Lakota Hills

.Introduction: Specialty food products are an eternal source of demand . Laura and Michael the owners of Lakota Hills fry bread knew that if they are able to bring in the competitive advantage that they already had against their competitors in terms of product and taste and flavor they would be able to make a success of their expansion plans of the Lakota Hills fry bread .Lakota Hills fry bread was in that stage where it was very necessary that there had to be a buyer momentum .though the decision makers were not willing to commit time and space to new products they were definitely looking for money churners .Lakota Hills knew that it was very easy for homes to bring their products to the local stores but the challenges as identified by Lakota Hills was going national there had to be heavy promotions and in house demonstrations that Lakota Hills had to undertake of they wanted their fry bread to be recognized .Laura with her experience in entrepreneurship training and hands on experience of selling fry breads in festive seasons knew that there was great demand for fry breads. The secret recipe that Lakota Hills used for its fry breads was handed over through generations . This brought in that very important taste and flavor to the fry breads that were conceived and sold by Laura..though the fry bread was originally meant only for local consumption, the idea of selling these to tourists was experimented and with great success .The handmade packs were well received and Laura decided to expand. Expansion required new strategies and new lines of entry in the hyper competitive market and heavy investments on promotion too. The expansion strategy had to be very carefully planned and so the firm decided to use the grocery model of entry and supermarket chains limiting their shelf space to certain up market locations only with great choice .the customer reeducation program and the gift shop sales including luncheon tacos was a novelty that could bring in revenues . The Fry bread retail sector was growing at a good rate and
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so it was certain that Lakota Hills would grow too. The expansion needed funding and Lakota Hills were looking for angel investors. The sale of the 2.5 pound bags have increased considerably and in 2010 the sales values approximately 101.000.the total revenue out of all sales made in 2010 was 17,406,900 which was a tremendous growth from 2008.The net income recorded in 2010 was 12,306,866 showing a vertical growth of over 28%.over 2009. One could see a new debt componenet in the 2007 cash flows suggesting that Lakota hills has started looking for debt financing .Cash positions were quite comfortsable but it is very necessary that Cash resources have to be thoroughly tightened in order ot keep uopto the operating effieciency.

1. Discuss the challenges and advantage of developing a specialty food business. The challenges as seen from the Lakota Hills expansion was that this industry was dominated by many fly by night operators and it was very easy to replicate the product . The fry bread sales as seen from past trends continued to rise and market trends showed that these were greatly favored food consumables. Lakota Hills had been serving fry bread since 1993 and the

opportunities that it had in terms of consumer distributor and food broker feed back was positive showing that the market place accepted the quality of food. Lakota Hills had the very important recipe for churning out the very special taste that fry breads had and this was the greatest advantage. The advantage in terms of competition was also favorable to Lakota Hills. The

competitors had neither improved the packaging designs nor have been aggressively marketing their products . Lakota Hills had spread to quite a few areas and is quite well known . The pricing of Lakota Hills is moderate and hence Lakota Hills can afford to compete on higher

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prices 2. Is their current strategy the best way to build Lakota Hills? I feel that Lakota Hills new packing and offering strategy to consumers is an apt one .the grocery model of entering the retailing segment is a very thoughtful one because the target audience of Lakota Hills are and are those who frequent grocery stores and would always want to try these fry breads The strategy of consumer education plans s another very important strategy . 3. How might they integrate other channels into their overall selling model?

Direct line extensions were seriously being considered by Lakota Hills the fry bread market was distinctly different in terms of appeal to the end consumer and the decision to introduce the chokecherry and the buffalo berry fry bread with the delicate pancake mix and a taco kit to support it were considered to be good market maneuvers .the resilience to mandate SKU was considered as a special advantage to Lakota Hills . Though Lakota Hills have identified whole sale markets on a national program with restaurant chains like Pizza hut and Denys the success of the same cannot be guaranteed .The best way would be to start retailing through very effective consumer relationships .specialty food outlets are the best targets as they would bring in double the amount for Lakota Hills products .since the shelf life of Lakota hill products are the most critical aspect, Laura feels that specialty shops and supermarkets are the best bargains and wholesaling too though the margins are very low. The on the road program and buyer education program was considered to be really innovative and the try your own through the recipe illustration and in store tasting samples including the buy one get one free kind of promotion was a good start .

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4. How will Lakota Hills make money? Laura Hills will make money if the expansion of Fry bread finds the mass consumer markets. The different lines of entry into the grocery market with many promotion schemes and stores to store exhibitions and participation in trade fairs will bring in the necessary awareness and consumer insight to Lakota Hills . 5. As an angel investor, would you participate in the round this venture is seeking? I have seen the opportunities and the innovative product design that Lakota Hills is trying out , I would definitely participate in this venture. I am sure that my investment as a angel investor will pay off because I feel that Lakota Hills will take the market by storm. Though the product has great competitors none of them have brought in any the necessary market capture or the brand consciousness or appeal into the market. Lakota Hills have brought this distinction to them minds of the consumers by their consumer education program and the way the consumer sampling could be done. This brought in the real taste of the product to the consumer. This is one of the reasons why I feel that investing in Lakota Hills will be a great initiative. Conclusion: Lakota Hills is in an expansive mode and if it looks at better retail entry the expansion can be made profitable. The market research has favorably reacted to Lakota Hills products and it is recommended that the consumer re education program and the promotional programs that Lakota Hills needs to participate in will bring in that competitive advantage to the firm in terms of visibility and audience .