Resource Integration Management

This report provides an external and internal environmental analysis of Pic's Peanut Butter, along with a VRIO analysis and comparison with its competitor Fix and Fogg. It also discusses the transformation process and key supplier areas.

Running head: RESOURCE INTEGRATION MANAGEMENT
Resource Integration Management
Name of the Student
Name of the University
Author Note

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Executive Summary
The purpose of this report is external as well as internal environmental analysis of Pic’s Peanut
butter. Along with this VRIO Analysis as well as polar diagram to compare the organization with one
of its major competitors Fix and Fogg has been performed in this report. The discussion and analysis
has presented that due to the high competitiveness the company is currently facing a strong
bargaining power from suppliers. Along with the operational changes, the quality of raw materials
also needs sincere attention from the operation management department of Pic’s Peanut Butter
Company.

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Table of Content
Introduction...........................................................................................................................................3
Transformation process:........................................................................................................................3
Pestle analysis.......................................................................................................................................4
Porter’s five forces Analysis...................................................................................................................5
Information about Fix and Fogg.............................................................................................................7
Competitive advantages of Pic’s Peanut Butter.....................................................................................7
VRIO Framework analysis..................................................................................................................7
Key Supplier areas and SCM Practice.....................................................................................................8
Conclusion:..........................................................................................................................................10
References and Bibliography:..............................................................................................................11

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Introduction
The processed food industry of New Zealand is huge since the country is one of the major
F&B exporters. When it comes to processed food, peanut butter is a highly popular one in the
nation. The product peanut butter is referred to a spread which is made from ground dry-roasted
peanuts. Generally commercial brands add additional ingredients like salts, sweeteners and
emulsifiers in order to enhance its taste and texture. Peanut butter is popular in several developed
as well as developing countries like UK, USA and New Zealand (Countdown, 2018). The purpose of
this report is to analyse as well as evaluate its external as well as internal environment to analyse the
market the chosen organisation wants to expand in and the opportunities it can avail to achieve its
goals, while considering the internal resources and factors that help them to make strong
competition in New Zealand food industry in increasing and emerging market variety. Therefore, in
this report the external as well as internal environmental analysis of Pic’s Peanut butter will be
conducted. Along with this VRIO Analysis as well as polar diagram to compare the organization with
one of its major competitors Fix and Fogg will also be performed in this report.
Transformation process:
In order to reduce the operational dilemma every company needs some effective
transformations through their operational and procurement based changes. Due to the high
competitiveness, the company is currently facing a strong bargaining power from suppliers. They are
not capable to meed the number of demands due to lack of proper supply chain. The only
transformational change can be done with PCA. The PCA are able to source from Argentina if
required. However, company needs to continue their supply chain with Dominion Salt for the supply
of salt. At the same time the company also wants to strengthen their suppliers of Jars, OI Glass,
Labels and Litho. It will help them to improve their packaging system. In terms of human resource,
Pic’s Peanut Butter has only 40 employees, while increasing number of production and services
process need additional support from workforce (Figure.nz., 2018). To make the overseas sales
stronger and to maintain actual production process smooth, the company will transform their
workforce recruitment an management process for additional 20 employees. In the production and
operational process, the management of the company will transform their internal operation for
increasing their daily production capacity from 28 pallets per day to 56 pallets per day. However, the
shift timings will remain same and only 2 shifts will be operated in each day (Sacks,et al., 2017). To

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gain more filling capacity the company will install larger auto fillers and will also increase the glass
handling efficiency by advance assembly lines.
Pestle analysis
In order to understand the political, economic, socio cultural, legal and environmental
environment of New Zealand, PESTLE analysis of the processed food industry of the nation has been
conducted bellow.
Political Factor
The political environment of New Zealand is highly stable and this has imposed positive
impact on the food industry of the nation. The government is pen towards global marketing and s a
result of this the cost of exporting and importing products is highly reasonable in the nation.
However, labor laws are highly strict and the labor force is expensive (Chenet al., 2015). Not only
this, the government have imposed high taxes on products with high fat content in order to diminish
the consumption of food products with high fat content. Considering the fact that majority of the
processed food products contents high fat, this factor is imposing negative impact on the processed
food as well as fat food industry of the nation.
Economic Factor
Being a developed country, the per capita income of the nation is excellent. This can be
considered as the result of low population of New Zealand. Despite the fact that inflation had
imposed impact on the GDP of New Zealand, the financial recovery of the nation is occurring rapidly.
Thus, it is considered to be a highly potential market for the processed food manufacturing
organization (Huang et al., 2017). The inflation rate as well as the unemployment of the nation is
very low. However, since the country is suffering from an aging population, about charges are very
high. Hence the investment cost is high for any industry in New Zealand.
Social Factor
When it comes to social factor, majority of the residents of New Zealand is getting inclined
towards healthy lifestyle. As a result, a result of this, individuality is found to invest on organic food
items instead of fast food. When it comes to the processed food industry, a mixed impact has been
noticed. While healthy processed foods like peanut butter, Natural probiotic yoghurt, Canned
salmon, tomato Puree and other are gaining popularity among the consumers, sausage rolls, pies
and pasties, that is the demand for processed foods with high fat content is diminishing (Mohsin &

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Lengler, 2015). However, the popularity of processed food can be noticed in the office gong
population who prefers easy to cook foods in order to save time.
Technological Factor
Being a developed country, New Zealand is highly advanced in technology. The organization
offers 24 hours service when it comes to electricity and internet. This turn enables the organizations
established in the processed food industry to provide their consumers with good quality of product
within the stipulated time and in a reasonable price. The technological advancement of the nation
also helps the organizations to enhance their market through social media platforms. Considering
the fact that more than 78.9 percent of the population of New Zealand is present in the social media
platforms a good number of organizations have established their business through promoting their
products online ad regularly communicating with the consumers (Bucchini et al., 2016). Not only has
this, being an aging population, majority of the consumers in New Zealand, prefer online shopping
over offline shopping. Technological advancement allows the mentioned industry to provide the
facility to the consumers.
Legal Factors
As mentioned earlier, the government of the nation is highly concerned about the increasing
health issues associated with obesity and thus have imposed high taxation on the fast food and
processed food industry. The government is open when it comes to inviting foreign countries to
establish their business in the processed food industry of New Zealand. However, the tax to be paid
by the companies is pretty high. This can be consider as a barrier to new entrance and thus is
beneficial for the local companies.
Environmental Factor
Both the government as well as consummers of New Zealand is highly conscious about the
environmental effect of any industry. Strict laws have been implemented by the government in
order to prevent high emission of carbon foot print, water and electricity usage. In order to maintain
the good will of the consumers as well as to maintain its business in the nation, it is highly crucial for
the organizations to abide by the rules and regulations (Vandevijvere et al., 2018).

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Porter’s five forces Analysis
In order to analyze the competitiveness that is faced by both Pics Peanut Butter and the Fix
and Fog, its greatest competitor, the porters five analysis of the two organizations have been
conducted bellow.
Threat from new entrants
While the government of New Zealand is open towards the export and import policies, high
taxes needs to be paid by the foreign organizations who wants to establish their business in the
country. As a result of this, the treat of new entrance, for local processed food organizations like Pics
Peanut Butter and Fix and Fogg peanut butter Company is low.
Threat from existing competitors
The rivalry among the competitors in the processed food industry of New Zaland is high. The
demand for processed food is higher among the consumers which in turn have given rise to a good
number of processed food manufacturing companies. When it comes to peanut butters, some of the
leading organizations that sell peanut butter include Nut Brothers, Fix & Fogg and Pics Peanut butter
Company (Lyons & Lawrence, 2017). Hence, in order to gain competitive advantage over its
competitors, it is highly crucial for the Pics peanut butter company to adopt a differentiation
technique to gain competitive adavantage.
Threat from substitutes
The threat from the substitute is medium for both Pics peanut butter and Fix and Fogg. The
major substitute of peanut butter includes plain butter, vegetable oil, cheese spread, sunflower seed
butter and soya nut butter. In spite of the huge number of options, majority of the consumer prefer
peanut butter over other types of butter (Balasubramaniam et al., 2015). While cheese spread and
plain butter is avoided due to high fat content, sunflower butter and Tahini are on the costlier side.
Power of the suppliers
The powers of the suppliers are medium. Since a good number of local as well as
international organizations offer peanut butter to the consumers, the bargaining power to the
organizations are low. Supplier can easily stop delivering raw material in case of slightest
dissatisfaction.
Power of the buyers

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The power of the buyers are high. The similar price rage of the products available in the
market as well as the huge number of organizations offering the same product is responsible for it.
Consumers can shift their preferences in case of slightest dissatisfaction (Vandevijvere et al., 2018).
Information about Fix and Fogg
The Fix and Fogg peanut butter is a highly renowned peanut butter manufacturing
organization that was invented in the year 2013. The company initially started its business by selling
peanut butter at local farmer’s market and now it is well known across New Zealand. The chief aim
of the company is to provide the consumers with high quality butter at an affordable price. dark
roasted hi-oleic peanuts and a sparing amount of organic Marlborough sea salt is sold to the
consumers.
Competitive advantages of Pic’s Peanut Butter
The peanut butter is used in a good number of breakfast dishes as well as in desserts and is
considered to be healthier than normal butter. The Pics Peanut Butter refers to a quite popular
peanut butter manufacturing organization located at Nelson, New Zealand. The owner of the
company is Pic Picot and he had started this organization from a small garage and near about 400
jars of Peanut production each year. However, in the year 2017, the company has manufactured
more than 3.5 million jars of peanut butter whose total worth is nearly 50 million dollars (Sacks et
al., 2015). The mentioned company has owned a good number of food and business awards and has
its name in the Deloitte’s Fast 50 index of fastest growing companies.
VRIO Framework analysis
The VIRO Framework in other words the Value, Rareness, Inimitable, Organised Framework
emphasises the competence level different part of the business operation including internal
operation, materials, production and facilities. To be sustained competitive advantage a business
component needs to satisfy all attributes of VRIO frame (Stevenson, 2015). In this framework Value
represents the value of the component in the organisational performance. Rareness implies the
relevance of the business components or products with the other materials or process available in
market. Inimitable refers the opportunity of other companies to imitate the speciality of the current
company. The term Organised refers how the business components are organised with the current
organisational structure organise. The following able represents these factors for Pic’s Peanut Butter
Company.

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Resource/Capability Value Rareness Inimitable Organised
Raw materials YES
Packaging YES YES
Products YES YES
Logistics YES YES YES
Human Resource YES
Facility YES YES YES
Promotional or advertisement YES YES YES
Distribution of brunches YES YES
Production process YES YES YES
West management YES YES
Relationship with partners YES YES
Stakeholder engagement YES YES YES YES
Corporate social responsibility YES YES YES YES
Competitive Disadvantages None
Competitive Equality or Parity Raw materials, Human Resource
Temporary Competitive Advantage Packaging, Relationship with partners, West management,
Products
Unused Competitive Advantage Logistics, Facility, Production process, Facility, Promotional
or advertisement
Long-term competitive Advantages Stakeholder engagement, Corporate social responsibility
Therefore, from the VRIO analysis it has been found that Logistics, Facility, Production
process, Facility, Promotional or advertisement are the major areas for building strong competitive
advantages. The major strong point of Pic’s Peanut Butter is, the company does not have any
significant competitive disadvantage. The raw materials and human resource do not have any
exceptional advantage. On the other hand, the major competitive advantages for long term
sustainability are Stakeholder engagement, Corporate social responsibility of the company.
Key Supplier areas and SCM Practice
Considering the fact that the competition in New Zealand food industry is increasing with
the emerging time, it is highly crucial for the mentioned organization to analyse as well as evaluate

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its external as well as internal environment to analyse the market it wants to expand in and the
opportunities it can avail to achieve its goals. To examine the current supply chain management
(SCM) and the resultant efficiency the scores for 5 major attributes have been considered. The five
major attributes to measure the efficiency are Cost of the process, Speed. Dependability on other
operations, Flexibility for alteration, and Quality.
Scores of production components
Jars and bottles Label and litho Production -packaging Machines
Cost 30 20 60
Speed 50 60 40
Dependability 20 30 85
Flexibility 65 55 55
Quality 70 30 65
Polar diagram of operational components:
Cost
Speed
DependabilityFlexibility
Quality
0
50
100
Jars and bottles Label and litho Production -packaging Machines
Raw meterials

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Source: (Created by author)
From the polar diagram analysis of supply chain and operational components it can be
clearly seen that the dependability of Packaging materials is very low. However, production and
packaging machines are not flexible enough for any alteration. Therefore, in order to make changes
in the equipments the company has to invest high amount of money. The quality of raw materials
like salt and nuts need significant improvement. Currently the quality of raw materials is very low
compared to the other supply chains.
Conclusion:
From the above discussion and analysis it can be said that, Due to the high competitiveness
the company is currently facing a strong bargaining power from suppliers. To gain more production
and supply advantages Pic’s Peanut Butter will need changes in their existing operation and
assembly level lines which also includes the logistical operation. The Human Resource also needs
some major changes. Along with the operational changes the quality of raw materials also needs
sincere attention from the operation management department of Pic’s Peanut Butter Company.
From the analysis and discussion and needs assessment it can be conclude that with proper
coordination and improvement in competitive sustainability Pic’s Peanut Butter can beat other
companies like Fix and Fogg successfully.

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