Cerse Gardening
Essay by Vishnu M • February 9, 2018 • Case Study • 574 Words (3 Pages) • 607 Views
1. There are a few factors that have played an important role in the growth of Ceres Gardening company:
- The ability to recognize the increase in health consciousness and do it yourself gardening products.- The company entered an economical activity that matched the generational trends in years to come.
- Slow safe and steady growth.- Ceres started as a mail-order catalog company with low inventory cost and adequate cash flow. It grew as it´s operation grew. This eventually generates investor confidence. They only increased their retail presence once their mail-order business was small to their total demand.
- Good supplier relations.- Ceres Gardening, as stated in page 2 of the case “developed a network of small, independent organic farms, offering them a commitment to purchase godos in Exchange for an exclusive supplier relationship.” A proof of this is that when Wydown, the CEO and founder, took the company public as a microcap in 1999, a number of Ceres´suppliers and dealers bought shares of the company.
- Costumer Service.- Part of Wydown´s strategy was to establish a loyal customer base and relationships with end-consumers. In page two we can see that “Although certified organic products were significantly more xpensive, Ceres developed a loyal following that valued its quality, reliability and hands-on customer service.” They created a sense of community and belonging among their customer base.
2. The stock market responded positively to the company´s performance. You can see from Exhibit 5 the following things:
- Share Price has increased from $4.11 in 2002 to $8.01 in 2005. The 2006E is even higher at $9.49
- Dividends / have increased steadily.
- EPS have increased from $0.40 in 2002 to $0.50 in 2005.
The market aknowledges there has been a steady performance.
3. The sales growth rate is lower tan the growth in inventory and accounts receivable. These rates have grown at a different rate since the company´s general growth comes from retailers not from their direct mail orders. Retailers
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