Introduction Charles and Gillian opened a farm that had a double impact on the public. Their main aim was to minimize cost, maximize profits as well as prevent themselves from experiencing very heavy losses. In this connection their aims led them towards establishing facilities that would act as a source of entertainment to the tourists. This perspective of doing business was quite unique and unusual different from the normal operations of the firm that included ice cream distribution that was being manufactured in a small factory behind the firm, a milking parlor that encompassed use of the latest technology in place for milking cows and a guiding tour for the firm (De Wit and Meyer, 2004).
Despite the fact that the business is doing well this paper seeks to address the major and serious issues that the owners are facing in relation to competition and constraints regarding capacity. ObjectivesThere are key objectives that Gillian and Charles aimed at focusing upon in relation to the problems that were being faced in the business. They include; increasing the farm’s profitability, increasing the number of ice cream flavors from four to ten and Gillian’s decision of attempting to increase visitors by 50% in the year 2008 leading to increase improvement of returns on farm tour assets.
Charles and Gillian are against any additional investment since that would mean putting in more capital that would result to borrowing at interest rates of up to 15%. Identification and analysis of the major issuesManagement Forecast and capacityManagement Forecast and capacity is a major issue in holly farm. Engagement in superior demand management by application of pricing structure can be a way of boosting and the number of visitors in the farm.
Pricing and cost management are important factors worth consideration in demand management. Regarding the holly farm it can decide to offer structures that support half day visits of visitors. In this case it could be that people arriving after 4pm to be give some discount on their charges. Additionally to manage capacity discounted fees can as well be offered to people arriving at 11am willing to stay there for some few hours and finally leaves before arrival of the large groups.
From this point of view it would be ensured that throughout the quieter periods more visitors are received. In a similar manner capacity management can be managed by setting high prices during the weekend and keeping prices low on week days. This could aid in making sure that more people make visits on Fridays and Mondays, periods when the farm is quieter rather than on the weekends when there are a lot of business in the farm. 3.2 Analysis target marketUnderstanding the target market is quite crucial for any given organization.
In this case it important to consider sales made to know who should be target. In this case forecasted sales of ice cream derived from customers were as follows: shopsForecasted 2008 sales of ice creams in dollars% of the total (420,000)Retail shop260,00061.9%Farm shop 160,00038.1%Given the expected 2008 sale of 260,000 dollars sales of ice cream from the retail shops and 160,000 dollars from the farm shops it would be demonstrated that nearly 38% sales are derived from the farm’s customers. That is; Total expected sales for the year 2008 = 420,000