Strategies For Glasshouse Avocado To Maximize Production And Gain Profits In The Niche Market

Internal Factors Affecting Production and Profits

Questions:

1. Identifying the main issue that Jack needs to consider.

2. The technique of gaining benefits by applying the rationale decision-making process to address the issues.

3. Describing three different resources that are available to Jack.

4. Identifying, explaining and applying one of the organizational strategies.
 

The case study indicates that Glasshouse Avocados gained a significant advantage from the existing market. However, like every business, there have been certain issues that need to be considered. Jack’s major vision was to develop and continue the business with avocados since they can be produced in a larger amount. The production margin of avocado was going down in compared to the production of previous years. Jack observed that the supermarket business in Queensland was progressively consolidated. In addition, the operation of Boutique had been set up on the Sunshine Coast, which mainly targets the local organic market with high quality of products. The Boutique operator had set premium pricing strategies for the high quality of products and services. On the contrary, the organizations from other country were importing the products at low price and creating a competitive environment, which was a pressure on Glasshouse Avocado. As mentioned in the case study, that competition from the cheap imports was driving the price down, which was largely affecting the profits of Glasshouse Avocado.

Apart from all these issues, another significant challenge, which Jack had to deal with, was increasing cost of maintaining irrigation equipment as well as managing root rot in the plants across the orchard. On the contrary, the changing climate was also affecting the production of avocados. Jack experienced that they did not focus on the key success factors of nutrition management of the trees and enhance irrigation techniques. However, it is important to focus on the factors that influence the production of avocados before analyzing the external factors. Jack could take suggestions from the experienced botanists who have knowledge regarding irrigation techniques and harvest. Appropriate implementation of these techniques could help to control the damages that occurred due to rotation as well as harvesting problems. In addition, Jack also needs to consider the external factors such as aggressive techniques of importers and implementation of premium pricing strategies. As mentioned by Jiang et al. (2012), to control damage in business, it is necessary to focus on developing the quality of business. Thus, by developing the quality of products, one could maximize market share. Nevertheless, to increase the market share, it is necessary to sell the products at low price using penetrative pricing strategy. 

As mentioned by McShane and Von Glinow (2012), rationale decision-making process is consisting of a number of steps from problem identification through solution, for making a rationale decision. While applying this particular technique, it is necessary for the marketers to focus on certain aspects such as formulation of a goal, identification of the criteria for making the decisions, recognizing the alternatives and some other steps. Hence, the major objective of Glasshouse Avocados is to increase the tones of production and gain profits in the niche market. The heads of the organization is also determined to expand the business into specialty niche market such as Kiwi Fruits to maximize the capacity of business. The techniques required to resolve the issues found in the case study can be implemented with the help some decision making theories. There have been multiple type theories on decision making such as organizational Process Model and rationality in decision-making. It is observed that centralized decision-making theory is usually applied when a centralized organizational decision is made from to down. However, for the current issues faced by Jack, it is necessary to implement the theory of rationality. The steps involved in rational decision-making helps to resolve the issues quite easily. For example, rational decision-making could help marketers to search other alternatives. Once the alternatives are found, further evaluation can be done. While deciding about the alternatives, the marketers could go through three fundamental approaches such as experience, experimentation and Research and Analysis.

Using Rational Decision-Making for Problem Resolution

Hence, Jack needs to set the criteria for making the rational decision. They could focus on the quality of products to deal with the external challenge. As commented by Hu et al. (2012), when the profit margin is going down, it is important to focus on the internal aspects instead of rushing into external environment. However, Chiang and Hsieh (2012) added that a business always is dependent o n both external and internal environment; thus, the marketers make sure that no such as aspect is left behind, which is significant. Thus, it can be mentioned that in order to resolve the issues such as poor production, external threats from Queensland and premium pricing strategies of competitors, Glasshouse Avocado firstly needs to focus on developing the quality of products. Jack faced the issues of production due to poor implementation of techniques of planting, irrigation, yield management and pest control. Jack needs to focus on these factors to resolve the issues of production. The organization should find out the current market trends and the market forces that influence the market largely. For example, they could conduct a customer analysis to identify the needs and demands of people in the local organic market. It is also important to identify the strategies used by competitors in the industry. Thereafter, the organization could make the final decision. This means they could work on the identified aspects such as quality development, pricing strategies, distribution of products and other aspect. Further, it can be added that to expand the business or enter into a new market could be apprehensive for the organization at the initial stage. Thus, the company could implement the strategies of franchising, joint venturing. This could help to learn the needs and demands of new market and then implement the required strategies. 

It is evident that a business usually includes different types of resources. The organizations have to deal with each resource to make an effective operation for the purpose of development of business. However, it is also observed that business may not get all resource equally at hand, which results in poor growth and loss of capital. The cases study indicates that Jack has a major resource of avocado based on which he could further expand the business. The production of avocado is huge; thus, it is easy to take decision to resolve the issue associated with the business. As mentioned Argote (2012), when the major materials are plentiful or available, the business will not take plenty of time to successfully dominate the market. Jack’s father had the belief that Sunshine Coast should be self-sufficient particular in their food production. Thus, a general belief formed by Errol is by providing enough food for the developing population, the needs and demands of people can be satisfied rather replying on the importers. Thus, it can be mentioned that tones of avocado is the large resources for the organization Glasshouse Avocado to fight against the obstacle.

On the contrary, custard apple as well as passion fruit is one of the effective resources available to Jack. However, the availability of this particular resource is not plentiful. Therefore, it will not be a good decision to reply on custard apple and fruit. In addition, the competitors are also dominating the market with their aggressive marketing strategies. Another major challenge faced by the organization was the trend of targeting the local organic market. The Sunshine Coast was fully dependent on the organic food market.  Therefore, relying on custard apple would not be a good option for Glasshouse Avocado to lead the business in competitive market. Another significant resource, which was rare to Jack, is the technology.  The organization Glasshouse Avocado required developing the technology for production of avocado. However, the heads of the organizations have only focused on the organic food but there should be a technical implementation to filter the food. When other organizations in the organic food market are in the rush of developing the quality of the products, Avocado is dealing with the issue of production. By applying the technology, Avocado could harvest the crops effectively. Lastly, it can be mentioned that absence of technology is the rare resource to Glasshouse Avocado.

Since the people understood about the trends of globalization, the organizations in every industry are in the rush developing and implementing the strategy to overcome the potential challenge in business. In the case study, it is observed that the organization Glasshouse Avocado is facing the issues of production as well as cheap imports. Thus, to resolve the issue, the organization could implement new market entry strategy such as Ansoff Matrix.

Figure 1: Ansoff matrix

There have been four different aspects associated with the strategy namely market development, diversification, market penetration and product development (Chrisman and Patel 2012). The organization could target different geographical market and then identify the opportunities as well as threats in different market. This is how the organization could develop the market. The next segment is product diversification, which is usually risky as there is little scope for implementing this strategy (Dezsö and Ross, 2012). However, Jack has another option to continue the business with avocado, which is Custard Apple and Fruits. The organization could focus on this significant alternative for further developing the business. Thereafter, the organization could focus implement the pricing strategy as introducing a loyalty scheme and launch price and other offers with products and services. In order to penetrate the market, Avocado could buy a competitor company especially in the mature market.

The last phase of the strategy is to pay attention on product development. Hence, Avocado could extend its products through the production of different variants or repackaging the existing products. As mentioned by Shin (2012), development of related product or services is also one of the significant strategies. In addition, the organization also needs to focus on customer service to retain the customers for long period.  

References

Argote, L., 2012. Organizational learning: Creating, retaining and transferring knowledge. Springer Science & Business Media.

Chiang, C.F. and Hsieh, T.S., 2012. The impacts of perceived organizational support and psychological empowerment on job performance: The mediating effects of organizational citizenship behavior. International Journal of Hospitality Management, 31(1), pp.180-190.

Chrisman, J.J. and Patel, P.C., 2012. Variations in R&D investments of family and nonfamily firms: Behavioral agency and myopic loss aversion perspectives. Academy of management Journal, 55(4), pp.976-997.

Dezsö, C.L. and Ross, D.G., 2012. Does female representation in top management improve firm performance? A panel data investigation.Strategic Management Journal, 33(9), pp.1072-1089.

Hu, Q., Dinev, T., Hart, P. and Cooke, D., 2012. Managing employee compliance with information security policies: the critical role of top management and organizational culture*. Decision Sciences, 43(4), pp.615-660.

Jiang, K., Lepak, D.P., Hu, J. and Baer, J.C., 2012. How does human resource management influence organizational outcomes? A meta-analytic investigation of mediating mechanisms. Academy of management Journal,55(6), pp.1264-1294.

McShane, S. and Von Glinow, M., 2012. Organizational behavior. McGraw-Hill Higher Education.

Shin, Y., 2012. CEO ethical leadership, ethical climate, climate strength, and collective organizational citizenship behavior. Journal of Business Ethics,108(3), pp.299-312.