Strategy Analysis for Mushroom Company

Topics: Strategic management, Technology, Supply and demand Pages: 5 (1299 words) Published: May 27, 2013
Coursera Categories: Business & Management
Prof. Michael J. Lenox University of Virginia
Date: April 14, 2013

Final paper
‘Insight’ is a newly emerging company which has ambitious ‘insight’ to dominate in the countries market of high quality specific foods. The company cultivates and produces mushrooms and gradually diversifies production by adopting modern technology to prepare raw material for pharmaceutical industry. Mushrooms are a rich source of proteins, carbohydrates, minerals, vitamins including all essential amino acids and unique as a nutritional supplement of low caloric diet. Their nutritional value can’t be replaced by meat and vegetables. Thus mushrooms are highly recommended for all kind of medical conditions. The company has achieved significant growth since it was founded three years ago. Strategic planning reveals the opportunity to expand mushroom farms in abandoned underground mining shafts which provide rent free space, an ideal environment for the mushroom farming and close to market location. Production of mushrooms can be established at very little cost while Mongolia imports a big amount of expensive mushrooms. The industry will attract a variety of consumers and investors as it provides a high quality food product at an affordable price. As a first entrant in the industry the company benefits from friendly environment and absent of rivalry and substitutes. ENIVORMENTAL ANALYSIS

DEMOGRAPHIC TRENDS * Growing interests and movements in health foods, * Expanding market size due to high velocity population growth| SOCIO-CULTURAL INFLUENCES * Shortage in the market and low food qualities are one of the national security issues of Mongolia. * | MACROECONOMIC IMPACTS * Newly developing pharmacological industry, * Growing market demand on health food | POLITICAL-LEGAL PRESSURES * Government engrossed aid for small and medium size entrepreneurships developments and establishing suitable legal environment.| TECHNOLOGICAL DEVELOPMENTS * New cheap or free technologies on mushroom farming * New cheap technologies on pharmacological industry increase the demand for raw material from mushroom| GLOBAL TRADE ISSUES * Lobbying opportunity to protect national companies from Chinese companies |

| REVENUES| MARKET SHARE| ROA| R&D INVESTMENT| STRATEGIC PARTNERSHIPS| Group 1Chinese Import| NA| > 90%| NA| NA| Possible to create conglomerate partnerships| Group 2National smallcompanies| Insignificant| Insignificant | NA| Insignificant| Possible to create conglomerate partnerships|

The actual market size for mushrooms has dramatically expanded over the last few years and there is a wide gap between the demand and supply. With demand outnumbering the supply, the local restaurant industry has progressed and, new western and eastern restaurants have popped up which extensively use mushrooms. Projected in the next 5 years the market will further expand and more production will be required to fulfill that enormous demand.   FIVE FORCES MODEL

| THREAT OF NEW ENTRANTS- some significant treat from Chinese and other import. - possible some new entrants, but market demand is very high| | BARGAINING POWER OF SUPPLIERS- space for production line and main row materials are very cheap and abundant for coming decade| RIVALRY AMONG EXISTING FIRMS- there are not currently existing rivalry | BARGAINING POWER OF BUYERS- Buyers divided and high demand for products will determine low bargaining power | | THREAT OF SUBSTITUTES- there are not known substitutes in the market| |

STRENGTHS * New idea that has never been introduced before * People already have awareness of mushroom  * Very high profit rate  * Inexpensive raw material * Ideal conditions for mushroom production-free mining site *...
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