BSBMGT616 Research and develop strategic plan project Assessment Task 3

There has been a massive trend toward locally grown and produced foods in recent years. It has been heavily marketed toward keeping local sellers and smaller Australian producers able to compete in the saturated imported product market. Australians have embraced this change in an effort to keep jobs locally and in turn help Australia’s economy.

Additionally there has been a ten fold increase in health awareness and the importance of maintaining a health diet. This alone has led to a huge increase in people wishing to eat the “cleanest” produce. Organic foods have been sought after more increasingly.

There is still quite limited competition for specifically native bush spices, however two main competitors that specialise in only native spices include Herbies Spices.. Herbies is owned and run by John and Rosemary Hemphill who have Forty Five years experience working in the spice industry, including face-to-face lectures to groups from the general public, industrial brokering, manufacturing and marketing. Herbies is well respected and popular in both Australia and overseas markets. John Hemphill now enjoys sharing his extensive experience and knowledge with his customers at Herbie’s Spices.

Another major competitor in the the market is Indigiearth. Indigiearth is an Award Winning, 100 percent Aboriginal owned and established business, with its headquarters in Mudgee - the heart of great wine country in Central West New South Wales. They provide premium bush foods made from authentic Australian native products that are ethically sourced and sustainably harvested.

After years of workshops and corporate catering, Indigiearth was launched to the food industry and in 2012 with twenty-five premium native foods.

Demand by chefs and home cooks for on-trend, premium quality native foods has steadily increased, allowing Sharon to further develop and introduce an ever-growing range of responsibly sourced products.

Today, Indigiearth offers over two hundred products including native spices, foods, candles, diffusers and the new all-natural Skin Care range.

Whilst Herbies and Indigiearth both sell native spices neither are fully organic and neither have acquired organic certification.

Organic food companies, such as The Wild Hibiscus Flower Co, have also positioned themselves producing natural preservatives, teas and drinks made from premium Australian native flowers.

Ballemy’s Organics are an organic baby food company another interesting area of sunstantial growth. They provide recipes to their customers and even conduct training sessions and seminars on how to use the various products they have available..

Organizations have gained global recognition through partnering with international, non-governmental organizations. Bellamy’s Organics did this when partnering with the World Health Organisation. This increased their international customer base and allowed a growth in international markets.

Competitors

Competitors would include Herbies and Indigiearth.

Bellamy’s organic and Wild Hibiscus Flower Co, are organic Australian companies that dominate our organic market also.

Potential new and emerging markets

Production of the commodities in various flavours like the native herbal tea can be produced in various flavours like apple, ginger and make the flavours as natural as possible

China has steadily become a leading country in need of organic foods.

This could increase the range of products available in trade chains. Currently the most widely practiced trade chains is with food. Primarily dairy products, eggs, bread and vegetables of organic origin.

Potential customers however, would also be interested in organic meat and fruit.

Supply of organic cosmetics, spa products, herbs and herbal products could be extended in connection with the growing interest to green and eco-friendly way of life.

Offering more organic products in other types of retail outlets (not sale), such as hotels and restaurants.

Other relevant factors.

Contraction of consumption due to poor availability of organic products. A significant part of potential consumers argue that they do not know where to buy these products or that they have never seen them sold in stores. Limited distribution channels are likely to cause the consumption to remain at a level which it is at present

2. Research conducted on the Cooperative venture including risks and benefits

Reduced consumption due to poor popularization of bioproducts. Promotion of organic products has several dimensions. First is related to the degree of awareness of the consumers that manufacturers and traders determined as relatively low. This creates a danger and consumption remains reduced unless steps are taken to increase the level of awareness to consumers. Another problem is the lack of advertising of organic products. This is one of the factors which the producers themselves determine as an obstacle to better realization of such goods.

Collapse of production for unfavourable external economic factors. Deepening of economic crisis is one of the factors that could negatively organic producers.

3. SWOT and PESTLE analysis

PESTLE ANALYSIS

Political

• Strong possibility- of introduction to impose carbon tax on all energy intensive products used for commercial use
• Market Regulations
• Anti-discriminatory laws and minimum wages

Economic

• Strengthen of Australian dollar against trading partners in coming years.
• Economic situations and trends
• Market Distribution
• Interest and exchange rates

Social

• Lifestyle trend to eat out is becoming more affluent and frequent
• Steady population growth rate
• Consumers are increasingly aware of the impact of business activity on the local

Technology

• Internet, information and social networking technologies continue to evolve and provide new challenges and opportunities for marketing.
• Native Bush Spices Australia will continue with its effective use of its website to promote and sell products and social networking to reach its target markets.

Legal

• Native Bush Spices Australia already have environmentally sound policies, but more of these policies can improve the companies brand image. They also have the opportunity to capitalize on its organic certification to build the company’s reputation. The organic certification evaluates suppliers based on 100% organic practices and in turn gives customers the peace of mind that they are in fact getting a complete organic product. They legally have to ensure every aspect of growth and production are in fact soley organic or they risk legal action for false or misleading claims.

Ecological/Environmental Factors

• Our recent environmental extremes such as bushfires and flooding threaten the productivity of farmers in the production and supply chain.
• Areas of the Coffs Coast where Native Bush Spices co currently operate have been impacted and may take some time to fully recover

4. Email to assessor

Dear Assessor,

I hope you are well.

Please find attached my SWOT And PESTLE analysis for Native Bush Spices Australia.

Organic certification has gained them a great advantage over their competitors as it gives customers peace of mind. The Australian and overseas trend toward clean organic products and a healthy lifestyle will remain a positive advantage for Native Bush Spices. There is a strong need and want for organic products in China in particular. This leads them into a great opportunity to diversify internationally.

One of the main threats to the current operation and production has been the environmental instability in the farming regions in the Coffs region. The bushfires and flooding has affected the farming land and could possibly affect the crops. We have seen an increase in the cost of locally produced produce on the shelves at present.

For a more detailed analysis please find attached the SWOT and PESTLE for your perusal.

Any feedback you could give me, would be greatly appreciated.

Thanks kindly,

5. Feedback

6. Develop a Strategic Plan

7. Email to Assessor

Dear Assessor,

I hope this email finds you well.

After assessing the SWOT and PESTLE analysis I have produced a Strategic Plan for Native Bush Spices Co.

You will note the main actions to be implemented in the next twelve months in order to meet their objectives. These actions will need to be broad and will include hiring more staff along with providing training. To grow both locally and within Asia, they will need a larger staff to increase productivity and output.

Product development should be continued on a constant basis, should they wish to broaden their product range.

Production of raw produce will need to be escalated to meet the growth we are intending. This will mean refining both our production and post production processes.

For a more detailed appraisal of the strategic plan, please find it attached. Of course your feedback would be greatly appreciated.

Kind Regards,

Assessment Task 3: Strategic Plan performance monitoring

Part B

Management report

Key performance indicators

• A 20% increase in total sales revenue.
• International market identified and exporting commenced. Sales to international markets to comprise 20% of total income.
• Suitable alliance for marketing identified and 10% increase in sales attributed to alliance marketing.
• Identify new products through review of competitors’ web sites.

Key performance indicators performance

Our goal of a 20% increase in total sales revenue was far reached and and exceeded. Total sales revenue climbed from $550, 000 to $800, 000. That makes for a 45.4% increase in sales revenue. Almost double of our initial expectatons.

In the past twelve months Native Bush Spices Co began export to sell internationally in both Hong Kong and Singapore. Strategic plan KPI was benchmarked at 20% of total sales. Total international sales were not reached as 70’000. This is 8.75% of our total sales revenue. Less than half of the KPI.

The strategic management plan sought to find a suitable alliance for marketing and identified the KPI to be 10% increase in sales attributed to that alliance marketing.

Unfortunately we did not reach this KPI at all. Native bush spice Co failed to find a suitable alliance for marketing and therefore made 0% increase in sales revenue as a result of our projected marketing alliance.

Similarly the strategic plan set out to identify potential new products through thorough research and review of our competitors offerings. Our product development KPI was to have ideas and that could lead to potential new products. We failed to meet this KPI with current data showing no ideas for new products were attained.

Recommendations for the next twelve months

As Operations Manager, I have evaluated the data from our previous 12 months of operation and considered our original strategic objectives and key performance Indicators.

Whilst we have increased our total sales revenue well beyond expected, we have also failed to meet some important parts of our strategic plan for long term success.

Figures show that we have increased out our sales greatly on a national scale, which has been fantastic. It is my recommendation that we continue this momentum but focus quite strongly on developing our marketing alliance and product range, Further visibility in the Australian market could see local sales increasing further.

Our international expansion into Hong Kong and Singapore were not without hurdles. Though we did don’t reach our KPI we must remember, we have only just entered the foreign market. During the next twelve months, our focus should be to grow our distribution network further among a number of leading retailers and larger retailers. We are currently working to further expand into the Japanese market in coming months.

No new products or product idea were developed in the last 12 months. This leads me to recommend the possibility of hiring staff to focus on product development. Whilst we have excellent products existing the need for innovation will we be needed if we are to meet our competitors and grow.

Changes that will need to be made in regards to our strategic plan will include:

• A 50% increase in sales revenue for the next twelve months (this revision is to be based on our previous year 45.4% increase in total sales revenue)
• Focus on our marketing strategies and more effort be made to find a suitable alliance for marketing.
• Hire specific product research and development personnel.

While our strategic plan outlined a need for product innovation, our KPI needs to be updated with the introduction of staff primarily looking to develop and implement new products. Our KPI might include 2 new product launches in the next twelve months.

Best practice strategic planning processes

There are many different frameworks and methodologies for strategic planning and management.

While there are no absolute rules regarding the right framework, most follow a similar pattern and have common attributes. Many frameworks cycle through some variation on some very basic phases:

• Analysis or assessment, where an understanding of the current internal and external environments is developed,
• Strategy formulation, where high level strategy is developed and a basic organization level strategic plan is documented
• Strategy execution, where the high level plan is translated into more operational planning and action items, and
• Evaluation or sustainment / management phase, where ongoing refinement and evaluation of performance, culture, communications, data reporting, and other strategic management issues occurs.

Native Bush spices Australia I believe achieved this primarily in the first strategic plan. However, there is some room for improvement to be made.

Analysis and Assessment was quite thorough as a whole in the previous strategic plan however I believe there was not enough high level strategic planning in the way of planning specific actions to be made. I believe there should be a much more in depth set of actions, broken down into specific time lines.

The part of the strategic plan that failed I believe is in the ongoing evaluation at different intevals within the first 12 months.

Product development for example should have been evaluated every few months to ensure it didn’t escape under the radar.

Email to the Management Team (your assessor).

Dear Management Team

I hope you are all well.

As our first twelve months of following our updated strategic plan have come to a close, I have evaluated and done a thorough analysis and evaluation on our final data.

Enclosed is the Management Report provided for you all to read.

It stipulates our results against our KPI’s set.

I have included my recommendations for our next twelve months.

Feel free to add your feedback and if you have any further questions, don’t hesitate to contact me.

Kind regards,