Strategic Management Report: Californian Nut Industry Theft Analysis

This report delves into the strategic management challenges faced by the Californian nut industry, primarily focusing on the issue of widespread theft within the supply chain. It begins with an introduction to strategic management and its importance, followed by a background analysis of the theft problem, which has resulted in significant financial losses. The report then applies PESTLE and Five Forces analyses to evaluate the external and competitive environments affecting the industry. It identifies key political, economic, social, and technological factors (PESTLE), as well as the competitive dynamics within the industry. The report also identifies five organizations involved in the industry. Finally, the report concludes with recommendations for addressing the theft problem and enhancing overall organizational performance within the Californian nut industry.

Running Head: Strategic Management
Strategic Management

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Table of Contents
Introduction......................................................................................................................................2
Background......................................................................................................................................3
PESTLE Analysis............................................................................................................................4
Five Forces Analysis........................................................................................................................5
Identification of Five organizations.................................................................................................7
Conclusion.......................................................................................................................................8
Recommendations............................................................................................................................8
References........................................................................................................................................9

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Introduction
Strategic Management is the process of identifying and developing certain techniques, strategies,
and policies in order to implement those in the workplace for attaining the desired goals and the
objectives of the organization. Under the strategic management process, certain crucial
components are involved i.e. scheduling, managing, monitoring, organizing and determining the
operational structure of an organization. This process is considered as the most suitable
technique in order to attain the desired goals and the objectives of the organization. Under this
process, appropriate standards and rules are meant to be set so that rest of the organizational
members could put their efforts in the same manner for reaching towards those targets. Setting
appropriate strategies in terms of strategic management process has the capability to gain the
adequate competitive advantage. Under this report, strategies will be developed for Californian
nut producing company in order to remove the issues such as wide-scale, sophisticated theft in
supply chain management. Adequate techniques will be implemented for reducing the impact of
these issues. Further, various recommendations will be given on the basis of strategies used for
enhancing the organizational performance.

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Background
This report will evaluate the reasons and the resolutions for the issues faced by the Californian
nut manufacturing industry. The major issue is sophisticated theft which has been occurring over
a long period in the nut manufacturing company. While determining, it was observed that theft
was found at various stages of supply chain management. It is observed that the crime rings are
majorly found in agricultural industry. To resolve this concern, many firms involved in this
industry along with the government authorities are developing some policies through which issue
of heavy losses faced by the organizations could be resolved. In order to this, organizations have
implemented the hi-tech mechanisms through which stealing culprits could be identified. To
make the things easier, hackers were capable enough to hack the systems of nuts producing
companies. Hackers were used to make false shipping papers in order to show themselves as
legitimate truckers and using this technique, they were easily able to load nuts of high prices
such as almonds walnuts costing $150, 000 and other products worth $500, 000. Nuts industry
realises the theft of nuts when trucks did not reach to the desired locations where they should be
reached. Apart from the desired locations, those were used to be reached at the different
locations of Europe and Asia where truck hackers were easily able to sell the stolen nuts. After
analysing the theft, it was observed that approximately $7.6 million’s loss was faced by the
whole industry in all four years (Ozimek & Stone, 2011).
As per the research conducted by the US Department of agriculture, California is the largest
producer of nuts such as almonds, walnuts, and pistachios, etc. amongst all countries. In 2014,
the value of nuts produced within the Californian region was $9.3 billion and amongst them, $5.9
billion were almonds only. General Manager of Caro nut Co. said that "It has made my life

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miserable”. This was said because their business entity involved in the same industry was
victimised for six times in the last year. Due to this, they faced a loss of $1.2 billion in that year.
California also used to import the nuts such as cashews from other countries. Africa and Vietnam
are the top exporters of cashews and they used to sell roasted cashews while they are packed in
Fresno. Criminals chose this industry due to huge profits available in this industry. Nuts
produced in the Californian region are of pure quality, hence; they have huge price in the global
market. This reason was evaluated by the Dan Brayant as he was appointed to the position of
special agent to resolve the issues such as violation of rules and organization of crime programs
in FBI Sacramento office (Parnell, 2011).

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PESTLE Analysis
PESTLE analysis is the most appropriate factor for analysing the external factors available in the
environment of the target market. This analysis helps the organization or the industry to evaluate
the impact of the certain external factors on the organizational working procedures. In the given
scenario, PEST analysis will be conducted for analysing the external factors impacting the
Californian nuts industry.
 Political: The impact of political policies has a great impact on the performance of the
nut industry of California. The components of the political policies and the strategies play
vital role in stimulating the concerned sector. Policies, rules, regulations and the norms
concerned with the particular industry are the major components of the political factor
which could create impact over the business. These are majorly known for stimulating the
particular industry. As per the research conducted for analysing the impact of political
factors, it was observed that California has a democratic political environment which has
very effective and efficient rules and laws in relevance with the governing authorities
which could create a great impact on the Californian Nuts industry (Ryan, 2016).
 Economic: Under the economic factor of external environmental analysis, it was
observed that various variables are involved in the economic conditions of the specific
area in which nuts entities are performing their activities. The region has the GDP of
$16.760 trillion which is quite high amongst all countries of the globe. And with this, it
can be observed that the California is one of the most developed regions across the globe
and it also provides competitive advantage on various grounds amongst the various
countries of the globe (Sun, 2010).

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 Social: As per the social factor, California is the smallest region in terms of population
and due to this, lack of labour issue could be faced by the California in future. This will
act as the major factor which could reduce the productivity of the region as well as it will
also affect the economic conditions. Human resource is the major integral asset for any
organization, region, and country and lack of this factor could lead to various issues at the
workplace.
 Technology: California is known for its technological skills as they have adopted and
invented various types of technologies in order to enhance the productivity of their
region. Apart from this, innovation is another major factor present in the Californian
market and due to this factor, huge growth in the economy could be attained (Teece,
2010).

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Five Forces Analysis
The major nut producing trees are situated in California, US. California is the western state of
US stretches with the Mexican border and this state is majorly known for producing various
types of nuts such as almonds, cashews, walnuts, etc. Since a period of time, California is facing
severe issues such as missing of approximately 35 loaded trucks with nuts whose actual value is
nearby to $10 million. Due to huge investment and high-cost involvement in the Californian nut
industry, it has been a favourable choice for criminals (Turker, 2013).
Following are certain components of Porter’s five forces analysis:
 The threat of New Entrants: Nut industry is quite profitable industry but it also requires
an adequate amount of investment. Along with the investment, huge area of land,
machinery, trees, working capital, etc. factors are also required by the Californian nuts
industry. Hence, the organizations will be capable enough to incur these types of huge
costs will be able to enter into the Californian market. Due to involvement of high payers
like Blue Diamond California, etc. is another threat for new entrants because they are
capable enough to make adequate pressure on the new entrants and in those conditions,
setting up goodwill and positive image in the highly competitive market is quite difficult
(Varadarajan, 2010).
 The threat of Substitutes: Threat of substitutes is not relevant to this industry because
nut industry includes walnut, almonds, cashews, etc. types of products. As these are
unique type of food products and they are also used for making certain types of food

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dishes. Hence, the chance of substitutes for Californian nuts industry is quite a weak
impact (Vogel, 2010).
 Bargaining power of suppliers: Due to high competition in the suppliers of Californian
nut industry, hence; they all have adopted various types of distribution networks and
channels. While evaluating the impact of bargaining power of suppliers in the market, it
is observed that supplier’s power will be moderate in the Californian Nut industry.
 Bargaining power of consumers: Bargaining power in relation with the consumers
varies from their nature. In other words, buyer’s power is more when they purchase large
volume of nuts while small buyers do not have sufficient powers. Due to the availability
of nuts at farms, retailers, and wholesalers, bargaining power with them does not create
huge impact over Californian nut market (Wang, Jaw & Tsai, 2012).
 Industry Rivalry: Under this force amongst the five forces defines the intensity of the
commotion level present in the industry. Nut industry of Californian market is made up
of various large companies as well as small companies too. The major source of
generating profits and revenues for these companies is exporting the nuts to the other
countries. Paramount Farms Los Angeles and Primex, Blue Diamond Growers California
are major companies of nuts industry in US market. Apart from this, growth and revenues
of these companies are affected by the recent activities involved in this industry is theft
which is being occurred from the last four years. With the effect of this, $4.6 million
losses have been faced yet and 31 cases have also been registered in this period (Werther
& Chandler, 2010).
 Resources and capabilities: Resources are the things which could help the company for
enhancing its profits and the growth and it also helps the organization to prevent its

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activities from the recent incidents such as theft. These are also known as the asset for the
organizations through which organization could raise its performance in the target
market.
 State and domestic law enforcement: Rules and regulations developed by the state and
domestic law could help the organizations present in the nut industry of the US market
from the fraudulent activities such as theft. Agencies involved under these enforcements
work for the interest of the nuts producing organizations. Tulare law enforcement is the
agency which has arrested 4 culprits with the help of Los Angeles port force.
Organizations need to develop some policies in relation with identifying the issues
present in the nut industries (Hoskisson, et. al., 2013).

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Identification of Five organizations
California Farm Bureau: This is an NPO type of organization of California involved in
working for saving the interest of farmers from such fraudulent activities. This organization also
performs to raise the living standard of the farmers. They are practicing various activities on
behalf of the farmers such as advocacy, economic services, and products, etc. to save the
interests of the farmers in the nut industry. In order to reduce the impact of these acts from the
farmer’s life, various initiatives are being taken by this organization (Huang, 2011).
Western Agriculture Processors Association: The major concern of this organization is to save
the industries from various activities such air pollution, food safety and other safety services.
They have professional staff members which are trained in order to detect the errors from the
industries of US market’s industries so that appropriate outcomes could be generated
(McWilliams & Siegel, 2011).
American Pistachio Growers: This organization is capable enough to analyse the usage of
human resources and the technologies and makes their appropriate combination so that
appropriate outcomes could be generated from the activities (Ismail, Poolton & Sharifi, 2011).
Blue Diamond: This organization is involved in the production of almonds at very large level
and in order to save the interest of the organization, they have developed various norms and the
policies through which unethical activities could be ignored (Khan, et. al., 2013).

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California Highway Patrol: With the use of technological tools, they have developed various
standards through which organizations could be able to protect themselves from the theft and
other types of unethical activities (Lindgreen & Swaen, 2010).
Conclusion
From the above discussion, it can be concluded that the California is known for producing
varieties of nuts in huge quantity. From recent years, the Californian nuts industry was facing the
severe issue of theft of the loaded nuts trucks. Due to these, the whole industry faced huge losses
and to determine various other impacts, PESTLE analysis was conducted. Along with the
PESTLE analysis, Porter’s five forces were also reviewed in order to determine the factors
present in the external environment of US market. Additionally, five organizations working
procedures were also discussed which works in order to save the industries from such fraudulent
activities.

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Recommendations
Due to high investment in the nuts industries, high revenues also exists and in order to save those
high profits and high investments, organizations need to spent a standard amount on the safety
and security policy too. This will help them to eliminate theft and other types of fraudulent
activities which reduces the productivity of the organization.

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