Harvest Farm Foods present situation is not good. Harvest Farm Foods averaged only a 1.5 percent profit return on shareholders investment while their competitors averaged 5-9 percent in the past 13 years. Profits are down for the firm, profits were $8 million in 1987 the closest Harvest Farm Foods have come since then is $6 million in 1995. Harvest Farm Foods have lost many small retailers due to their line forcing policy, which requires a store to carry most of the 65 items in the their food line.
What would you advise Patrick Webb to do to improve Harvest Farm Foods’ profits? Explain why.
To improve Harvest Farm Food profits Patrick Webb should first lift the line-forcing policy, with more stores able to sale Harvest Farm Foods the more profits the company will receive. Next Mr. Webb should discontinue products that aren’t selling well. This will lower costs across the board and make it easier to add specialty items like Harvest Farm Foods competitors. Mr. Webb should add specialty items similar to their competitor’s exotic foreign vegetables with gourmet sauce. Harvest Farm Foods managers considered such proposal years ago but didn’t follow through because of small potential sales volume. Mr. Webb should also hire a new production manager who’s on board with the new changes. Ji-Sung Park the current production manager is an old employee who has agreed with decisions that has put Harvest Farm Foods in its current predicament. With these few changes Patrick Webb should see an improvement in Harvest Farm Food profits.
Perreault, W., Cannon, J., & McCarthy, E., (2011). Basic marketing: A marketing strategy planning approach. (17 ed, Vol. e) New York, New York: McGraw Hill Irwin