Truearth Swot Analysis

TruEarth SWOT Analysis

Strengths

1. Established brand equity with customer and retail stores
2. Invested in manufacturing facility and implemented supplu chain distribution channel
3. Created systematic process for product development
4. Timing with health food trend
5. Successful    launch    of    Cucina    Fresca    allowed    company    to    establish    market    share    and    distribution    network Strong    position    within    niche    market

Weakness

1. Revenue growth decreasing due to new entrants in the market
2. Limited product line (only selling whole grain pasta)
3. Pricier pasta products compared to Rigazzi

Opportunity

1. Gain first mover advantage
2. Increase profitability and overall revenues with the extension of pizza line
3. Expansion of product line

Threats

1. Rival pasta companies (Kraft, Rigazzi)
2. Competition on pizza from Rigazzi and other larger companies
3. Threat of Competitors: HIGH

TruEarth faced a formidable competitor in Rigazzi Brands, which was not only of a similar scale, but also sold all the same products as TruEarth. It competed with TruEarth for the limited shelf space & had previously targeted TruEarth’s high priority cities with its own line of whole grain fresh pasta. It had also offered high trade discounts to retailers and high-value coupons to consumers in the process. It had also tested its own pizza concept and was likely not far from an introduction.

1. Threat of New Entrants: HIGH

Like in the case of whole grain pastas (pp 5-6), it would not be long before other companies figured out how to make whole grain fresh refrigerated pizza that also tasted good, just like Rigazzi. The entry barrier was low. Therefore, in the whole grain fresh refrigerated pizza market, TruEarth could face a high level of threat from new potential entrants.

1. Threat of Substitutes: HIGH

Whole grain fresh refrigerated pizza faced a whole array of substitute products. For those customers who were inclined to consume whole grain pizza out of health concerns, restaurants such as Papa John’s and Pizza Hut, as well as local pizzerias had offerings.

In general, pizzas were available as takeout/delivery, restaurant pizzas refrigerated pizzas, frozen pizzas (from Kraft and Nestle) and homemade pizzas.

1. Threat of Buyers’ Growing Bargaining Power: MODERATE

As more players enter the whole grain fresh pizza market, the bargaining power of the buyers’ would increase. However, TruEarth had the reputation of supplying high quality and tasty products and hence, the threat would be moderate.

Situational Analysis

1. Increase in the demand for truearth’s whole grain pasta encouraged the company to launch another healthy product
2. Growing demand for quick homemade replacements, refrigerated pasta, and whole grain food options
3. Semi prepared options sought by some consumers
4. Increased trend in the annual sales of pizza ($53b in 2007)
5. Truearth has an option to launch a new whole grain pizza and be first to market product or not launch and wait for a better opportunity

Alternatives

1. Launch – be first to launch and gain first mover advantage or launch after rigazzi to get better understanding of market trends
2. Don’t laumch – reformulate the crust or perform more market analysis

Breakeven analysis

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