Transcript final presentation

Duane Horvey
Curtis Ridgway
Eldon Forrest
Karrie Buxton
Industry Overview
• The certified organic industry is a fast growing
industry with a lot of interest from many people.
• Much of the interest in organic food is coming
from the more health conscience people. Who
may be worried about hormones and antibiotics
in their meat.
• As of now there isn’t many people into marketing
organic beef in the prairies, and it could be a
major opportunity for Organic Beef.
Operations Plan
• It is a co-operative made up of over 30
members.
• The thirty members are mostly producers
who supply the company with cattle.
• The thirty members elect a board of
directors. Who help make decisions to
keep the company moving forward.
Organizational Structure
30+ member
co-operative
Board of
Directors
President
Administrator
Marketer
Organizational Structure
• The board of directors are mostly made up of
producers involved in the co-op.
• The board will make most of the major decisions
so that they can keep the co-op happy.
• President will be in charge of the two employees
keeping them informed and on task at the duties
that need to be performed.
• The administrator and marketer will take care of
the daily activities that need to happen to keep
the company running smoothly.
Flow of Work
• The producers load
cattle and deliver to
XL Foods plant.
• At the XL plant the
animals are to be
slaughtered and
processed.
Flow of Work
• Then the meat is
transported to TML meats
in Melfort.
• At TML the meat is hung
for 14 days to tenderize.
It is then processed into 3
different cuts of meat.
• Processed into steaks,
roasts, and ground beef.
Flow of work
• Aero Delivery then
takes the meat from
TML to Calgary.
• Once in Calgary the
meat is then
transported to East
West Delivery who
delivers the meat to
retail co-op stores in
Calgary.
Average Business Month
• In average business month you would see
the marketer and administrator watching
over the days activities.
• They would be making sure everything ran
smoothly from the producers all the way to
the retail stores.
Capital Budget
Capital Budget
Total Capital Budget
Working Capital
Cash
Accounts Receivable
Accounts Payable
Total Net Working Capital
-
(606,592)
33,440
(88,002)
(661,154)
Capital Budget
Operating Expenses
Beef Cost
XL Beef
TML Meats
Aero Delivery
East West
Packaging
Labelling
Total Operating Expenses
842,400
67,500
90,558
10,135
3,285
6,669
3,538
1,024,086
Human Resources
• Sol will be will employ
one administrator and
one part time
marketer.
• Both the marketer
and the administrator
will be paid by salary.
Human Resources
• The Administrator will be hired to do the
daily jobs consisting of communications.
• They look after which producer is sending
in cattle and at what stage the beef is at.
• They will also look after the payment of all
the producers for their cattle, and receiving
payments from the co-op for their cattle.
• Will report to the board of directors.
Human Resources
• The marketer will deal with marketing of
the final product.
• They will also have to make the product
desirable to the consumer.
• Responsible for public relations with
retailers.
• Some overlap with the administrator.
Marketing Plan
• 4 P’s
– will be marketing three different products.
Steaks, Roasts, and Ground Beef.
– will be getting a premium over the
conventional beef prices.
– Promotion will be done mainly through word
of mouth and through website.
– will be placing their products in the Calgary
Co-op retail centres.
Segmentation
• The two segments SOL is looking to
market to are:
– The health conscience people looking for a
lean healthy beef product.
– The upper-class society looking for a high
quality beef product.
Targeting
• SOL plans to target the two area where
the two segments of people coincide. This
is where they will get the most interest in
their product, and it will also be the people
who will buy most of their product.
Positioning
• SOL will be branded a high quality beef
product that is health friendly.
• It will be positioned as a environmentally
friendly product, because the use of
hormones and antibiotics are not being
used.
SWOT
• Strengths
– is made up of organic producers who have
knowledge about raising organic beef.
– Low capital costs means not much money
invested into the company.
• Weaknesses
– Rely on other companies to get the job done,
which means less control over the product.
– Possible limited demand because of the
premium charged for organic beef.
SWOT
• Opportunities
– Fast growing industry
– People are looking for a healthy alternative to
traditional meats.
• Threats
– Higher prices demanded for organic products.
– Consumer knowledge.
Market Analysis
• Past Performance
– In the past there
hasn’t been much
of an organic beef
market on the
prairies.
– Seize market
share.
Market Analysis
• Market
– Small right now
– Growing market for organic meat
– Looking to get no less than a half of a
percentage of the Calgary population to
purchase the certified organic beef
Market Analysis
• Competition
– The main competition
will be coming from
non organic beef.
– Competition will also
be coming from other
organic meats like
poultry and fish.
Market Analysis
• Customers
– will be marketing their product to rich young
and health conscience people.
– Aging population (baby boomers).
Marketing Strategy
• Sales and Profit Objectives
– SOL is going to market 45 head a month or
540 head per year at a 10% increase per year
– SOL will be selling in the first year 17,550lbs
roasts, 32,994lbs steaks, and 89,856lbs
ground beef.
Marketing Strategy
• Channels of
Distribution
– Distribution of product
will be done through
retail Co-op stores in
Calgary.
– Transported via
trucking.
Marketing Strategy
• Pricing
– Sol will be pricing their products by taking the
price of conventional beef and charging a
40% premium for it. Then multiply by 45% to
subtract the mark-up and find what Sol gets
from the Calgary co-op.
Marketing Strategy
• Select Markets/Products/Services mix
– Establishing an early market in Calgary.
– Looking to grow with the growth of the organic
industry.
– Offers the assurance of a high quality
products and not just another meat.
– Consumers will be more likely to become
loyal to this product, because of its healthy
connotations.
Marketing Strategy
• Selling and Advertising
– will rely on the Calgary Co-ops to market their
product.
– will also market through the use of their
website.
– Word of mouth from satisfied consumers is a
way that their products will be advertised and
sold.
Marketing Strategy
• Market Plan Budget
Brand Consulting
5,000.00
Label Certification
4,050.00
Dies and Plates
3,525.00
Total
12,575.00
Accounting/Financial Plan
• Revenue
– Revenue is generated from 3 different
products steaks, roasts, and ground beef.
– In year one Sol should be getting $4.25
dollars wholesale for steaks, $3.41 for roasts,
and $2.30 for ground beef.
– This is expected to increase by two percent
each year to cover inflation costs.
Accounting/Financial Plan
• Risk Analysis
– Few risks affect.
– Prices paid to producers affect profit.
– Prices received for product affects profit.
Base Case
• will be paying the producers $2.40/lb
based on hot hanging weight which is 650
lbs per animal.
• The price it is getting for their products are
$2.30 for ground beef, $3.41 for roasts,
and $4.25 for steaks.
• Net income for year one is $-673,592.
Questions?