After reading the Nature View Farm case, answer the following questions: How has Nature View succeeded in the natural foods channel? They carved out a niche in serving a very specialized customer. The organic & natural segment that was not served adequately through the normal retailing chains. There are a few dominant players in the normal grocery chains whose revenues dwarfs natureviews. The total Sales volume for refrigerated yogurt was $1.8 billion so Natureview only had 0.7% of the market. In the 10 years since beginning business Natureview had a 62.5% CAGR versus an average groth rate of around 3% in the yogurt market as a whole and 20% growth in the natural food stores. What are the two primary types of growth strategies under consideration by Nature View? They took an approach to the market through the distribution of the Natural food stores where their sales prices would be superior to those they could get through normal grocery stores. Looking at natural food stores the sales price for an 8oz cup was $0.88 which translated to a price of $0.54 per cup to Natureview versus a sales price of $.74 in the supermarket that translated to a price of $0.46 to Natureview. What are the strategic advantages and risks of each option?
Option 1 while it improves revenues more than any other option it yields a decrease in Gross Margin and a less significant increase in Net Income than either of the other two options.
Option 2 seems to give the best combination of revenue enhancement while maximizing overall profitability. Profits in year two and forward are almost $1 million better than than the next best alternative. What channel management and conflict issues are involved? Discuss which option Nature View Farm should adopt and explain why?
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