Introduction
For $30 each week, Lufa Farms provides the consumer with a subscription to fresh, local, organic produce, delivered to a convenient location of the consumer’s choosing. This Montreal-based start-up, founded by Mohamed Hage, is breaking down the wall which blocks the consumer from purchasing locally grown produce year-round. This company embodies each discipline within management. Not unlike other companies, Lufa Farms faced challenges in the implementation of all of these disciplines. On the contrary, Lufa Farms succeeds in many areas.
Organizational Behaviour Organizational behaviour is the study of the way people interact within groups, and is applied to create more efficient business organizations. At Lufa Farms, this is …show more content…
Recurring costs are referred to as “revenue expenses”. As seen in Exhibit 14, Lufa Farms had total revenue of $8,404,485 (including effective gross income), total operating expenses of $7,113,097, which included labour, rent, security, supplies, marketing, and insurance, and total start-up costs of $5,500,000, including equipment and construction. Additionally, the company had high capital expenditure. Capital expenditure refers to funds which a company uses to acquire or update physical assets, in this case, greenhouses. However, the company was able to balance its high capex with low operating costs. Total daily operating costs were approximately $300, which accounted for fuel, labour, transportation, and delivery. The preliminary greenhouse had capital expenses of approximately $80 per square foot, with the initial investment in the building totaling at nearly $2.3 million (81). Although rooftop greenhouses will always cost more (81), they act as lease hold improvements to the building upon which they are enacted. As the landlord owns the greenhouses, they are intangible assets, which can be amortized, and not …show more content…
Lufa Farms has integrated information systems with strategy through product differentiation; inciting a competitive strategy, in order to forge customer loyalty through the development of products which are new, unique, and difficult for competitors to replicate. Commercial farms harvested unripe produce, gassed it for ripening or processed it after the food traveled long distances, in order to ready it for sale, none of which Lufa farms did. There were many other companies who hoped to capitalize on rooftop farming, however, it was estimated that any new ventures would take 3-4 years to reach Lufa Farms’ level.
Strategy Lufa Farms’ primary strategy was to capitalize on the local food movement, whose followers opted to eat nearby and in-season food (75). These were people who had concerns with the quality and environmental effects of commercially farmed foods (75). By the time food reached consumers, it was believed that nutrients, taste, texture, and smells were lost (75). This is where Lufa Farms comes in, as the company eliminates issues of food coming from too far. As a result of the popularity of local foods, many competitors began cropping up. Lufa Farms’ strategy to manage competition was to establish a network of farms.
Strategy and
For $30 each week, Lufa Farms provides the consumer with a subscription to fresh, local, organic produce, delivered to a convenient location of the consumer’s choosing. This Montreal-based start-up, founded by Mohamed Hage, is breaking down the wall which blocks the consumer from purchasing locally grown produce year-round. This company embodies each discipline within management. Not unlike other companies, Lufa Farms faced challenges in the implementation of all of these disciplines. On the contrary, Lufa Farms succeeds in many areas.
Organizational Behaviour Organizational behaviour is the study of the way people interact within groups, and is applied to create more efficient business organizations. At Lufa Farms, this is …show more content…
Recurring costs are referred to as “revenue expenses”. As seen in Exhibit 14, Lufa Farms had total revenue of $8,404,485 (including effective gross income), total operating expenses of $7,113,097, which included labour, rent, security, supplies, marketing, and insurance, and total start-up costs of $5,500,000, including equipment and construction. Additionally, the company had high capital expenditure. Capital expenditure refers to funds which a company uses to acquire or update physical assets, in this case, greenhouses. However, the company was able to balance its high capex with low operating costs. Total daily operating costs were approximately $300, which accounted for fuel, labour, transportation, and delivery. The preliminary greenhouse had capital expenses of approximately $80 per square foot, with the initial investment in the building totaling at nearly $2.3 million (81). Although rooftop greenhouses will always cost more (81), they act as lease hold improvements to the building upon which they are enacted. As the landlord owns the greenhouses, they are intangible assets, which can be amortized, and not …show more content…
Lufa Farms has integrated information systems with strategy through product differentiation; inciting a competitive strategy, in order to forge customer loyalty through the development of products which are new, unique, and difficult for competitors to replicate. Commercial farms harvested unripe produce, gassed it for ripening or processed it after the food traveled long distances, in order to ready it for sale, none of which Lufa farms did. There were many other companies who hoped to capitalize on rooftop farming, however, it was estimated that any new ventures would take 3-4 years to reach Lufa Farms’ level.
Strategy Lufa Farms’ primary strategy was to capitalize on the local food movement, whose followers opted to eat nearby and in-season food (75). These were people who had concerns with the quality and environmental effects of commercially farmed foods (75). By the time food reached consumers, it was believed that nutrients, taste, texture, and smells were lost (75). This is where Lufa Farms comes in, as the company eliminates issues of food coming from too far. As a result of the popularity of local foods, many competitors began cropping up. Lufa Farms’ strategy to manage competition was to establish a network of farms.
Strategy and