Monforte Dairy Harvard Case Solution & Analysis

Monforte Dairy Case Solution

Introduction:

Monforte dairy company was the dream of Ruth Klahsen, a chef at Stanford’s well-known restaurants. The company was established in 2003 with two partners Ruth Klahsen and Sebastiano Monforte, the partnership did not last for long as after six months Sebastiano Monforte left the company as the prepared artisanal cheese was unsafe to sell. Later on, Klahsen prepared herself to operate the business by her will. She was very energetic to make a high quality brand of artisanal cheese and to actually survive in the industry. The artisanal cheese had a small market at that time, and mostly it is was from the Western Europe, as people were unaware of the product as it was a non-industrial product.

Current agriculture situation of Ontario has helped Klahsen to introduce the product. She made strategy of giving healthy food product to the farmers, which was the requirement to agriculture industry.Moreover, the company provides different benefits to the doctors to suggest their product to the farmers. At that time Klahsen invested 90% cost to quality of product and 10% profit, and this pricing model helped to create the brand awareness.

The main key factor of the company’s success was the trust of its customers. It was the time in February 2008, when the new landlord tried to purchase Monforte land by charging double rent, and Klahsen did not have that much amount to purchase the land, therefore she appealed to the customers to pre-pay the amount for future products with more weighted capacity.

Problem statement:

The company is facing the problem of financial constraints and has no capital available to introduce new products, which has restricted the growth of the company on customers and market share.

Current situation analysis:

Monforte Dairy is one of the leading companies in the industry nowadays. The company has survived many hurdles, and it has been successful in making the brand in the dairy industry.The company is not so financially strong however, it has been able tosave some extra capital for the critical situation.

The demand for artisanal cheese is increasing day by day as people are becoming aware of the product, and there has been a high increase of tourism, which has created more opportunities to introduce new products to the market. Monforte is dealing with the same supplier for many years as well as the same products. The company has less working staff and small space of working however,there are only limited customers who are the frequent buyers of artisanal. The current situation is feasible, as the company needs to perform better to further grow.

The raw materials are imported in high cost and in small quality, which in curs high expenses and generates less revenue against the product. Moreover, Klahsen introduced cheese making to the schools to create more awareness of the product and to expand the business in North America. Furthermore, Monforte’s sales were much higher in 2009 than the previous years.

Swot analysis:

Strength:

  • Brand image is high from the past years: The company is providing high-quality products to the market with no subsidies
  • Growth in sales: Customers take interest in purchasing the products which are less priced and have unique designs
  • High-quality product: All ingredients are well tasted before production as well as they are safe from any disease.
  • Experienced staff: Clean workplace is maintained with highly skilled staff to protect the product from bacteria.

Weakness:

  • Less employees’ benefits: Employees are less motivated to work because of having no benefits such as no bonus for better performance
  • Weak financial positions: Less extra capital available to launch any new product
  • Same suppliers: Monforte purchases the milk of cow and goat from the same vendor, and they are unaware of the market rates
  • High-cost lease: The invested amount on leasing the land was high and due to this process, the production was stopped for a whole year.......................
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