Introduction
With increasing globalization and changing market needs, the fresh food and fruits industry has gone through a number of changes with technological advance and innovation being key change drivers. In that respect, the industry’s players need to establish suitable strategies in their operations as well as develop new products as means of enhancing their competitiveness. In that reference, this analysis seeks to demonstrate how businesses address market needs and changing environment through application of suitable business strategies. To achieve the objective, the discussion uses the case of Fresh Tec with its introduction of SmartPac Technology into the market being the main focus. In that respect, the focuses on how the business should introduce the product in to the market as well as on identifying whether it would have a disruptive effect and the necessary measures that would address the issue. To begin with, the analysis explains the factors that affect the industry as well as the brand’s positioning and the necessary competencies that should be developed. Further, there is an explanation of the approach that the business should take in respect to the industry’s adoption of its product in addition to identifying the new technology’s target market. The analysis also establishes whether the business should seek to get fruit farmers to change the fruits harvest time as well as whether the business should adapt an aggressive or slow growth plan in introducing the product. Finally, the analysis explains the possible business response if the product’s introduction was a disruption to the industry.
External factors, Fresh Tec’s positioning and necessary competencies
A business’ positioning in the market is dependent on both internal factors that are within its control as well as on external factors that are beyond its controls and which determines its opportunities and threats. In that respect, a review of the external factors is a good measure of the positioning as well as the suitable strategies that should be applied to enhance a business’ positioning relative to the industry peers. In that view, Fresh Tec’s positioning is summarized through an analysis of the external factors and the necessary competencies are identified. (Scott, Erring & Gibson, 2006)
Developing countries realization that agriculture is one of the key sectors that can be used for purpose of enhancing employment as well as driving commerce is one of the key factors affecting the industry. That has resulted to an increased focus on production and export of fresh fruits and vegetables. Further, there are increasing concerns over food quality in major markets including Asia, America and Europe. In that respect, there is a growing demand for products to be transported and packed in cartons that assure product’s safety while they pass through different environments in storage and transportation. In addition, there is also an increase in low cost production areas that are far from emerging consumers and markets. For example, Mexico is a large producer of fresh fruits and produces more that the US market can consume hence a need to reach out to other key markets including Asia, Europe as well as Middle East. (Fresh Tec, 2014a)
Fresh food and fruits industry is also marked by increasing environmental concerns and regulations that require industry operations including farming as well as transport to be carbon-footprint effective and friendly. That results from the increase in freight services as sea, rail and land vessels. It is also notable that production and consumption of fresh fruits and vegetables have registered an increase in a number of markets including the Pacific region as well as Asia that are increasingly concerned over food safety, quality and convenience. That has resulted to the industry players seeking to assure of the products quality and safety through selection of high quality produce as well as implementation of good processing and packaging practices. (Fresh Tec, 2014b)
Other factors affecting the industry include change in consumer demand and consumption that have resulted to change in convenience and varieties’ preferences hence an increasing variation in produce standards. Variety variation and diversity have also had an impact in increasing availability of produce which were only considered to be seasonal. In addition, changes in consumer behavior have resulted to changes in industry operations with consumers increasingly seeking to eat their food and fruit produce away from home. That affects retailers as their share of food and fruits sale increases. Further, retail industry consolidation is a key factor since retailers play a great role in distributing fruits and fresh produce to the market. In that respect, retailers’ consolidation has the effect that the largest retailers have the largest share of the market as well as market power. In that respect, support services have to be focused on their needs. (Fresh Tec, 2014a)
Technological innovation and advance are also increasingly changing the relationship between the industry players ranging including farmers, shipping agents, retailers and consumers. In addition, the food and fruits market is also marked by increasing consumers’ consciousness on the health effects of the quality and variety of products they access in the market. In that respect, businesses that are capable of delivering healthy products are more competitive in the highly competitive industry. On the other hand, high industry entry costs deters new ventures hence existing industry players do not face a high risk of market share loss to new entrants. Finally, globalization of food and fruits market has resulted to increased competition as well as an opening up of more markets for international businesses. Other factors include, increasing food safety as well as environmental regulations, increasing competition and increasingly liberalized international markets. (McGrath, 2000)
Positioning
Fresh Tec was founded in 2012 by Richard Binks after discovering that there was a gap in the Fresh produce market for a one stop solution in areas of fresh produce and foods. With that, the business started operations with a philosophy that it seeks to consistently deliver high quality, added value as well as professional consultancy to the global fresh produce and food industry. The business is well positioned in the industry with a portfolio of services ranging from crop protection to quality and product management. In that view, the business positioning is defined by its products’ delivery that seeks to decrease carbon footprint, reduce risks in food safety as well as improve quantities and value of food exports. In addition, the business’ products and services enable consumers to enjoy fresh foods that are better at all seasons and all places as well as reduce handling cost and transport spoilage (Fresh Tec, 2014a)
SWOT analysis summarizes the business’ positioning in the industry as having strengths in being innovative as well as being a well recognized brand. Therefore, the business is in a better position to utilize opportunities presented by the external factors among them the ability to develop more effective products and systems through high technological advance, the increasing demand for health conscious products as well as the opportunity to deliver more effective systems and products. . (Fresh Tec, 2014b) In addition, the business’ positioning enhances its ability to address threats as increasing competition and the fast obsolesce of technology-based products. (Fresh Tec, 2014d)
Necessary competencies
In view of the industry factors, enhancing the business’ competitiveness requires it to develop some competencies including delivery of products at affordable prices and having suitable marketing strategies as advertising that delivers relevant information to customers about their products benefits. In addition, the business should seek to differentiate its products through delivery of unique benefits and innovation as a means of addressing increasing competition. Finally, Fresh Tec should ensure it meets industry and regulatory requirements in order to enhance operations sustainability. (Scott, Erring & Gibson, 2006)
Fresh Tec’s best approach to industry adoption of smart pack system
New products’ launches are led by strategy variables including products’ advantage, relative pricing, relative promotional effort as well as market pioneering. In delivering a competitive advantage, product should increase the value that they delivered to customers. Thus, the approach that is suitable for SmartPac technology’s introduction to the market should be a fit between its market environment and strategy. In that view, adoption of the product by the market should be driven through a number of strategies including market, product, firm and competitive focused strategies. (Scott, Erring & Gibson, 2006)
Product strategy would entail developing more product features as the market continue with its adoption. (McGrath, 2000) Market strategies would involve establishing suitable pricing that cannot be easily matched by competitors as well as development of suitable distribution channels for the product. In view of addressing industry competition, the company should seek to enhance raw materials sourcing as well as developing key partnerships with stakeholders like suppliers. Finally, the approach should be in line with the firm’s objective of delivering added value. That could be done through embracing more innovation as a means of enhancing the product’s performance. (Clayton & Scott, 2004)
Smart Pack’s target market
A number of challenges face the fresh fruits market with fruits and flowers dying from the harvesting moment as well as continuously losing moisture, weight, nutrients and value all through the cycle from the farm to the retail stores. However, although refrigeration helps in slowing down the spoilage, it extracts moisture in addition to its need for open cartons that exposes the fruits to pathogens and bacteria during logistics and shipping. In addition, a comparison with other packaging brands show that SmartPac technology has added and unique benefits as they serve as shipping containers and modifies atmosphere as well as reduces weight loss. Further, the product retains fruits texture, reduces perspiration rate and extends fresh produces life spans. Finally, SmartPac accommodates shipping of fruits with increased maturity in addition to reducing carbon footprint and logistical cost. (Fresh Tec, 2014c)
In that respect, SmartPac technology provides an active liner solution to packaging as well as marketing of fresh fruits. That technology provides a barrier to moisture through emission of active ingredients which provide products’ preservation through one device. Thus, SmartPac technology suits farmers, brokers and retailers’ needs for reasons including its ability to reduce needed packaging materials that result to less packaging inventories for businesses. In addition, the product is fast and easier to use in packaging hence being cost effective and supportive for recycling. Further, the technology presents a better option for stores that prefer tear-off format as a result of its better presentation of fruits that fit retailers’ needs. Finally, the product has low operating and packaging costs in fruits’ marketing and protects fruits from post pack contamination all of which are benefits that suit the three target segments. (Fresh Tec, 2014d)
Fresh Tec strategy with fruit growers
Postharvest quality indices for fresh fruits are used as means of delivering optimum quality for terminal, storage and fresh markets. In that respect, fruit growers sample their fruits before deciding whether to harvest while fruit processors assess the fruits’ maturity before their in-house storage. For example optimally mature peaches may not be suitable for processing as they could be too ripe or soft for cutting but could be suitable for other end use. Thus, processors and farmers must have a good understanding of fruits physiology and finished products so as to determine the suitable harvest time. In that respect, the choice for maturity, harvest time, shelf life and storage as well as harvest condition varies with different fresh fruits and their end use. Some of the key factors that affect the fresh produce’s quality are the harvest maturity as well as the postharvest storage and handling. (Fresh Tec, 2014a)
In view of the above needs by potential customers who include farmers, brokers and retailers, the business needs to help them realize the advantage that the product delivers relative to the competing brands. In that respect, the ability to package and retain fruits’ value at different maturity levels offers the farmers flexibility in harvesting their fruits depending on market demand and needs including early harvesting as well as late harvesting. In addition, getting farmers to change the harvesting time would create product differentiation and a brand identity that would set the SmartPac technology as different from its competing brands. (Fresh Tec, 2014d)
Fresh Tec’s Growth plan in launching SmartPac technology
New products’ launch is increasingly becoming a prerequisite to business competitiveness. In addition, businesses are faced with increasing pressure to introduce highly innovative products in record time. Such factors contributing to a need for an aggressive launch and growth plan include improved communication, intense competition, technological advance acceleration and marketplace fragmentation as well as globalization. In addition, products’ lifecycles are becoming shorter as demographics quickly change. Thus, the combination of those factors contributes to accelerated product obsolescence hence a need for a quick launch and aggressive growth plan for innovative and technology-based products. On the other hand, products that are not highly dependent on technological advance and which cannot be easily replicated by competitors can be launched through less aggressive growth plan. (McGrath, 2000)
Thus, as a means of creating a competitive edge, businesses adapts aggressive growth plans for their products’ launch. In that view and given that SmartPac technology is a technology based product, it would be appropriate for Fresh Tec to adapt a fast and aggressive growth plan. That would allow the business to quickly penetrate the market and develop its products as brands of choice ahead of development by potential competing products. (Clayton & Scott, 2004)
Fresh Tec’s response to Smart pack’s industry disruption
If the product launch was disruptive to the market, it would have been classified under any of the two disruption types; namely new market disruption and innovation disruption. New market disruptive products have an initial focus on non-consumers for their affordability as well as simpler use; they attract a new market of consumers who adopts its use. However, continued use and improvement attracts other products’ consumers hence pulling consumer from the other value networks. In that respect, the disruption does not invade the mainstream market but pulls customers from the market to the new product for its convenience and ease of use. In that view, the existing market players would not feel the impact of the new product in the initial stages until the final stage when it would start pulling customers from their line of products. (Clayton & Scott, 2004)
In the same sense, if the product had an innovation disruption it would be by offering benefits to existing customers through convenience, less cost as well as simplified use. In that respect, the products improvement would begin when SmartPac technology gets a foothold in the low end market. In the process SmartPac would improve to intersect with the demanding customers needs hence Fresh Tec would be getting into the path of out-competing its peers in the industry. Although the industry players and competitors would seek to match the innovation and new product, the disruptive innovation would be more likely in favor of Fresh Tec as it continues to allocate more resources in improving the SmartPac technology. In that view, competitors would prefer to go for the up-market rather than compete for the low end market that the business will have sought to serve. In addition, disruptive strategies and innovations are usually applied by companies that operate in industries which are marked by too expensive, too good or inconvenient products. In that respect, disruptive innovation and strategies uncovers progressive growth potential that could help the business displace its competitors. There are different disruptions that require unique responses and approaches as follows. One such disruption would be the new market disruptions that seek to convert non consumers to consumers. This mainly applies when customers face a challenge that is not addressed by the existing products. (McGrath, 2000)
Conclusion
In view of the analysis, Fresh Tec is identified as being well positioned to compete with its industry peers and achieve business sustainability. However, the changing industry factors require the business to develop some competencies in order to enhance its operations and competitiveness. In that respect, innovation and seeking to adhere to the industry standards and regulations are some of the identified key competencies that the business needs. In addition, the business should seek to drive SmartPac’s adoption through product, firm and marketing strategies. In addition, the product’s target market have been identified to comprise of farmers, brokers and retailers while getting fruit growers to change their harvest time has been identified as being suitable in seeking to differentiate the brand from competing products as well as in addressing the fruits growers needs. Finally, the product has been identified as having potential of being disruptive on the industry hence a need for the business to address the issue with an aggressive growth plan as well as continuous product improvement.
References
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