Situation Analysis of Californian Nut Producing Industry

This report provides a situation analysis of the Californian nut producing industry, including a background of the industry, PESTEL analysis, Five Forces analysis, resource and capability analysis, and recommendations for companies. It discusses the increasing theft in the industry and the measures that can be taken to prevent it. The report also highlights the political, economic, social, technological, environmental, and legal factors affecting the industry. The findings and recommendations are based on a comprehensive analysis of the industry.

Running head: SITUATION ANALYSIS OF CALIFORNIAN NUT PRODUCING INDUSTRY
Situation Analysis of Californian Nut Producing Industry
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1SITUATION ANALYSIS OF CALIFORNIAN NUT PRODUCING INDUSTRY
Table of Contents
Introduction......................................................................................................................................2
Situation Background......................................................................................................................2
PESTEL Analysis............................................................................................................................3
Five Forces Analysis........................................................................................................................4
Resource and Capability Analysis...................................................................................................5
Business Level Resource and Capabilities......................................................................................6
Findings and Recommendations for Companies.............................................................................7
Conclusion.......................................................................................................................................7
References........................................................................................................................................8

2SITUATION ANALYSIS OF CALIFORNIAN NUT PRODUCING INDUSTRY
Introduction
Situation analysis is referred as techniques employed by companies in analyzing its
internal and external business surrounding for analyzing the capabilities, consumers and business
environment of the companies operating within the sector (Anton 2015). The objective of the
report is to carry out situation analysis of Californian nut producing industry through analyzing
the background of the industry by carrying out PESTEL, Porters five forces along with resource
and capability analysis of the companies operating in the sector. Based on the analysis suitable
recommendation will be provided to make them more resilient on large-scale and decreasing
theft.
Situation Background
From analyzing the Californian nut producing industry it is also alleged that the sector is
dealing with wide-scale and increasingly sophisticated theft at every stage within the supply
chain. Media has also reported that theft on the identical scales is affecting certain other
commodity sectors within the state that encompass avocado and pistachio nuts. Large scale nut
thefts is increased over several years that is increasing because of rising prices of nuts (Baarda et
al. 2017). It is also indicated that such organized crime is getting deeper within the business. It
has also been revealed that the thefts are not just sophisticated but companies or individuals
involved in stealing of nuts is observed to have increased connections with the black market.
Focused on same, commodity theft is deemed to follow within the market where other crops like
avocado and pistachio nuts are also target for thieves in California.

3SITUATION ANALYSIS OF CALIFORNIAN NUT PRODUCING INDUSTRY
PESTEL Analysis
PESTEL analysis is carried out in explaining the landscape n which the nuts as well as
other commodity industry operates within the Californian primary production sector.
 Political: Certain political factors are causing the prices of nuts to be higher in the
Californian nut production industry includes expropriation, currency inconvertibility and
contract renunciation.
 Economic: Californian nut industry is facing increasing demand of nuts and such
demand is affected by tariffs in the nation on the largest sellers such as walnuts, prunes
dulcets and macadamias that is more than 25% (Ferguson and Kallsen 2016).
 Social: The Californian civilization is more about eating nuts and the culinary culture of
the nation includes stir-fried dishes that consider an increased use of peanuts. In addition,
Californian civilization prefers using high quality nuts that has increased demand of all
nut harvests in the nation.
 Technological: Investment in technological innovation in the Californian nut producing
industry is increasing. Such advanced technology implementation in the industry is
focused on decreasing air pollution that requires upgrading the industrial base where nuts
are cleaned and packaged (Fulbright et al. 2017).
 Environmental: Californian government considers its serious affairs directed towards
protection of the environment where it imposes a batch of ordinances in safeguarding ad
bar of pollution in agriculture of nuts that further focuses on improving urban
environment.

4SITUATION ANALYSIS OF CALIFORNIAN NUT PRODUCING INDUSTRY
 Legal: The level of environmental laws in California necessities the agriculturists of nuts
in the nation to maintain a robust legal as well as technological mechanism in addressing
such regulations and laws.
Five Forces Analysis
Porters Five Forces analysis is carried out of Californian nut producing industry in
analyzing industry suffering from large scale and elaborate theft.
 Threat of substitutes: Californian nut industry has broad range of nut types where there
is fewer substitutes were employed as an ingredient for a particular food product. Cost of
switching is low and fruits are observed to be hampering than nuts where people can go
for fresh fruits as substitutes of nuts (Geisseler and Horwath 2017).
 Competitive rivalry: Absence of diversity among nut growers increases rivalry in
Caltufyrnia as they are hugely dependent on demand for nuts either as snack or food
predict ingredients. Competitive rivalry is moderate as nut companies can increase prices
for such products.
 Threat of new entrants: Cost of entrance in Californian nut industry needs suitable land
purchase, crops and machinery because of which barriers to entry is quite high as the new
nut growers will need sufficient capital in sustaining initial operations. Low-cost
switching is also has also been observed in the industry where buyers negotiate contracts
that favors them to switch players in case there is a cheaper deal (Kreutzer 2019).
 Bargaining power of suppliers: Supplier power is high in Californian nut industry in
smaller holdings because of its increased harvesting done via manual labor. In addition,
growth in nut consumption resulted in increasing demand for nut growing machineries

5SITUATION ANALYSIS OF CALIFORNIAN NUT PRODUCING INDUSTRY
greatly needed by nut growers that has made suppliers power such materials in the
industry moderate.
 Bargaining power of consumers: Buyers in this industry is segmented into three groups
including grocery retailers, wholesalers and food producing companies (Marvinney
2016). Products in the industry is highly undifferentiated that increases the buyers power
and the market for nuts is highly volatile, where almonds observed decrease in value with
decline in prices and such price sensitivity affects consumers purchase decisions
negatively in California.
Resource and Capability Analysis
Five major companies that are observed to have sufficient resource and capabilities in
preventing theft within these affected companies include Chico Nut Company, Valley Pride Ag
Company, Star Nut Company, Poindexter Nut Company and Horizon Nut LLC. In order to
prevent chances of theft, these major nut companies in California have resources and capabilities
such as “a 360 degree approach to nut-theft risk management” along with having “tailored
insurance coverage” (Moral et al. 2019). In dealing with nut-theft the nut growers attains a string
and efficient post-loss solution. These major companies are observed to have specialized
expertise in making sure that they have adequately structured insurance placements. These
companies also have commercial package policy, cargo or transit policy and the stock-
throughput policy. Having such stringent cases serves as unique capabilities for these companies
in decreasing instances of theft within the nut producing companies (Ortega-Beltran et al. 2019).
This is for the reason that following such policies these five companies attain necessary
resources in maintaining correct trucking carriers control along with entertaining that trucking
carriers cargo policies limits chances of theft coverage even if cases vehicles carrying nuts is

6SITUATION ANALYSIS OF CALIFORNIAN NUT PRODUCING INDUSTRY
unattended. These companies’ offers the nut growers and the distributors with high
comprehensive protection based on each the nut products are moved processed or stored.
Business Level Resource and Capabilities
Focusing on the situation of increasing nut theft cases in California nut industry, certain
business level resources and capabilities are considered to be maintained by the companies
operating within the industry in preventing large-scale and elaborate theft in affected
organizations are indicated below:
 Pre-loss risk control: The growers and distributors must ensure that they have necessary
resources and capabilities to prevent nut theft situation that includes maintaining high
security in nut crops along with in the transport vehicles and storage spaces. Such
security resources can include fencing, cameras along with effective guard services
(Phillips and Moutinho 2018). It is also necessary that the important resources to
maintain exceptional security must include radio-frequency trackers in making sure that
nuts are transported to the location where intended without a theft.
 Having extensive capacity of maintaining effective relationship with a for selected truck
carriers and with them a consistent protocol can be maintained. This can further confirm
the most suitable drivers in picking up the nut produces in a safe and convenient manner.
 Ensuring that the companies’ computer systems security remains efficient with state-of-
art along with asking the carriers regarding maintenance of their data integrity so that the
thieves do not hack into data regarding the transportation details of nut produces (Smith
2016).

7SITUATION ANALYSIS OF CALIFORNIAN NUT PRODUCING INDUSTRY
Findings and Recommendations for Companies
The findings of the situation analysis on California nut industry revealed that the farmers
of nut crops in California are the victims of low-level of property crimes. This is for the reason
that the remote locations makes thefts simpler to pull off. It has also been revealed that several
thefts in the California nut industry involved social engineering where truck arrives for picking
up nut products where theft takes place (Taylor 2016). Such they have also been observed to take
place in nut processing plants and in the form of stolen cargos while shipping. Based on such
situation, the companies operating in Californian nut industry and affected from increased theft
are provided with certain recommendations that can make their businesses highly resilient to
large scale and elaborating theft. Such recommendations include implementation of 360 degree
risk management approach, contract review, insurance program design and pre-loss prevention
that can be effective in avoiding exposure to theft.
Conclusion
The objective of the report was to carry out situation analysis of Californian nut
producing industry through analyzing the background of the industry. It was gathered from the
report that the findings of the situation analysis on Californian nut industry revealed that the
farmers of nut crops in California are the victims of low-level of property crimes. Considering
such situation, the growers and distributors must ensure that they have necessary resources and
capabilities to prevent nut theft situation that includes maintaining high security in nut crops
along with in the transport vehicles and storage spaces.

8SITUATION ANALYSIS OF CALIFORNIAN NUT PRODUCING INDUSTRY
References
Anton, R., 2015. An Integrated Strategy Framework (ISF) for Combining Porter's 5-Forces,
Diamond, PESTEL, and SWOT Analysis.
Baarda, R., Bergman, S., Gonel, G. and Kornbluth, K., 2017. Energy Analysis of Walnut
Production in California.
Ferguson, L. and Kallsen, C.E., 2016. Origin and History in California. Pistachio Production
Manual, 3545, p.19.
Fulbright, D.W., Mandujano, M., Medina Mora, C., Lizotte, E., Guyer, D.E., Donis-González,
I.R., Jarosz, A.M., Springer, J.C. and Blackwell, R., 2017, October. Establishing a successful
chestnut industry in Michigan: some problem solving strategies. In VI International Chestnut
Symposium 1220 (pp. 155-162).
Geisseler, D. and Horwath, W.R., 2017. Walnut Production in California.
Kreutzer, R.T., 2019. Tools for the Strategic Analysis. In Toolbox for Marketing and
Management (pp. 89-142). Springer, Cham.
Marvinney, E.M., 2016. A life cycle based assessment of energy use, greenhouse gas, and
pollutant emissions in California nut production. University of California, Davis.
Moral Moral, J., Morgan, D., Trapero-Casas, A. and Michailides, T., 2019. Ecology and
Epidemiology of Diseases of Nut Crops and Olives Caused by Botryosphaeriaceae Fungi in
California and Spain. Plant Disease, (ja).

9SITUATION ANALYSIS OF CALIFORNIAN NUT PRODUCING INDUSTRY
Ortega-Beltran, A., Moral, J., Picot, A., Puckett, R.D., Cotty, P.J. and Michailides, T.J., 2019.
Atoxigenic Aspergillus flavus Isolates Endemic to Almond, Fig, and Pistachio Orchards in
California with Potential to Reduce Aflatoxin Contamination in these Crops. Plant disease,
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Phillips, P. and Moutinho, L., 2018. Strategic analysis. In Contemporary Issues in Strategic
Management (pp. 46-79). Routledge.
Smith, S., 2016. The EU almond industry. Agricultural Commodities, 6(3), p.112.
Taylor, E., 2016. Supermarket self-checkouts and retail theft: The curious case of the
SWIPERS. Criminology & criminal justice, 16(5), pp.552-567.