IIM lucknow assignment

1. Presented By
Dinesh Reddy
Summer Intern,
IIM Lucknow.

2. Agenda
•Issues
•Goals and Objectives
•Problems
•Solution
•Q & A

3. 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?

4. •Increase its revenue by over 50%
before the end of 2001
•Increase its 1999 revenue from $13
million to $20 million before the end
of 2001.
•Natureview must achieve its goal in
order to
attain the highest possible valuation

5. “Natureview should expand their
business into the supermarket
channel or not”

6. Current situation
- 2 main channels for Natureview to sell its
products
Supermarket and Natural food stores
- In the proportion of 97% to supermarket
and 3% to natural food stores.

7. “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

8. Option 1
Advertising Cost is abundance,
Natureview would have paid
4,800,000 on ads by year 2001

9. Option 2
The slotting fee is too much, Nature
view would have to enter 64
supermarkets

10. Option 3
No SG&A, Broker Fee, and Slotting
Fee 

11. Option 3: Introducing two SKUs of a children’s
multi-pack into the natural foods channel

12. Solution
Defense
• Competitive advantage
– Strong relationship with natural
foods retailers ex: Whole Foods
and Wild Oats.
– Sustainable competitive
advantage
– Main profit comes from natural
foods channel.

13. • 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
Solution
Defense

14. • 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
Solution
Defense

15. Solution Financial Forecast 2001

16. Thank you!