Natureview Farm was established in 1989 as the brand of refrigerated cup yogurt. After 10 years, it was able to increase its revenue by 129%, which is from $100,000 up to 13 million. However Natureview had difficulty in maintaining its consistent level of profitability which lead firm to financial problem. To solve this problem Natureview needed VC to fund investments. VC would grant the fund only if Natureview could accomplish the goal: growing its revenue to $20 million before the end of 2001. Still there are many barriers that the firm had to deal with before reaching the goal some of which are as the followings. Firstly, the current channel partners could not fulfill the objective with this time constraint. Secondly, Natureview did not implement the right channel design strategy to respond to the market. Lastly, how firm protect its premium brand if they decide to get into supermarkets To this problem, the solution is divided into three main parts. First, the selection of option number 1 mixed with option number 3. Second, Natureview should negotiate on the product display, price set and promotion prior to the launch to supermarket. Third, Naturview comes up with strategies in managing the relationship and conflict among channels. Goal Defense
Natureview had to achieve this goal because it needed VC to support its financing to operate the business by generating significant revenue growth. If the firm could not make it, VC would not grant the fund leading Natureview to face extremely difficult financial circumstance. Therefore, in this case, it will discuss only on how to generate more overall revenue rather than profit or cash flow. The main objective is to grow revenues by over 50% within two years or 2001. There are some factors which induce the company to fulfill the objective some of which are changing trends, consumer behaviors, and financial support from VC. Firstly, since consumers tend to be more health conscious on their diet, they consume more organic products. Thereby, the trend of yogurt sales for natural food stores had growth pretty high accounted for 20% per year comparing with supermarkets expansion 3% on average per year. This trend perfectly fits with the positioning and image of Natureview including the product itself which is purely made from natural ingredients, so this would facilitate the firm to reach the goal faster. Secondly, the potential consumers particularly at natural food stores tended to have higher purchasing power and high education rather than the typical supermarket shoppers. Lastly, to attain the financial support from VC, management team of this firm has to come up with the right strategy to complete the goal as fast as possible so that Natureview would not suffer with financial crisis later on. Problem Defend
The existing channels cannot provide an optimal solution to the company
It is not possible to reach the objective which generates $20 million at the end of 2001 if Natureview remains its current strategy. Without implementing any other new strategies or options, the company would gain only $18.72 million which is not adequate to achieve the goal. (The calculation is referred from appendix A.) Therefore, the firm must choose one of those three options or integrate them in order to come up with the new strategy to meet the objective. Natureview did not respond to the actual need of the market demand and the firm did not implement the right channel design strategy
Referring from the case, it was about 46% of organic food consumers purchase organic products at a supermarket following by 29% went to natural food stores, and 25% of consumers shopped at a small food stores. Moreover, a key barrier of 67% U.S. households do not make a purchase because of its price, and 58% of consumers would buy more if the price is less expensive. As you can see, the company did not use the channel design as they placed the products only in natural food stores, but...
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