Table of Contents
Executive Summary
Real Food is a San Francisco-based company founded in 1991. It supplies mainly natural foods and products that are non-genetically modified. The company’s products are mainly for body-care, healthy living and luxury. The Real Food Company website outlines the organization’s criteria for promoting food, nutritional supplements as well as self-care products. The company sells their products to local, regional and international distributors and retailers. Because of their nutritious foods and products, All Real Food should focus on expanding their market to mostly developing countries such as China whereby a good number of citizens suffer from malnutrition. In India, expectant mothers who suffer from malnutrition are more likely to have unhealthy babies. Being under and over nourished has relentless consequences. PESTEL and SWOT Analysis can be used to examine holistic view of the Real Food Company. The different foreign market entry strategies include license, franchising, Greenfield projects, selling companies and direct entry which is the most suitable for this food company.
Introduction
The company ‘All Real Food,’ commonly known as Real Food Company, is a business entity based in San Francisco. It is dedicated to supplying the most natural food and products for healthy living, surrounding as well as sustainable societies. With great concern, consideration and vigilant product selection, the company offers non-genetically modified produce and one hundred percent organic groceries. This paper mainly discusses the business overview of Real Food Company, the rationale involved, its macro and micro analysis regarding different analysis. It also ventures into its foreign market entry strategy.
Business Overview
They aim at eradicating GMOs in every product, supplements, body care and give out organic products at any convenient time and place. Some of the main products the company offers are an organic salad bar and grab, a hundred percent organic produce, non-genetically modified and inorganic meat, fish, and poultry. The company also offers organic and fair trade coffees and teas, local and artisan cheeses, sustainable wines and craft beers, non-genetically modified nutritional supplements. Other products are homeopathic and flower essences as well as natural beauty and body-care products (Shrivastava, 2014). They consider the sweeteners, preservatives, colors as well as many other components. All Real Food Company are categorically against selling milk or meat from animals which have been cloned or even their young ones since being ruled safe for consumption by the United States Food and Drug Administration (FDA).The company also offers several organic foods and products that have been certified by the United States Department of Agriculture (USDA) that focuses on becoming environmentally friendly and cost-effectively dependable.
According to Renton (2007), the company provides a genetically modified organism Fact guide which includes a catalog of top GMO crops, packed foods having genetically modified organisms as well as other products processed with plants which have been genetically modified. The guide also entails shopping criteria which aid in not purchasing potential genetically modified products. All Real Food has also instituted wine and beer shops to gratify their upmarket products (Parmeggiani, 2009). Real Food Company buys products for their markets from their neighborhood, local and global wholesale providers and merchants (Traill&Pitts, 1998). According to an article in the Wall Street Journal in August two thousand and nine, a good number of American citizens testified that the company had a strong touch with being ‘real’ and the notion that health is linked to the quality of food taken and hence its natural food roots.
Most of the trading process takes place at the local and nationwide levels to bargain capacity discounts with prominent merchants as well as distributors. Local and stockpile retailers concentrates on regional products and exceptional products essential for ensuring a locality market feel in the stockpiles. All Real Food is devoted to purchasing from regional producers that offer quality standards. There are also specific employees whose main obligation is sourcing regional products for all the stores (Renton, 2007).
Rationale
Owing to their natural foods and products which are believed to be promoting good health, Real Food Company should mainly focus on expanding their market to the third world countries, commonly referred to as developing countries. This is because people in these countries mainly suffer from malnutrition. India is one of the leading countries whose citizens suffer from malnutrition. Malnutrition refers to a condition of lack of balanced diet in the body owing to lack of some nutrients or excess nutrients leading to an off beam proportion. In simple terms, it can be referred to as over-nutrition and under-nutrition (Szajkowska, 2017). Although India has had a fifty percent increase in Gross Domestic Products since the year nineteen ninety-one, over one-third of the global malnourished children are found in India. About a half of these children are below the average weight and more than a quarter of children born from the wealthy families are over-nutrimental therefore obese. According to the World Bank, India is among the highest ranking nations globally with the number of children who are malnourished (Szajkowska, 2017). The dominance of children which are underweight in India is at the global peak, virtually doubling that of Sub-Saharan Africa accompanied by dismal effects in economic growth, mortality, and mobility.
India is among the fastest growing nations concerning economics and population. Its economic condition has been categorized as a low-income state with most of the people lying at or below the poverty level. Despite the fact that most of the people are still living below the National Poverty Line, India’s economic growth shows new opportunities and a direction towards elevating the occurrence of chronic illnesses that are at high rates in developed nations like the United States, Australia, and Canada. The grouping of people living poor conditions and the current economic growth of the country has resulted to the co-existence of two classes of malnutrition. These are the under-nutrition and over-nutrition. The main cause of malnutrition in India is the economic disparity. Their diet frequently lacks in both quantity and quality as a result of the low social status of those below the poverty level. Women in India, in general, do not have the appropriate knowledge of feeding their children. As a result, newborn babies are not able to obtain enough nourishment from mothers (Schaffner & Schroder, 1998). The Real Food Company, in this case, can be of great importance since they not only provide nutritious foods but also have the guidelines of taking these foods and the appropriate time as well.
Deficiencies in nutritious foods, for example, those of the ‘all real foods’ have long-term negative effects on both the persons and the society at large. In comparison with their peers who are properly fed, those who frequently take foods which lack a balanced diet are more susceptible to getting infectious diseases such as tuberculosis and pneumonia that results in a higher mortality rate. Besides, these individuals are less productive in tasks compared to the healthy ones. Less productivity gives them a low income which locks them in a vicious circle of lacking good nutrition.
Low productivity can also result to inadequacy to the country at large, more so in India where labor is the main contributing aspect of economic production (Renton, 2007).In India general obesity rates in the year, two thousand and ten was fourteen percent for the females and eighteen percent for the males with several urban regions rating as high as forty percent. Obesity results in some diseases such as diabetes, cancers, chronic respiratory diseases and cardiovascular diseases though are non-communicable. Research conducted by the World Health Organization (WHO) has overwhelmingly indicated that malnutrition for the period of pregnancy results to the baby having reduced cognitive abilities, physical retardation and augmented the risk of potential diseases in the future and Real Food Company is, therefore, an appropriate remedy for malnutrition in India. This will even help the company to gain financially owing to the consumer’s demands as well as low competition since there are no better food companies in India (Shrivastava, 2014).
Macro and Micro Analysis
The customers rely on the Real Food Company to offer them a variety of choices and inventive, safe and valuable products. The company has witnessed stable growth though is at the mercy of swiftly alleviating participation costs, government policies and prices related to tension in the chain of supply. PEST analysis which is a segment of PESTEL analysis can be applied in outlining some of the external factors which affect the Real Food Company. This analysis examines how the company faces influence from the political arena, economic and social status as well as technological factors. PEST analysis aids in planning using these fundamental factors. Without the four, a concrete foundation is deficient in the strategic planning.
Political Factors
Political trends have a lot of impacts on any food company, All Real Food included. Fast-food eateries are adding more healthy choices to their lists as public health policies are acting against foods with higher sugar and sodium intakes. Novel policies advocates for more caution on the public when it comes to purchasing foods. Such changes like reducing the amount of sugar and sodium intake greatly affects importing and exporting of foods. Also, inflation, taxation, inflation, costs of importing and exporting food and related products involving health policies influence the type of food offers (Kres & Brimelow, 2001).
Economic Factors
The condition of the nation and redundancy rates may influence any food company. For example, alternatives to foods which are healthier are more expensive in comparison to fast food or easily made foods. Besides, the expediency of readily made food regardless obeying unhealthiness may overshadow the trial and error of food preparation from the beginning. This has provided for a larger growth of fast food cafes over time. Taxation, spending by the consumer and food interest rates has impacted the choices as well as opportunities that are brought about in the food company (Shrivastava, 2014).
Social Factors
Fast food trends usually change depending on what the customers need. As was earlier mentioned, healthy living is the main concern in almost every country. It is pressed upon by both the consumers and governmental authorities. What is being observed is an increase in organic and whole foods as dietary hence changes in the living standards emerge. Lacto-vegetarian and pescetarian are now more of a lifestyle and fashion, especially with the modern civilization. The appealing component of these foods is based on their objective appearance.
Technological Factors
Technology is another factor which we can fail to mention owing to its competitive edge. It is indispensable in creating food labels, production, and packaging of food in the Real Food Company. Novel entities can be in lack of technological supremacy in comparison to expert food-based industries. With technological advancement, food companies find it very conveniently to reach consumers in a diversity of the available methods. The All Real Food Company has online groceries that distribute fresh produce to the consumers within a short period, thanks to technology (Harrington, Boyson & Corsi, 2011).
Environmental Factors
There has been an escalating shortage of raw materials, pollution targets, conducting business as an amoral and sustainable corporation, carbon footprint goals set by governments and this can be considered both political and environmental (Brody,2016). They are the main issues companies are undergoing in this factor. In their belief and virtue of being completely transparent to its consumers and wholesalers, the Real Food Company is devoted to being the first nationalized grocer to offer genetically modified organism to its consumers (Acker, 2006).
Legal Factors
The Real Food Company has a purchasing program which emphasizes on ethics and social responsibility related to products which have been imported from other countries which are still developing. The consumers’ rights, freedom, safety, and health have to be safeguarded at all cost. The program entails ensuring that the prices of the crops are customer friendly, the services are offered in on time, there are better wages as well as friendly labor conditions for the employees. All Real Food Company has a policy of making a contribution of at least seven percent of its annual gross revenues to charity (Shrivastava, 2014).
We can do it today.
SWOT Analysis
All Real Food company is witnessing a greater shift as result of consumer awareness. Strengths and can also be analyzed using the SWOT Analysis. This analysis focuses on the strengths, weaknesses, opportunities and finally threats.
Strengths
As discussed earlier on, the Real Food Company holds that it has a higher quality standard regarding offering natural and fine foods and products as compared to other food companies. This enables it to create a center of attention and upholds an extensive base of faithful consumers who come back more frequent. The company standards have a myriad of ingredients that are common in other food companies most of which are not good for health. They comprise of sweeteners, natural flavors, and hydrogenated fats among others. It as well purchases eggs from hens which are not caged (Shrivastava, 2014).
Harris (2015) argues that it has favorable industry trends by the fact that whole foods will never stop profiting from some food company trends. Historically, there has been an increased understanding of the part plays by healthy eating for a prolonged period. Consequently, their offers of organic and natural products should carry on with selling and support income growth. Real Food Company continues to profit from a vastly influential youthful generation that values not only their health but also maintenance of food and moral trade (Kearney &Nagengast, 1989). The customers are as well apprehensive of where and how food is processed and also the environmental concerns.
Weaknesses
Different consumer perception affects the company for there are those who think that the prices are too high since they have many fans. Whereas their prices are averagely higher than most of their business opponents, their quality is as well higher. On the other hand, it has not been easy shaking off this image from the middle and lower earnings households. Consequently, most of these customers have seldom purchased the company’s foods and products (Wheeler&Katz, 2011).
However, Real Food Company is creating counter-strategies in addressing these issues(Davies, 2014).The other weakness is that it is dependent on the American market. This makes it susceptible to depressions in its economy. Over the recent United States downturn, Real Food Company noted a decline in profits and this could reoccur in the subsequent recession.
Opportunities
There are opportunities for international expansion owing to the provision of funds by the government and other allied companies from the Canada. With this fiscal availability, the company has room to spread globally. It can as well expand its stores base in different parts of the country. This company, like the Whole Food Market, has an increasing percentage of its population that has an interest in natural and organic produce. This company, which has been operational in the United States for almost fifty years, can have a necessary enhancement from its American operations since similar sales in Canada are in a way soft.
Threats
Competition is the main threat facing the All Realm Food Company. It undergoes strong competition in its industry, right from regional, national and global markets, natural food companies, online dealers and storehouse membership unions. The other threat is negative publicity. Apart from its products being costly, the company has also gone through some other challenges such as being accused of overcharging its consumers (Schattman, 2017).
Foreign Market Entry Strategy
There are diversities of strategies in which an organization can enter a foreign market. No single market entry strategy applies to all global markets. Some of these entry strategies include licensing, franchising, direct entry, partnering and joint ventures. Others may include buying a company, piggybacking, Turnkey Projects as well as Greenfield Investments (Chaldon &Wansink, 2012). All Real Food sweets, snacks, breakfasts, and salads are prepared from finest quality, whole food, and organic products. Unsullied produce is regionally and seasonally sourced from organic producers from Australia and New Zealand. Quality foods, seeds, and nuts are included for final nutritional taste and value. The company’s Head Chef together with the certified Health Coach endorses the nutrition recipes to come up with a balanced and healthy taste.
Real Food Company is one of the United States’ certified organic grocers and hence it is accountable to National Organic Program standards in ensuring that the veracity of the organic and heterogeneous products is well met. This includes the duration they take to arrive at the stores and then put in a cart (Sachs,2014).The company only offers products that are of its self-invented quality standards for being authentic, that it refers to as plainly processed products that lack hydrogenated fats and flavors which are artificial in nature (Renton, 2007). The most suitable entry strategy is the Direct Entry which is also referred to as Direct Export. It involves selling directly into the market of your choice by first using your resources. Most companies, after establishing a sales program resort to distributors and agents to stand for them afterward in that market (Hawkes, 2007). Distributors and agents partner closely with you to represent your interests and thus becoming the face of the organization. For this reason, it is essential to treat the choice of agents and distributors similar to hiring a chief staff member.
Direct exporting, though, can be the most suitable strategy in a market and yet in another may require a joint venture and in the third one may need licensing of manufacturing. There are quite some factors which can affect the choice of strategies such as transportation costs, the level of adaptations of the needed products, tariff rates, and marketing. Since these factors can alleviate the costs, the amplified sales can counter-balance the costs (Kunkel et al., 2009). According to Nestle (2013) and Vasconcellos (2003), the main advantage of direct entry is that manufacturing is home based and hence it is not as risky as foreign based. It also offers an opportunity to learn about foreign markets even before bricks and mortar investments and also reduces potential risks of working overseas. The main disadvantage is that one may be accustomed to the mercy of foreign agents and hence lack control. For example, when horticultural products are being exported to Africa, the Dutch flower auctions and the agents are capable of dictating to the producers (Drucker, 2011).
Conclusion
The Real Food Company has upheld its picture of offering the quality natural and organic foods and products. Nevertheless, since the company’s trends have shown a healthier conscious United States population, more food companies and grocers have also switched to providing natural foods. This has resulted to some setbacks, especially because of its elevated prices. For its significant progress, value investors can get an opportunity at the company and gain from favorable business trends.
- Acker, J. (2006). Inequality regimes: Gender, class and race in organizations. New Delhi: Sage Publishers.
- Brody, H. (2016). Professional medical organizations and commercial conflicts of interest: Ethical issues. Oxford: University Press.
- Chandon, P., &Wansink, B. (2012). Does food marketing need to make us fat? A review and solutions. Nutrition Reviews.
- Crafts, D., & Loanna T. (1996). Career advancement obstacles for women in the foodservice industry. Ohio: University Press.
- Davies, J. (2007). Henry’s bought by smart and final. San Diego: Union Tribune
- Drucker, P. (2011). Technology, management and society. Boston, MA: Harvard Business Press.
- Duane, S. (2014). Business and marketing: Business plans. Ohio: Pacific Business News.
- Harrington, L. H., Boyson, S., & Corsi, T. M. (2011). X-SCM: The new science of x-treme supply chain management. New York, NY: Routledge.
- Harris, D. A. (2015). Taking the heat: Women chefs and gender inequality in the professional kitchen. New Brunswick, NJ: Rutgers U Press.
- Hawkes, C. (2007). Regulating and litigating in the public interest: Regulating food marketing to young people worldwide. American Journal of Public Health.
- Kearney, M., & Nagengast, C. (1989). Anthropological perspectives on transnational communities in rural California. Davis, CA: California Institute for Rural Studies.
- Kres R. E., & Brimelow, C.J.B. (2001). Instrumentation and sensors for the food industry: Technology and nutrition. Woodlesford: Woodhead Publishing Series.
- Kunkel, D. et al. (2009).The impact of industry self-regulation on the nutritional quality of foods advertised to children on television. Oakland, CA: Children Now.
- Nestle, M. (2013). Food politics: How the food industry influences nutrition and health: California studies in food and culture. Davis, CA: University of California Press.
- Parmeggiani, L. (2009). Food fight: The inside story of the food industry. London: Sage Publishers.
- Renton, A. (2007). Ripe target: The Guardian. London: Sage Publishers.
- Sachs, C. (2014). Front and back of the house: Socio-spatial inequalities in food work. New York: Routledge Publishers.
- Schaffner, D., & Schroder, W. (1998). Food marketing management: An international perspective. San Francisco: McGraw-Hill.
- Schattman, R. (2017). Sustainable food sourcing and distribution in the vermont-regional food system. London: McGraw Publishers.
- Shrivastava, A. (2014). Whole foods buys seven Dominick’s leases in Chicago from safeway. Chicago: Reuters Publishers.
- Son, H. (2015). The history of Western futures studies: An exploration of the intellectual traditions and three-phase periodization. Paris: Rutgers Press.
- Szajkowska, A. (2017). Regulating food law: Risk analysis and the precautionary principle as general principles of EU food law. Westminster: Wageningen Academic Publications.
- Traill, B., & Pitts, E. (1998). Competitiveness in the food industry. San Francisco: Springer Publishers.
- Vasconcellos, J.A. (2003). Quality assurance for the food industry: A practical approach. Washington, DC: CRC Press.
- Wheeler, A., & Katz, J. (2011). Brand Atlas: Branding intelligence made visible. Hoboken, NJ: Wiley.