Introduction
The increased interest showed by Great Deal Inc. venture on the significantly profitable organic products being produced by Earth Baby Inc. is based on the extensive distribution network of Great Deal Inc. The commercial potential of the distribution of the new line organic products is estimated to be profitable as costs are valued to be low. A systemized process for venture planning and assessment is required by both Great Deal Inc. and Earth Baby Inc. to edifice the often arbitrary development related with such ventures for them to be successful.
The required process must progressively collect the necessary information from the market to arbiter the viability of the project. A guided structured business planning process would increase the chance of high quality decision made by Earth Baby Inc. on the new proposed venture. The business venture is set to benefit Earth Baby Inc. as the costs are projected to be minimal.
Since the growth in market share of organic baby products has grown and is expected to be around 10.9% by 2014 from about 7% in 2011 it poses a viable business venture for the products. Quite a number of baby food consumers are reeling of the benefits of organic products over conventional products and they are willing to pay a premium for the products. This is because organic baby foods are more nutritious compared to the conventional foods. This extensive and expanding market creates a great opportunity for both Great Deal Inc. and Earth Baby Inc. venture for their products.
The organic baby products have high nutritional value, taste better and have almost nil levels of synthetic chemical contamination. The newly introduced organic baby foods by Earth Baby Inc. will be free of pesticides that are normally found in conventional foods and the organic foods such as organic milk have been tested and found that they have about 60 to 80 percent more nutrients than the conventional milk.
This nutritional value and the lucrative nature of the products are essential in attracting new consumers and increasing repeat customers for the product. The other products including toys and clothing would record an increase in purchase as the distribution network would be enhanced by the extensive and superior network provided by Great deal Inc. This will result in increased revenues for Earth Baby Inc.
The marketing of the products to the target consumers will be dependent on Great Deal Inc. The product modifications and packaging made by Great Deal Inc. will be tailored to suit the tastes and preferences of the consumers who include parents who value their health and those of their kids. The pricing of the products to the consumers would be affordable as the production costs as calculated and determined by Mr. Stanley of Great Deal Inc. is lower than the usual cost of production of $3 incurred by Earth Baby Inc. during production.
Since Great Deal Inc. would be distributing the products at a more cost effective price, the venture dealing they are about to enter with Earth Baby will prove profitable and this would result in an increase in produce and company size.
Conclusion
The venture deal between Great Deal Inc. and Earth Baby Inc. will mean increased distribution network for Earth Baby Inc. and hence increased revenues as they will be required to meet the increased demand. On the other hand, Great Deal Inc. would benefit through advertisements on the Earth Baby Inc.’s products and at a lower cost will they be distributing the products. This business venture is profitable to both the companies and so it is advisable that Earth Baby Inc. accept the business venture.
References
Ehmke, C., & Boehlje, M. (2005). A Methodology and Model for Assessing Entrepreneurial Ventures.
Ardichvili, A., Cardozo, R., & Ray, S. (2003). A theory of entrepreneurial opportunity identification and development. Journal of Business Venturing, 18(1), 105-123.
