Strategic Analysis Report: Assignment
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Added on 2021-06-05
Strategic Analysis Report: Assignment
Added on 2021-06-05
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Lewis Road Creamery in 2021Strategic Analysis Report
Executive SummaryThis means that it is a part of both the food and beverage as well as the dairy industry. The dairy industry is one of the most important and lucrative in New Zealand. Lewis Road Creamery leads the flavoured milk sector with 33%. The major strength noted in this report isthe strength of the Lewis Road Creamery branding and its partnerships. Lewis Road Creamery has become a household name in New Zealand and has also maintained a strong online presence. It is because of this that customers consistently choose Lewis Road Creamery, because of its reputation for high quality products. This is a competitive advantagethat other firms will find difficult to imitate. This report found that an important for Lewis Road Creamery is the pursuit of partnerships in order to promote more excitement for the company and generate more sales. The strengths listed earlier will also help with a larger, long term goal of Lewis Road Creamery, international expansion. The main hurdle in achieving this goal is being able to replicate their popularity overseas in the international market.The main weaknesses of the company stem from its reliance on larger corporations. The dairy industry is completely reliant on the availability of milk and therefore is always at the mercy of farmers. Lewis Road Creamery is owned by the Southern Pastures farming fund,making them a small entity in a much larger firm. This means that the majority of operations are logistical, mainly concerned with organising how products go from farm to fridge. Another important weakness is the price of their products. Because Lewis Road Creamery operates in the supermarket sector, the high price of their products will make consumers choose one of their competitors. 2
1.IntroductionThe purpose of this report is to analyse the strategic issues facing Lewis Road Creamery in 2021. Lewis Road Creamery is a manufacturer of beverages and dairy products in New Zealand. Lewis Road Creamery is a growing brand in New Zealand, and because of this it is important to analyse the company’s plans moving forward. This report will highlight important details and objectives Lewis Road Creamery should pay attention to. This report will take into account the industry in which the company resides in, competitors, internal and external factors as well as a comprehensive SWOT analysis. This report will also use PEST+,Porters 5 forces, Value Chain and VRIO analysis to clearly show the issues facing Lewis Road Creamery. This report is aiming to provide Lewis Road Creamery with a clear direction to follow leading success in the future.2.External Analysis2.1.Industry ProfileLewis Road Creamery is part of the food and beverage sector, more specifically the dairy industry. The dairy industry is one of the most lucrative in New Zealand, accounting for almost 3% of the GDP as well as being New Zealand’s largest export earner. Dairy exports inNew Zealand have grown by 7.2% in the last 30 years. The main competitor for Lewis Road Creamery is Fonterra. Other competitors include smaller firms which compete domestically. With Fonterra accounting for almost 80% of employment in the dairy industry and controlling most of its resources, it is New Zealand’s main source of exported dairy products,making smaller companies compete domestically. Fonterra will also supply smaller companies with milk when demand is abnormally high or low. The majority of the industry isheld up by Fonterra at times making its competitors also its customers. It is important to recognise that Fonterra is both a partner and a competitor of Lewis Road Creamery. This is 3
because they are a key supplier for Lewis Road Creamery as well manufacturing their own products. New Zealand is one of the largest exporters of dairy to Asia making the Asian market a key customer. Another key customer domestically is the restaurant industry, especially for smaller firms which take pride in their quality. Due to large companies controlling the majority of the market, other competitors focus on more niche and specialised products2.2.Competitor ProfilesA key aspect of the dairy industry especially in the New Zealand market is the massive amount of influence that Fonterra has over the industry. The majority of smaller firms rely onthem for supplies in order to manufacture their own dairy products and they also produce a massive amount of products consumed in New Zealand. Along with this Fonterra is the biggest exporter of dairy products for New Zealand. This forces smaller firms to market themselves towards more niche customer bases. Fonterra owns the majority of the market butin New Zealand there is always space for companies looking to provide higher quality niche products. For Lewis Road Creamery, the boutique nature of the business attracts people towards their brand. Domestically, Fonterra still holds over 80% of the market, with no other firms holding more than 10%. It is important to note that Fonterra’s influence is an important mobility barrier in the dairy industry. The answer for companies looking to be successful in the dairy industry must look for a way to navigate around Fonterra with more specialised products rather than directly compete with them. This is the case for both the domestic and international dairy market. Other small firms are less competitive because they are also attempting to carve out their own niche in the market4
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