Zespri Case Study Analysis
Alternative Solution: 2- Expand Growth in Emerging Markets
It is suggested for the company to expand its consumer base and growth in the existing as well as emerging market such as China, Turkey and Iran. These Asian markets had represented a huge growth market, because of increasing customers demand. It has been forecasted that kiwifruit production and demand in China could be increased by 5% by the end of 2013. In order to increase growth in existing and emerging markets, Zespri would require a focused marketing strategy. Thus, the consumer’s rising income could lead toward improved diet plan for the customers. On the other hand,currently China is the fifth largest market of Zespri,which accounts for one-third growth.
Alternative Solution: 3- Cut DownUn-growingMarkets
It is suggested that Zespri should cut down un-growing market, because it could yield negative margins and would threaten the company’s’ leading global image. In the US and Japan; the kiwifruit growers represented a negative growing trend. In addition to this, Chinese sales margin were lower than the US margin, five years ago. Thus, it could be seen that the company should lower down its production and shipment to those countries, which is yielding low growth margin.
Recommendations
After evaluating all the possible alternative solutions with respect to its appropriateness for the company, it is recommended for the company that it should adopt the second alternative solution, which suggested to grow and expand the customer market in the emerging and existing growing countries, which will help the company in not only increasing its sales, but also in building a strong global leading image. China, Turkey and Iran cold be considered as a growing market, because of its increasing demand for kiwi consumption. In order to increase growth in existing and emerging markets, Zespri would require a focused marketing strategy.It could be seen that the China’s market would grow by 5% in 2013 and the customers/ per capital income will also increase, which will lead towards the concept of more healthy diet plan. Zespri provides a high-quality product with number of healthy ingredients and considered as super healthy fruit, which will satisfy the growing need of healthy diet. Thus, it is concluded that expansion in the growing markets would help the company to become the global first leadingcompany and also help to cope up with the fierce competition.
Risk Analysis
The proposed strategy has many benefits as well as number of potential risks with respect to external and internal threats. These risks have been discussed in detail below:
- The suggested strategy would require huge investment in order to expand its operations into the new markets.
- The strategy might fail because of unawareness of the local taste awareness of the product.
- The product would not be accepted by the customers, as it was expected.
- It is reported that the global sourcing should be increased by three times in size, if Zespri double its size in the global market.
- It could be seen that the company had faced a major setback of its last 12-months supply program in 2009, because of outbreak of bacterial disease.
- Moreover, new entrants could also impose a high threat for the company. Enva brand had been introduced by Turners and Growers.
Conclusion
It is concluded that the establishment of company had helped the kiwifruit industry to provide high quality product and helps to become the stronger supplier.Jager was very confident on the Zespri’s strategies, but he was also concerned about the set target for the year 2025. The company’s target customers are the health-conscious customers, who enjoy to eat fresh and healthy fruits and very well aware about the health concept.Kiwifruit producers were divided into two hemisphere- Northern Hemisphere and Southern Hemisphere.China was one of the growing countries in the field of high vale fruit expansion, which attracted a number of new entrants.it is recommended for the company that it should adopt the second alternative solution, which suggested to grow and expand the customer market in the emerging and existing growing countries, which will help the company to not only increase its sales, but also to build a strong global leading image............................................
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