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Meenal Malhotra

Natureview Farm

Assignment - 3

Attached is the critical evaluation of the three options. The financial analysis are given in the excel sheet attached in this file.

3. Natureview.xlsx

The Pros and Cons of Option 1 are: Pros Very high potential for increased revenues Consumers in east and west region are most likely to purchase organic Expected 1.5% of marketshare after 1 year May have the first mover advantage of being the only organic yoghurt brand in supermarkets The Pros and Cons of Option 2 are: Pros Less competition Higher margin than 8 oz one Year 1 sales expected to be 5.5 million units Less trade promotion expenses The Pros and Cons of Option 3 are: Pros No competition and less risk Can capitalize on the current relationships Natural food channel growing at a fast rate Cons Low expected revenue Cons New consumers may not want to buy large pack size High risk as high slotting and trade promotions are required Cons Very high risk as high investment of slotting etc is required High advertising cost ($2.4 million) Direct competition with national brands (Dannon, etc)

After analysing, we see that even though in option 1 the highest sales are expected and the targets are being met. Still, option 3 is a better option as it is in line with the company strategy and has less risk. Moreover, the net income percentage is highest in this case.