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!