Overall the farm seems to be in a weak state .Two main options : to sell and moving into the crisp market .There are many factors that success depends on such as the present financial position for the potato farm is weak .The liquidity is low and the profit is low also the shareholders get the dividends at a very low level .Therefore they should think about a new market for the business then it is a reason to going to the crisp market.The second point is current bargaining position for the potato farm is weak as well.Most of their potatoes are going into the leading UK supermarket and in addition with a falling price .That is one reason that they should switch to the crisp market .For expending their business.The third reason for moving into the crisp market is Romily with highly experience and skill for crisps' business .And she spend half of her saving for supporting the business that show her confidence and the loyalty which has a positive effect on the business.Then in Romily's business plan she show the probability of the successful is quite high .Well the brand name is old a strong ,therefore if they move into the crisp market the demand can be inelastic.Anyway in Romily's business plan it says the crisp product will have a USP(which is low fat ,low salt )it fits the needs of the society so the demand will be inelastic .Those all the reason for moving into the crisp market .
However there are also some weaknesses for moving into the crisp market.Which is the other main option to keep the potato farm.The first point is if they move into crisp market they have to recruit new staff but there is no increase in hierarchy in the organisation so the span of control is higher .Which is difficult to organise. And lead an overloading for the workforce.the second point is the current situation of their finance is poor therefore how can they get enough support for the new crisp market . Higher risks are involved in there . And there are 30% probability of failure .So if they fail they are going to lose 50,000 pounds.
According to the discussion above my recommendation is that they should moving into the crisp market.
1 year ago