Natureview farm Case Study-This is the Harvard Business School case study in which most suitable business strategy to be chosen after the critical analysis of the facts mentioned in the document

1. Natureview
Farm Case Study

2. About the
Company
• Founded In 1989 in Cabot,Vermont
• Manufacturer of refrigerated cupYogurt
• Follows the unique process in manufacturing
of cupYogurt that gives it unique smooth and
creamy texture

3. What makes it
different
• The company uses milk from cows
untreated with rGBH
• Uses natural ingredients
• No chemicals for finishing
• Positioned itself in the market as the
organicYogurt brand
• Longer product life value
This Photo by Unknown Author is licensed under CC BY

4. Market
Trends
Top 4 Competitors control over
50% of the market share
Supermarkets sells 97% of all
yogurt consumed with 3% annual
growth
Natural Food Stores sells rest 3%
of all yogurt consumed with 20%
annual growth

5. Insights
Lower price sensitivity
among Natural Foods
Customers

6. Yogurt Market
Share by Packaging
Segment, 1999
74%
9%
8%
9%
8-oz. cups and smaller
Children's multipacks
32-oz. cups
Other
Yogurt Market Share
by Region, 1999
Northeast
26%
Midwest
22%
Southeast
25%
West
27%

7. Yogurt Market Share by Brand, 1999
33%
24%
23%
15%
5%
Dannon Yoplait Others Private Label Columbo
Supermarket Channel
24%
15%
19%
7%
35%
Natureview Farm Brown Cow Horizon Organic
White Wave Others
Natural Foods Channel

8. Natural Foods Channel
Manufacturer
Distributor
Retailer
Customer
Manufacturer
Distributor
Retailer
Customer
Natural Foods
Wholesaler
Supermarket Channel
Distribution Channel

9. • Identify path to grow revenue by
over 50% from $13 Million in
1999 to $20 Million at the end of
2001.
• VC firm is cashing out
investment
• Another investor needs to be
found or Natureview Farm needs
to prepare for acquisition
• Need to decide if they should
take the risk of expanding into
the supermarket channel

10. Option 1
Pros
• Expanding to two supermarket
chains first
a. Easier to implement
b. Lower slotting fee
c. Greater control
• Growing trend in natural foods in
supermarkets
• Natureview would be the first
natural yogurt brand
• Supermarkets may only allow
one natural yogurt brand
To expand 6 SKUs of the 8oz product line into one or two selected
supermarket channel regions
Cons
• Higher costs
• Higher advertising costs ($1.2
million per region, per year)
• SG&A increases by $320,000
per year
• Conflict between supermarket
and natural food store loyalty
• Lack of experience competing
with Less consumers in
supermarket channel

11. Option 2
Pros
• Generate higher gross profit
margin than 8-oz size(43.6% vs.
36% for 8-oz. line)
• Strong competitive advantage:
longer shelf life(45% share in
Natural foods)
• Lower promotional expenses :
promoted only twice a year
Expand 4-SKUs of the 32-oz. size nationally into Supermarket Regions
Cons
• 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
• Company Needs to hire sales
personnel and establish
relationships with supermarket
brokers
• The 32-oz. expansion option
would increase SG&A expense
by $160,000

12. Option 3
Pros
• The sales team was confident
that they could achieve
distribution for the two SKUs
• The financial potential was
very attractive (Gross
profitability : 37.6%)
• Lower marketing expenses;
no additional SG&A costs to
introduce the product
• The natural foods channel
was growing almost seven
times faster than the
supermarket.
Introduce 2-SKUs of a children multipack into the natural foods channel
Cons
• Fast growth of natural food
channel will lead to
demands equal to those of
supermarkets
• It will miss opportunity to
enter supermarket channel
before competitors.

14. Option 1- Financial Analysis

16. Option 2- Financial Analysis

18. Option 3- Financial Analysis

20. Comparative Analysis of All the
Options

22. Recommendation

23. Option 1
• Benefits are high
• Higher Revenue
• Growth rate is higher comparatively
• 8-oz. is most feasible for customers
more new customers may join
• Best opportunity to expand into
supermarket simultaneously achieving
the desired goals

24. Disclaimer
These slides have been created by Akhil
Yash Tiwari, Welingkar Mumbai, during
a marketing internship by Prof. Sameer
Mathur, IIM Lucknow

25. Thank you