MGT5STR: Strategic Management Report on Plants Plus, Australia

This report provides a strategic analysis of Plants Plus, an Australian agribusiness operating in the horticulture sector. It begins with an executive summary and introduction, outlining the company's operations and its role in the market. The report then delves into a PESTLE analysis, examining the political, economic, social, technological, environmental, and legal factors influencing Plants Plus. Following this, Porter's five forces are applied to assess the competitive landscape. The internal environment is then analyzed, focusing on the company's resources, capabilities, core competencies, and competitive advantages. The report concludes with recommendations for the future strategic direction of Plants Plus, aiming to enhance its market position and profitability. The analysis is based on the assignment brief provided, adhering to the required structure and referencing guidelines.

Strategic Management

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Executive summary
The aim of the report is to define the concept of the strategic management through the
business operations of the Plants Plus. The strategic management is the continual planning,
monitoring, analysis and assessment of everything which is required for the organization’s
success. It is all about the management of the organization’s resources for attaining the
organizational goals and objectives. This report defines the current state affairs of the Plants
Plus. He discussion has been done on the pestle analysis, porter’s five forces and resources,
capabilities, core competencies and competitive advantage.
At the end it can be concluded Plants Plus can use cost leadership strategy to upturn market
share by charging the lower prices. The company can still make a rational profit on each sale
even after reducing the costs.

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Contents
Executive summary...............................................................................................................................1
Introduction...........................................................................................................................................3
Aim........................................................................................................................................................3
Discussion.............................................................................................................................................3
Pestle analysis....................................................................................................................................3
Porter’s five forces............................................................................................................................5
Resources, capabilities, core competencies and competitive advantages...........................................7
Conclusion.............................................................................................................................................8
Recommendations.................................................................................................................................9
References...........................................................................................................................................10

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Introduction
Plants Plus operates on the behalf of the individually owned garden centres. It is an
Australian and buying group. Each member of the nursery is liable to pay an annual fee for
the membership and get to trade under the banner of Plants Plus. The members sell branded
garden products and participate in the purchasing and marketing schemes. Plants Plus is a
specialist for the Australian native tube stock and young plants. The company stocks over
200 varieties of the tube stock plants arranged for the garden planting or landscaping needs.
The most popular varieties of the Plants Plus are grevilleas, Callistemon, innate grasses, and
rainforest plants. The Koala food trees are also stocked by the company with regional and
seasonal preferences. The plants provided by the company enhance the look of the garden
with high-quality landscaping services.
The members of the company in the nurseries sell a range of the plants, gardening equipment,
fertilizers, and the associated garden products. Plant Plus offers a loyalty scheme known as
Plants Plus loyalty club. The members are provided with the quarterly magazine, membership
card and discount vouchers for the annual fee charged. These discount vouchers can be
redeemed at any nursery. Plants Plus is having seventy-five member nurseries across
Australia.
Aim
The aim of the report is to define the business operations of the Plants Plus. The business
units of the organization are identified along with the importance of these business units. The
external and internal environment of the organization is analyzed. Al last the
recommendations are also made for the future strategic direction of the organization.
Discussion
Pestle analysis
Political factors: Australia has an established economy and has appealed to various business
organizations. The country is having translucent and efficient regulatory requirements with
proactive reforms. Australia provides appropriate conditions to the businesses for growth and
investment (Findlay and Garnaut, 2017). The financial incentives are also provided by the

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Australian government in order to develop the markets. The credit insurance is also provided
in order to participate in international projects.
Economic factors: The country is having deregulated and open economy as a result which is
capable of attracting more entrants. Australia is even not affected by the financial crisis
which represents good opportunities for businesses like Plants Plus. The reforms introduced
in the country has promoted to economic stability. The business investments in Australia are
picking up the economy gradually (Duong, et al. 2019).
Social factors: The country is having a multi-cultural society. The employees working in
organizations are treated equally. Australia has even maintained a high standard of the people
living in society. The initial population of the country was made up of the Aborigines and
British people. The heavy migration from Europe in Australia created a greater workforce.
The reforms initiated by the local government leaders to an increase in the workforce and an
increase in population will assist organizations to start their business with an adequate
workforce.
Technological factors: The labor in Australia is skilled with the new technology and the
advancements can be effortlessly commenced in the nation. The upgraded technology usedto
lead to the enhancement of the quality products and also results in reducing costs. The
technology advancement has enhanced Australia’s economy and the country lead in
exporting and importing of the goods worldwide. The country even accounts for the greatest
expenditure on research and development (Cox, 2018.
Legal factors: The legal factors comprise the following:
Business structure: The legal structure of the organization should be known before initiating
business. It assists in deciding the liability of a business.
Business license: The business license depends on the requirement needed to have certain
authorizations and licenses. At least tax registration and a business license are required in
order to conduct operations (Wiesner, Chadee, and Best, 2018).
Zoning: A zone is required to know in which the business is to be operated. An area should
be selected which proves valuable for the business and its growth.

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Non-disclosure agreements: Plants Plus is required to sign disclosure agreement while
contracting with the outside countries. The disclosure is signed in order to secure the idea of
business.
Environmental factors: The licenses are necessitated to discharge waste and removal of the
waste composites. The approvals are also required before using the land for a certain type of
plantation. It is essential that the material used by the company for the growth of the plants is
to be more natural. The waste produced should be recycled by the organization. It should not
harm the organization. It is an efficient step to control pollution in the water, air, and land
(Adapa, 2018). Australia faces certain challenges like it is the driest inhabited continent on
the earth. Climate change is also a great challenge here (Burton, 2016).
Porter’s five forces
Porter’s five force is a strategy framework includes deliberate decision along with
investigating the current opposition. Porter’s five forces focus on the way Plant Plus can
build a supportable modest advantage in the horticulture industry. The company can not only
use Porter’s five forces for developing strategic position but also can discover gainful
opportunities in the entire horticulture and agriculture sector.
Threats of new entrants: The new applicants in the horticultural sector conveys innovation,
unique traditions of doing things put force on the Plants Plus through decreasing costs, lower
pricing strategy and offering new value proposals to the customers. Plants Plus tackles all of
these challenges and constructs actual barriers in order to protect the competitive advantage
(Gilding, Gregory, and Cosson, 2015).
Plants plus can manage the threat of the new applicants by revolutionizing products and
services. The innovations attract new customers and give old clients a prospect to buy
products of Plants Plus. Constructing economies of scale can assist in dropping the fixed cost
per unit. The company can even build capacities by investing money on research and
development. The new applicants are less anticipated to enter a vigorous industry where the
reputable players like Plants Plus keep signifying the standards constantly. It considerably
condenses the space of the unexpected revenues for the new firms consequently discourage
new players in the horticulture industry (Underhill and Rimmer, 2017).
Bargaining power of the suppliers: Most companies in the horticulture and agriculture
industry purchase their raw material from several suppliers. The suppliers in the foremost

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position reduce the margins the Plants Plus can earn in the market. The dominant suppliers in
the horticulture and agriculture industry use their assigning power for extracting higher prices
from the firms in the horticulture sector. The higher bargaining power of the suppliers lowers
the overall profitability of plants and the equipment.
Plants Plus can hold the bargaining power of the supplies by building a proficient supply
chain with multiple suppliers (Sudmeyer, Bennett, and Strawbridge, 2016).
Bargaining power of the buyers: The buyers are usually demanding a lot. They are likely to
buy the products at the minimum prices possible. It puts pressure on the Plants Plus’
productivity in the long run. The slighter and influential customer base of the company is,
restricted the higher bargaining power of the customers is. It also upsurges the ability of the
customers to pursue discounts and offers.
A large base of the customers assists the company in reducing the bargaining power of the
buyers along with the opportunity to rationalize sales and the production process.
The threat of substitute products: When another company meets the needs of the
customers in unique ways, the profitability of the company suffers. The threat of the
substitute products is high like the products offered by the Ball Australia Pty Ltd. the
substitute product offer value proposition which is quite dissimilar from the assistances of the
Plants Plus (Shry and Reiley, 2016).
Plants Plus can grab the threat of the substitute products by being service oriented than just
being the product oriented. It can also be made possible by switching cost for the customers.
Rivalry among the existing competitors: Plants Plus works in the competitive industry.
This competition put force on the company in the long term profitability. The company can
tackle this challenge by building a sustainable differentiation and scale in order to compete
better. Plants Plus can even collaborate with the competitors to increase the market size than
just competing with the smaller market.
Resources, capabilities, core competencies and competitive advantages
Plants Plus requires resources and the required are physical and financial resources. The
criteria for the selection of the products also rely on these resources. The physical resources
comprise the following:

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Land: Land is the most basic resource for Plants Plus. The area available is considered before
planning the nursery along with the products. The soil sample testing is done in order to
avoid problematic and unmanageable soils. The soil for the nursery is required to be well
drained, absorbent and light to medium in the texture. The soil needed to be 6.5-7.5. The
substantial, sandy, black cotton soil, ill-drained and the soil having more than 8 Ph are
severely avoided (Gill, et al. 2017).
Irrigation facilities: The land with an abundant supply of irrigation is the most significant
basic resource. The quality of the irrigation water is required to be maintaining at the
recommended level.
Labour: The degree of the mechanization is deliberated before estimation of the labor
requisite. Both skilled and unskilled labor is essential for tasks like grafting, spraying,
maturing, dusting, spraying, clipping, training and more (Reilly, et al. 2018).
Electricity: Along with man power, electricity is also important. Load flaking is the minimum
possibility. The electricity is needed for the spraying, water pumps, dusting, and several other
operations.
Road and transport: The nursery is required to have good transportation facilities. Such
facilities should be ensured for the timely importing of the stock and other material for the
maintenance of the plants.
Mother plants: The mother plants are a significant factor for the successful garden center. The
distinct planting of the mother plants is necessary. The pesticides and fungicides are used for
the control of the pests and diseases (Meyer, et al. 2016).
Propagation structures: These are used for the production and multiplication of the grafts. The
propagation structure makes possible hardening of the plants.
Hedges and compound: The pointed plants like chilar, agave, and golden duranta are used as
hedges in the garden center (Rendell, 2017).
Store and office: The garden equipment, raw materials, manures, insecticides, fertilizers,
fungicides and more are deposited in store house (Newsome and Sheridan, 2018).

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The financial resources required are bank loans, financial assistance from the government and
nationalized banks. The terms and conditions of the bank differ from bank to bank and state
to state.
Plants Plus has capabilities in offering customers high-quality succulents and groundcovers,
grown in the most environmentally sound and planet friendly conditions. The company
delivers to the customers with the greatest standards of reliable services. Plants Plus has core
competencies in the form of highest environmental and safety standards which has a role in
sustaining the industry. Plants Plus has gained a competitive advantage as a greenhouse
capacity and has quality control over the basic stock (Abuzar, et al. 2019). The company pays
attention to the quality of the soil in which the plants are grown.
Conclusion
The aim of the report was to describe the business operations of the Plants Plus. In order to
describe the operations, the discussion has been done. The discussion includes the pestle
analysis, Porter’s five resources along with the resources, capabilities, core competencies and
competitive advantage. The political condition of Australia is stable enough to conduct
business operations. The local government assists the businesses in conducting operations on
both the local and international level. The soil is also nurtured which promotes the growth of
the plants. Plants plus can manage the threat of the new entrants by innovating products and
services. The company has even gained a competitive advantage by offering the most
attractive plants at the nominal prices. The modern equipment provided by the company has
also appealed to the customers.
Recommendations
Plants Plus is recommended to use a cost leadership strategy as a part of Porter’s generic
strategies. It is a way of gaining competitive advantage. This strategy helps in attaining the
sales which take away from the competitors. Plants plus can use a cost leadership strategy in
two ways:
 The company can upsurge profits by dropping costs along with indicting industry
average prices.

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 Plants Plus can even upsurge market share by charging the lower prices. The company
can still make a reasonable profit on each sale even after reducing the costs.
The can attain and sustain the number one position by selecting the cost leadership route.
Plants Plus needed to spend in the technology which can bring the costs down.

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References
Abuzar, M., Whitfield, D., McAllister, A. and Sheffield, K., 2019. Application of ET-NDVI-
relationship approach and soil-water-balance modelling for the monitoring of irrigation
performance of treed horticulture crops in a key fruit-growing district of
Australia. International Journal of Remote Sensing, pp.1-19.
Adapa, S., 2018. Factors influencing consumption and anti-consumption of recycled water:
Evidence from Australia. Journal of Cleaner Production, 201, pp.624-635.
Burton, L., 2016, January. Climate change: risks and opportunities in nursery production©.
In Proceedings of the 2016 Annual Meeting of the International Plant Propagators' Society
1174 (pp. 5-12).
Cox, K., 2018. One Eco step: Small, sustainable changes can add up to big gains for our
environment. Wildlife Australia, 55(3), p.21.
Duong, T.T., Brewer, T.D., Luck, J. and Zander, K.K., 2019. Farmers’ assessment of plant
biosecurity risk management strategies and influencing factors: A study of smallholder
farmers in Australia. Outlook on Agriculture, p.0030727019829754.
Findlay, C. and Garnaut, R., 2017. The political economy of manufacturing protection:
Experiences of ASEAN and Australia. Routledge.
Gilding, M., Gregory, S. and Cosson, B., 2015. Motives and outcomes in family business
succession planning. Entrepreneurship Theory and Practice, 39(2), pp.299-312.
Gill, B., Webb, J., Stott, K., Cheng, X., Wilkinson, R. and Cossens, B., 2017. Economic,
social and resource management factors influencing groundwater trade: Evidence from
Victoria, Australia. Journal of hydrology, 550, pp.253-267.
Meyer, M.H., Needham, D., Dole, J., Trader, B., Fox, J., Conley, M., Neff, M. and Shaw, J.,
2016. Importance of horticulture and perception as a career. HortTechnology, 26(2), pp.114-
120.
Newsome, L. and Sheridan, A., 2018. Taking Stock: Identifying the Growing Agricultural
Service Sector in Australia. Australasian Agribusiness Review, 26(1673-2019-707), p.1.

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Reilly, A., Howe, J., van den Broek, D. and Wright, C.F., 2018. Working holiday makers in
Australian horticulture: Labour market effect, exploitation and avenues for reform. Griffith
Law Review, 27(1), pp.99-130.
Rendell, R., 2017. Agriculture in Northern Victoria (Australia) Over the Past 20–30 Years:
Factors Influencing Decision Making by Individual Farmers. In Decision Making in Water
Resources Policy and Management (pp. 59-84). Academic Press.
Shry, C. and Reiley, E., 2016. Introductory horticulture. Cengage Learning.
Sudmeyer, R.A., Bennett, A. and Strawbridge, M., 2016. Climate-ready agriculture: a
situation statement for Western Australia.
Underhill, E. and Rimmer, M., 2017. Private governance, state regulation and employment
standards: how political factors shape their nexus in Australian horticulture. Relations
Industrielles/Industrial Relations, 72(1), pp.33-55.
Wiesner, R., Chadee, D. and Best, P., 2018. Managing change toward environmental
sustainability: A conceptual model in small and medium enterprises. Organization &
Environment, 31(2), pp.152-177.