Strategic Analysis of True Fruit: Germany Smoothie Market Expansion

This report presents a strategic analysis of True Fruit, a Germany-based smoothie company, examining its market position and potential for expansion. The analysis employs various frameworks, including PESTLE and SWOT analyses, to assess the external and internal environments, respectively. Porter's Five Forces is used to evaluate the competitive landscape of the industry. The report also identifies the industry lifecycle stage and potential modes of market entry. Furthermore, a rank analysis is performed to evaluate various countries based on factors like GDP per capita and consumer expenditure. The report concludes with an assessment of the attractiveness of the industry and identifies the key stakeholders involved. The analysis covers key problems and opportunities, the company's strengths and weaknesses, and the threats it faces. The report also covers the modes of entry for the company to enter the market with their pros and cons.

Running head: STRATEGIC ANALYSIS OF TRUE FRUIT
STRATEGIC ANALYSIS OF TRUE FRUIT
Name of the student:
Name of the university:
Authors note:

1STRATEGIC ANALYSIS OF TRUE FRUIT
Executive summary
The report focus on a case study of a smoothie based industry named as True Fruit. This is a
Germany based country and is a partnership based industry. Pestle analysis, SWOT analysis and
rank score analysis is being based here based on the information in the case study. Analysis
reports and a clear picture of the company format are being depicted here.

2STRATEGIC ANALYSIS OF TRUE FRUIT
Table of Contents
Who is the central stake holder in the case?....................................................................................2
When is the case taking place and are there any considerations of note because of when it is
taking place?....................................................................................................................................3
What is the key problem and opportunity that is being considered in the case?.............................3
Porter’s Five Force analyses:...........................................................................................................3
Name and description of the industry:.........................................................................................3
The analysis:................................................................................................................................4
What stages of the industry lifecycle is the industry in? Justify your answer.................................6
What conclusion can you make based on the analysis? Is it an attractive industry?.......................7
SWOT analysis:...............................................................................................................................7
Rank analysis:..................................................................................................................................7
References......................................................................................................................................11

3STRATEGIC ANALYSIS OF TRUE FRUIT
Who is the central stake holder in the case?
Ans: The central stake holders or people who will be mostly affected by this company in the
said case will be its employees, its share holders, banks that are related to it, its consumers, its
advertising medias in the proposed countries.
When is the case taking place and are there any considerations of note because of when it is
taking place?
Ans: The case or expansion will take place in the second half of 2017. This is a period when a
new financial year starts and an old financial year ends (Thourani et al. 2016). Hence, the
company can form a clear idea regarding their financial condition and of their competitors as
well. This will help in economic planning. Again, the period is favorable for fruit growth. Hence,
they will have a plenty of raw material supply facility.
What is the key problem and opportunity that is being considered in the case?
Ans: The key problems will be listed like threats of entry, buyer’s power, supplier’s power.
Opportunities are like increased health drink market and few of its products are abundant in
sugar quantity.
Porter’s Five Force analyses:
Name and description of the industry:
The industry name is True Fruit. It is a Germany based smoothie making industry which has
introduced smoothies in German market and is a partnership based industry with three of the
partners named Koster, Knauf and Lecloux. The company’s valuation is US$40 million

4STRATEGIC ANALYSIS OF TRUE FRUIT
approximately as was noted in 2016. The industry has an international presence in the countries
like Austria and Switzerland.

5STRATEGIC ANALYSIS OF TRUE FRUIT
The analysis:
Force Assessment
(H,M,L)
Rationale
(Justify your assessment with
facts from the cases)
Threat of entry Low The existence of barriers like
patents and right were quite low
and government policies and
investment capital sources were
easily facilitated (Song et al.
2017). There was a little bit of
cost disadvantages and the
absolute cost was high. Product
differentiation was present on the
point of health product.
Switching costs are low but
expectation retaliation was high.
Industry profitability was high as
well.
Industry Rivalry Medium True fruit is quite active
regarding marketing innovations
and emphasize on advertising

6STRATEGIC ANALYSIS OF TRUE FRUIT
and customer communication
(Mkude, and Wimmer 2015).
The company has strong
competitive strategies and the
uniqueness advantage. The
degree of transparency is quite
high.
Threats of substitute High There is a propensity of the
buyers for substitutes and there
are price efficient substitutes
available in the market. Hence
switching costs are quite low for
a buyer. Again there are close
substitutes for these products like
fruit and vegetable juices and
they are considered as better
health products. There, there is a
ease of substitution.
Buyer power High Buyer and seller concentration
ratio is quite high and equal here
Product information is quite
available. Uniqueness advantages
are available for few products.
There is a bargaining leverage for
high cost and the switching costs
are low at times. Substitute

7STRATEGIC ANALYSIS OF TRUE FRUIT
products are easily available in
the market. Customer value is
low because of being sugar based
product.
Suppliers power There is a moderate degree of
differentiation among the inputs.
Impact of inputs in cost margin
of the finished product is high
(Molnár and Lendvay 2016).
What stages of the industry lifecycle is the industry in? Justify your answer.
Ans: True Fruit is in the innovation phase of industry life cycle. The company is working for its
market making and market expansion. It is innovating its products according to the market
demand.

8STRATEGIC ANALYSIS OF TRUE FRUIT
What conclusion can you make based on the analysis? Is it an attractive industry?
Ans: It can be concluded from the analysis that it is an attractive industry with a market presence
(Guo and Fraser 2014).
It is a growing industry.
SWOT analysis:
Strengths Staff, Board members, Location, Equipment, Fund
agencies, Employed systems, Reputation in the
community, Building blocks and learning from
success (Bohari, Hin and Fuad 2017).
Weaknesses Target population, Program they run.
Opportunities Future trend, Local economy, Foundation funding
source, Local events, national events (Bull et al.
2016).
Threats International economy, Age changes, Demographic
changes, Gender changes, Physical environment.
Rank analysis:
Rank Divisions:
Criterion Divisions Ranks
GDP per capita 2032.5-19097.875 1
19.97.875-36163.25 2

9STRATEGIC ANALYSIS OF TRUE FRUIT
36163.25-53228.625 3
53228.625-70294 4
Consumer expenditure fruits
per capita
8-100.75 1
100.75-193.5 2
193.5-286.25 3
286.25-379 4
Disposable income per capita 1,566-9,834.5 1
9,834.5-18,103 2
18,103-26,371.5 3
26,371.5-34,640 4
Rank Analysis:
Criteria 1 Criteria 2 Criteria 3 Total Weights
of ease of
business
ranking
Weight Weight Weight Weight
Country Raw
Score
Weight
ed
Score
Raw
Score
Weig
hted
Score
Raw
Score
Weigh
ted
Score
Raw
Score
Weig
hted
Score
Belarus 1 37 1 37 1 37 3 111 37
Belgium 3 126 2 84 3 126 8 336 42
Bosnia-
Herzegovina
1 81 1 81 1 81 3 243 81
Bulgaria 1 39 1 39 1 39 3 117 39

10STRATEGIC ANALYSIS OF TRUE FRUIT
Croatia 1 43 1 43 1 43 3 129 43
Czech Republic 1 27 1 27 1 27 3 81 27
Denmark 3 9 2 6 3 9 8 24 3
Estonia 1 12 2 24 2 24 5 60 12
Finland 3 39 3 39 3 39 9 117 13
France 3 87 2 56 3 87 8 230 29
Georgia 1 16 1 16 1 16 3 48 16
Greece 1 61 1 61 2 124 4 246 61
Hungary 1 41 2 82 1 41 4 164 41
Italy 2 100 2 100 3 150 7 350 50
Latvia 1 14 1 14 1 14 3 42 14
Lithuania 1 21 1 21 1 21 3 63 21
Macedonia 1 10 1 10 1 10 3 30 10
Montenegro 1 51 1 51 1 51 3 153 51
Netherland 3 84 2 56 3 84 8 224 28
Norway 4 24 4 24 4 24 12 72 6
Poland 1 24 1 24 1 24 3 72 24
Portugal 2 50 1 25 2 50 5 125 25
Romania 1 36 1 36 1 36 3 108 36
Russia 1 40 1 40 1 40 3 120 40
Serbia 1 47 1 47 1 47 3 141 47
Slovakia 1 33 1 33 1 33 3 99 33
Slovenia 2 60 2 60 2 60 6 180 30
Spain 2 64 2 64 2 64 6 192 32

11STRATEGIC ANALYSIS OF TRUE FRUIT
Sweden 4 36 3 27 3 27 10 90 9
Turkey 1 69 1 69 1 69 3 207 69
Ukraine 1 80 1 80 1 80 3 240 80
United
Kingdom
3 21 2 14 3 21 8 56 7
What are the modes of entry can True Fruits use to enter the market? What are the pros
and cons of each?
Modes of entry Pros Cons
Franchising Low risk of business failure,
Products will have an established
market share, Using a recognized
brand name, Franchisor’s support
like training, business setup, No
prior experience is needed,
Ability to compete with a big
business, Exclusive rights in the
territory, Established relationship
with suppliers (Li et al. 2016).
Costs may be higher, Restrictions
due to agreement, Intrusive
franchise monitoring, Franchisor
may go out of business, Problem
in mass sell, Profits are shared
with the franchisor, Restriction in
the introduction of changes due
to inflexible franchise.
Joint ventures New insight, new expertise,
temporarily advantages, share in
risks and costs, flexibility,
chances of exit, more likely to
succeed, building networks,
Vague object, less flexibility, no
equal involvement, cash
imbalance, cultural clash, less
opportunities outside. Efforts in
research and planning, lack of