152.350 Strategic Management: Kapiti Cheese Industry Analysis Report

This report provides a comprehensive analysis of the Kapiti Cheese industry, focusing on its strategic position within the New Zealand dairy sector. It begins with an executive summary and an introduction to Kapiti Cheese, followed by an in-depth industry analysis, including major issues and challenges faced by the company. A macro-environmental analysis using the PESTEL framework assesses the political, economic, social, technological, environmental, and legal factors impacting the industry. The report then applies Porter’s five forces model to evaluate the competitive landscape, including threats from new entrants, substitutes, and the bargaining power of customers and suppliers, as well as competitive rivalry. The second part of the report presents strategic options and recommendations for maintaining and enhancing Kapiti Cheese's business, including strategies for animal care, compliance with regulations, and market expansion. The report concludes with an evaluation of these strategies and provides recommendations for future growth and development, supported by references to relevant sources.

KAPITI CHEESE
Industry analysis and Competitive analysis

1
INDUSTRY ANALYSIS AND COMPETITIVE ANALYSIS OF NZ DAIRY INDUSTRY
Executive Summary
The industry analysis and competitive analysis of the Kapiti Cheese is described the various
special aspects of the business of the Company Kapiti Cheese and dairy industry. Macro
analysis of the industry also defined the various aspects of different types of factors which
may have a direct impact over the growth of the industry.
On the bases of the analysis of different factors, some strategies are suggested for the
business development for the industry. The evaluation of the strategies has been done in order
to check the feasibility of the strategies. In the end, recommendations are provided for the
development and growth of the industry.

2
INDUSTRY ANALYSIS AND COMPETITIVE ANALYSIS OF NZ DAIRY INDUSTRY
Table of Contents
Executive Summary...................................................................................................................1
Introduction................................................................................................................................4
Part (1): Strategic analysis of the Kapiti Cheese........................................................................4
Introduction of Kapiti Cheese....................................................................................................4
Industry analysis.........................................................................................................................4
Major issues which the Kapiti cheese and dairy industry is facing.......................................5
Macro environmental analysis...................................................................................................5
PESTEL Analysis...................................................................................................................5
Political environment.........................................................................................................5
Economic environment......................................................................................................6
Social environment.............................................................................................................6
Technological environment................................................................................................6
Environmental factor..........................................................................................................6
Legal environment.............................................................................................................6
Competitive analysis..................................................................................................................7
Porter’s five forces model......................................................................................................7
Threat of new entrants........................................................................................................7
Threat of substitutes...........................................................................................................7
Bargaining power of customers.........................................................................................7

3
INDUSTRY ANALYSIS AND COMPETITIVE ANALYSIS OF NZ DAIRY INDUSTRY
Bargaining power of suppliers...........................................................................................7
Competitive rivalry............................................................................................................8
Part (2): Strategic options and recommendations......................................................................8
Strategies for maintaining and enhancing the business of the Kapiti Cheese........................8
Evaluation and prioritisation of the strategic options............................................................9
Recommendations..................................................................................................................9
Conclusion................................................................................................................................10
References................................................................................................................................11

4
INDUSTRY ANALYSIS AND COMPETITIVE ANALYSIS OF NZ DAIRY INDUSTRY
Introduction
In this assignment a brief analysis will be done over the various aspects of Kapiti Cheese.
The competitive analysis of the Kapiti Cheese will be done using tools of analysis like
Porter’s five forces model. The focus is also provided over macro environmental industry
analysis using the tool PESTEL. The complete analysis of the industry will be done in order
to understand the Strength, weaknesses, opportunities and threats for the Companies. This
analysis will be helpful in understanding the situation of the Company which can be used for
framing strategies for growth and expansion of the business.
Part (1): Strategic analysis of the Kapiti Cheese
Introduction of Kapiti Cheese
Kapiti Cheese is offering many dairy products specially related to cheese like Cheddar
cheese, Fresh cheese, Semi soft yellow cheese and many other types of cheese. It is known as
New Zealand’s most awarded cheese. It is also offering different types of ice creams for the
customers (tastekapiti, 2020). New Zealand is known as the largest exporter of dairy
products. Dairy industry is based upon rearing of cattle at a large level. The major cattle are
milk producing cows, buffalos, sheep and other animals. New Zealand dairy board was
established in 1923. Since then New Zealand Dairy is one of the famous dairy throughout the
world. The products of New Zealand industry are milk, cheese, butter, milk powder and many
other products. It is the world’s 8th largest producer of dairy products with the total 3% of
milk production of the total world’s milk production (DCANZ, 2020).
Industry analysis
Kapiti Cheese is performing very well inside the countries in terms of producing the very
good quality of cheese. It is also exporting its products outside the country. New Zealand
exports its dairy products throughout the markets of the world. The major key factors of the
New Zealand’s dairy industry is grass farming system, huge level rearing of milk producing
animals and very massive level investment in the processing of the food. The industry life
cycle of any Company has around five stages like Start up, growth, shake out, maturity and

5
INDUSTRY ANALYSIS AND COMPETITIVE ANALYSIS OF NZ DAIRY INDUSTRY
decline (iEduNote, 2020). The Kapiti Cheese is at maturity stage. It has been performing very
well in terms of producing milk products. It is also very famous in producing a very good
quality of cheese named as Kapiti Cheese (tastekapiti, 2020).
Major issues which the Kapiti cheese and dairy industry is facing
The industry is facing some issues which have to be resolved for the proper growth and
development in producing the different types of dairy products. Some of the challenges are as
follows:
 Establishing integration with the various co-operative Companies which are a part of
NZ dairy industry and producing a lot of dairy products (Mounsey, 2015).
 Availability of high nutritious food for the milking yielding animals is very costly.
The industry has to purchase a large amount of high nutritious food for getting a
better yield of milk (Mounsey, 2015).
 The industry is exporting all dairy products in all markets of the world. There is not
any specified need of particular dairy products is mentioned.
 Increasing use of nitrogen and other fertilizers increases the yield of crops but
excessive uses of fertilizers are harmful for the milking animals.
 Latest updations in the technology of rearing of animals and their breeding are one of
the challenging tasks for the industry.
 Breeding, taking care, feeding and health care of animals are the major challenge for
the industry because rearing of a large volume of animals takes a lot of efforts and
investments (Mounsey, 2015).
Macro environmental analysis
PESTEL analysis of the Company helps in understanding the various aspects of the industry.
PESTEL Analysis
Political environment
New Zealand is known as one of the most stable democracies in the World. The fluctuations
in the political factors of the country are very rarely noticed. The Kapiti Cheese Company
and dairy industry is very much comfortable about the export and import policies of the

6
INDUSTRY ANALYSIS AND COMPETITIVE ANALYSIS OF NZ DAIRY INDUSTRY
country. The head of the state is also very lenient towards the development of Kapiti Cheese
industry. The industry always receives a sufficient fund for investment for its progress (Easy,
2020).
Economic environment
The New Zealand industry attained a growth rate of 2.5% in the year 2019. It is expected to
remain same in the year 2020 and 2021. The monetary and fiscal policies of the country will
also be expected to remain similar as it were before. The economic environment is friendly
and stable for the Company Kapiti Cheese. Purchasing power of the people will also remain
same that is very much beneficial for the industry (Easy, 2020).
Social environment
The people of the society always consider cheese as an important ingredient of their diet. But
now days, the concern of obesity and use of vegan diet is keep on increasing that may
negatively affect the business of the industry. However, still cheese and its product are a high
source of calcium and protein that is why the demand of these products will always remain
same (Nicola M Shadbolt, 2020).
Technological environment
The technology related to processing and storing the milk products is quite challenging for
the industry. The animal’s rearing activities also should update with respect to time. Overall,
it can be said that technological environment is suitable for the industry but updations is
required for the growth of the Company Kapiti Cheese (Nathan Clay, 2020).
Environmental factor
Environment concern is related to the welfare of the environment and the society. Taking
care of animals and protect them from various diseases is one of the major challenge in front
of Kapiti Cheese and dairy industry. Sometimes due to the infections in the animals, the milk
and milk products may also be contagious and infected that is why a lot of precautions are
needed to make the activities of the industry environment friendly. Grazing area of animals
should be changed with respect time so that the areas receive sufficient time to develop the
grass. Moreover the industry has to keep an eye over the environmental concern (JK
Margerison, 2020).

7
INDUSTRY ANALYSIS AND COMPETITIVE ANALYSIS OF NZ DAIRY INDUSTRY
Legal environment
The Kapiti Cheese and dairy industry also has to follow the rules, regulations and norms of
the national and international level. The essential information about vitamins and minerals
should be on the packet of the product including its minimum retail price (Adamkasi, 2020).
However the industry is easily able to follow the norms and laws of the country (Easy, 2020).
Competitive analysis
Porter’s five forces model
According to Porter, there are five forces are responsible for the growth of the industry. The
analysis of five forces with respect to Kapiti Cheese is as follows:
Threat of new entrants
The cheese industries are kept on increasing not only inside the country but also outside the
country. Cheese and Dairy industry is one of the beneficial industries that is why there is
always a threat of new entrants in this field (Nicola M Shadbolt, 2020).
Threat of substitutes
Many substitutes of milk products are available in the market. Now a days people are very
much concern about obesity that is why they prefer the substitutes of cheese and other milk
products. Industry should make the food products healthier and target the maximum
population of all groups of people (DCANZ, 2020).
Bargaining power of customers
Customers are becoming very serious about the price of the products and they are bargaining
for the cost of the products. The cheese industry has to decide the cost of the products after
analysing the investment and profit of the industry. However, holding a large group of
customers is also essential for the business of the cheese industry (L Cheng, 2020).
Bargaining power of suppliers
The suppliers are also very much concern about their benefits like health care experts of
animals, employees, technicians and other staff members are also expecting benefits from the

8
INDUSTRY ANALYSIS AND COMPETITIVE ANALYSIS OF NZ DAIRY INDUSTRY
side of the industry. That is why it is very challenging for the industry for minimizing the cost
of suppliers (Nathan Clay, 2020).
Competitive rivalry
For the success in the marketing and selling of the cheese and dairy products like ice creams,
chocolates with different fruit flavours and other recopies, a deep understanding is needed
related to the strategies of rival companies (tastekapiti, 2020). Many of the dairy industries
are performing well and producing a good quality of food products. That is why it is very
essential to keep an eye over the activities of the rival firm for sustaining in this competitive
world (Nathan Clay, 2020).
Part (2): Strategic options and recommendations
Strategies for maintaining and enhancing the business of the Kapiti Cheese
The Kapiti Cheese should adopt some strategic options for ensuring about its proper growth
and development. Some of the strategic options are as follows:
 Kapiti Cheese should keep an eye over its cattle and milk producing animals because
taking precautions against various diseases of animals and vaccinations are very
important for the business of the industry (MT Harrison, 2017).
 The laws related to manufacturing and selling the milk products should be reviewed
with respect to time because sometimes the national and international policies are
keeping change (Zealand, 2020).
 Proper co-ordination with farmers is very necessary for the availability of nutritious
food for the animals, which is the basic need of the Kapiti Cheese (Nicola M
Shadbolt, 2020).
 Proper strategies should be adopted in order to ensure about proper functioning of the
milk products. Checking and testing the quality of the milk products is very essential
in order to maintain the good quality of packed food items (Mounsey, 2015).
 The Company should focus on more environment friendly activities because constant
grazing of animals may destroy the greenery of a particular area that is why rotational
grazing techniques should use for maintaining the greenery of the lands (JK
Margerison, 2020).

9
INDUSTRY ANALYSIS AND COMPETITIVE ANALYSIS OF NZ DAIRY INDUSTRY
 Proper packaging is essential because milk products are very sensitive. A fine and
strong packing is needed to make the food products secure and safe for use (MT
Harrison, 2017).
 The Company should take the help of researchers in identifying the demand of
different milk products in the various global markets so that the industry can find out
its future customers (L Cheng, 2020).
 The Company should enhance its export in those countries where the shortage of milk
products is found. It will be highly beneficial for the business of the industry (Nicola
M Shadbolt, 2020).
 The Kapiti Cheese should focus on research over breeding techniques of the animals
(tastekapiti, 2020). By increasing the number of animals, the industry will be
receiving a large volume of milk so that the production of food products may be
enhanced (Nicola M Shadbolt, 2020).
Evaluation and prioritisation of the strategic options
Kapiti Cheese should be focused over the quality maintenance of its products (tastekapiti,
2020). The safety concern of animals and focus on environmental saving activities should be
on priority for the industry. Taking care of animals by providing them sufficient food and
protect them from diseases should be on the priority for the management of the Kapiti Cheese
(Nicola M Shadbolt, 2020).
The extension and globalisation of the business should be on second priority for the
Company. However the industry is already exporting its products in many countries but still
if the industry will enhance its exports, it will be highly beneficial for the industry (Nathan
Clay, 2020).
Overall, it can be said that the industry should work upon all the strategic options in order to
ensure about its growth and development (Nathan Clay, 2020).
Recommendations
Despite of a very good performance and situation of the Kapiti Cheese, some
recommendations are suggested for the growth of the Company. Some of the
recommendations are as follows:

10
INDUSTRY ANALYSIS AND COMPETITIVE ANALYSIS OF NZ DAIRY INDUSTRY
 Kapiti Cheese should keep an eye over the quality of dishes made by chef. They
should be well focused on maintaining the good quality of fresh dishes (Cheese,
2020).
 The Company should provide more focus on allocation of safe environment for the
animals. More reliable staff should be hired for taking care of the animals of the
industry (Mounsey, 2015).
 The Company should be well update about the increasing dairy industries of other
countries. It should adopt latest technologies in order to receive the benefits of
technology in processing and packaging of food (Zealand, 2020).
 For getting a competitive advantage over the other rival industries, NZ dairy industry
should focus on research related to rearing, breeding, feeding and health care of
animals for enhancing its production (Nicola M Shadbolt, 2020).
 It is very important to protect the animals from diseases and infections because these
infections and diseases may be transferred into humans by consuming their products.
Timely health check-ups of the animals and providing them safe accommodation are
very essential (L Cheng, 2020).
 Cleanliness is very essential in maintaining the quality of the food items which are
producing by the dairy industry, especially cheese need a lot of cleanliness. Neat and
clean environment not only good for the health of the animals but also it is beneficial
for the quality of the food (MT Harrison, 2017).
Conclusion
On the bases of above analysis, it can be concluded that Kapiti Cheese is one of the large and
famous Company of cheese in the world. However, it is performing very well in almost each
and every sector but still some strategies should be adopted by the industry for getting a
competitive advantage over its rivals and for enhancing its business activities.
Recommendations are provided for the future growth of the Company for maintaining the
very good quality of the milk products produced by the Company and for making the
activities of the Company more favourable for the environment.

11
INDUSTRY ANALYSIS AND COMPETITIVE ANALYSIS OF NZ DAIRY INDUSTRY
References
Adamkasi. (2020, March 26). PETEL/PEST for dairy industry. Retrieved from The official
website of free pestel analysis: https://freepestelanalysis.com/pestelpest-of-dairy-
industry/
Cheese, K. (2020, April 1). Our Story. Retrieved from The official website of Kapiti Cheese:
https://www.tastekapiti.co.nz/about-us/our-story.html
DCANZ. (2020, March 21). About the NZ Dairy Industry. Retrieved from The official
website of New Zealand Dairy: https://www.dcanz.com/about-the-nz-dairy-industry/
Easy, M. T. (2020, March 26). New Zealand: Economic and Political Overview. Retrieved
from The official website of mauritius trade:
http://www.mauritiustrade.mu/en/market-survey/new-zealand/economic-and-political-
outline
iEduNote. (2020, March 26). Industry Life Cycle. Retrieved from The official website of
iEduNote: https://www.iedunote.com/industry-life-cycle
JK Margerison, J. L. (2020, March 26). Lying and feeding behaviour of dairy cows at pasture
and housed in free stalls fitted with sand and water filled matts. Retrieved from The
website of flrc:
http://flrc.massey.ac.nz/workshops/14/Manuscripts/Paper_Margerison_2014.pdf
L Cheng, K. M. (2020). Modelling: effect of feeding plantain pasture to three different breeds
of calf/heifer on weight gain and nitrogen leaching in Canterbury. New Zealand
Journal of Agricultural Research , 123-137.