Background

The company is one of leading greenhouse farms in the Canada that has expertise in the field of the hydroponic cultivation of the plants, and vegetables, therefore, thecompany has the fixed menu of the vegetables given to the customers. The company had initially 400 subscribers, but afterwards, it announced flexibility that customers can choose the items they want to add to their basket and that customers can cancel their subscription or delivery at any time before morning. This boostedthe customers’ subscription, and also churn rate reduced.

Lufa Farm has 35 its in-house produced products, but to meet the requirements of the customers in the market, it contacted many local farms to provide customers with the products that were not being produced by the company.Thecompany was selling 200 different products including its 35 products in the market. Lufa was adistributor for other products, which added to its packages as required by the customers.It built pick-up points throughout the city of Montreal. However, due to its increasing customer base in the market, it created complications for the company to manage the operations efficiently.

The customers in the market prefer this service to consume the product that has been cultivated for them. Indeed, the products sold by the company are more fresh, and delicious than the products being sold by other local farms in the market at grocery stores. On the other hand, the company has been facing many problems in the managing the outbound operations efficiently.The increasing customer base in the market could also create many problems for the company, becauseit isdirect to customer company where it would need to make a proper distribution channel in the market.Alternatively,the company could start selling products to the outside supplier in the market.

Future Directions – Question 1

Greenhouse in each city

Hage has also been considering the option of the establishing the greenhouse each time to thenewcity. This option is very attractive when you have become anexpert in your field, and that availability of the funds is also important in this respect. However,the competition in the market has been increasing.Also, opening a new greenhouse in another city would require the huge amount to manage the operations from initial costs to the cost associated with the cultivation, and distribution of the products in the market.

However, the company has been using its direct to customer business model, which is unique in nature in the industry. The company supplies to customers directly, therefore expanding in another city would require thecompany to go through a lengthy process of getting permission from the governmental authorities, which has been experienced very poorly by Hage at initial opening of its first greenhouse.Aside from theauthorisation of the greenhouse, thefundraising for the greenhouse was critical.

Similarly, if we talk about the opening its new greenhouses to another city, it would require thecompany to preparelarge fund needed to construct the greenhouse and a team of experts that could manage the operations of the greenhouse thoroughly. The outbound activities are the core operations of the greenhouse wherethe company has to put all its efforts to distribute the products at the pickup designed pick up points near to customer’s location………………………

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