ZESPRI Case
Case Analysis-Zespri
04-78-651-02
Business Strategy
Dr. Jonathan Lee
Content
1. Main issue
Zespri’s main issues are to maintain their leadership in the industry and to increase New Zealand kiwifruit exports to $3 billion by 2025. In order to reach the objective, in existing market, Zespri should increase per capita consumption through more focused marketing. They also need to find emerging markets, research on new varieties and improve the 12 months supply program.
2. Porter’s five forces
2.1 Degree of rivalry
The degree of rivalry is low. The four biggest kiwi fruit producing countries are China, Italy, New Zealand, and Chile. Despite of the higher production of China, it had become a net importer of fresh kiwifruit. From the exhibit 16, it demonstrates that New Zealand has the highest average net market returns and grower returns from 1999-2009, compared with Italy and Chile. According to those data, we can conclude that they cannot compete with New Zealand cause other countries do not have the management and financial support from the government as comprehensive as Zespri has. They are not able to produce the kiwi, which is high quality and high productivity like Zespri produced, even if they spend tons of years. Apart from that, Zespri spend over 6% of the revenues on promotion, not only in-store activities but also using mass media. The value of ‘brand New Zealand’ was recognized as pure and natural, and thus Zespri is a price setter rather than a price taker, therefore they can price higher than other brand and people would still like to choose Zespri.
2.2 Threat of substitutes
According to the possibility of substitute by other fruits, the rate is really high. There are multiple fruits people can easily choose from the supermarket. They have variety of nutrition people can get by digesting them. Even though we know that kiwi has more nutrition than other fruits have, we may still not choose
04-78-651-02
Business Strategy
Dr. Jonathan Lee
Content
1. Main issue
Zespri’s main issues are to maintain their leadership in the industry and to increase New Zealand kiwifruit exports to $3 billion by 2025. In order to reach the objective, in existing market, Zespri should increase per capita consumption through more focused marketing. They also need to find emerging markets, research on new varieties and improve the 12 months supply program.
2. Porter’s five forces
2.1 Degree of rivalry
The degree of rivalry is low. The four biggest kiwi fruit producing countries are China, Italy, New Zealand, and Chile. Despite of the higher production of China, it had become a net importer of fresh kiwifruit. From the exhibit 16, it demonstrates that New Zealand has the highest average net market returns and grower returns from 1999-2009, compared with Italy and Chile. According to those data, we can conclude that they cannot compete with New Zealand cause other countries do not have the management and financial support from the government as comprehensive as Zespri has. They are not able to produce the kiwi, which is high quality and high productivity like Zespri produced, even if they spend tons of years. Apart from that, Zespri spend over 6% of the revenues on promotion, not only in-store activities but also using mass media. The value of ‘brand New Zealand’ was recognized as pure and natural, and thus Zespri is a price setter rather than a price taker, therefore they can price higher than other brand and people would still like to choose Zespri.
2.2 Threat of substitutes
According to the possibility of substitute by other fruits, the rate is really high. There are multiple fruits people can easily choose from the supermarket. They have variety of nutrition people can get by digesting them. Even though we know that kiwi has more nutrition than other fruits have, we may still not choose