ppt

Since the firm commenced business in 1989, the greatest challenge that confronted Nature View Farm was the ability to maintain a consistent profitability level. However, in the year 1996 the firm hired Jim Wagner as the chief financial officer. He was able to develop and advance financial control systems that brought steady profitability in line with the dairy industry standards. Previously, in the year 1977 the firm had raised capital by soliciting funds through an equity infusion from a venture capital firm to fund their strategic investments. The venture capital firm has sought to cash in their equity and part ways with Nature View Farm. This therefore put across the challenge to seek another suitable investor for continued capital financing. In order to attract investors, many businesses have to maximize their net book value in order to ensure the highest possible valuation to maximize capital resources.

Normally the firm having achieved the objective of maximizing profits in accordance to the dairy industry standards, consequent growth achieved would have been a key indicator to attract potential investors easily. However in the organic foods industry, many investors value the various firms on a basis of revenues realized rather than profits earned (p 1). This is unorthodox way of finding a key indicator of a business financial position. Therefore, organic food companies such as Nature view Farm and other similar companies are confronted by the problem of maximizing overall revenues. This is in order to achieve the highest valuation by potential investors.

To achieve this objective, the chief finance officer who is tapped with the responsibility of developing models to raise capital knew it would be vital to conform to the client demands. This meant reviewing the firm’s strategic and operational activities in order to increase and maximize revenues to maximize investor’s valuation. Therefore he has developed a framework and advised that Nature view farm has to come up with a plan to increase its revenue to twenty million dollars by the end of the year, which is quite a significant leap from its revenues of thirteen million dollars it reported in the year 1999 (p 1). This is almost a 50% increase in its revenue.

To make this revenue plan a reality, the management has been tasked with reinventing the company’s distribution channels. This will involve integrating supermarket that will be a major departure from its old established distribution channels. The pressure to come with a decision is mainly on Barry Landers, the Chie Executive Officer, Jim Wagner, the Chief Financial Officer and Walter Bellini the vice president of sales.

Nature View Farm has developed a model to realize this objective. In the year 1999, the market statistics showed that the market was fairly concentrated with the four arch competitors having the dominant share of the market and the top two competitors controlling over 50% of the market (p 2). This meant that in order to achieve increased revenues the firm has to develop ways in which to achieve cut throat margins and win the fairly concentrated market. This will involve a change in their distribution channels as well as modifying their products in accordance to customer driven demands.

These decisions have to be optimized in order to overcome the potential channel conflict as well as manage the resource requirements the supermarket channel would impose. These include staffing, inevitable costs, change and trauma attached with entering the supermarket channel.

The management is faced with an urgent decision since this increase in revenue is to be realized before the next financial year which in a business world this is a short term goal. The constraints with realizing this goal are the relative significant impacts it has on the overall strategic and operational activities the firm had already established. This involves the departure from its custom ways of distribution and such changes require efficient management policies since they will significantly affect every aspect of Nature View Farm business. The development of new channels will also require accordant marketing strategies atop the usual models of emphasis on natural ingredients and the strong reputation of quality and great taste to allow the brand market to expand and grow quickly to help increase revenues.