Based on the research, we recommend that NatureView expand two SKUs of children’s multipack into the natural solutions foods channel. Option 3 unlocks the most profitability for the firm while maintaining good relations with natural food relations. Although Options 1 and Option 2 represent a higher incremental net profit than Option 3, they also offer a significantly less profit margin than Option 3.
Option 3, though doesn’t generate the same top-line as other options, represents the right strategy that NatureView should follow. Instead of entering a new channel, NatureView should use its strategic assets to develop a new product that matches the current market’s needs. By choosing Option 3, NatureView first solidifies its relationship in the natural foods channel. As 24% of total yogurt …show more content…
Maintaining and keeping these relationships happy is key to NatureView’s success. Second, NatureView has been in this channel since its inception and understands the secular headwinds and competitive nature best. Moving into the supermarket channel requires NatureView to compete in an industry that they are not familiar with. With high competition and a lack of resources to properly compete with, NatureView should stick with the channel that they are most familiar with. Finally, Natureview’s development of a multipack yogurt for children takes advantage of the natural foods high growth rate. Although natural foods 5-year CAGR was less than supermarkets (15% vs. 20%), it is still growing at seven times faster than supermarkets. As market leaders, this puts NatureView in position to capture any additional value added in the natural foods channel. From a financial perspective,