Monforte Dairy Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Introduction

Monforte Dairy Company (Monforte) was founded in January 2003, it was based on the partnership shared by Ruth Klahsen and Sebastiano Monforte. Monforte, was in the industry of cheese making. Later on, due to different issues Monforte left the company. After taking charge of Monforte Dairy Company, Ruth Klahsen assisted the company in showing the direction of success. Klahsen took initiatives in flourishing the company and making it agriculture-friendly company. Klahsen has different opportunities through which it could help the company in achieving goals and profits.There were many options that Klahsen could use for increasing the growth of the company. With the growing demand and weak competition in the market, Klahsen was able to grab the opportunities and was able to reap the benefits like increasing profits and growth. The problem arose when one year was wasted because of the construction of buildings; hence, Klahsen was in serious debt.

Mission, Goals and Current Strategies

Monforte was one of the Perth County micro producers, and it had a goal of improving the agricultural industry in Ontario. Klahsen had an aim for taking agricultural measures for reducing the harm to the environment, workers, providing fair wages to farmers and supporting farming communities. Monforte was also involved in high quality products with the support of slow food movement. It also had the goal of working for the community and was involved in sharing profits with nonprofit organizations as a fund. Klahsen wanted to grow Monforte into a $10 million revenue company. She wanted to achieve the profits, but didn’t want to put pressure on the environment.

Klahsen was a mature lady and she was looking after the whole company by herself, therefore, she had an aim of taking right decisions which can give long-term benefits to the company and the community, as she was thinking of retiring in the next 10 to 15 years. Monforte had already become the role model in the industry and Klahsen wanted to fulfill the demands of the society.

Klahsen believed in the pricing model of 30/30/30, 30 percent of the price was covered by food costs, 30 percent was covered by labor costs and 30 percent by fixed costs and 10 percent by profit. Monforte was supposed to pay fair wages, buying raw materials at adjustable prices and allocating the money for expenses. Monforte also worked on the strategy of building brand awareness, increasing media coverage and being present at the farmers’ market which helped the company to be successful in its operations.

Internal Analysis

The biggest strengths of Monforte are its brand awareness and loyalty of its customers. The awareness of the company can be attained by giving Monforte media coverage and being present at the farmers’ market.The customers who were health-oriented increased the brand awareness via word of mouth and this led to a continuous growth in the business. The brand image of Monforte increased due to the social work done by Klahsen. This increased the sales of the company as the image of the company was high in the industry and working for the environment gave its image a boost.

The customers gave preferences to the Monforte’s cheese due to the values and social responsibility of the company. The company created a positive image between the company and its customers. Hence, these operations increased the marketing of the product. Monforte also has great excellence in identifying its abilities in the area where it can increase its sales growth and influencing smaller markets like a farmers’ market and retail stores.

Monforte’s weakness is that it was facing delays in its future growth. Due to the reason that Monforte is under high leveraged debt and that it is deteriorating makes it difficult to expand in the market. One of the major weaknesses of Monforte is that it does not have high capital to purchase the land and it was too risky in lending the loan from the bank. The low capital was due to the reason that only 10% profit was allocated in the price model of the company. This is why Monforte faced difficulty in arranging the capital for expansion. Moreover, the current salaries of the employees are not enough in keeping the high quality employees loyal to Monforte. The issue is to be addressed by Monforte in the future. It is believed by Klahsen that different programs should be initiated to keep the employees loyal.......................

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Owner Monforte Dairy Company Ltd in Stratford, Ontario, is torn between two alternatives for the future of the company. It depends on the company for her life, but she also wanted to use the company for further culinary few movements. All of the major growth opportunities under consideration would require debt financing, and the owner wonder what affect this will have on her company. "Hide
by Elizabeth M. Grasby, Jamie Hyodo Source: Richard Ivey School of Business Foundation 11 pages. Publication Date: April 28, 2010. Prod. #: 910M37-PDF-ENG