Natureview Farm case study (HBR) Slides

6. 74%
9%
8%
9%
YOGHURT MARKET SHARE
BY PACKAGING SEGMENT
8 oz. cups
Others
32 oz. cups
Children's
multipack

7. Northwest
Midwest
Southwest
Westt
26%
22%
25%
27%
Yogurt Market Share by
Region,1999

11.  Usage of natural ingredients
 Longer shelf life and low cost
 Strong brand
 No artificial thickeners used
Unique,smooth and creamy texture
of yogurt

12. WEAKNESSES
 No alternative financing available
 Lacks potential of taking higher risks and costs
 Doubt on sales team’s ability

13. Opportunity
Strong relationships with leading natural
foods retailers

14.  Accumulation of cash by Horizon from
IPO.
 Being dropped out of traditional channel.

19. • First mover as organic yogurt brand to
enter supermarket channel
• High potential to increase revenue
• 8-oz have highest incremental
demand

20. • First mover as organic yogurt brand
to enter supermarket channel
• High potential to increase revenue
• 8-oz have highest incremental demand

25. • Generate higher profit
margin than 8-oz size
• Strong competitive advantage:
longer shelf life
• Lower promotion expenses

26. • Doubt on claim of new users would readily
“enter the brand” via a multi-use size
• Doubt on sales team’s ability to achieve full
national distribution in 12 months
• The 32-oz. expansion option would increase
SG&A expense by $160,000

31. • The sales team was confident that they
could achieve distribution for the two SKUs.
• The financial potential was very attractive.
• The natural foods channel was growing
almost seven times faster than the
supermarket.

32. • There were many potential conflicts and
other uncertain factors that the manager
could not determine
• Can not achieve the target objective
of Natureview farm

36. .
OPTION 2!!!
• Natureview could not risk itself losing the trust of
the
natural food stores as they were expected to
grow 7 times faster than the supermarket stores.
• Natureview could not risk losing a significant
portion of market segment
• The revenue generation objective is fulfilled.
• The natural foods stores ,on the other hand, will
have a reason less to feel detered and violated as
the 32 oz occupied a smaller portion of market