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natureview case analysis

Category: Business Paper Type: Homework Reference: APA Words: 1500

How has Natureview succeeded in the natural foods channel?

Natureview faced many difficulties for attain its goals towards profitability. It is yogurt manufacturer and grabs the vast market. They were facing failure to attain the targeted revenues in past times and it was quite challenging for them. They have to think initially that how to generate 50% revenue before 2001. Thanks to Christine Walker who put his efforts to conduct a meeting, which was very effective. They planned that they have to go with their products in supermarket with great explanation. This was all for only generate the required revenues. I think this was the turning point for the success when they decided to go with creativity and difference with distribution channels. It was very risk also to challenge the old and organized distribution culture but is also said that high-risk lead maximum high chances of profit.

Role of success of Natureview is also goes to the chief finance officer who was hired in 1996 named Jim Wagner. He maintains the effected accounts and creates best check and balance program with effective financial control and then they start growing up. Jim was proved as a first step to success as he provided financial stability and direct farm to profitability. This was the second phase and big reason towards the success of Natureview.

In third phase of success there was the existence of VC (Venture Capital) who had investment in Natureview and further they decided to take back all of it. This was challenging for this company and they were decided not to increase its revenue until VC takes away. This was the wise decision that leads Natureview comfort to back minimum return. After a long jump regarding revenue, Natureview build a remarkable brand quality and get some serious satisfaction from customers. Customers trust from anywhere and image of Yogurt quality was very much supporting for them to success. They also had sharp and active management at that time to tackle the difficult situations all the time as they shown before.

2.What are the two primary types of growth strategies under consideration by Natureview?

Natureview has been considering two growth strategies so that they can also increase its revenues and business profits. According to the first primary type of growth, strategy is product expansion. Natureview has been expanding its product lines and distributing through the Natural food channels and they have applied the growth strategy where large number of wide variety of products being sold. This is the effective growth strategy because consumers always want to consume the natural foods product and initially Natureview was only selling the packet yogurts.

The management has the concern of increasing the revenues up to the $20 million by the end of 2001 financial year, they have limited options of increasing the sales through distribution channels and therefore they applied the growth strategy and increased the product line. This type of growth strategy where firm decided to increase the product line is known as Diversification growth strategy. The top management of the Natureview has decided that they had to increase the product line and introduce the diversification strategy into the operations. Therefore, they are considering the diversification strategy for generating the higher sales and reaching the revenues up to the $20 million by the end of 2001.

Second type of growth strategy is known as the Market development considering by the top management. They are considering that they should be introducing the new Health food products and selling through the natural food channels as a “Market development” strategy. This newly introduced product can be purchased by the consumers and customers through natural food channels as people already are used to be visiting these channels for buying the natural refrigerated yogurt. This channel would help to develop the market for this newly introduced product, which was not possible, if these channels were not available. Therefore, Diversification and Market development are the two growth strategies, which are being considered by the top management of the Natureview. Market development is one of the growth strategies because as long as market has not been developed for the newly introduced products, Natureview can achieve the growth in the revenues and reach the sales up to $20 million by the end of financial year 2001. They are considering developing the market through the natural food channels which is the best opportunity available to the Natureview.

3(a). How do the three options compare financially in terms of yearly revenue, gross margin, required investment, and profit potential?

Revenue Comparison:

According to the three options given by the top management and different members were present in the meeting. In the first option, there was the introduction of the Eight-ounce cups and it has the potential of increasing the revenues significantly. It is expected that this new eight-pounce cup would double the sales volume and total revenues would be increased. In the first option, management considered the fact that Soymilk and Amy’s Organic food generated and increased revenues by the 200%. Therefore, a yogurt is an organic food and increasing its size is a source larger dollar.

As far as second option is concerned, it was discussed the fact that Natureview should be expanding its operations through more retail stores all over the United Kingdom. In the second option, they have to expand its operation up to 64 retails chains to increase the revenues. As far as third option is concerned, it is discussed that Natureview should be introducing the yogurt pack especially for the Kids and they support the idea of increasing the revenues through selling the most famous Yogurt product through the retailers. Natureview can increase its revenues if their organic yogurt is available over all retail stores.

Assignment On Natureview Farm By ABC Date 1.How has Natureview succeeded in the natural foods channel? Natureview faced many difficulties for attain its goals towards profitability. It is yogurt manufacturer and grabs the vast market. They were facing failure to attain the targeted revenues in past times and it was quite challenging for them. They have to think initially that how to generate 50% revenue before 2001. Thanks to Christine Walker who put his efforts to conduct a meeting, which was very effective. They planned that they have to go with their products in supermarket with great explanation. This was all for only generate the required revenues. I think this was the turning point for the success when they decided to go with creativity and difference with distribution channels. It was very risk also to challenge the old and organized distribution culture but is also said that high-risk lead maximum high chances of profit. Role of success of Natureview is also goes to the chief finance officer who was hired in 1996 named Jim Wagner. He maintains the effected accounts and creates best check and balance program with effective financial control and then they start growing up. Jim was proved as a first step to success as he provided financial stability and direct farm to profitability. This was the second phase and big reason towards the success of Natureview. In third phase of success there was the existence of VC (Venture Capital) who had investment in Natureview and further they decided to take back all of it. This was challenging for this company and they were decided not to increase its revenue until VC takes away. This was the wise decision that leads Natureview comfort to back minimum return. After a long jump regarding revenue, Natureview build a remarkable brand quality and get some serious satisfaction from customers. Customers trust from anywhere and image of Yogurt quality was very much supporting for them to success. They also had sharp and active management at that time to tackle the difficult situations all the time as they shown before. 2.What are the two primary types of growth strategies under consideration by Natureview? Natureview has been considering two growth strategies so that they can also increase its revenues and business profits. According to the first primary type of growth, strategy is product expansion. Natureview has been expanding its product lines and distributing through the Natural food channels and they have applied the growth strategy where large number of wide variety of products being sold. This is the effective growth strategy because consumers always want to consume the natural foods product and initially Natureview was only selling the packet yogurts. The management has the concern of increasing the revenues up to the $20 million by the end of 2001 financial year, they have limited options of increasing the sales through distribution channels and therefore they applied the growth strategy and increased the product line. This type of growth strategy where firm decided to increase the product line is known as Diversification growth strategy. The top management of the Natureview has decided that they had to increase the product line and introduce the diversification strategy into the operations. Therefore, they are considering the diversification strategy for generating the higher sales and reaching the revenues up to the $20 million by the end of 2001. Second type of growth strategy is known as the Market development considering by the top management. They are considering that they should be introducing the new Health food products and selling through the natural food channels as a “Market development” strategy. This newly introduced product can be purchased by the consumers and customers through natural food channels as people already are used to be visiting these channels for buying the natural refrigerated yogurt. This channel would help to develop the market for this newly introduced product, which was not possible, if these channels were not available. Therefore, Diversification and Market development are the two growth strategies, which are being considered by the top management of the Natureview. Market development is one of the growth strategies because as long as market has not been developed for the newly introduced products, Natureview can achieve the growth in the revenues and reach the sales up to $20 million by the end of financial year 2001. They are considering developing the market through the natural food channels which is the best opportunity available to the Natureview. 3(a). How do the three options compare financially in terms of yearly revenue, gross margin, required investment, and profit potential? Revenue Comparison: According to the three options given by the top management and different members were present in the meeting. In the first option, there was the introduction of the Eight-ounce cups and it has the potential of increasing the revenues significantly. It is expected that this new eight-pounce cup would double the sales volume and total revenues would be increased. In the first option, management considered the fact that Soymilk and Amy’s Organic food generated and increased revenues by the 200%. Therefore, a yogurt is an organic food and increasing its size is a source larger dollar. As far as second option is concerned, it was discussed the fact that Natureview should be expanding its operations through more retail stores all over the United Kingdom. In the second option, they have to expand its operation up to 64 retails chains to increase the revenues. As far as third option is concerned, it is discussed that Natureview should be introducing the yogurt pack especially for the Kids and they support the idea of increasing the revenues through selling the most famous Yogurt product through the retailers. Natureview can increase its revenues if their organic yogurt is available over all retail stores. Gross margins comparison: There are lower gross profit margins in the first option because it needs to make the higher marketing expenditures for the promotion of the Eight oz cup. This product needs to be promoted aggressively in the market so that consumers know about the product and they come for buying it. Higher promotional and marketing expenditures would decrease the gross margins for the Natureview. It has been estimated that $1.2 Million needs to invest for the advertisement of the product introduced in option 1. In the second option, there are also higher distribution expenses required for making the 32-oz available all over the United States of America. However, these distribution expenses are estimated as 10% of the marketing expenditures in the first option. This shows that there are higher gross margins for the second option because this option would also achieve the higher sales. In the third option, this is the most profitable and viable option where gross profits are increased by 37.6%. This option is promoting the idea of selling multi-pack yogurt and its distribution is not a problem because Natureview has good relationships with the retail stores. This option would increase the sales with 1.8 million units expected and gross margins would be higher as compared to two other options because it has lower expenditures. Required Investment: There is large investment required in the advertisement campaign and marketing expenditures in the first option. The success of this highly depended over the promotional campaign on the electronic media through the advertisement; therefore, they have to invest $1.2 million per year. In the second option, Natureview have to make the large investment in training the sales force and in their development but this investment is smaller as compared to the marketing investment in option 1. In the option three, there is a need of investing in the product development for offering multi-pack natural food to the consumer for which they have to import the Plant & Machinery. Profit Potential: There is a large profit potential available in the first option because it can increase the sales up to 35 million units which also help in increasing the market share, although the marketing and promotional expenditures are higher but sales would be increased with more proportion. As far second option is concerned, there is a stiff competition available in selling 32 oz cup and profit margins would be compromised to meet the competition. This option is less profitable as compared to first option. In the third option, this is most profitable option because expectedly 37.6% profits would be increased due to attractive market available for multi-pack natural food and yogurt. b- If the venture capitalists extended their deadline for meeting the $20 million revenue target by 12 to 18 months, would that change your recommended action plan? It would not change the recommended plan because more time is favorable for the implementing the business plan to generate the higher revenue and meet the target for $20 million revenues. The plan success is depended upon the natural food distribution channels and it needs the time of secure all distribution channels over the United States of America. Extending the time from 12 months to the 18 months is not going to affect the plan as long as financial resources and funds are disbursed to manage expanding operations, opening more distribution channels and hire the sales force to gain the new consumers. 4. What are the strategic advantages and risks of each option? What channel management conflict issues are involved? There are different strategic advantages and risks of each option; First option has strategic advantage of increasing the market share in the yogurt product because it is expected that aggressive promotion campaigns and advertisement would be contributing into the increased market share and they would be capturing large market as compared to competitors. There is also risk of spending the large money on the promotional campaigns and it may not achieve its payback. In the second option, they have the strategic advantage of offering the largest cup 32 oz that is never offered by the competitors. It will give the strategic advantage because consumer would like to buy the large cup of 32 oz, there is also risk of second option as not able to find the experienced personal and without the experienced sales force, and revenue would not be increased. In the third option, it has strategic advantage of having good relationships with the natural food retail store as they provide the strategic advantage of large distribution; moreover, its risks are they may not be able to establish the strong relationships with the supermarket anymore. There are also channel management conflicts available because Natureview have good relationships with the Natural food retail suppliers and Supermarkets both. Both channels are expecting from the Natureview to promote their new natural food products. Natureview needs using the retail store network because they can gain the strategic advantage and also promote their brand name through natural food retail stores which resulting in bad relationships with supermarkets. 5. What action plan should the company pursue? What changes in the current marketing mix, sales, brand, and channel partner arrangements do you recommend in order to implement the action plan? First action plan for me is to get a competitive advantage with differentiate its products regarding natural foods. There are now lots of competitors that are producing the same products with same or better quality with features. I think plan should be to create a difference in their products. It is very important for the company that they have product with same quality but customer makes its image better in his/ her mind and change the buying decision. With relative to marketing mix, there should be plans for promotions immediately. Offering something new with the products in market can also enhance the customers. Old, existing and new customers will have attraction and position the product in their minds. Replacing the old, methods of advertising and bringing new modern ways for advertising and communicating the message can be effective for the marketing mix action plan. Sales forecasting through professionals can be vital for Natureview. Action plan should be to build team under different areas managers to expand in the city and work like a team. Purpose is to generate more and more sales for people and create best availability of products of Natureview. It will be easy for the people that they can get foods from their door and near places without consuming the time. Best possible availability in all famous departmental stores is also very important factor for the sales of Natureview. Brand management has to follow the best brand portfolio plans. Regarding this action plan is to be not very complex with different brand and keeping the things simple for the people. It is often happens that most of people confuse with the brands of a similar company. In end, there should also be a plan to have best distribution channels and retailers. Availability in the best and lime lighted channel in the city or country will be beneficial for Natureview. Reference BIBLIOGRAPHY \l 1033 Fleming, K. M. (2007). Natureview Farm. Hardvard Business School, 2(1), 25-31.

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