Describe how Kropf progressed through the four stages of the strategic planning process.
Strategic planning process includes a set of procedures and mechanisms that help companies to develop and implement their vision for the future. It can be subdivided into 4 stages: diagnosis, planning, implementation and maintenance. The diagnosis step includes a thorough evaluation that considers the goals, environment and internal resources and capabilities of the organization. The combination of these factors allows companies to understand the main challenges on the way to achieving their objectives and helps to design strategies for the future. Kropf Fruit Company’s diagnosis is based on the analysis of the market dynamics and shows that the current environment favours large fruit processors. Kropf’s management further outlined internal resources and capabilities of the company as well as its mission and heritage, in order to match them with the external needs. In the final step of the diagnosis phase Kropf’s management uses SWOT analysis to aggregate their findings. SWOT incorporates internal strengths and weaknesses of Kropf as well as its external threats and opportunities. The strengths of Kropf include good relationships with the growers, flexibility and market fit, while its weaknesses mostly relate to low yields and limited equipment capacity. The company can exploit the opportunities to expand its capacity and export, but it faces the threat of international competition and the domination of bigger and more efficient players. The consolidation of these results created the foundation for the second phase of strategic planning. At this point the two selected alternatives, expansion and medium-size retention, were analyzed from several perspectives. This process included collecting suggestions from stakeholders and evaluating the expansion needs. The decision to expand operations to double the size over 10 years was implemented in the third stage of the strategic planning process, where Kropf expanded its packing and storage facilities, lowered overheads, increased acreage and fruit variety and attracted more growers. Lastly, the maintenance stage of strategic planning involved continuous adjustment of the original plans to the new challenges of meeting customer demands, developing new markets, forecasting of the future market dynamics and coordinating all the activities.
2) Who and what alerted them to the potential dangers of remaining a medium sized fruit processor? Do you believe Kropf's future success might have been different if no one had alerted them?
The first signal of the potential danger to remain a medium-sized fruit processor was sent to Kropf by its downstream partners, the retailers. The consolidation in the grocery store industry favoured larger food processors, while medium-sized family owned companies were losing orders. This fact has become a signal for Kropf that the strategy to remain a medium-sized producer could not be sustainable in the long-run.
It is hard to predict whether the success of Kropf would have been different if no one had alerted the company about the changes in the industry. Moreover, the fact that the company operated in a competitive market guaranteed that any changes in the market dynamics were immediately reflected in the demand for products. The only possibility to remain unaware of the industry consolidation could appear if Kropf was shielded from the changes in the market by long-term contracts and preferential agreements with retailers. In this case, Kropf could have enjoyed high demand even if the other medium-sized companies had been failing. In this case the expiration of the contracts or the change in the partnership agreements would have exposed Kropf to the completely changed landscape of the competitive market, where the company would have had neither resources nor capabilities to compete with global players. However, even in this case it is hardly possible to imagine that Kropf’s strategic planning would not have considered the behaviour of its competitors, which would have signalled the changes in the market and the need to increase size in order to remain in line with the industry trends.
