Case Analysis Study Example | Topics and Well Written Essays - 750 words - 6

Analysis - Case Study Example It is a fact that Natureview is the main player in the natural food channel with a market share of 24%; however, in order to raise $20 million revenue by the end of 2001, the company has to re-strategize and increase its sales and output if it is to use this channel. The $13 million the company accrued in 2000 is not sufficient enough to offset its debt and may lead to absorption of the company by a larger firm. The second option of entering the supermarket channel has both merits and demerits. The main advantage of this channel is that products will be sold at lower prices than in natural food retail shops due to less number of middlemen in the supply chain. Lower prices lead to higher demand and ultimately higher returns. Furthermore, supermarkets take stocks in bulk than wholesalers in the natural food channel who take small quantities and break them further to distribute them to small retailers. On the other hand, Natureview would be forced to pay $10000 slotting fee per SKU for each retail chain. This means that the company may be forced to pay millions of dollars to be able to distribute throughout the country. In addition, the manufacturer will also have to incur marketing, advertising and trade promotion expenses including hiring of marketing personnel. Under this channel, the small scale manufacturer will be forced to expand its production to meet the high demand in the supermarkets. The first option would be to expand six of the best selling 8-oz brands to one or two selected supermarket channels in the region. The second option would be to expand four SKUs of 32-oz size nationally. The third option would be to introduce two SKUs of the multi-pack line into the natural foods channel specifically for children. The first option would yield higher returns for the company as the 8-oz brands are the most popular among consumers. However, for this option to be viable Natureview has to meet the