Glaubinger Tree Farm

After 15 years of selling Christmas trees through a large retailer, how much additional profit could the Glaubinger Tree Farm capture by switching to a direct-to-consumer model?
Olivier Toubia  | Spring 2010
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Lawrence Glaubinger, a Columbia Business School alumnus, became increasingly involved in running his 100-acre Christmas tree farm after he retired in 1992. Between 1993 and 2008, Glaubinger sold Ponderosa pines through an arrangement with Green Acres, a large retailer that bought Glaubinger's trees to sell at its nurseries. While Glaubinger Tree Farm sold the trees to Green Acre at a wholesale price based on its marginal cost, the retailer independently set retail pricing. Glaubinger suspected his tree farm could have shown higher profits if it had sold directly to consumers. In this case students examine 15 years of sales data and consider Glaubinger's marginal costs to determine how much additional profit he could capture by selling directly to consumers.

Case ID: 100504
Supplemental Materials: Solutions Spreadsheets
This case is used in core curriculum

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