. It will also enhance customer loyalty between the two primary customer bases including women and women who buy yogurt for their children. Also, introducing these two products in the Midwest and the Northwest areas is another strategic approach to increasing market capitalization in the top yogurt buying areas of the country.
Exhibit 1 depicts that Scenarios 3 offers a higher return in profit versus the other two scenarios presented, this is mainly to due that it fits within the current business model of the company. Scenario 1 &2 both would be changing the business model of Natureview and its core reasons for success. At this time given the financial instability of the company we did not feel that expanding into the supermarket industry with such high costs, which are between 42%-43% higher would benefit Natureview at this time. In addition the childrens market is expected to grow by 12. % to 21. 5% (Exhibit 2) versus only 3% for the 6oz size and 2% for the 8oz. , plus the natural/organic food market is expected to grow by 20% each year. Flavors should be chosen form the lines most successful flavors but will be given creative names that appeal to kids. The multi-packs will be positioned as the healthy snack alternative for kids. So at this pivotal point, it is most advantageous for Natureview to remain with their trusted distribution channel of natural food stores, rather than attempting to diverge into large grocery stores.
Some ideas for implementation for the product is a website targeted for cool moms, in store tastings, add value through recipes message boards and special offers, community involvement program in Vermont, and floor sticker displays to catch kids attention, to name a few. This approach is consistent with their low budget creative promotions and they can make advantage of their company’s small size. http://www. scribd. com/doc/5046099/Portfolio-of-Kate-Johnson Appendix We can get some data from the excel spreadsheet and then I think we can develop ones with flair.
Appendix/Exhibits You should limit your appendix to a maximum of three exhibits. Assume that you will be making an oral presentation using these three exhibits. A well-crafted exhibit can convey a lot of information (quantitative, financial and qualitative as necessary), so make the exhibits clear and easy-to-follow. Remember, clarity (text and exhibits) is important. Simple pie charts, bar charts and other “single-variable” displays of data should be avoided since they typically provide little value beyond that which can be accomplished more concisely in text. )
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