Fresh Connections is a fresh food manufacturer that provides meal solutions products to retailers, restaurants and co-pack companies. After a successful stint of one year, Fresh Connections is suffering from variety of short term, operational and strategic issues. In the immediate future, cash liquidity of the company is a problem and it is recommended that take the deal with the co-op client to alleviate their financial situation. Moreover, they are in the position of high financial risk pertaining to their R&D costs and it is recommended they refine their contract policies with clients. Furthermore, Fresh Connections is suffering from a number of operational issues and it is recommended that they improve their …show more content…
Recommendation: Control R&D expenses by using a legal contract when developing a customized product
For example: A client comes to Fresh Connections and wants the best Marinara sauce to serve at its restaurant. Fresh Connections already has a Marinara sauce recipe, but the owner of the restaurant is not very fan of it, he thinks that it is missing a little something. Fresh Connections will then try to find that little something by altering its recipe, and will then ask the client to taste it. It is better than the first time, but still not perfect. Second try and it is still not exactly what the client was looking for. But they are getting close. At this point, Fresh Connections could come up with a legal contract that would commit the potential client to a certain minimum order for the following months. A non-refundable deposit could also be asked, depending on each development project and its expected profit margin, or the level of risk that the company is taking.
Advantages of the recommendation: * Significant reduction of R&D expenses * Money spent more likely to result in sales * Offering a few “free” trials can be used as a promotional tool -- “we are customizing for you before you have to pay anything” * Fresh Connections keeps total rights of the recipes * Could always include an exclusivity agreement in the