TruEarth Healthy Foods Harvard Case Solution & Analysis

Problem Diagnosis

             TruEarth Healthy Foods is a company which had been founded by Gareth DeRosa in the year 1993 in Missouri. The overall trend in the frozen products market in United States had shifted recently and the consumers had started to place more importance upon the fresh pastas, semi prepared single proportion meals and they have also started to avoid the foods that had bad carbohydrates. The management of the company has always focused upon quality ingredients, healthy selections and freshness for all of its products.

            The company has created a competitive advantage in the market based upon its core competency which emphasizes on using the whole grain ingredients and the company has been providing its customers with the most convenient home meal replacement products which were liked by the customers. The main product line of TruEarth comprises of sauce and the pasta and as a result of these product lines the management of the company has been enjoying higher than expected retail sales and higher than expected profit margins from the sales of pasta and sauce products. However, the success of these products could not continue for a longer period of time as a result of the threats from the competitors with their aggressive marketing strategies.

            Therefore, in order to maintain their core competency and sustain their competitive advantage in the market, the management of the company has been investigating a product line extension with the whole grain pizza. The product development process at TruEarth for the whole grain pizza is almost near completion and now the management of the company is faced with the dilemma that whether they should launch the new whole grain pizza product in the market or not. The management of the company will have to make this decision based upon many factors. First of all the quantitative analysis will need to be performed for the new whole grain pizza product under the best and the worst case scenarios and then determine that whether the dollar sales for the average or the excellent product cross the $ 12 million minimum requirement that has been set by the company.

Secondly, if the product needs to be launched now it needs to be justified and lastly, the management of the company will have to also determine that if it launches the whole grain pizza product now will it get a first mover advantage in this case also as the company created a first mover advantage with its fresh pasta products. The success of the whole grain pizza product would be determined with the help of the overall calculated risk and the future sales volume and sales dollars.

Situation Analysis

            TruEarth has achieved a leading position in the frozen pasta market and it is the market where the company has a strong staple in. The annual sales achieved by the company in this product category had reached to $ 4.1 billion by the end of the year 2004. However, to cope up with the increasing competition in the market the management of the company has come up with whole grain pizza concept which is basically an extension of the pasta product. In order to make the launch of the new product the management of the company has conducted a detailed research and market surveys.

First of all an initial interview was conducted to compare the TruEarth concept with the other refrigerated pizza products and the takeout. When this product was compared with the takeout, this product had been rated highly on the category of the health ingredients, while it was rated negatively on all the other factors. However, as compared to the other refrigerated pizza products, it was rated very highly in all the categories. Therefore, this initial survey had revealed that the TruEarth concept could be considered as a success and it could grab market share away from all the other refrigerated pizza products available in the market.TruEarth Healthy Foods Case Solution

However, at the same time it is also revealed that still some improvements need to be made in order to improve the TruEarth concept and in order to achieve that the management of the company was prompted to perform the BASES II analysis. If we analyze the information provided in case exhibit 8, then it could be seen that at the mall intercept the favorable appeal for the TruEarth whole grain pizza product is around 60%. ..........................

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