Holly Farms
Holly farms strategy
Introduction
In order to revive profits and save themselves from bearing heavy losses, Fred and Gillian Giles had opened a two purposed farm for the general public in 1993. Their ambitious goals had let them to put in all their savings to establish facilities on the farm which would entertain the tourists. This side of the business was apart from the usual farming being carried out which included the distribution of ice cream which was manufactured behind the farm in a small factory, a milking parlor to see the latest technology being used to milk the cows and an additional guided tour of the farm. Even though the business is currently running reasonably well, the owners are facing some serious issues related capacity constraints and competition.
Answers
Answer 1: There is a no. of issues which Gillian Gales is facing in her side of the business. These issues include the fact that in order to grow the Holly Farm 's business, it is not possible for the owners to add additional capital. They have already invested a lot of money and any additional capital available to them will be in terms of a loan. However, the interest rate on the loan is expected to be above ten percent which would not make it feasible since the owners are not expecting to earn that high a return on their investment in order to pay the interest and the principal amount. Other issues which Gillian needs to take notice of include the fact that the ice-cream factory is not operating at full capacity, the freezer which has a capacity to hold 10,000 units is operated at 7000 units ' storage to allow for stick rotation. The lack of preservatives used in the ice-cream would also be a factor in this regard where the inventory needs to move out of the factory within 6-12 weeks. This factor would be driving down retail sales to shops and hotels which might be interested in stockpiling the ice-cream for their peak periods (since Gillian is not in a position to increase production for
Introduction
In order to revive profits and save themselves from bearing heavy losses, Fred and Gillian Giles had opened a two purposed farm for the general public in 1993. Their ambitious goals had let them to put in all their savings to establish facilities on the farm which would entertain the tourists. This side of the business was apart from the usual farming being carried out which included the distribution of ice cream which was manufactured behind the farm in a small factory, a milking parlor to see the latest technology being used to milk the cows and an additional guided tour of the farm. Even though the business is currently running reasonably well, the owners are facing some serious issues related capacity constraints and competition.
Answers
Answer 1: There is a no. of issues which Gillian Gales is facing in her side of the business. These issues include the fact that in order to grow the Holly Farm 's business, it is not possible for the owners to add additional capital. They have already invested a lot of money and any additional capital available to them will be in terms of a loan. However, the interest rate on the loan is expected to be above ten percent which would not make it feasible since the owners are not expecting to earn that high a return on their investment in order to pay the interest and the principal amount. Other issues which Gillian needs to take notice of include the fact that the ice-cream factory is not operating at full capacity, the freezer which has a capacity to hold 10,000 units is operated at 7000 units ' storage to allow for stick rotation. The lack of preservatives used in the ice-cream would also be a factor in this regard where the inventory needs to move out of the factory within 6-12 weeks. This factor would be driving down retail sales to shops and hotels which might be interested in stockpiling the ice-cream for their peak periods (since Gillian is not in a position to increase production for
References: [Author of Book] (1999), “Case Study: Holly Farms”, [Name of Book], Pp 244-248 Read more: http://www.ukessays.com/essays/business-strategy/holly-farms-strategy.php#ixzz2DakGnUSm