The Pasta Tree in Springfield is the only fresh pasta wholesaler. For the past three years, the company has sold its fresh pasta products out of its own storefront and in the city’s five natural food stores. Since its inception, the company has developed a loyal customer base that has resulted in an increase of 15% per year in sales. The Pasta Tree expects to gross over $300,000. This was made possible by an initial investment from $80,000
Pasta Tree has plans to expand to include distribution to major supermarket chains within the whole city. There are fifteen supermarkets in Springfield. More than thirty-five smaller grocery store serve the surrounding areas and new suburban neighborhoods. To meet the increased product demand, The Pasta Tree will have to double production. Owner funding and internally generated cash flow will enable only a portion of the expansion plan. Pasta Tree will be able to secure a $50,000 loan in order to expand its production facility. Based on the current success of the Springfield target customer base, sales projections for the next 3 years are made.
This plan will result in sales revenues growing to almost $420,000 by Year 3.
Pasta Tree is situated in a 3,000-square-foot facility. This facility serves two purposes: as a shopfront and as a production facility. The expansion will see production take up 3/4 of the space. The cost to prepare the new space for production is $10,000. New equipment will add $30,000. In order to meet new demands, the company will have to upgrade its packaging equipment. The cost of this upgrade will be $10,000
Pasta Tree will launch a new marketing campaign in grocery stores and supermarkets that will carry its products. For new customers to be attracted, attractive in-store displays were created. Displays will feature discount coupons for new customers.
In conjunction with the introduction of the products, The Pasta Tree will be a major sponsor of the Canal Run which raises funds for children’s cancer research.
1.1 Objectives
The Pasta Tree has the following objectives:
- Expand production facility without compromising product quality.
- Strong sales at the major supermarket chains in the city.
- Ensure tight control of costs and operations during expansion.
1.2 Mission
The Pasta Tree’’s mission is the following:
- Quality – Our products are of the highest quality and freshest pasta.
- Value – We provide greater value to our customers with delicious, nutritious products.
- Integrity We are proud of the pasta products we produce for our customers. The Pasta Tree’s commitment to the highest quality is what gives our customers their trust. We can guarantee that our customers will not be disappointed by our products.
