1 Even’ Star Organic Farm By Chasedream The Association for Accountants and Financial Professionals in Business.

1

Even’ Star Organic Farm

By Chasedream

The Association for Accountants and Financial Professionals in Business

Case Overview

Three ProposalsLong-term

StrategyProcess Restructure

Risk Control

Content

Case Overview

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Demand & Supply

• Lower yields than planned

• Larger potential customers

Sales & Service

• Restaurants• Community-supported agriculture• Farmers’ market

Production• 10 Acre of land

• High-quality organic vegetables

Profit

maximization

(best market

share)

Proposal III

Case Analysis

Profit

maximization

(best cash flow)

Proposal II

Profit

maximization

Proposal I

0 5000 10000 15000 20000 25000

Restaurant profit

CSA profit

3800

8597.21

12254.28

13631.34

15388.41

17145.47

11395.36

10124.12

8852.89

7581.65

6310.41

6

7

8

9

10

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Restaurant Customers

87

77

67

58

43

25

CSAsubscribers

12666.59

Proposal I—profit maximization

When serving 6 restaurants 87 CSA subscribers, the farm get

the HIGHEST PROFIT.

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Net Incremental in Profit

$8226.63/channel

CSAsubscribers

0 5000 10000 15000 20000 25000

Restaurant profit

CSA profit 13176.46

14628.68

12660.91

7581.6

6310.4

3767

2

3

4

5

6

7

Restaurant Customers

90

90

81

71

62

528059.7

5362

9892.0

5397

5039

11344.23

5432.4

5467.4

5502.4

5537.5

Farmer Market (Sunday)

When serving 3 restaurants, 90 CSA subscribers and Sunday farmers’ market, the farm can get highest profit under the

precondition of highest cash flow

Proposal II—Cash Flow

0 5000 10000 15000 20000 25000

Restaurant profit

CSA profit 7389.7

8835.3

10660.9

7581.6

6310.4

3767

2

3

4

5

6

7

Restaurant Customers

83

73

64

54

444417

5039

5811

Farmer Market (Sunday)

8165.6

8344.2

8522.8

8694.0

8855.1

9016.1

Farmer Market (Sunday & Saturday)

CSAsubscribers

Proposal III—Sales Channels

When serving 2 restaurants, 83 CSA subscribers and both

farmers’ markets, the farm can get highest profit under the

precondition of three channels

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Three Proposals—Summary

These three proposals are our strategy to overcome the low yield and high demand problem in the short-term.

We prefer the second proposal for its abundant cash flow and relatively high profit. Additionally, three channels have been covered in this way.

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CSA and farmers’ market can generate

high cash flow for restaurant’s

development.

Restaurant10 customers to 20

Profit proportion is about 57% ,which is high.

BCG long-term development

We should increase the market share for

restaurants in the long run.

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Market risk Future Contract

Financial risk CSA Channel

Environmental Risk

Legal protection

How to solve?

Even’ star can sign future contract with

restaurants to reduce market risk. Subscription from CSA channel can relieve cash flow

pressure.Seeking legal

protection is the best way to defense contamination.

Risks

Market demand fluctuates and may not consistent with

production.

Low demand will lead to cash flow problems.

Adverse weather and potential pollution will

reduce production.

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Case Analysis

Package Communication

ProductDelivery

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HIGH

LOW

Process complexity

HIGHLOW Strategic importance

Harmon’s Matrix

Technology improvement--irrigation

Production expansion

Product

Environmental protection

On-line sales order processing

Automatic reply

Communication

Manual regular check

Automatic delivery reminder

Outsourcing to logistic companies

Delivery

Experienced staff to increase efficiency

Regular contact with order and delivery system

Package

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Social responsibility

Organic farm Providing more job

opportunities

Crop rotation, intercropping can benefit the land.

Landscape for Recreation for the

public

Ecological balance—no harm to hilly land and soil and

water conservation

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Advice & Tips

• Provide a more free choice platform for customers.

• Utilize the unused land.

• Adopt more accurate weather forecast.

Thank You!

By Chasedream