Strategic Management Analysis: Pohutu Wines Ltd Case Study

This case study analysis examines Pohutu Wines Ltd., a company offering wines, beverages, and light meals, focusing on its strategic management and leadership. The analysis employs strategic management tools such as SWOT, PEST, and Porter's Five Forces to evaluate the company's strengths, weaknesses, opportunities, and threats, as well as external factors impacting its performance and competitive position. The report explores the company's decision-making processes, suggesting decentralized approaches and employee involvement. Core values, including excellence, are examined for their impact on customer relations and employee motivation. The report also covers the company's market position, competition, and future growth potential, emphasizing the importance of adapting to market trends and leveraging opportunities for expansion and sustainability. The report concludes with a discussion on the company's future direction and how it can maintain and improve its market position.

MANAGEMENT
LEADERSHIP IN BUSINSS

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Contents
Introduction................................................................................................................................2
Strategic Management Tools......................................................................................................2
SWOT Analysis......................................................................................................................2
Strengths.............................................................................................................................2
Weaknesses.........................................................................................................................3
Opportunities......................................................................................................................3
Threats................................................................................................................................4
PEST.......................................................................................................................................4
Porter’s Five Forces................................................................................................................5
Decision making.........................................................................................................................7
Core Values................................................................................................................................7
Conclusion..................................................................................................................................9
Bibliography.............................................................................................................................10

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Introduction
The report focuses on the business enterprise named ‘Pohutu Wines Ltd. It is a recognized
company offering multiple products to the customers and it includes wines, beverages and
light meals. It is a highly reputed company as it offering products for many years. It is located
at the heart of the city and it attains a string customer base. The internal issue includes limited
capacity and an external issue of sales limited to three main centres and limited target market.
Considering the report structure, the initial section includes information based on Strategic
Management Tools named SWOT, PEST, and Porter’s Five Forces. The next section includes
the appropriate decision making approaches for the company. The succeeding part involves
the company’s core values analysis and its impact on customer relation and employee
motivation.
Strategic Management Tools
SWOT Analysis
SWOT is an acronym for Strengths, Weaknesses, Opportunities and Threats. It will assist
Pohutu Wines to determine its weakness. This will allow the company to undertake steps to
minimize and eradicate these (Phadermrod, Crowder, & Wills, 2019). This tool is highly
advantageous as it provides timely information about key weakness. Business organization
fails to identify the opportunities prevailing in the environment (Sarsby, 2016). It assists the
organization to be acquainted with these. Gaining timely information about these
opportunities will enable the Pohutu Wines to grab these opportunities. The SWOT
framework determines the current position of the enterprise (Gürel & Tat, 2017).
Strengths
1. High business reputation: Gradually, Pohutu wines have gained recognition and
reputation in the market. It has gained the title of ‘The place to eat in Rotorua’ and it
has assisted the company to minimize competition from its competitors.
2. Multiple product line: The Pohutu Company offers multiple products to the customers
and it includes wines, espresso coffee, snacks, and light meals. It has enabled the
company to fulfill the diverse cravings of the customers and raise their sales revenue.
3. Tourist attraction: It offers beautiful walks around the vineyard with a majestic vies
over Lake Rotorua, a gift store, restaurant, and a wedding and event venue

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4. Product high quality: The Company produces high quality wines and it has assisted
the company to maintain the demand for its products. It has assisted in gaining more
than 6 million dollars.
5. Higher consumption: The Pohutu wines were famous and about 1200 customers
visited the winery on busy days and weekends. The customer purchases minimum of
two bottles of wines and spend around $60 on wines and light meal.
6. Free tour: It does not charge entry fee and allows tour for self-walk around the scenic
vineyard. These add value to the service and assist the company to attract high
number of customers.
7. National awards: the company has also won multiple awards and accolades from the
satisfied customers. It has contributed in raising company’s goodwill in the market.
8. Attractive location: It is located at one of the significant tourism regions of New
Zealand. It minimizes the company’s marketing efforts and assist in easily attracting
customers.
Weaknesses
1. Sales limited to three main centres: The Company is earning revenue from three main
centres and it includes Auckland, Willington, and Christchurch. Therefore, it limits
the company’s sale.
2. Limited target market: The target for the wines is up-market hotels (above 4 stars).
The company is relying on top hotels and therefore it limited target market.
3. Limited capacity: It is running on an average capacity of 45% and it limits the
company’s profit.
Opportunities
1. Sustainability: The Company’s chief authority has taken over the reins and is building
on the sustainability and organic ethos inline with Maori cultural belief’s connection
to the land. Its minor efforts towards the sustainability will enable in raising its
reputation in the market.
2. Rising product demand: There is rise in visitors from Australia, North America, Asia
and china. Therefore, it is anticipated that it will raise the company’s financial
earnings.
3. Rising number of tourist and domestic visitors: A Pohutu wine is one of the top tourist
attractions. It is laying continuous efforts to develop and it is attracting the growing

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visitors. The company is experiencing continuous rise in its annual revenue for the
past five years.
4. Additional flights from Rotorua airport to Sydney: The additional flights from
Rotorua airport to Sydney has announced. It is estimated that there is rise in number
of travellers from Australia (about 10000 visitors per year).
5. Expected additional growth: It is expected that the wedding business will in future
and it will benefit the company to gain more demand and revenue.
6. Availability of additional land: The Company owns and additional land and it allows
in gaining benefits either through sale and or fulfilling the rising demand.
Threats
1. Reduction in customer strength: There are other tourist attractions based in Rotorua
and it attains a threat of reduction in total customers.
PEST
PEST is an external environment analysis tool used to identify the political, economic, social,
and technological factors laying an impact on the business performance (Zalengera,
Blanchard, Eames, Juma, Chitawo, & Gondwe, 2014). The external environment tool is
useful to the Pohutu Company. It provides the information based on factors laying a negative
impact on the organization. It also helps the company to exploit these opportunities and gain
best possible outcome (Song, Sun, & Jin, 2017). This tool provides detailed information
about the country. Therefore, it proves highly useful to analyze suitable market for the
business entry. It assists in determining the key trends prevailing in the market (Paul, Cadle,
& Yeates, 2014).
Political Factor: It focuses on factors including government stability, tax policy, health and
safety law, consumer protection law, environment law, corruption level and many more (Ho,
2014). The Pohutu Company is engaged in production of wines through personally owned
land and It is a highly reputable company and it depicts that it aligns with the country laws
associated with the business. It complies with the environmental laws and aims to fulfill its
obligations towards the environment. There is high government integrity between the
domestic and international government as the government is welcoming the high numb of
tourists from distinct country (Australia, and China). It acts as an opportunity for the
company as the rising tourists is contributing to the

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Economic Factor: It takes into account factors like monetary policies, Gross Domestic
Product, and Disposable income. It also includes employment level, inflation rate, broth rate,
and unemployment rate (Rastogi & Trivedi, 2016). The company is expecting an upturn in
economy and it will lay on the customer’s disposable income. It will raise customer’s
disposable income and it will increase the company sales and overall revenue.
Social Factor: It considers customer’s buying behaviour, lifestyle, attitude towards work,
leisure, health consciousness, and attitude towards product quality and customer service,
attitude towards and support for renewable energy (Sridhar, et al., 2016). It is acknowledged
that individuals show high preference for visiting new places.
The customer spent high amount the consumption of wines and it states that they have strong
purchasing power. They show high preference for quality products and they mainly rely on
Pohutu wines. This is advantageous for the company as it is engaged in production of high
quality wines. The customers are conscious towards the price and therefore the Pohutu wines
offers free entry for customers.
About 1200 people visit the winery on weekends on an average they spend around $60.
Additionally, they consume least 2 two bottles. Therefore, customers show positive attitude
towards the leisure activities. Thus, it clearly depicts that they are not health conscious as
they highly consume the wines. Customer’s low consciousness towards their health acts as an
advantage for the company. This assists the company to easily avail the demand for its
products by minor marketing efforts.
Technological Factor: It emphasizes on level of infrastructure, research and development,
technology, access to newest technology, automation, data connectivity, internet
infrastructure and penetration, and innovation prevailing in the country (Nandonde, 2019).
The New Zealand attains fine degree of technology and therefore the company is engaged in
production of ines and it is not highly dependent on the technology. The company is availing
high profit on a regular basis and it will assist in easily availing the use of latest technology
(it has adequate financial position).
Porter’s Five Forces
Porter’s Five Force is a business analysis model. It enables the company to understand the
forces that shape competition in the industry (Kanakulya & Jinzhao, 2017). It is highly useful
tool to determine the strategic position of an organization. It will provide key information to

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company about business and assist in developing plan and framing strategies in response to
the information (Tavitiyaman, Qu, & Zhang, 2011). It takes into account five forces and it
includes Industry rivalry, customer’s bargaining power, and supplier’s bargaining power,
threat of substitution and threat from new entrant (Magretta, 2011). Therefore, Pohutu
Company must develop the use of Porter’s Five Force Model.
1. Industry Rivalry: It focuses on number of player and level of competition prevailing
in the industry (Burns & Dewhurst, 2016). The Pohutu Company is offering products
since 1999 and it has high goodwill and reputation in the market. It offers high quality
wines at reasonable prices. Additionally, it is the only producer of ‘Sparkling white
wine Asti Spumante’.
2. Supplier’s bargaining power: It refers to the power attained by the suppliers to drive
up/down the price of raw material (Rothaermel, 2016). ‘Asti’ is the most significant
supplier and therefore it attains strong bargaining power.
1. Customer’s bargaining power: It considers the power to increase and decrease the
price of the commodity (Pan, 2013). The company offers wide variety of products
including wines, beverages, and light food. There are large numbers of customers and
Pohutu is one among the top companies. It has a strong customer base from the
international market as well. Therefore, the customer attains lo power to drive down
the price of the wines.
2. Threat of substitution: This threat mainly arises when are able to easily find a
substitute product of higher quality at attractive prices (Huggins & Izushi, 2011).
There are many other companies offering similar services to the customers but these
companies’ charges entry fees. Therefore, they are not offering services at attractive
prices. Therefore, Pohutu Company attains lo threat of substitution as it offers quality
products and offers free entry to its customers.
3. Threat of new entrant: It is the threat generated from the entry of ne firm in the
industry (Jurevicius, 2013). The Pohutu Company has high goodwill and reputation in
the market. Additionally, it is trustworthy as it is offering products for long years and
it attains strong position and high market share. Thus, Pohutu Company attains lo
threat from the new entrant.

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Decision making
The tourists from Australia, China and many other countries were showing positive response
towards Pohutu wines. Additionally, it attains a strong demand for its wines in domestic
market. Therefore, Pohutu Company should opt for decentralized decision making.
It should recruit employees from international market as it will enable the company to gain
better knowledge about their taste and preferences. It should give prior attention to their ideas
and suggestions. It will assist in fulfill their demand to a higher level and it will offer high
number of benefits to the company and it includes high recognition in global market, strong
customer base, rise in annual financial earnings, and minimize competition in domestic
market.
Core Values
Values are the guiding principles enables in determining right and wrong. An organization
relies on these beliefs to conduct business operations. It allows managing the internal and
external affairs and maintaining relationship with the customers (Kahneman & Tversky,
2013). Pohutu Company aims to offer quality experience to its customer regardless of their
purpose and its core values are as follows:
Excellence: It is the quality of ‘being excellent’. The company will devote efforts to maintain
the quality standards of its beers. The company will strictly avoid the usage of low quality
material to develop high quality beers. It will enable the company to retain existing customer
and attract potential users. Adhering to excellence as a business value will offers multiple
benefits to the organization. It will assist in enhancing innovation, and idea generation.
Offering innovative product will assist the company to maintain customer base and increase
their satisfaction level. It will minimize the company’s competition in the external market. It
will assist in improving efficiency and effectiveness and it will also contribute to product
reliability. It will also leads to organizational growth of Pohutu Wines. This will provides
multiple benefits to the company as it will assist in company to improve employee retention.
This is because company will be able to offer excellent services to its employees and it
includes better pay, performance base incentives and timely payment. It will offer
performance based incentives and it will assist the company to raise the employee motivation
to perform more effectively and efficiently to gain these incentives. It will aid in gaining
quality performance from its employees. This in turn, will enable the organization to offer

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high quality services to its high number of customers. It will aid in improving its relation with
the customers and retaining them. Offering quality products and high services assist the
company to gain positive word of mouth and positive feedback from its customers. This will
raise the company’s reputation in the market and it will find an ease in attracting customers
from domestic and international market. Thus, Pohutu Company should lay high attention in
adhering to its value of being excellent to develop positive relation with its customers and
employees.
Integrity and Honesty: It is one of a basic core value than an organization must demonstrate.
A business organization should be honest in its work process. It will allow the company to
easily gain the trust of its employees. It should be trustworthy, loyal, and fair to its human
resource (Bauman, 2013). It should recruit employees from distinct cultural background as it
cultural diversity promotes innovation, and creativity in the organization. It will assist in
fulfilling its corporate social responsibility towards the society and assisting the Maori
community. It will offer perks and benefits without any biasness and to maintain integrity, it
will conduct fun activities in the organization. It will assist in raising the collaboration and
interaction of culturally diverse workforce with other employees. This will enable the
company to develop harmonious work environment. This will benefit in raising satisfied
employees and gaining quality performance. It will enable in raising reputation in the market.
This will directly help the organization in attracting large number of customers. It should
fulfill the claims based on its wines. It will aid in improving the trust level of its customers.
This will give rise to positive word of mouth from the employees and customers. Therefore,
the company will find and ease in maintaining better relation with the customers.
Socially responsible practices: These activities aim to benefit the individuals, community,
and environment. The company will rely on sponsorship, grants, and corporate volunteering
(Skudiene & Auruskeviciene, 2012). To adhere to its value, the company will offer grants to
the society for a social cause prevailing in the society (Ahmad, Amran, & Halim, 2012). This
will assist the company to seek employee support and it will develop company’s positive
image among the employees. Investing financial resources and efforts towards the uplifement
of the society assist the company in increasing its goodwill among the customers. Therefore,
it will aid in easily attracting domestic customers towards its products and services. Thus, its
value allows the company to maintain positive relation with the customers and maintain its
employee motivation and morale to work for the company.

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Sustainable Practices: The Company should initiate efforts to conduct sustainable practices.
The company will minimize the carbon footprints and initiate the use of ‘hybrid trucks’ for
the fulfillment of value. It will assist the company to fulfill its corporate social responsibility
towards the society and environment. Initiating these practices will develop a driving force
among the employees to help the organization to fulfill its sustainability goals. This will
develop a company’s positive image on customers (Evans, McMeekin, & Southerton, 2012).
Additionally, it can also opt for recycling it must motivate the employee to lay high focus on
minimizing the waste material and undertaking efforts to reuse and recycle the products
(Meléndez, et al., 2014).
Conclusion
The report summarizes the business analysis of Pohutu Company. From the above discussion,
it is acknowledged that Pohutu Company is a recognized company offering multiple products
including beer, light meal, and beverages. From the swot analysis, it is analyzed that Pohutu
Company experiences high number of strengths, and opportunities but low weaknesses and
threats. It attains strengths based on high business reputation, multiple product line, tourist
attraction, higher consumption, and attractive location. Their weakness includes sales limited
to three main centres, limited target market and capacity. From the Limited target market
Pestle framework, it is analysed that company experiences high benefit from the social
factors prevailing in the market. Considering industry analysis, it is realized that company
attains low threat of substitution and from new entrant. Additionally, it faces low competition
as it has high reputation, and strong customer base. It is assessed that company should opt for
decentralized decision making. Its key values include excellence, integrity and honesty,
socially responsible practices, and sustainable practices. Hence, Pohutu Company is
experiencing fine business environment.

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