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You can find the Excel file in the content area on blackboard. Results of three analyses were presented in the Excel file: 1) Margin Chain for Manufacturer selling price for Natureview through both the Supermarket channel and the Natural foods channel. 2) Evaluation of Growth options of the three proposed options. 3) Market Share analysis for yogurt market.
It might be tempting to make your decision based on the numbers, especially on the growth potential. However, I would like to caution you on that approach.
First of all, the sales growth and profit contribution are telling very different stories of these three options.
Second, the numbers do not reflect any competitive reactions Natureview may face from its competitors which can drastically change the dynamic. Given the much deeper pockets of the major competitors, any defensive actions from any one of the major competitors would pose significant challenge to Natureview and those growth numbers need to be adjusted.
Third, these numbers did not take into consideration of the cross-channel dynamics. For example, can Natureview continue to price its products at the current level with the Natural Foods stores once their product appear in the supermarkets with a much lower price tag? If not, how much loss of sales we can expect from the Natural foods stores is not reflected in the sales growth numbers. The list can go on and on such as product positioning, learning curve in dealing with new distribution partners, short-term goal vs. long-term goal, etc.
I am not asking you to ignore the numbers. They are very important information to be taken into consideration as you think this through. What I am trying to say here is that you should not make your decision solely on the numbers. There are some other strategic elements that are not reflected in these numbers that you should also consider seriously. You need to keep a good balance between the quantitative analyses and qualitative analyses. Your decision should address both by integrating both the quantitative and qualitative analyses. At the very least, I expect you to address the pricing, positioning, and channel conflict (meaning issues arise when you use different channels and these channel members may view things very differently) as part of your qualitative analysis or recommendations.
The writeup should have these Three clearly labeled sections:
1.Decision: State the decision(s) to be made succinctly
2.Analysis: Discuss the most important qualitative and quantitative pros and cons for alternative solutions
3.Recommendation: State your recommendations