Natureview Farm

Presented By

Dinesh ReddySummer Intern,IIM Lucknow.

Agenda

•Issues•Goals and Objectives•Problems•Solution•Q & A

Issues•VC needed to cash out of its investment.

•Need to find a path to grow the revenues by more than 50% by the end of 2001.

•Should natureview farm into the super market channel?

GOAL SolutionProblem

•Increase its revenue by over 50% before the end of 2001 •Increase its 1999 revenue from $13 million to $20 mill ion before the end of 2001.

•Natureview must achieve its goal in order to attain the highest possible valuation of the company.

GOAL SolutionProblem

“Natureview should expand their business into the

supermarket channel or not”

GOAL SolutionProblemCurrent situation- 2 main channels for Natureview to

sell its productsSupermarket and Natural food stores- In the proportion of 97% to

supermarket and 3% to natural food stores.

GOAL SolutionProblem

“Even though supermarket is more attractive, there are some reasons behind this and that should be considered” - Depend heavily on broker's knowledge - Broker's fees, slotting fees, promotional allowance bring high risk and high cost to Natureview.

- Conflict (Final price)

Problem Defense

Option 1

Advertising Cost is abundance, Natureview would have paid

4,800,000 on ads by year 2001

Option 2

The slotting fee is too much, Nature view would have to enter 64

supermarkets

Option 3

No SG&A, Broker Fee, and Slotting Fee

GOAL SolutionProblem

Option 3: Introducing two SKUs of a children’s multi-pack into the natural

foods channel

GOAL SolutionProblem

SolutionDefense

• Competitive advantage– Strong relationship with

natural foods retailers ex: Whole Foods and Wild Oats.– Sustainable competitive

advantage– Main profit comes from

natural foods channel.

GOAL SolutionProblem

• Brand Image– Organic yogurt–Shoppers at natural foods

stores earn more income, more educated and not price sensitive.– Natural foods store

shoppers are more concern on health issue, not price.– If expand to supermarket,

its brand image will be doubted by current consumers.

SolutionDefense

GOAL SolutionProblem

• Financial and Risk Analysis–No extra slotting fees and

advertising expense–Option 1 and 2 creates

more expense –Lowest risk and cost if

choose option 3–Will not have to compete

with two main competitors in supermarket channel which are Dannon and Yoplait

SolutionDefense

Solution Financial Forecast 2001

Thank you!