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Zespri Corporate Strategy: Single Product, Broadly Engaged Across the Value Chain

Essay by   •  February 28, 2018  •  Case Study  •  336 Words (2 Pages)  •  530 Views

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Corporate Strategy: Single product, broadly engaged across the value chain (60 countries and 17 offices)

Industry: Global kiwifruit industry

Business-Level Strategy: Differentiation (premium price)

Issues: Over the next 15 years they want to double sales ($3 billion of sales by 2025)

1.5(1 + r)15 = 30, r = 4.73% (reasonable based on passed growth

External Analysis

Stakeholders: Growers, end users, government, competitors, retailers

Political:

  • New Zealand government
  • Trade agreements between countries
  • Shipping regulations
  • Tariffs and taxes

Economic:

  • GDP/Disposable Income
  • Exchange rates in countries where kiwi is sold

Social:

  • Kiwi is considered a “Superfruit”
  • Trend towards healthy living (“Foodies”)
  • Affordable luxury product
  • NZ as a pristine land
  • NZ national identity

Technological:

  • Transportation and logistics
  • Research and development
  • Biology research

Environmental:

  • Agricultural capabilities
  • Green movement

Legal:

  • Patents on new products

SUMMARIZE

Zespri advertises kiwi, which is a commodity. Competitors gain as well (not only Zespri). Growers and suers of kiwi benefit, as do retailers, creating a demand to have Zespri kiwi products on shelves. This creates higher margins

Porter’s Five Forces

Barriers to Entry

Medium

  • Scale/size of farms
  • Knowledge of growing procedures
  • High risk industry
  • Low capital requirements

Bargaining Power of Suppliers

Low

  • Due to integration, little is being supplied
  • Vertically integrated industry

Bargaining Power of Buyers

Medium to High

  • Retailers are the biggest buyers, as well as retailers

Substitutes

High

  • Other fruits, foods, or kiwi brands

Rivalry

Medium to High

  • Differentiation strategy reduces rivalry, they are price setters (leveraged against buyers and substitutes)

SUMMARIZE

VRIO

V

R

I

O

Product Innovations

Yes

Yes

Yes

Yes

Government Relations

Yes

Yes, maybe not in long term

No

Yes

Network of Farmers

Yes

Yes

Maybe

Yes

Network of Buyers

Yes

No

No

Yes

Marketing/Branding

Yes

Yes

Yes, maybe not in long term but have first mover advantages

Yes

Zespri System

Yes

Yes

Yes

Yes

New Zealand

Yes

No

No

Yes

Logistics

Yes

Yes

Yes, maybe not in long term

Yes

Communication

Yes

Yes

Yes, maybe not in long term

Yes

...

...

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