Supply Chain Security & US Economy

The assignment delves into the critical issue of supply chain security within the United States, with a particular emphasis on cargo theft as a significant threat. It requires students to analyze various aspects, including statistics on cargo theft, regulatory frameworks in place, and the economic implications of such thefts. Furthermore, students are expected to examine the impact of external factors like the US economy and technological advancements on supply chain security.

Running head: STRATEGIC MANAGEMENT
Strategic Management
Name of the Student
Name of the University
Author note

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Executive summary
The aim of the paper is to analyze the theft-taking place in the nut industry of California and
to recommend steps to reduce theft. The theft has increased incredibly in the nut industry of
California, which has lead to a decrease in the revenue and profit. A proper information
system, tracking system and human resource is required to improve the condition and reduce
theft.

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Table of Contents
Introduction................................................................................................................................3
Background................................................................................................................................3
Pestle Analysis...........................................................................................................................4
Porter’s Five Forces...................................................................................................................6
Organizations Preventing Theft in the Nut Industry..................................................................7
Capabilities and Resources Required to Prevent Theft..............................................................8
Conclusion and Recommendations............................................................................................9
References................................................................................................................................11

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Introduction
Nut industry in California is huge supplying large number of nuts to the United States
and all over the world. The industry has experienced a continuous growth in the demand for
nuts which has pushed its price and as a result the acres of land used for growing nuts has
increased leading to huge profitability and increase in export. Production of Almond and
Walnut has been growing rapidly and it has been increasing for almost two decades.
However, the booming nut industry of California has been targeted for theft where truckloads
of nuts are being carried out of the industry. This has lead to an increase in tension of all the
nut growers in California (Fierro 2017). The report discusses about the theft problem faced
by theindustry in California recently with special focus in its supply chain. For this purpose a
Pestle and Five forces analysis is carried out to judge the business environment and industry
condition. Further, some organization with strong resources for preventing supply chain theft
has been identified with special mention for the resources and capabilities.
Background
California has recently realized a huge problem in the supply chain process of Nut
Industry. This is because nuts has always appeared to be the most appealing and healthy
product for the world. This has increased its chance of theft in this industry. It became
difficult for controlling the theft because nuts are products that are difficult to track. This
means the industry found it difficult to track the millions of nuts being stolen away from the
cargo. These stealing have been done by thefts of big hi-tech organization that can easily
track the loads of truck carrying nuts and pose themselves as truckers in the nut industry
(Inboundlogistics 2017). These incidents increased in this industry day by day in which nuts
like almonds, walnuts and others were being stolen. It was evident that 4200 pound of
walnuts got stolen in 2015. The theft is more for nuts than any other items because it is

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difficult to give a serial number to these nuts. Thus, it becomes easier for them to steal it.
Cargo theft was estimated to be more than $15 billion (Purtill 2017).
Pestle Analysis
Pestle analysis will help in analyzing the situation of the business landscape in which
the nut industry is operating in California. It will help to analyze the opportunity that the nut
industry offers in the market of USA (Zalengera et al. 2014).
Political
United States in which California exists has a federal republic in which the national
government is the center of power. The country is politically a well-stabled economy with
less number of wars and political issues in the past years. The federal government also
regulates the power to allow working in the country as a legal citizen. All business are
subjected to some or the other local and state laws for running their business. This gives a
more or less healthy environment to run a business (FocusEconomics 2017).
Economic
The economy of United States ishighly developed economy in the world with a GDP
as high as $18 trillion. It is known that theeconomy have the second largest GDP in the world
and it is theseventh highest per capital GDP. This shows that the purchasing power of people
in this country is very high. This gives a healthy environment to the businesses foroperating
in USA (FocusEconomics 2017).
Social
Socially as well, United States is very modern and the people of the country maintain
a very good healthy life. They love to maintain a high standard life for themselves and love

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consuming branded and good quality goods. it is a highly modern society. Moreover, the
country also experiences huge number of immigrants into the country from all over the
world. This serves a healthy demand for goods produced in the region by different
businesses.
Technological
Technologically the country is very advanced experiencing a fast growth in its
technology sector. It has always encouraged advancement and invention in technology by
flow of new ideas and knowledge. The country has witnessed fast growth in information
technology and is known as the most high-tech economy of the world. This has put some
beneficial as well as negative impact on the businesses that operates in the country (SA
TODAY 2017).
Legal
There are various kinds of legal laws that the country maintains for the citizen and the
businesses operating in the country. The corporate law of the country is at 39 percent, which
makes the country stand at third largest corporate tax economy in the world. Corporate tax is
the amount that corporate needs to pay to the government for operating in the country. This
shows that that the businesses needs to pay huge tax for its operations (Taxsummaries 2017).
Environmental
Lastly, the country is not healthy environmentally due to large number of
industriesand impact of globalization in United States. This makes it necessary for the
businesses to operate sustainably and maintain an environmental control body in their
organization to keep a check in its operations.

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Porter’s Five Forces
Porter’s five forces analysis helps in analyzing the industry environment of nut
industry in which the companies facing the threat operates. The analysis shows the threat that
the industry offers to the company operating under it:
Threat of substitutes
The nut industry offers a very low threat of substitutes to the companies operating
under them. This is because the nut industry has very less substitutes that the consumers can
buy other than these nuts. Thus, the chance of nut industry to lose its business to other
industry due to various factors is very low (Rothaermel 2015).
Threat of new entry
The industry also show a moderate threat of new entrant in the industry from new
companies because of the amount of investment and capital required to set the business. The
new company has to invest a lot on the land to set the business and machinery required to
roast and peel the nuts. Moreover, the new company has very less money initially to invest in
such as bi business. Thus, the threat is very low and the old company takes up most of the
operations (Grant 2016).
Bargaining power of suppliers
Bargaining power of suppliers of nut industry are farmers and cultivators growing
nuts. They supply their products to these big companies in exchange of money. Thus, these
farmers do not want to lose business from these big companies and this puts their bargaining
power low. Moreover, the nut companies have large number of suppliers and can switch from
one to another without any cost (Blackwell and Eppler 2014).
Bargaining power of buyers

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Buyers have a huge bargaining power in a nut industry because of existence of large
number of firms selling similar products to them. Moreover, the customers do not incur any
switching cost while moving from one company to another for buying the nuts. The buyers
own a huge power in the industry and can change the price with their collective demand.
Threat from competition
Huge number of companies operates in the nut industry selling similar goods at more
or less similar prices. This shows that the companies suffer huge competition from one
another and thus it cannot change the price of nuts according to its own wish. Competition
also has some beneficial effects as every company try to be the best from each other.
Organizations Preventing Theft in the Nut Industry
The increasing amount of threat in the supply chain department of the nut industry is
leaving a bad effect on its growth and development. It is necessary to recognize organization
that has strong resources and capabilities in this industry in its supply chain to prevent theft.
This will help and encourage other to take up good quality high technology to track the nut
thieves and track the trucks carrying nuts. Moreover, these companies will also allow them to
protect the industry from losing its products and to maintain a high tech information system
as well. Top five organizations that have good resources and capabilities in preventing theft
are Paramount Farming, Farmland Management Services, South Valley Farms, Premiere
Entities and Agriland Farming. All the five companies are the highest grower of nuts in
California and maintain a highly secured supply chain system. The resources through which it
operates a safe supply chain system are a strong audit committee, whistleblower hotline, a
strong internal anti-fraud policy and others. All these systems incorporated in the operations
of these five companies helps them to prevent the theft that is taking place in the nut industry.
Moreover, it allows the company to carry out regular audit committee and a strong anti fraud

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policy through which it can catch and indentify the people involved in it and stops it within
time. These committee and system helps the five organizations to catch any person falling in
their doubt section and track the fraud truck being moved out of the company.
Capabilities and Resources Required to Prevent Theft
The increasing crime in the nut industry in California is raising an alarm in the
companies operating in this industry. This is because due to the theft the company is losing
most of its supply, lower revenues and finally leading to their downfall. Thus, the industry
requires good and high quality resources to prevent these theft activities. The resources can
be in the form of a information system, a technology or human resource to control the whole
theft activity. In case of information system, the industry needs to maintain a high quality
secured information system in which only few people should have the right to see that
information (Alpizar–Castro and Rodríguez–Monroy 2016). Confidentiality should be
maintained and the availability of the information should be minimized to some people. The
next best alternative is to install software that would detect the driver of the truck entering in
the company. The software should be able t detect a body part of the driver such as
fingerprint or eye detector before allowing the truck to enter the premises. This would
improve the security system of the company and prevent fraud drivers from entering the
premises of the company. For checking purpose the companies should employee more
workers and staff that would allow the trucks to enter the company only after proper check
and identification (the Guardian 2017). GPS system in the truck will also help the industry to
track the trucks moving outside the premises of the company. These are some of the
resources and capabilities the companies in the nut industry can maintain in order to save
themselves from further theft and loss of products and revenue.

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Conclusion and Recommendations
Some of the recommendations for the nut industry to take required step to avoid theft
in business are:
 Avoid unnecessary recruitments in the organization and hire workers only after proper
background check in order to allow them to enter the premises of the company
 The company should implement proper training program to train its employee about
using the advance technology truck detector near the gate to ensure proper check in
the gate
 To carry out regular audit to ensure the performance and improvement of the
company after the implementation of mentioned technology
 To investigate the real route of this increasing threat in the nut industry of California
in the recent years
From the above analysis, it can be concluded that California is suffering a lot from the
increasing amount of theft in the nut industry. It has witnessed more than thirty incidents in
the stealing of nuts. The pestle analysis showed that the country that California exists exhibits
a strong and healthy business ground for the industries to operate successfully and the
industry also faces a lot of threat from its competitors and buyers. Thus, every company
needs to employee resources that might reduce the theft rate and take advantage of the
growing economy of United States. Reduction in theft also helps the nut companies to fight
competitors and improve their bargaining power in front of the buyers. This is because the
better the company will be in quality and name the more the buyers will prefer that company.

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References
Alpizar–Castro, I. and Rodríguez–Monroy, C., 2016. Review of Mexico׳ s energy reform in
2013: Background, analysis of the reform and reactions. Renewable and Sustainable Energy
Reviews, 58, pp.725-736.
Blackwell, R. and Eppler, D., 2014. An Approach to Strategic Situation Analysis: Using
Models as Analytical Tools. Journal of Global Business Management, 10(1), p.80.
Fierro, D. 2017. Cargo theft is a tough nut to crack in California. [online]
Truckinsurancenitic.com. Available at: https://www.truckinsurancenitic.com/company-
news/530-cargo-theft-is-a-tough-nut-to-crack-in-california.html [Accessed 11 Oct. 2017].
FocusEconomics | Economic Forecasts from the World's Leading Economists. 2017. United
States Economy - GDP, Inflation, CPI and Interest Rate. [online] Available at:
https://www.focus-economics.com/countries/united-states [Accessed 11 Oct. 2017].
Grant, R.M., 2016. Contemporary Strategy Analysis Text Only. John Wiley & Sons.
Inboundlogistics.com. (2017). Cargo Security: Protecting the Supply Chain - Inbound
Logistics. [online] Available at: http://www.inboundlogistics.com/cms/article/cargo-security-
protecting-the-supply-chain/ [Accessed 11 Oct. 2017].
Purtill, C. 2017. A $10 million nut heist is a window into the shady, lucrative world of large-
scale food theft. [online] Quartz. Available at: https://qz.com/663152/a-10-million-nut-heist-
is-a-window-into-the-shady-lucrative-world-of-large-scale-food-theft/ [Accessed 11 Oct.
2017].
Rothaermel, F.T., 2015. Strategic management. McGraw-Hill Education.

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SA TODAY. 2017. Technology and Electronics Reviews - USATODAY.com. [online]
Available at: https://www.usatoday.com/tech/ [Accessed 11 Oct. 2017].
Taxsummaries.pwc.com. 2017. United States - Taxes on corporate income. [online]
Available at: http://taxsummaries.pwc.com/ID/United-States-Corporate-Taxes-on-corporate-
income [Accessed 11 Oct. 2017].
the Guardian. 2017. California cracking down as crime rings steal truckloads of nuts worth
millions. [online] Available at: https://www.theguardian.com/us-news/2016/apr/14/california-
nut-thefts-agriculture-shipments-almonds [Accessed 11 Oct. 2017].
Zalengera, C., Blanchard, R.E., Eames, P.C., Juma, A.M., Chitawo, M.L. and Gondwe, K.T.,
2014. Overview of the Malawi energy situation and A PESTLE analysis for sustainable
development of renewable energy. Renewable and Sustainable Energy Reviews, 38, pp.335-
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