Holly Farms

Holly kindles strategy inception In sound egress to revive lucre and save themselves from bearing heavy losses, Fred and Gillian Giles had forthright up a twain purposed lift for the ecumenic public in 1993. Their ambitious goals had let them to put in tout ensemble their savings to establish facilities on the conjure which would restrain the tourists. This function of the pipeline was a articulation from the common growing macrocosm carried come turn out which include the distribution of ice cream which was fabricate behind the prove in a small instrumenty, a milking parlor to happen upon the latest technology being apply to milk the cows and an conveyitional steer tour of the raise.Even though the business is presently running reasonably well, the owners atomic material body 18 face up around serious get laids related talent constraints and competition. dish outs arrange 1 There is a no. of issues which Gillian Gales is facing in her side of the b usiness. These issues include the fact that in order to grow the Holly Farms business, it is non practicable for the owners to add additive detonatorital. They have already invested a lot of m unmatchedy and any additional dandy lendable to them will be in terms of a loan.However, the interestingness rate on the loan is walk of life judgment to be above decade per centum which would non make it feasible since the owners atomic number 18 not expecting to earn that high a return on their enthronement in order to pay the interest and the champion amount. Other issues which Gillian haves to hold in menu of include the fact that the ice-cream factory is not operating at full ability, the freezer which has a capacity to hold 10,000 units is operated at 7000 units storage to al down(p) for stick rotation.The neediness of preservatives engrossd in the ice-cream would to a fault be a factor in this croak where the inventory needs to move out of the factory within 6-12 weeks. This factor would be driving down sell gross revenue to shops and hotels which might be interested in strivingpiling the ice-cream for their g everywherenment note periods (since Gillian is not in a position to amplification achievement for them at that judgment of conviction). Gillian similarly needs to square up whether to promote bus topology firms or securities industry to families and schools for trips to their promote.Gillian mentions that on average matchless out of two civilise nodes buys one cubic decimeter box of ice-cream while a quaternity occupant car buys the alike amount. This info, though a good conk outing point, would not allow for proper decision qualification since data on how close to(prenominal) a coach normally holds. Also the use of averaged data is not advisable when devising decisions as to who the seat merchandise would be for the coming year.There is similarly a need for extra staff by the bring up, in the lead long the ice-cream manufacturing employs give rise workers wives ( tether) and a maximum of intravenous feeding flavor can be aroused granted the measure constraints and the set up time (to change flavors). Since cracking investment is not thinkable at this time, Gillian would need to apply to a greater extent(prenominal) staff for ice-cream manufacturing if she purposes to sum up the weigh of flavors to ten, analysis and accurate forecasting of what quantities of flavors to aver would also be require if the name of flavors is to be adjoind.Market queryes as to which flavors are being ingested by the customers would also be required and could help eliminate the need to hit the roof to ten flavors outright, but this is currently not being under taken by Gillian. The lack of promotional activities by Gillian has seen the descend of arrivals to the farm cap at 15000 a year this situation is being ignored as Gillian is concentrating to a greater extent on expanding the manu facturing side, now she needs to take a much active approach shot to change magnitude the business at the farm.The issue of farm timings not being contributory to picnics and factory visits (20% of the customers leave before the milking process) and this veridically fact that many visitors are uneffective to see the milking process is also one which would be driving swallow ice-cream gross sales and needs to be looked into by Gillian. Answer 2 To join on the occur of farm visitors by 50% in a single year is a near unachievable goal that Gillian has set for herself. Although it is possible that the go be increased, but leaving from 15000 visitors to 22500 visitors is not a small line of work which can be achieved in the date of a single year.This is payable to a summate of factors which, for Gillian, would be constraints in achieving this produce bottom. These factors include 1. The fact that the farm is pass on to visitors for 7 months in a year, during the be months the animals are kept inside and the rides etc lendable to customers are not safe due to the weather situation. This is a limit which Gillian would be unable to surmount in a single years time without capital investment into building sheds and indoor facilities etc at the Holly Farm. 2.An former(a) time constraint is the fact that Gillian and Fred ground that keeping the farm open for more than than the four days it is already open (Friday to Monday) is not feasible due to the low traffic during the remaining days. Also the farm workers would not be free during the three days of the week (they would be gnarled in the real farm work), so the only way to keep the farm open the entire week is with with(predicate) hiring extra staff which could only be justified and feasible if Gillian were able to plump for attendance/traffic at the farm during these days via school trips etc.The weekend is the peak period for Holly Farm and it is unlikely that works individuals would b e willing to take farm trips during work days. The sales forecast for 1999 shows that Gillian has fain is highly presumptuous wedded that she has but to decide how she would be increasing the number of customers on the farm. Whether she wishes to bring in more customers by centre of coach firms or target the family and recreational travelers (who come by car).With coach firms Gillian would most likely have to cover discounts on the farm visits to the coaching firms to plan trips or revert to her old merchandise tactics of giving lectures at schools and institutes and foodstuff her farm herself. The decision on whether or not to engage with coaching firms is not possible at this time because the number of passengers on each coach has not been identified, thus one cannot calculate the dinero to be had from the sales of ice-cream and other produce along with the admission fees (with or without the discounts).Even if the averaged go in of one-liter ice-cream sale per two coac h passengers is taken to be reliably accurate without the number of potential customers coming by means of with(predicate) the coach trips, and via cars for that matter (one liter per four passengers), picking between the elections would be more count point than proper decision do on the part of Gillian. If we were to assume that fractional the customers come by car and one-half come via coach trips than promoting coach trips would regaining more benefits in terms of ice-cream sales as * 7400 coach trips/2 = 3700 liters of sales & * 7400 car travelers/4 = 1850 liters of salesGiven that 13500 liters were exchange through the retail shop ($27000/$2(selling price)) this would guess that c escape to 41% of the sales comes through the customers on the farm. A 50% increase in the number of customers on the farm would lead to sales of $40,000 only if the number of customers at the farm window also increased by 50% which is a securities industry not being targeted by Gillian, thus the following calculation lede to a figure of $40,000 would be irrational as the sales would be lower (higher from the customers on the farm but when including the form based sales through the farm window the total sales would be lower). 148001. 5=22200 customers * 11100 coach trips/2$2=$11100 * 11100 car travelers/4$2= $5550 * $16650/0. 41 = $40,610 in sales. School parties and trips could be a good tactic on the part of Gillian as they would ensure higher number of visitors and a larger sale of ice-cream and other products which could be made on the farm. Charging a lower admission fees for parties and retaining the catering of the ships company would be a good generator of income for the farm and has the potential of increasing the traffic at the farm by hatchway a whole new target grocery store for Holly Farms i. e. party venue.Gillian should invest some time and effort into undertaking market research into how many schools would be willing to have parties or field trips on the farm (before offering party packages), also information on the customer perimeter for queuing (to vigil the milking process) would be beneficial to Gillian in analyzing how to increase the number of customers on the farm because if the customers are not able to watch the milking process and view this as a deal breaker, they might seek out other sources of recreation and by increasing customers in the short run, Gillian might lose customers in the long run.Information on the actual number of car visitors vs. those coming through coach trips should be sought before Gillian decides on a course of action. Answer 3 Before undertaking a decision to increase the number of ice-cream flavors from 4 to 10 Gillian should weight the advantages and the disadvantages of this estimate. The first factor which Gillian needs to consider is whether a market exists for ten flavors of ice-cream or not, and whether it is feasible for the farm to be producing ten flavors.The fact that cap ital investment is not possible for Holly Farms reputes that the additional yield would be through an increase in the labor cast but the overall amount of money of the ice-cream produced would mum be limited to an inventory take of 7000 liters (which can be held by the freezer). This would mean that the new flavors would be introduced at the write off of the old flavors. This can be an advantage if the customers of Holly Farm are seeking one or two flavors other than those eing offered (market research would be required to confirm this) and that the quantity demanded would allow for greater turnover through either farm or retail sales. Alternatively this venture could lead to unsatisfied customers in musical scales where the farm could experience stock outs of certain flavors due to the fact that many flavors would be under production. A move to directly offering ten flavors would also throw logistical problems as the machines available for production and storing are limit ed.The fact that more staff would have to be hired would also increase the cost of production of all ice-creams and that would affect the profits of the ice-cream venture and Gillian would be forced to make another(prenominal) key decision on whether to pass on the increased cost to the customers in the form of higher prices, and risk losing some business, or decrease the profit margins of the same.Since an increase in volume is only possible if the inventory turnover is greatly raise by the introduction of new flavors (which is not certain) the profits for the farm would be on a downward trend if all other factors remain constant and flavors are added to the product offerings.Since there is no research to suggest that there would be a greater uptake of ice-cream (at retail or farm level) with more flavors, a digest to 10 flavors would be rash and create more problems for Gillian in terms of resourcefulness management, forecasting the demand for individual products and high-and -mighty the manufacturing of the same, rather than the advantages Gillian seeks.Undertaking some degree of market research and exploring one or two additional flavors (based on research findings) whilst representing the same level of staff could be more beneficial for Holly Farms and they could expand their flavor offerings over the long run when they have the capacity to increase production or maintain higher levels of inventory. ConclusionThe case under look back explores the capacity and resource constraints being confront by a small business which was able to attract customers and diversify into other forms of complemental businesses i. e. tours and ice-cream retailing. What we find in this case is that Gillian, the partner in charge of the complementary businesses is facing two critical decisions (a) how to increase the number of customers visiting the farm and (b) how to increase the retail sales of the ice-cream.Since capital investment is not a viable option for the busin ess the means of increasing customer traffic are limited to promotional activities and attracting the right customers for both tours and ice-cream sales. We find that much(prenominal) decisions are not possible with the data available to Gillian at the present time and that the option to increase the number of ice-cream flavors to ten (from four) is also not viable given the manufacturing and storage constraints.Gillian should therefore seek additional data on the target interview for promotional activities and if she plans to increase the number of ice-cream flavors she should start on a smaller scale after conducting proper market demand research. References Author of Book (1999), Case Study Holly Farms, Name of Book, Pp 244-248 Read morehttp//www. ukessays. com/essays/business-strategy/holly-farms-strategy. phpixzz2DakGnUSm