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    Natureview Farm Case Study Analysis

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    Sachin Kamra
    Natureview Farm, an organic yogurt manufacturer, is considering three expansion options to reach its $20 million revenue goal by 2001 as its venture capital investor looks to exit: 1) Expand to Northeast and West region supermarkets, 2) Expand nationally in supermarkets with its 32oz size, or 3) Stay in natural food stores and introduce new sizes. The document analyzes the pros and cons of each option and recommends expanding to supermarkets regionally with its top-selling 8oz size to gain a first-mover advantage and exposure to new customers.

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    Natureview Farm Case Study Analysis

    Uploaded by

    Sachin Kamra
    594 views15 pages
    Natureview Farm, an organic yogurt manufacturer, is considering three expansion options to reach its $20 million revenue goal by 2001 as its venture capital investor looks to exit: 1) Expand to Northeast and West region supermarkets, 2) Expand nationally in supermarkets with its 32oz size, or 3) Stay in natural food stores and introduce new sizes. The document analyzes the pros and cons of each option and recommends expanding to supermarkets regionally with its top-selling 8oz size to gain a first-mover advantage and exposure to new customers.

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    Solution 1 Case Study solution

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    Natureview Farm, an organic yogurt manufacturer, is considering three expansion options to reach its $20 million revenue goal by 2001 as its venture capital investor looks to exit: 1) Expand to Northeast and West region supermarkets, 2) Expand nationally in supermarkets with its 32oz size, or 3) Stay in natural food stores and introduce new sizes. The document analyzes the pros and cons of each option and recommends expanding to supermarkets regionally with its top-selling 8oz size to gain a first-mover advantage and exposure to new customers.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pptx, pdf, or txt
    594 views15 pages

    Natureview Farm Case Study Analysis

    Uploaded by

    Sachin Kamra
    Natureview Farm, an organic yogurt manufacturer, is considering three expansion options to reach its $20 million revenue goal by 2001 as its venture capital investor looks to exit: 1) Expand to Northeast and West region supermarkets, 2) Expand nationally in supermarkets with its 32oz size, or 3) Stay in natural food stores and introduce new sizes. The document analyzes the pros and cons of each option and recommends expanding to supermarkets regionally with its top-selling 8oz size to gain a first-mover advantage and exposure to new customers.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pptx, pdf, or txt
    of 15

    Natureview Farm

    Case Study Analysis

    Sachin Kamra 8347669938


    Saransh Jha 9874539551
    BACKGROUND
    Jim Wagner joined as CFO Revenue reached 13mn Growth of $20 mn

    1989 1996 1997 1999 2000 2001

    Founded
    • Manufactured refrigerated cup yogurt
    • Started with two flavors and two sizes
    • 8 ounce and 32 ounce
    • Plain and Vanilla flavor Wagner arranged for an equity
    VC firm wants out
    infusion from a VC to fund
    investments

    Average shelf life of the yogurt was 50 days while most competitor had a 30 day shelf life

    2
    Yogurt Distribution Channel
    Yogurt Market Share by
    3% Packaging Segment

    9%
    8%
    9%
    97%
    74%

    Supermarket Natural Food Stores

    8 oz cups and smaller Children's multipack


    32 oz cups Other
    Supermarket channel
    Manufacturer Distributor Retailer Customer
    15% 27%

    Natural Foods Natural Foods


    Manufacturer Retailer Customer
    wholesaler distributor
    7% 9% 35%
    Natural Food Channel
    ISSUES

    Need to find a
    VC needed to path to grow
    cash out of its revenues around 4

    investment 20mn dollar


    before the end of
    2001

    The company wanted to attain


    highest possible valuation in case
    any possible acquisition
    Header Full Image

    Senior Management Team’s Options

    OPTION 1 OPTION 2 OPTION 3

    • Expand in • Expand in • Stay in


    Northeast and supermarket Natural Food
    west region nationally channel
    supermarkets • Bring in 4 • Introduce 2
    • Bring in 6 SKUs of the children’s
    SKUs of the 8- 32 oz size multipack
    oz size
    OPTION
    1
    PROS CONS

    • 8-oz has largest dollar and unit • High risk and high cost
    share in the yogurt market (marketing)
    • Significant revenue potential • Require quarterly trade
    • First mover advantage as organic promotions
    yogurt brand to enter • Advertising plan would cost $1.2
    supermarket channel million per region per year
    • Providing organic product • SG&A expenses would increase
    attracts higher income and less by $320,000 annually
    price sensitive customers thus • Need to pay one time slotting fee
    helping supermarkets gain their • Channel Conflicts
    market share
    PROS CONS

    • 8-oz has largest dollar and unit • High risk and high cost
    share in the yogurt market (marketing)
    • Significant revenue potential • Require quarterly trade
    • First mover advantage as organic promotions
    yogurt brand to enter • Advertising plan would cost $1.2
    supermarket channel million per region per year
    • Providing organic product • SG&A expenses would increase
    attracts higher income and less by $320,000 annually
    price sensitive customers thus • Need to pay one time slotting fee
    helping supermarkets gain their
    market share
    • Channel Conflicts
    54

    YPE OF CHANNEL CONFLICT


    Causes of Channel Conflict

    Goal Incompatibility

    1 2 3 Unclear roles and rights

    Differences in perception
    Horizontal Vertical Multichannel
    • Between
    • Same level • Different level two or more
    channels Intermediaries' dependence on the
    manufacture

    Supermarket
    Natural Food Stores
    Margin Analysis
    OPTION
    2
    PROS CONS

    • 32-oz. cups have a higher profit • 32-oz. expansion option would


    margin than 8-oz. cups increase SG&A expense by
    • Fewer competitive offerings in $160,000
    this size • Possible conflict of interests
    • Strong competitive advantage in between supermarkets and
    terms of shelf-life natural foods stores
    • Lower promotion expenses • Doubt over new users readily
    entering the brand via multi-use
    products
    • Doubtful if existing sales team
    can achieve nation-wide
    distribution in 12 months
    OPTION
    3
    PROS CONS

    • Existing strong relationships • Missing out on the opportunity


    with leading natural food channel to become the first-movers in the
    retailers supermarket channel
    • The sales team was experienced • Rapid growth of natureview
    in this distribution channel farms in the natural food channel
    • Financially attractive- the natural might lead to bigger demand
    foods channel was growing 7 from retailers, similar to the case
    times faster than the supermarket of supermarket channel
    channel
    • It would yield the strongest profit
    contribution of all the strategies
    under consideration
    Recommended Solution
    OPTION 1

    • Target achieved
    • First-mover advantage of organic
    yogurt manufacturer to the
    supermarket channel
    • Exposure to new segment i.e price
    sensitive
    • 8 oz has maximum demand
    • Short term risk is compensated by
    long term revenue
    increase

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