NATUREVIEW FARM

The Natureview Farm, a small yogurt manufacturer wanted to grow its revenue by 50% at the
end of 2001. Though the company had achieved growth, it had also faced struggles to maintain
its profitability levels. In 1997, Natureview arranged for an equity infusion from a Venture
Capital firm which now needed to cash out its investment. To solve the problem of finding
another investor and increase its revenue, the strategic approach for the company was to expand
its market in the supermarket channel. But it will disturb the established channel of the company
Initially, the company entered in two cup size yogurt in two flavors segment only. The company
always focused on using natural ingredients which built up a strong reputation in terms of quality
and taste. This helped the company to grow its distribution in nation wide and to get leadership
in the natural food channel. By the year 2000, Natureview started producing twelve refrigerated
yogurt flavors (8-oz cups) and four flavors (32-oz cups). The company had also started
expanding in multipack yogurt products as a growth for the company. The company earned a
position as a major brand in the natural food channel and this reputations and position helped the
company to build strong and valuable relationship with the leading natural food retailers like the
whole foods and wild oats chains. The company had a dilemma for whether the company should
expand their market to supermarket channel to revenue goals of reaching 20 million dollars at the
end of 2001. Moving towards supermarket channel would affect the company in every aspect
dislocating from its established channel strategy. Another way is by finding another investor due
to the Venture Capital is demanding a cash out its investment in the company. The first option is
to expand six SKUs of the 8-oz product line into one or two selected supermarket channel
regions. This option has great potential for the business growth but also involves higher risks and
costs. The second option is to expand four SKUs of 32-oz nationally. This option has many
advantages but has a barrier of new users trying the multi-use size product. The third option is to
introduce two SKUs of a children’s multi-pack into the natural food channel. This option
requires development of multi pack products and also requires different costs on marketing and
advertisements. The three options are being proposed by three heads of the company on the basis
of sales and earnings.