Reference no: EM133039258

Mark Roberts is the owner of Greenfield Nurseries, a company specializing in growing plants for sale to garden centers and to specialist garden designers. With the growth in home ownership and an increase in leisure time this sector of the economy has seemed recession-proof. The company has grown over the past ten years and with 30 employees and several glasshouses it has a turnover of almost £1 million.

The company is located on one relatively large site near to a rapidly expanding urban area. There is currently within the site no physical room for expansion. If the company is to increase its profits as a garden nursery it must either acquire additional land for growing plants or it must direct more of its sales to the ultimate user (the general public) away from sales to other intermediaries (the garden centers) and so obtain higher margins.

Mark is annoyed when he sees garden centers putting large margins on his products for re-sale. Why are these profits not coming to Greenfield Nurseries he wonders? He is now contemplating re-focusing his activities on selling plants and not producing them. It has been suggested that he turns his growing areas into a garden Centre. He also should buy from other specialist nurseries, transforming his glass house space into selling areas.

There is a large market nearby, with several new housing developments, all generating a huge demand for horticultural products. Mark has read that the further one moves downstream in the business chain - into dealing directly with the consumer - the greater is the profit margin. He is very tempted by this 2 strategy, but he is not fully convinced of the wisdom of such a move.

Examine the kind of growth strategies that Greenfield Nurseries need to adopt?