I. Address Who You Are and Who You Are Writing To
This analysis is provided by the members of the marketing team at Natureview Farm, Inc., on behalf of Christine Walker, Vice President of Marketing. The purpose of this analysis is to provide a recommended course of action for the company to grow their revenues by 50% by the end of the 2001 through the use of SWOT analysis on the three recommendations proposed by the senior leadership at Natureview Farms. The findings will serve as the recommendation for Christine Walker to present to the CEO, Barry Landers.
II. Business Overview
Natureview Farm, Inc., founded in 1989, is a small yogurt manufacturer based in Cabot, Vermont. The company has done rather well since its inception, growing revenues from $100,000 to $13 million annually. Natureview Farm caters to a niche market, namely consumers of organic and sustainable foods. Since it’s founding, Natureview Farm’s product offerings has grown from 2 flavors in 2 sizes to the current assortment of 12 flavors in the 8 oz. size and 4 flavors of the 32 oz. size. Natureview Farm has done a great number of this correctly to grow their business substantially since their founding 10 years ago. In order to continue to thrive however, the company must also correct or amend processes that are considered weaknesses. These strengths and weaknesses are outline below.
Natureview Farm has gained the largest single market share for yogurt in the Natural Foods Channel (See, Exhibit 5). These impressive results are be attributed, in part, to the strong relationships they have forged with leading nature foods retailers, including big name chains like Whole Foods and Wild Oats. This is great news for Natureview, as they have poised themselves nicely in the marketplace with the organic foods market predicted to more than double in revenue by 2003 (to an estimated $13.3 billion). Another success for Natureview Farm is that the consumer who is likely to purchase the product is not as price conscious as the average consumer. Natural foods shoppers value the product’s ingredients, whether or not the product was organic, and the product’s health-promoting qualities more so than price when making a purchasing decision. Natureview uses a family yogurt recipe which gives their organic product a unique “smooth, creamy texture,” which is good news for the company since these specialty consumer values this quality above price.
While Natureview Farm, Inc. has had great success thus far, the company is not without its weaknesses. First, the company currently sells their products only in natural foods channels. While they have a large market share in this specific channel, their current operations prevent them from easily entering the larger supermarket channel. Additionally, the company does not seem to have the available budge to bring their products, in any meaningful market penetration, to the supermarket channel. For example, Natureview Farm would need to each supermarket chain roughly $80,000 to introduce eight flavors of the 8 oz. size into the chains. This is in addition to having to participate in promotions, which would eat away at the already low margin they would get for their product.
Another issue that Natureview Farm faces in considering the options presented by senior leadership stems from the very fact that they are well known in the natural foods channel. While this is great that they have such a strong market presence in the natural foods channel, this may very well prevent them from entering the broader supermarket channel. Their current customers may react negatively to seeing the same yogurt at the large supermarket down the street at a cheaper price. They could view the company as selling out and compromising their integrity to make a larger profit. In other words, Natureview’s strong market presence in the natural foods channel may be seen as a...