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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Lakota Hills

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 .

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