Ultimate Nature Food Project Proposal - Assignment Example

Ultimate Nature Food Project Proposal Introduction The Ultimate Nature Food is an organic food market company whose origin is in Brixton. The company entered into the organic food business in 2001 with the sole aim of supplying organic food products to consumers. During its initiation, the company had only six employees working in its only branch. The company started operating through stocking a small selection of organic food products. The organization later increased the variety of the stock as the demand of its products increased with time. The company has had a strong dedicated culture of maintaining integrity in providing customers with the best and satisfactory organic food produces. The company has diversified its services to include stocking and supply of health supplements. The idea behind the formation of the company was initiated by three entrepreneurs who are graduates from different Universities. During its startup, the company had only a handful of workers. The working force has since increased with gradual growth of the business. The company was co-founded by Thomas Wellbeck, Daniel Frasch and Rebecca Roberts. Mr. Wellbeck is a Harvard graduate, holding a degree in economics. Frasch and Roberts are graduates from Yale University. They both hold master’s degree in management. The three are the directors of the Ultimate Nature Food. The company has additional staff members that oversea the managerial operations on behalf of the directors. The members include James Rafaela, Lorna Randon, Collins Dale and Wayne Weldon. The members hold different degrees from different universities in the United Kingdom. The company operates under the guidance of the laws enacted by the UK government to control business activities (Baourakis 125). The business startup capital was raised through individual efforts and grants provided by the Prince’s Trust. Part of the initial capital raised by the founders was used in acquiring a building that housed the first offices of the business. The startup capital has been used in stocking produce and conducting viable market research. The company was formed following a preliminary investigation that was conducted to determine a business venture that was considered a potential market opportunity in the city of Brixton. Though the business was established when other market players providing the same services as Ultimate Nature Food were in existence, the idea behind the formation of the company was based on the need to provide quality products at a satisfactory price. The management of the company has developed and embraced ideas based on the dynamic business environment. The ideas have acted as a basis for the growth and development of the business. The business has recorded a tremendous growth in its market structure and capital base. Though it started with one store, the business has since grown to eight stores in different localities in the United Kingdom. Owing to the achievement already made, the business has a potential of growing and developing through having its branches spread across different cities in the UK. With increased product promotional methods and better methods of creating product awareness, the Ultimate Nature Food market is set to grow. With the availability of ample business resources, the company is set to experience growth in terms of the overall market command size. The company will utilize the advantages that come with the economies of scale as a way of staying competitive. The Management The management of the company has three directors that acts as the executives of the business organization. Each manager has a mandate of overseeing different tasks assigned to them. Recently, the management formed a board consisting of the current management team and three successful entrepreneurs from across different fields. Robert Patterson, Lawrence Lawn and Judith Keller are some of the members that have been appointed in the board. Judith Keller of Tech Ventures is the board chairperson while Robert Patterson, Green Business founder, is the secretary general. The other board members hold different roles. In total the board has ten members who are mandated with the duty of conducting duties of recruiting new employees and enacting policies that help in overseeing the overall operation of different task within the organizational fraternity. The aim of appointing experienced business individuals has been directed towards achieving a strong team that would steer the company to being among the best organic food providers in the United Kingdom, and beyond the UK borders (Blick 78). The management has worked in conjunction with the external legal advisors and renowned consultant firms. The aim of this has always been directed towards achieving systematic policies that builds successful ethical and legal foundations that characterizes strong and thriving businesses (Baourakis 115). The organization has a strict work policy that each worker is expected to observe. Although the company has made great strides in building its public image, the image has been affected by critics who argue that the company has practiced gender disparity in its recruitment process. As much as it is a fact, the company is planning to fill a gap in social issues through allocating employment slots based on race and gender orientation while maintaining consideration on utmost educational qualifications. The Products Description The Ultimate Nature Food stocks and supplies quality organic food produces produced from the best ecological friendly practices. The company has embraced a reliable process of determining the authentic quality of the produces that it purchases from farmers. For this reason, the company has ensured that it provides customers with hype standard products as a way of growing its reputation in the organic food market. The company has embraced a practice of providing direct expertise production solution to farmers. The result has helped in creating products that are not only of quality value, but that also provides variety of health benefits to consumers. The organization has therefore maintained an advantageous against rival institutions. The company may employ the idea in exploiting the vast global market for organic food. Property Rights The ideas and features of the organization are protected under the intellectual property rights (IPR) of the United Kingdom. The right encompasses the logo, trademark, name and any idea developed in operating the activities of the organization (Baourakis 101). The company during its initiation, made a successful application for the IP rights. The Ultimate Nature Food is therefore protected from most issues that arise from cases of copyright infringement. The company has enjoyed competitive advantage against its rivals by developing and enacting new ideas in building a strong business structure. The rival business are prohibited from using the ideas developed by the Ultimate Nature Food Finances In order to increase its profit margin, the Ultimate Nature Food has set varied objectives. The business has planned to broaden its line of service provision through providing health supplements and beauty products manufactured from the naturally occurring raw materials. The company has set marketing goals and targets as a means of attracting and maintaining a pool of customers. A big customer base will help in increasing the sales of the organization (Baourakis 111). Similarly, Ultimate Nature Food has an ambition of establishing different branches in different regions in the United Kingdom. The company has been considering adding value to most of its brands of products and levying charges on the extra value added. The sales revenue is calculated through adding the value of total sales from each kind of product produced by the business. The total value of each product is acquired through multiplying the selling price of each unit with the number of units produced (Blick 65). For instance, consider a business that produces 200 quantities of product A, 300 quantities of product B and 100 quantities of product C. Assuming the unit selling price of A is 2 pounds, that of B to be 1 pound and that of C to be 3 pounds. The sales revenue for the three products will be calculated as follows. Sales Revenue = (200X2) + (300X1) + (100X3) =400 + 300 +300 =1000 Pounds Production cost is acquired through adding the value of total costs incurred in producing different types of products. Using the same quantities of A, B and C above, and assuming the unit cost of producing A is 1 pound, B is 0.75 pounds and that of B is 2 pounds. Production cost = (200X1) + (300X0.75) + (100X2) =200 + 225+200 =625 Pounds The profit is acquired through getting the excess difference between the sales revenue and production cost. Profit = (1000 – 625) Pounds =375 Pounds As a mechanism of attracting clients and customers, the business has reduced the selling price of most of its products while reducing the cost of producing the products. The Market The Ultimate Nature Food currently enjoys a wide market, though the market is limited to the localities with its branches. London has a great concentration of the market due to the high fraction of branches that are located in three towns in London. The company has a promising market in Glasgow, Bristol, Leeds, Sheffield and Dublin. Each of these cities has a branch of the Ultimate Nature Food. The marketing process will focus on the localities and towns where the branches of the company are established. A study of the financial figures from some of the branches has shown a favorable improvement in sales and market expansion. Basing argument on these figures, the demand for the products of the company is set to increase with time (Duram 92). The market segment of the company may be affected by the activities of both local and International players in the organic food business (Baourakis 85). The Doves Farm is high potential competitor, offering diversified services in organic food distribution. Unlike Ultimate Nature Food, the Dove Farm has wide and predictable market structure. The company, established in 1987 has distribution outlets in almost every town in the UK. Whole Food Market is a foreign company that has remained competitive in the production and supply of natural food products. The company was initiated in 1971 in Houston Texas and has grown to a world class supplier of naturally occurring food produce. Perceived Threats While the company is projected to record some level of growth, the company may face imminent competitive factors that may be caused by a number of market forces. The forces should be factored while the business is being developed. The forces may be caused by entrance of new businesses that offers the same services offered by Ultimate Nature Food (Choate 67). The change in the power of bargain among the consumers and farmers may have adverse effects on the profit margin of the company. The business may record dismal performance as a result. Heightened competitive forces may affect the operations of the business (Blick 47). The stiff competition may drive the management of the company to concentrate on adopting mechanism that will counter the competition. The company may forget to concentrate on developing its goals leading to overall dismal progress. Competitive Market Strategy The company should work towards developing reliable and lasting solution that will place it on a higher competitive level whenever it is faced by imminent market forces. The business, as a mechanism of dealing with new threats posed by new businesses, may adopt different operational strategies (Levitt 82). The company may provide high quality natural food products while lowering cost of production through utilizing the economies of scale. The bargaining capability of both the consumer and the suppliers of the company may impact the development of the company. As a way of dealing with a powerful supplier, the business should get an alternate method through it will access quality natural food products at a lower price than what is offered in the market. The business, as a way of dealing with the bargaining issue among the clients, should open business at a location with a high number of clients and low number of individuals supplying the product. Dealing with a highly stiff competitive business situation requires that the company establish its branches to the locations with low number of organizations that provides services related to the provision of the organic food products. The Ultimate Nature Food in the event of being affected by the introduction of new products that are substitutes to what it offers may develop new ideas through which it will compete against the competitors. The company in this case may resolve to add value to its products while reducing the prices of its commodities at a reasonable price. Ultimate Nature Food should consider presenting to the market, products with distinctive qualities. The company for instance, may produce a single type of supplement product that has a wide range of health benefits. The company, owing to its current level of progress has a potential for conducting a successful marketing process. The promotional ideas should be directed towards gaining new clients and maintaining the existing customers (Levitt 52). The business should embrace reliable systems of production and supply. The production process should remain uninterrupted as a means of building a strong supply chain. The management of Ultimate Nature Food Company should consider embracing modern ideas of promoting products. The online media provides one of the best platforms for gaining more customers. Operations and Production The Ultimate Nature Food has invested in different assets that have proven to assist in the overall process of running the day today business errands. The company has stores distributed in different town s in the United Kingdom, with a head office situated in the England. The management has duties delegated to the workers in the company. The company has eight heavy commercial trucks that aids in transporting produce from the farm. The vehicles also help in supplying the produce to the company branches. A typical working day entails preparing the produces through cleaning and sorting. The head office of the company has a special laboratory with a lab specialist who conducts tests on selected samples of the produce. Some staff members are delegated the duty of supplying the produce on demand, to foster homes and other community service institutions in the country. Each department has personnel that are mandated with the duty of keeping records on input and output supplies. The company has a large number of support staff that has proven to be efficient in meeting the goals of satisfying the needs of the clients. There are thirty drivers working in shifts at different times of the day. The company has forty security personnel that secure its various branches. The business has flexible resources that are capable of adapting the changing market needs apart from purchasing produce from farmers in the United Kingdom. The company has a link to external supplies that produce high quality produces. Israel provides a ready source of the produce. The management has embraced the process of conducting a measurement system that helps in determining the business progress process (Baourakis 125). Sales and Distribution The business has planned to adopt strategic ideas of selling and distributing its products. The Ultimate Nature Food will adopt a distribution system that directly links it to the client. The company will make use of its different distribution outlets and stores while using its trucks to supply different retail markets that stores most of its products. A lot of benefits will be accrued by the business when it directly supplies the customer with the products. There will be reduction in the average cost of production. The extra cost incurred in storage of products will be reduced. The result will be increase in the company revenue and earnings. The organization has a plan of introducing a distribution process which will ensure that products are delivered directly to the clients. The company may face hurdle in using the direct method of product distribution system. In this case, it will be imperative if the company considers hiring an independent distributor for a certain percentage of agreement. Hiring an independent distribution institution is beneficial to some extent. Apart from ensuring an efficient distribution system, the institution will help in maintaining the demand for the products and provide quality warehousing services. Financial Projections Cash Flow Year Operational Profit Income Taxation Net Operating Profit Add. Inv. Capital Opert. Cash Flow 1 745,400 1000 --------- 744,400 300,250 -------------- 1,044,650 2 820000 88,256 ------------ 731,744 105,280 --------------- - 837024 3 1,985,500 756,255 ------------- 1,229,245 180,650 ---------------- 1,409,895 Note: All the figures indicated are in pounds. Balance Sheet Year Cash Marketable Securities Receivable Account Valued Current Assets Account Payable Total Current Liability Retains Gains Extra Equity Sum of Liability & Equity 1 160,250 1,200,450 85,250 ------------ 1,418,950 1,200 ---------- 1,200 150,000 850,520 ------------ 1,418,950 2 98,450 1,500,260 140,210 ----------- 1,738,920 2,100 --------- 2100 650,000 950,000 -------------- 1,738,920 3 360,000 1,600,000 590,230 ------------ 2,550,230 2,100 ------------ 2,100 700,000 950,210 --------------- 2,550,230 Trading Position Statement Year Revenue Sales value Gross Profit Cost of Account Brand promotion Bank Fees Staff Benefits Consultation fee Coverage License Cost Security Drivers Miscellaneous Earning B.I. Income Tax Net income 1 1,856,540 1,686,540 -------------- I70, 000 ----------- 7,000 17,000 30,100 20,000 2100 1100 400 1100 20,000 1200 ---------- 100000 70000 2100 ---------- 70,000 2 2,123,450 1,905,000 ----------------- 218,450 -------------- 8,100 15,000 51,230 40,100 500 2080 410 2400 30,000 2300 --------- 152,120 66330 2500 ---------- 152,120 3 2,500,650 2,005,605 ------------------ 495,045 ----------------- 9,200 30,000 62,360 45,000 5000 6200 420 3000 35,000 4000 --------- 200,180 294865 3200 ----------- 200,180 The financial figures projected shows that the business has a potential of growing. Through proper coordination of business resources and sticking to the financial plan, the business is expected to record an increase in sales. Risk Analysis Uncertain Events and circumstances are bound to rise in the event of the development of the business. One of the challenges the business may face is the exit of potential and reliable employees. A highly skilled and experienced workforce plays an important role in the overall progress of the organization. Employees may be attracted by favorable deals from other companies. To prevent this occurrence, the company will be required to offer incentives to employees that apply creative and outstanding skills in performing their duty. The amount of work bonus should be awarded to the employees depending on their experience and the amount of time they have worked for the company. Termination of the funding groups is also likely to be an issue for the growth of the company. The termination may be caused by unsatisfactory results posted from the overall business performance which may result from the inefficient management system. The management of the company needs to properly coordinate all the operations pertaining to the growth of the company. Unfavorable change in the attitude and taste of the Ultimate Nature Food customers may have adverse effect on the positive development of the business. The change may be caused by a wide range of factors. Customers may develop negative attitude towards the company in the event that the company degrades the ecological systems through releasing effluents. As a preventive mechanism, the company has set up mechanisms that will help in studying the change in the behavior of the consumers of its products. The business will therefore adapt to the changes depending the findings acquired. Works Cited Baourakis, George. Marketing Trends for Organic Food in the 21st Century. River Edge, NJ: World Scientific, 2004. Internet resource. Blick, Dee. The Ultimate Small Business Marketing Book. Surrey: Filament Publishing, 2011. Print. Choate, Mary. Organic Lies: Misconceptions of the United States Organic Act in America and the World. Arvada, CO: Coastalfields Press, 2007. Print. Duram, Leslie A. Encyclopedia of Organic, Sustainable, and Local Food. Santa Barbara, Calif: Greenwood, 2010. Print. Levitt, Theodore. Marketing for Business Growth. New York [u.a.: McGraw-Hill, 1974. Print. Read More