Hubbard's Foods Diversification Strategy

This assignment examines the diversification strategy implemented by Hubbard’s Foods Limited, a New Zealand cereal manufacturing company. The analysis focuses on how the company expanded its product line to cater to different market segments, ranging from high-end to private label products. The case study highlights Mr. Dick Hubbard's vision of introducing seasonal variations and unique product lines like muesli-style cereals to stay competitive in a rapidly evolving industry. The effectiveness of this diversification strategy in securing a competitive edge for Hubbard’s Foods is also discussed.

Running head: BUSINESS STRATEGY
Business Strategy
Name of the Student:
Name of the University:
Author Note:

1
BUSINESS STRATEGY
Q.3) Diversification Strategy
Hubbard’s Foods Limited is a cereal manufacturing company situated in Auckland. The
company was found by Dick Hubbard, who started the family business in the Auckland city of
New Zealand (Sbc.org.nz 2017). The eventual growth of the business is much commending.
However, maintenance of the sustainable position in this ever growing competitive scenario, it is
necessary for the company to undertake the relevant strategic decision. The diversification
strategy is quite fruitful for maintaining the business sustainability. Apparently, the
diversification strategy focuses on increasing customer base (Serrano, Fernández-Olmos and
Pinilla 2015). It is notified that the company is aiming at selling both the high range products to
low range products. In order to ensure growth, Mr. Dick Hubbard is promoting the high quality
cereals under the brand of Hubbard’s Foods Limited. Moreover, the company is also paying
attention towards manufacturing the unique product lines specifically for the private labels of the
supermarket. Products like cornflakes and puffs are included in such private labels that are lower
end in terms of price range.
Mr. Dick Hubbard has also introduced the seasonal variations for the cereal products. For
instance, people consume at least 10% cereals more in summer than the winter season. It is to be
considered that the cereal industry has been experiencing the rapid changes in last few decades.
Therefore, the company has decided to present the product variations by introducing the
Mueslistyle Cereals (Sbc.org.nz 2017). The threats from the competitors are quite significant.
Concentrating on such competition level, the company has been introducing the diversification
process in the product line. Starting from the lower end prices to high price products are
available for the customers. Such product diversification strategy is much helpful in generating
the customers’ attention. It is needless to mention that the preference of the high quality products

2
BUSINESS STRATEGY
is the first priority. The brand does not compromise with the quality parameter even the price
becomes higher sometimes. The clear focus towards the high quality product ranges is
impressive to gather more customers’ attention. Hence, it can be implied that the implementation
of the diversification strategy is quite profitable for the company to secure the competitive edge.

3
BUSINESS STRATEGY
References
Sbc.org.nz, 2017. Sustainable Development Reporting Case Study Hubbard Foods [online]
Available at: <http://www.sbc.org.nz/__data/assets/pdf_file/0003/55587/Hubbards-SDR-Case-
Study.pdf> [Accessed 20 Aug. 2017].
Serrano, R., Fernández-Olmos, M. and Pinilla, V., 2015. International diversification and
performance in agri-food firms. Documento de Trabajo, 1.