Coopers Creek And The New Zealand Industry - Essay Example

? Coopers Creek And The New Zealand Industry (ESSAY Case Study Based) Contents Contents 2 Introduction 3 Analysis and Discussion 4 Analysis of the external environment of Coopers Creek by Porter’s five forces model 4 Using VRIN Criteria, Assess the Bases of Coopers Creek’s Strategic Capabilities 6 The key strategic capabilities for Coopers Creek to attain sustainable competitive advantages 9 Conclusion 10 References 11 Introduction This paper represents an essay about a detailed case study analysis of Coopers Creek and its industry in New Zealand. The case has been analysed in two major perspectives such as detailed analysis of external environment or market competitiveness of Coopers Creek using Porter’s five forces model and in-depth analysis of the bases of Coopers Creek’s strategic capabilities using VRIN model Lastly effective recommendation have rendered about strategic capabilities for Cooper’s Creek based on the analysis of the case i.e. the company and its industry in New Zealand. Since the age of 18th and 19th century the craze of wine increased significantly due to its pleasant taste and flavour. As a result, its growth also enhanced with a subsequent rate of 30 to 35 % every year in spite of heavy custom duties. Due to which, it was able to create a niche market for itself that acted as a boom for the industry to gear its global market value with a considerable extent among many other health drinks in the market. Thus, in order to analyse the external environment of Coopers Creek, Porter’s five forces model needs to be used. Strategic capabilities are recognised as the most vital resources and competencies of an organization that will help it to prosper and survive in this competitive market in the coming era. With the help of these underlining resources, the reputation and productivity of the organization enhances its position in the market among other contenders. Moreover, these resources act as the backbone of an organization on the basis of which the net profit and revenues get enhanced significantly. So, these strategies are very important for any organization, irrespective of size and location (Reid, 195, pp. 357-378). The resources might be both tangible and intangible in nature and the skills as well as the competencies of the employees might also vary from one organization to another. But all of them are useful in enhancing the net output of the organization. Therefore, using VRIN analytical tool, the strategic capabilities of Coopers Creek might be evaluated. VRIN stands for value, rarity, in-imitable and non-substitutable (Teece, 2009, p. 367-389). Analysis and Discussion Analysis of the external environment of Coopers Creek by Porter’s five forces model The industry of wine is extremely competitive due to the presence of numerous wine players. Since competition is quite evident, the power of buyers is extremely high in this industry as compared to others. The prime cause behind such competitiveness is that the customers are free to select any type of brand and so the rate of switch over cost is quite high in this industry. So, it is extremely difficult for any specific brand to retain the similar set of market value and share for a long run (Walder, 2013, p. 234-267). However, it might be possible to retain and maintain a sustaining pool of customers, only if the player tries to introduce innovative types of product lines with mind-blowing tastes and savours. This might help the market players to attract large number of customers towards its products thereby amplifying its brand image and equity in the market among others. Side by side, the reputation of that specific brand might also get enhanced among many other players. On the other hand, the prices of the products also play a vital role in this industry and so it needs to be adjusted according to the competitor prices so as to remain competitive in the market. Otherwise, the brand or the player might not be able to retain its brand value and profit margin among others. The power of the suppliers in this industry is neither too high nor low. This is mainly because of the snag to present unique quality of grapes. Due to which maximum extent of the players in this industry try to produce own vineyards so as to meet their requirements. Along with this, such type of vineyards not only helps the player to attain distinctive quality of grapes but also in availing unique prices. The power of the suppliers in this industry becomes quite lower as compared to others. Therefore, the suppliers always try to maintain long term contracts with the major players so as to retain its portfolio and profit margin in the market among others. Along with this, the suppliers also try to present their products at a quite lower price so as to retain the customers for longer period of time. Due to the presence of such facilities, the customers try to reduce their switching costs that prove quite helpful for the vine manufacturers. So, the power of the suppliers of the wine industry remains lower for the entire year. In this age of health conscious individual, the craze of alcoholic drinks decreased to a certain extent. As a result, the market value of natural fruit juices and beverages increased and so the threat of these substitute products increased considerably and so the industry of wine faces a very rigid competition due to the presence of numerous players, both alcoholic as well as non-alcoholic drinks. Therefore, in order to retain the image and brand value, most of the players try to introduce innovative products to maintain its supreme position among other threats in the market due to which the rate of substitutes remained in a stable condition in the market. The competitiveness among the existing firms is extremely high and so the threat of entrance of the new players in the market is extremely low. Moreover as the existing reputed market players maintain a dominant position so the new entrants hardly find any opportunity to market its products. Apart from this, the entry cost and exit cost for the new entrants are also extremely high as compared to others. So, most of the players try to present varied types of product with revitalizing taste so as to generate a significant position in the market among others. Only then, the players might create a sustainable position in this aggressive market for longer period of time. Due to the presence of numerous players, the intensity of rivalry is extremely high. As a result, most of the players had to maintain competitor based prices policies so as to retain the market value and brand image significantly. Otherwise, due to high rate of prices the total sale of the products of a specific brand reduces as compared to others. Only then, the players might retain their sale and profit margin in the market and side by side maintain its competitiveness. On the other hand, due to intense rivalry the threat of new entrants is also comparatively low. This is quite advantageous for the existing players but they had to present high level of concentration over the tastes and preferences of the customers so as to maintain their position within their hearts. This might prove effective for the players to enhance their level of loyalty and faith within the minds of the customers resulting in reduction of the switching costs. Using VRIN Criteria, Assess the Bases of Coopers Creek’s Strategic Capabilities As Coopers Creek came into existence many years ago, it was able to generate a strong market share and equity for itself, as compared to other players. That might be well understood by viewing the export figures (3.8 % increased) of Coopers Creek in 2003 in the market of Australia and others. Along with this, the total sales in the domestic market of New Zealand also enhanced significantly that improved its position considerably. Due to which, the customer values regarding its products and services are quite high as compared to others (Roy, 2011, pp. 347- 367). Side by side, the organization of Coopers Creek also includes varied types of rare competencies like its location in West Auckland along with 15 years of experience in this industry. These rare competencies helped in increasing its level of reputation with the customers and brand image among others both in domestic and international market. So, it helps Coopers Creek in attaining competitive advantage in this aggressive market that improved its sustainability. Moreover, the uniform culture of the organization of Coopers Creek also helped in enhancing the level of performance and devotion of the employees resulting in amplification of the total productivity. Side by side, the inner skills and competencies utilized in enhancing the product lines of the organization of Coopers Creek also acted as a catalyst in amplifying its net profit and sales targets (Purvis & Grainger, 2013, pp. 345- 367). Other than this, Coopers Creek became successful in implementing innovative machines that enhanced its production system by almost 900,000 litres and 96000 cases in every batch. Moreover, the organization also comprises of almost 100-120 tonnes of grape loading truck capabilities that also helped in attainment of competitive advantage. Due to such facilities, Coopers Creek attained high level of popularity and supremacy in the market among other operating rivals (Maples, 2005, pp.257- 289). Not only this, after undergoing vivid research, the management of the organization of Coopers Creek analyzed that super markets present a vital role in their total sales. Due to which, management along with all other employees decided to offer all their products in the supermarkets as well so as to increase their popularity and profit margin to a significant extent. This also helped to improve its brand image and dominance in both domestic and international markets among other rival players. Other than this, the organization of Coopers Creek also presented varied types of special wines along with music and meals in the seasons of Easter Weekends (Porter, 2008, pp. 245-267). The underlining cause behind such motive is to enhance its sales and productivity. Apart from this, it also helped in attracting large array of new customers that improved its range of sales and customers base as well. Consequently, in varied types of festive seasons, varied types of discounts as well as extra facilities are also provided by the retailers, restaurant owners and wine vendors so as to increase its range of customers (Pearce & et. al., 1990, pp. 237- 278). This also helped in retention of the loyal customers thereby reducing the rate of switching costs to a significant extent. Other than this, the prime aim of these retailers and vendors are to make the customers accustomed with different flavours of wine so as to increase its efficiency in the market and within the minds of the customers. This might also enhance the level of faith and confidence over the product which is very essential for any organization or brand to sustain in this market scenario (Henry, 2008, pp. 256- 278). Subsequently, the value chain of the Coopers Creek also proved quite effective for the organization. This is mainly due to the presence of inventive technologies and skills of the human resources of the organization. Along with this, the distribution network of the organization of Coopers Creek is mainly country specific that fulfilled the local requirements very easily and effectively. This is also another vital reason that improved its sustainability in the market in the coming years among others (Egelston, 2012, pp. 234- 245). Similarly, the marketing and sales activities are also quite effective that helped the organization of Coopers Creek to accomplish its target objectives (Elohimjl & et. al., 2000, pp. 189- 199). Therefore, due to the presence of such value creating strategies and competencies, the organization of Coopers Creek became successful in attaining competitive advantage. Other than this, due to the presence of such benchmarking strategies, the level of performance of the organization of Coopers Creek enhanced to a certain extent as compared to previous years (Diane Publishing, 2005, pp. 156-178). Thus these types of strategies helped the organization of Coopers Creek to improve its underlining strengths and reduce its weakness considerably. This is extremely essential for any organization operating in both domestic and international markets to retain its dominance among new entrants (Daniell, 2004, pp.134- 145). The key strategic capabilities for Coopers Creek to attain sustainable competitive advantages The capacity of the target market for Coopers Creek is extremely narrow as it mainly targets a niche part of premium customers of US, Australia, Europe and Japan. Therefore, in order to increase its range of sales and profits, it might concentrate on either cost focus or differentiation focus (Baker, 2013, pp. 156-167). However, it is better for the organization of Coopers Creek to follow the strategy of cost focus as by presenting varied types of premium quality products, the overall cost might be achieved. This might help the organization of Coopers Creek to enhance its brand image and competitiveness in the market among other rivals. Side by side, the profit margin and the overall investment of the organization made over supply chain and other core competencies and threshold resources might also be easily achieved. But the organization needs to offer high level of concentration over the customer requirements of the market so as to retain them for long run. Otherwise, the competitors might imitate the similar strategy followed by the organization and its efficiency may get reduced (Atkinson & et. al., 2007, pp. 134-145). Similarly, if it concentrates on differentiation strategy, then it had to offer more focus on resources and capabilities of the organization of Coopers Creek. It might not be possible for the organization of Coopers Creek to maintain such strategies for long run. Conclusion From the detailed analysis of the case in two major perspective and strategy recommendations mentioned above, few important facts have been identified which can mentioned here to conclude the case analysis. From the analysis of market environment or market competitiveness it can be stated that in spite of extensive rivalry, the effectiveness and equity of the reputed players remain constantly high. Side by side, they also become able to create a distinctive position in the market thereby amplifying its dependency within the minds of the customers. This is extremely beneficial for the players of the wine industry as compared to any other industry. From the analysis of strategic capabilities of Coopers Creek using VRIN model it can be stated that strategies play a vital role in the development of the image and reputation of the organization. So, it needs to be developed in such a way that might prove effectual for the organization in long run. Thus, the strategies and capabilities of the organization act as the basement of the organization that paves its way towards success in this age of globalization and industrialization (Blewitt, 2012, pp. 156- 178). So, it is essential for the organization of Coopers Creek to maintain specifically over the needs and desires of the target customers. Only then, it might maintain its supremacy in the market among other competitors. References Atkinson, G. & et. al. (2007). Handbook of Sustainable Development. London: Edward Elwar Publishing Limited. Baker, S. (2013). Sustainable Development. New York: Routledge. Blewitt, J. (2012). Understanding Sustainable Development. New York: Routledge. Daniell, H, M. (2004). Strategy: A Step-By-Step Approach to Development and Presentation of World Class Business Strategy. New York: Palgrave Macmillan. Diane Publishing. (2005). ATF Strategic Plan FY2000-2005. London: Diane Publishing. Elohimjl & et. al. (2000). Sustainable Development. London: Rainer Hampp Verlag. Egelston, A, E. (2012). Sustainable Development: A History . New York: Springer. Henry, A. (2008). Understanding Strategic Management. London: Oxford University Press. Pearce, D, W. & et. al. (1990). 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