School of Management and Entrepreneurship

Marketing Strategy
(MKT631)
MBA 2019-21

PROJECT REPORT: Wiikano Orchards Case

SUBMITTED BY:
GROUP - 5
Ritika Sharma (1910120028)
Ashutosh Choudhary (1910120007)
Anuj Yadav (1910120163)
Atul Mishra (1910120135)
Mayank Sharma (1910120021)
Morvi Dhawan (1910120022)
1. INTRODUCTION

2. CURRENT SITUATION

3. COMPETITIVE POSITION ANALYSIS

4. MARKET ATTRACTIVENESS ANALYSIS

5. KEY STRATEGIC DECISIONS

6. MARKETING OBJECTIVES

7. MARKETING MIX

8. KEY IMPLEMENTATION RECOMMENDATIONS

9. PROFITABILITY ANALYSIS

10. CONCLUSION
Profitability Analysis:
Wiikano Orchards' financial loss is the outcome of poor variable cost management, so it is

recommended that the company reduce costs in labor maintenance and harvesting by labor

outsourcing. Correcting the management of these variable costs would allow for reinvestment

in the company's branding, product differentiation, and capturing target consumers, as well as

an overall improvement in the company's financial standing. The problems with existing

training and pruning clearly result in a cost gap between budgeted and actual costs. The

aforementioned malpractice resulted in a reduction in the estimated number of trees per acre,

which, in turn, resulted in a decrease in the number of apples harvested. Because the trees

were heavily planted, they needed special attention and pruning to ensure that they were

properly exposed to sunlight, which aided in the growth of the trees and their crops. The

organization invested a significant amount of money and resources in the workers who were

supposed to look after the orchard, but the desired outcome was not achieved.

According to Exhibit 7, 89 % of the overall cost is variable. As a result, in order to reduce

cost, it makes sense to examine the variable components and identify those that were

identified as problematic in the case. According to the above statements, there was a

significant problem with the labor's quality of work. Maintenance and harvesting costs were

the two most volatile labor costs. As a result, our recommendation is to cut costs while also

improving orchard care quality by outsourcing the job or recruiting only highly skilled

experts who can do the job better and at a lower cost. The average price for outsourcing

pruning is $800-$1000 according to the HomeAdvisor International.

In this profitability analysis we are reducing the labor- maintenance and labor- harvesting cost

and will see the impact of that on profitability.(it will be a rough estimate)
 From Exhibit 6

Budget Actual Updated

Labor- maintenance $1000 $970.65 $800.00

Labor- harvesting $1600 $1510 $1000

Total variable cost $4833 $4658.00 $3977.73

Fixed Cost $575 $570.22 $570.22
Total specified cost $5408.00 $5228.60 $4597.95
per Acre
Number of Tress per 908 818 818
Acre
Production cost per $5.96 $6.39 $5.56
tree

If we reduce the Labor- maintenance and Labor- harvesting cost in the total variable cost than

the Total specified cost per Acre will be decreased to $4597.95 from $5228.60. Hence saving

$630.65 per acre and the production cost per tree will be reduced to $5.56.

From exhibit 7 , Income statement summary 2016

FY’16 Updated
Revenue - $ 1,220,160 Revenue - $ 1,220,160
Apple production (120 acre @$5228.60 per Acre) - Apple production (120 acre @$4597.95 per
$ 627, 432 Acre)- $ 545, 754
Cost- $ 1,235,380 Cost - $ 1,153,702
Profit (Loss) Before taxes and subsidies – Profit (Loss) Before taxes and subsidies –
($ 15,220) $ 66,458

It can be seen that managing the variable cost efficiently will resulted into profit. As for the

profitability , due to reduction of total cost per acre the company earned profit of $ 66,458,

compared to the incurred loss of $ 15,220 in the actual statement.